Showing posts sorted by relevance for query fragile. Sort by date Show all posts
Showing posts sorted by relevance for query fragile. Sort by date Show all posts

20 April 2011

The unsustainable lightness of Tom Marshall

Tom Marshall keeps a tight grip on the provincial government’s purse strings.

He has to do that.

The damn things won’t stay that wide open on their own.

In presenting the provincial government’s budget to the House of Assembly on Tuesday, Marshall announced that the Conservative administration of Kathy Dunderdale would continue the practice of unsustainable public spending set under Dunderdale’s predecessor, Danny Williams.

Overall government spending will grow by 4.9%;  that’s about twice the rate of inflation. 

A windfall in oil prices directly attributable to turmoil in the Middle East helped to erase a forecast cash deficit of $959 million and turn it into a modest cash surplus of $133 million. (Estimates 2011 p. iv)

For the past two years, Marshall claimed the government’s profligate spending came from the need to spend cash to fuel an economic recovery

Now he’s got a different excuse:  we can afford it.  Marshall told reporters that the provincial economy was “sizzling”. That’s nonsense, of course.  The economy is actually becoming increasingly fragile and public spending is sustained by cash coming from a volatile source, namely oil. Marshall seems to know that just like he knows the public debt is something he should be reducing.

Oddly, Marshall never seems to do anything about it

Marshall forecast that the province’s net debt will increase in 2011, largely the result of continued growth in unfunded pension and benefits liabilities in the public service.

And that’s despite repeated warnings from the province’s auditor general among others.  In 2009 a provincial cabinet minister resigned unexpectedly citing concerns about unsustainable public spending.  Earlier this year, Auditor General John Noseworthy repeated the same concerns;  interestingly enough he did it in a report on Fiscal Year 2009, the same year Paul Oram left cabinet.

Two years later, the provincial government is still on the same path.

- srbp -

Related:

16 November 2010

The Dismal Science: Debunking the “federal presence” fairy tale

Far from being hard done-by when it comes to federal jobs in the province, Newfoundland and Labrador is pretty much on par, according to a recent study conducted by the Frontier Centre for Public Policy, and reported by the National Post.

You can find a news release summarising the report here, while the full report is available in pdf format.

FCPP -equalization

Some provinces  - Prince Edward Island, New Brunswick, Nova Scotia and Manitoba – have significantly more than the national average number of federal jobs per 100,000 population.  Quebec, Saskatchewan, British Columbia and Alberta have less.

Newfoundland and Labrador and Ontario are only slightly higher than the national average.

The study effectively refutes claims that this province is receiving something less than its “entitlement’ to federal pork spending.  The comparative figures also demolish two reports released by Memorial University’s Harris Centre in 2005 and 2006.  The provincial government has used those studies repeatedly to bolster its claims for increased federal transfers to the province to offset what turn out to be imaginary grievances.

The Frontier Centre study refers to these federal jobs as a form of “stealth” Equalization.  That is, they contend that the federal jobs serve as a type of federal transfer to the local economy in each of the provinces. More importantly, though, the Frontier Centre contends that the transfer comes in addition to the formal Equalization program and is particularly heavy in the provinces it refers to as “major” have-provinces.

The study also notes that the have-not provinces with the highest ratio of federal government jobs also tend to have higher than average reliance on provincial public sector jobs generally. They compare provinces based on the number of public sector employers as a share of the total population.  Newfoundland and Labrador is third highest on that scale, with Prince Edward Island and Manitoba coming, respectively, first and second.

Looking at the same information but as a share of the provincial labour force, Newfoundland and Labrador is by far the province with the largest dependence on the public sector.  Almost 30% of the provincial labour force is employed by the federal, provincial or municipal government.

The Frontier Centre study puts the findings into a particular context, namely transfer payment reform:

The stealth equalization of unbalanced federal employment described in this paper is part of a much bigger problem —an approach to public policy in Canada that transfers money out of high-productivity regions into low-productivity regions.

Not only is this policy approach harmful to our productivity growth, it is also, quite simply, unsustainable. Historically, the taxpayers in three provinces—British Columbia, Alberta and Ontario, have paid most of the bill for high levels of public sector employment in the have-not provinces.

At the same time, the study does point to issues that are especially relevant to Newfoundland and Labrador, even if the report’s authors simply missed the poster child for their argument of unsustainable public spending and the dangers of reliance on what the author’s call “the state driven approach to economic development”.

Most residents of the recipient provinces are unaware of the extent to which their economies are state-driven and reliant on transfers. Beyond the official equalization money, massive amounts of revenue from elsewhere flow into these provinces from a number of different sources. Stealth equalization through federal employment is one important example—but there are others. Higher dependence on federal
government transfers to individuals and discrimination in ordinary  operating programs in favour of the have-nots are two more examples of ways Canadian public policy transfers wealth into the have-nots.

Most residents of Newfoundland and Labrador are unaware of the extent to which the provincial economy is state-driven and reliant on federal transfers in addition to overall public sector spending.

They aren’t alone, of course.  The current provincial administration operates as if going off Equalization was a tragedy of biblical proportions.

- srbp -

Related: 

05 January 2011

The Fragile Economy: finance minister complains about his own policies

Finance minister Tom Marshall thinks its time for the private sector to step in and boost the economy around Corner Brook.

“Other than construction, I would like to see more economic investment; I would like to see more businesses coming in and investing here,” he said. “It is jobs ... What we have seen is government spending, in a massive way, in this area.”

That’s from a story in last Friday’s Western Star.

Two observations come readily to mind.

First of all, that’s a great big “D’uh” there, Tom.  Your humble e-scribbler has been banging out post after post after post over the past six years on this very subject.  The number of posts on it has gone up in the past two years because the fundamental situation is getting fundamentally worse. 

It is getting fundamentally worse – to hit the second point – as a direct result of government policy.  In everything from its energy policy to its disastrous seizure of private sector assets in 2008, the current administration has shown itself to be relentlessly opposed to creating an economic climate that attracts investment, promotes innovation and rewards entrepreneurship. 

The current fragile state of the provincial economy  - “fragile” is a word Tom Marshall used not so long ago, by the way - is a direct consequence of government policies.  Only a fundamental shift in those policies can move the province off the course it is currently on.

As it stands in early 2011, the current administration is firmly committed to continuing the policies that have contributed to putting the economy in its current parlous state.

We have seen the enemy, says finance minister Tom Marshall, and he is us.

- srbp -

18 March 2013

Hobson’s Choice #nlpoli

The provincial Conservatives love to spend public money. 

That doesn’t sound very conservative and it isn’t.  Politically, the provincial Conservatives in Newfoundland and Labrador are more like Republicans than the Progressive Conservatives who used to run the province in the 1980s. American Republicans like to cut federal taxes and jack up federal spending and then blame the resulting financial meltdown on the Democrats.

Around these parts, the Reform-based Conservative Party, as the Old Man used to call them, blames everything on the Liberals.  That is the Liberals who, in case you missed it,  haven’t been in power in a decade.

19 July 2010

Fragile Economy – The Public Sector

Last week, labradore comments on the size of the provincial labour force occupied by the provincial government public sector.  He capped it off with a chart (below) showing a comparison for all 10 provinces over the past decade.

All this brings home one of the points made here earlier this year in a series of posts on the increasingly fragile state of the provincial economy. More the provincial economy is dependent on trade with a single market, namely the United States.  There are fewer private sector industries driving the economy and, at the same time, provincial government spending has assumed an increasingly large role in the economy as a whole.

If you extend the picture back over the three decades for which data is available, you can see both the persistent over-reliance in Newfoundland and Labrador on public sector labour compared to the situation in other provinces as well as the increase in the public sector labour force over the past three years.

These charts go a long way to demonstrating the extent to which popular perceptions of local prosperity  are entirely wrong.  Whatever is going on locally is most certainly not the result of private sector economic development.

Rather there are more public servants making more money, 20% more, in fact over the most recent four year contract.  Couple this with the dramatic increase in overall provincial government spending – upwards of 60% in four years – and the picture is unmistakeable.

Those who want to talk about prosperity in the province or those who want to celebrate the province’s “have” status would do well to look at the three provinces with the smallest proportion of their labour forces working for the provincial government.  It is no coincidence that those provinces with the strongest economies are also ones in which the public sector labour force is a relatively small proportion of the overall working population.

That doesn’t mean that public servants and public services are unimportant.  Rather, the situation in Newfoundland and Labrador demonstrates the extent to which successive provincial governments in Newfoundland and Labrador – but most particularly the current one – have failed to create the climate in the province for sustainable economic development let alone diversification of the local economy.

What makes the current administration stand out, though, is that increasing the role of the public sector in the economy, whether through NALCOR or through admittedly unsustainable growth in public spending, is openly stated as the goal.

The fact that observers outside the provincial government have repeatedly failed to notice that this is occurring is another matter.  No surprise, though, that if they cannot even correctly identify the trend to growing fragility, they may not pay any attention at all to the very serious implications from policies that promote the hollowing out of the province’s economic underpinnings.

- srbp -

13 July 2011

Public sector job growth outpaces private in NL

From labradore:

In the five years since the recent-historic low, in early 2006, of about 55,600 public-sector employees, the public-sector labour force has increased by about 11,500 or over 20%. As a share of total employment, the public sector has grown from 26% to 30%.

The twelve-month average ending in June 2011 was 67,100 — an increase of 4100, or 6.5%, from the same period twelve months earlier. This represented an increase of over half a percentage point in the public sector's overall share of the employed labour force.

Then there are the pretty charts showing the public sector employment, federal, provincial and municipal, in thousands of people:

and the private sector:

 

So when you have digested the full impact of that little bit of information, consider what the Muskrat Falls project is really all about: the megadebt will be worth it because it will “bring significant employment and income to the residents and businesses of Newfoundland and Labrador.”

 

- srbp -

Related:

10 November 2011

A step in the right democratic direction #nlpoli

One New Democrat is fighting the re-count in Burin-Placentia West on grounds that the special ballot provisions of the provincial Elections Act are unconstitutional.

Let this be the first measure to turn back the anti-democratic current of the past eight years.

Now fighting against the anti-democratic tide is familiar stuff to SRBP readers. 

September 11, 2007.

Note the date.

That’s when your humble e-scribbler first raised questions about the changes the House of Assembly made to the Elections Act the previous spring.  The amendments sailed through the legislature in of its typical speedy sessions with no debate beyond the bare minimum needed to make the amendment bill into law.

Others  - notably Mark Watton – saw the same thing around the same time, bit into the issue with their considerable knowledge and gusto.As Mark wrote in 2008:

In the lead-up to a by-election, when there are no candidates in the running, these provisions are just plain silly. But in the weeks preceding a general election, they afford a tremendous advantage to incumbents. It is hard to imagine a greater democratic injustice than rules permitting incumbent candidates to campaign (and do so free from electoral-spending scrutiny) and collect votes while their potential opponents cannot even register. It's no wonder the amendments passed through the House of Assembly with no opposition.

Over a decade ago, a unanimous Supreme Court of Canada stated: "Elections are fair and equitable only if all citizens are reasonably informed of all the possible choices and if parties and candidates are given a reasonable opportunity to present their positions. ... "

More recently, this court ruled the provisions of Canada's Elections Act, which effectively ensured "that voters are better informed of the political platform of some candidates than they are of others," violated Section 3 of the Charter of Rights and Freedoms and struck them down.

In the words of the Supreme Court of Canada, our rights under the charter go beyond the "bare right to place a ballot in a box"; they "grant every citizen a meaningful role in the selection of elected candidates."

In the three years since Mark published those words, nothing has changed.  The special ballot provisions still smell to the high heavens and generally the people who ought to be raising concerns about this have been silent.  One call-in radio host today left the impression he’d never heard of this issue before. Let’s hope he misspoke in the rush of the moment.

Well, nothing until one candidate and her lawyer decided to take a simple judicial re-count and strike a blow to restore fair elections to the province. The New Democrats did include changes to the House of Assembly as one section of their election platform last month but special balloting and the other changes the NDP supported in 2007 got not so much as a whispered mention.

Fair elections are a basic democratic right.

It is such a basic right in our society that we often take for granted what it means.  But we need look no farther back than 2007 to see just exactly how fragile our most basic democratic principles are. 

They are so fragile that the very group  - the members of the House of Assembly  - we expect to protect our democratic rights are the ones who happily and blindly violated them.

Of course, no one is surprised by this given the sustained assault on our fundamental democratic principles the past eight years have brought.

Just to give you a sense of what we are talking about here, let’s look at those democratic principles as laid out in the Bill of Rights (1689) and the examples of the attack on those principles.

And make note of that date:  1689.

  • “That election of members of Parliament ought to be free;”   - the special ballot provisions as well as the other changes made to the Elections Act since 2003.
  • “That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament;: – Danny Williams’ public statements in 2007 that he favoured ending free speech in the provincial legislature and his efforts to chill free speech through personal, verbal attacks and threats of law suits.
  • “… that for redress of all grievances, and for the amending, strengthening and preserving of the laws, Parliaments ought to be held frequently.”  The House of Assembly last sat in the spring and will not sit again until next spring.  Under the Conservatives since 2003, the House of Assembly sits the least number of days of any legislature in the country.

To be sure, the fundamental contempt displayed by the government for the legislature continues unabated with the the change in Premier.

What is encouraging, what is different is that for the first time in eight years, more people are starting to argue against the Conservatives’ contempt for democracy.

This court case over a simple re-count could prove to be one of the most important legal decisions in the province’s history.

- srbp -

30 March 2010

NL economy “fragile”: Williams’ finance minister

“When there is uncertainty, when the economy is fragile, government steps into the breach.”

That’s the way finance minister Tom Marshall explained the reason behind the Williams administration’s plan for three more years of deficit spending including a projected deficit in 2010 of nearly $1.0 billion on a cash basis.

Marshall made the remarks in an interview with CBC’s Debbie Cooper Monday evening.

In his budget speech Monday, Marshall forecast accrual deficits of between $156 and $194 million to follow the accrual deficit of $294 million in 2009.  Marshall gave no forecast of when he expected the provincial government to balance the books again or return to surplus.

In the past, Marshall has explicitly rejected the idea of balanced budget legislation.  Earlier in March, Danny Williams dismissed balanced budgets saying that delivering “balanced budgets is just achieving a number.”

During the interview Marshall referred to the deficit for the year just ended as being half a billion dollars,  after a string of surpluses which he said totalled almost four billion.

But that’s an odd mixture of numbers. Since 2007, the provincial government has kept two sets of books, delivering the finance minister’s budget speech on an accrual basis and delivering the Estimates on a cash basis. Marshall and one-time finance minister Jerome Kennedy typically have referred only to the accrual numbers.

They never mention the cash numbers since they show deficits in all but two years since 2003. And last year’s deficit of $494 million was on a cash basis.  That’s the half billion Marshall mentioned.

But on a cash basis, the Williams administration only produced a cash surplus  - the same figures Marshall used - in two years since taking office in 2003.  In every other year, the Williams administration had to borrow to make ends meet.

Marshall’s 2010 budget forecast that trend to continue.

clip_image004_thumb[4] The green lines in the chart represent deficits.  In Fiscal Year 2006, the shortfall was $707 million, followed by $88 million in 2007.  There was a cash surplus in 2008 of roughly $820 million.

Marshall delivered a $494 million deficit in 2009 and forecasts a cash shortfall of $949 billion in 2010.  It doesn’t take a rocket scientist to realise that if Marshall is only half right in his deficit forecasts for the next three years, the Williams administration will add $1.5 billion to the province’s debt load over the next three years.

Even the deficit forecast for 2010 of $959 million is based on oil averaging US$83 over the next 12 months.  If oil were to average US$70 a barrel -  as it did in 2009 -  the deficit would balloon by another $500 million.  In other words, oil royalties would be only $1.6 billion compared to the $2.1 billion forecast.

And if all other projections held, the 2010 deficit would be more like $1.4 billion in a single year rather than what Marshall forecast on Monday.

None of that includes any debt incurred by the province’s energy company to pay for construction costs on its share of oil projects or the Lower Churchill. Both would show up on the provincial government’s books since NALCOR energy and its subsidiaries are owned wholely by the provincial government. At the same time, the province’s oil and gas company isn’t required to pay any royalties to the provincial treasury like other oil companies.  Instead, NALCOR will pocket the cash, pay off debt or use it to fund other projects which also likely won’t generate any money for the provincial treasury.

The apparent surpluses Marshall claimed during his interview were actually paper transactions resulting from the accounting practice of distributing the one time advance cash transfer payment from Ottawa in 2005 over the fiscal years in which the money was actually earned.  In 2008, an apparent surplus of almost $2.5 billion on an accrual basis produced an actual cash surplus of only $820 million.

The one-time transfer was used to reduce unfunded pension liabilities.

No other money was received under the 2005 deal before it expired in 2009.  The provincial government will receive one last cash download as a result of the 2005 agreement but that amount is based on the 1985 Atlantic Accord.

Approximately $1.8 billion in temporary investments apparently held by the provincial government would not be enough to cover the likely cash deficits over the next three years, based on current budget projections. 

There is no explanation for Marshall’s claim during the CBC interview that the provincial government had the cash to cover the anticipated shortfalls.

-srbp-

18 March 2010

Good one there, Wente

Margaret Wente argues that bloggers are mostly male and demonstrates in the process that her argument [as to why that is so] is wrong.

[Sarah and I believe the urge to blog is closely related to the sex-linked compulsion known as male answer syndrome. MAS is the reason why guys shoot up their hands first in math class. MAS also explains why men are so quick to have opinions on subjects they know little or nothing about.]

Clearly, basing your column on an inherently fragile, sexist stereotype demonstrates that blogs aren’t the only place for instant, ill-founded opinions.  Moreover,  the time it takes to produce a column versus a blog post doesn’t -  in and of itself  - improve the quality of the thought behind the column.

Not many women are interested enough in spitting out an opinion on current events every 20 minutes.

Maybe not, Peg, but apparently at least one is interested in taking longer to get to the same place.

But don’t worry, plenty of bloggers wind up generating exactly this kind of writing:  an argument that defeats itself.

At least Peg doesn’t have to write her own sock puppet comments.

-srbp-

[] denotes additions to clarify the point for people who don’t go off and read Wente’s column.

Wente Sorted Updated:  Apparently the considerable number of women who write blogs decided Peg was full of shit, too and decided to tell her in so many far more elegant words [original links from the Globe version are live]:

"When influential women are ignorant to the numerous women's voices on the Internet, when the voices of many women are dismissed as endearing, cute and girly, and when the voices of those women who are most oppressed are ignored altogether, that gender gap is perpetuated. Thank you, Margaret, for proving your own point about how hard it is to change the conversation."

Changing the conversation is very hard to do.

So the Globe has decided to have an online chat between Peg and women bloggers.  Get the popcorn.  This should be funny.

-srbp-

 

 

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16 January 2014

The Vibrant Unsustainable Super Energy Debt Warehouse #nlpoli

The Conservatives used to say that Newfoundland and Labrador was eastern North America’s energy warehouse.  Once Danny Williams ran for the hills and left Kathy Dunderdale in charge, she kicked everything up a notch.

Energy warehouse was too plain for Kathy, whose party ran on the slogan “New Energy” in the 2011 general election.

With Kathy running the place, it became a super warehouse.  “We are an energy super warehouse,” said Kathy countless times. 

The New Energy Party even clipped this bit of Kathy from the House of Assembly for its website back in 2011:

Mr. Speaker, this Province is an energy super warehouse. We have what the world wants. We will bring it to market. We will supply our own people, Mr. Speaker, and we will earn from those resources for generations to come.

“We will supply our own people, Mr. Speaker.”

14 March 2016

Picking stuff out of the appointments hockey bag #nlpoli

One of the provincial Conservatives’ signature new initiatives in the first session of the legislature after the 2003 election was a bill that supposedly set fixed election dates. 

Changes to the House of Assembly Act also triggered a general election if the Premier left office other than within a year of an existing fixed election date and reduced the number of days the Premier had to call a by-election from 90 days to 60 days.

When the bill appeared in the House, there were some obvious problems with it.  For starters, and in keeping with the constitutional traditions of Canada, there actually were no fixed dates for general elections.  The first clause of the amendment bill made it plain that nothing in the bill change the power of the Lieutenant Governor-in-Council to call an election whenever it wanted.

20 September 2008

"Reality Check" reality check on Equalization and the Family Feud

The crew that put together's CBC's usually fine "Reality Check" can be forgiven if they missed a few points by a country mile in a summary of the Family Feud.

Forgiveness is easy since the issues involved are complex and  - at least on the provincial side since 2003 - there has never been a clear statement of what was going on.  Regular Bond Papers readers will be familiar with that.  For others, just flip back to the archives for 2005 and the story is laid out there.

Let's see if we can sort through some of the high points here.

With its fragile economy, Newfoundland and Labrador has always depended on money from the federal government. When they struck oil off the coast, the federal government concluded it would not have to continue shelling out as much money to the provincial treasury. N.L.'s oil would save Ottawa money.

Not really.

Newfoundland and Labrador is no different from most provinces in the country, at least as far as Equalization goes.  Since 1957 - when the current Equalization program started - the provincial government has received that particular form of federal transfer.  So have all the others, at various times, except Ontario.  Quebec remains one of the biggest recipients of Equalization cash, if not on a per capita basis than on a total basis. Economic "fragility" has nothing to do with receiving Equalization.

In the dispute over jurisdiction over the offshore, there was never much of a dispute as far as Equalization fundamentally works.

Had Brian Peckford's view prevailed in 1983/1984, Equalization would have worked just as it always has.  As soon as the province's own source revenues went beyond the national average, the Equalization transfers would have stopped.

Period.

That didn't work out.  Both the Supreme Court of Newfoundland (as it then was called) and in the Supreme Court of Canada, both courts found that jurisdiction over the offshore rested solely with the Government of Canada.  All the royalties went with it.

In the 1985 Atlantic Accord, the Brian Mulroney and Brian Peckford governments worked out a joint management deal.  Under that agreement - the one that is most important for Newfoundland and Labrador - the provincial government sets and collects royalties as if the oil and gas were on land.

And here's the big thing:  the provincial government keeps every single penny.  It always has and always will, as long as the 1985 Accord is in force.

As far as Equalization is concerned, both governments agreed that Equalization would work as it always had.  When a provincial government makes more money on its own than the national average, the Equalization cash stops.

But...they agreed that for a limited period of time, the provincial government would get a special transfer, based on Equalization that would offset the drop in Equalization that came as oil revenues grew.  Not only was the extra cash limited in time, it would also decline such that 12 years after the first oil, there'd be no extra payment.

If the province didn't qualify for Equalization at that point, then that's all there was.  If it still fell under the average, then it would get whatever Equalization it was entitled to under the program at the time.

The CBC reality check leaves a huge gap as far as that goes, making it seem as though the whole thing came down to an argument between Danny Williams and Paul Martin and then Danny and Stephen Harper.

Nothing could be further from the truth, to use an overworked phrase.

During negotiations on the Hibernia project, the provincial government realized the formula wouldn't work out as intended. Rather than leave the provincial government with some extra cash, the 1985 deal would actually function just like there was no offset clause. For every dollar of new cash in from oil, the Equalization system would drop Newfoundland's entitlement by 97 cents, net.

The first efforts to raise this issue - by Clyde Wells and energy minister Rex Gibbons in 1990 - were rebuffed by the Mulroney Conservatives.  They didn't pussy foot around. John Crosbie accused the provincial government of biting the hand that fed it and of wanting to eat its cake and "vomit it up" as well.

It wasn't until the Liberal victory in 1993 that the first efforts were made to address the problem.  Prime Jean Chretien and finance minister Paul Martin amended the Equalization formula to give the provincial government an option of shielding up to 30% of its oil revenue from Equalization calculations.  That option wasn't time limited and for the 12 years in which the 1985 deal allowed for offsets the provincial government could always have the chance to pick the option that gave the most cash.  It only picked the wrong option once.

The Equalization issue remained a cause celebre, especially for those who had been involved in the original negotiations.  It resurfaced in the a 2003 provincial government royal commission study which introduced the idea of a clawback into the vocabulary.  The presentation in the commission reported grossly distorted the reality and the history involved. Some charts that purported to show the financial issues bordered on fraud.

Danny Williams took up the issue in 2004 with the Martin administration and fought a pitched battle - largely in public - over the issue.  He gave a taste of his anti-Ottawa rhetoric in a 2001 speech to Nova Scotia Tories. Little in the way of formal correspondence appears to have been exchanged throughout the early part of 2004.  Up to the fall of 2004 - when detailed discussions started -  the provincial government offered three different versions of what it was looking for.  None matched the final agreement.

The CBC "Reality Check" describes the 2005 agreement this way:

The agreement was that the calculation of equalization payments to Newfoundland and Labrador would not include oil revenue. As the saying goes, oil revenues would not be clawed back. Martin agreed and then-opposition leader Harper also agreed.

Simply put, that's dead wrong.

The 2005 deal provided for another type of transfer to Newfoundland and Labrador from Ottawa on top of the 1985 offset payment.  The Equalization program was not changed in any way. Until the substantive changes to Equalization under Stephen Harper 100% of oil revenues was included to calculate Equalization entitlements.  That's exactly what Danny Williams stated as provincial government policy in January 2006, incidentally.  The Harper changes hid 50% of all non-renewable resource revenues from Equalization (oil and mining) and imposed a cap on total transfers.

As for the revenues being "clawed back", one of the key terms of the 2005 deal is that the whole thing operates based on the Equalization formula that is in place at any given time. Oil revenues are treated like gas taxes, income tax, sales tax, motor vehicle registration and any other type of provincial own-source revenue, just like they have been as long as Equalization has been around.

What the federal Conservatives proposed in 2004 and 2006 as a part of their campaign platform - not just in a letter to Danny Williams - was to let all provinces hide their revenues from oil, gas and other non-renewable resources from the Equalization calculations.  The offer didn't apply just to one province.  Had it been implemented, it would have applied to all. 

That was clear enough until the Harper government produced its budget 18 months ago. What was clear on budget day became a bit murky a few days later when Wade Locke of Memorial University of Newfoundland began to take a hard look at the numbers.

Again, that's pretty much dead wrong.

It became clear shortly after Harper took office in 2006 that the 100% exclusion idea from the 2004 and 2006 campaigns would be abandoned in favour of something else.  There was nothing murky about it at all. So plain was the problem that at least one local newspaper reported on a fracas at the Provincial Conservative convention in October 2006 supposedly involving the Premier's brother and the Conservative party's national president. That's when the Family Feud started.

As for the 2007 budget bills which amended both the 1985 and 2005 agreements between Ottawa and St. John's, there's a serious question as to whether the provincial government actually consented to the amendments as required under the 1985 Atlantic Accord.

The story about Equalization is a long one and the Family Feud - a.k.a the ABC campaign - has a complex history.  There's no shame in missing some points.  It's just so unusual that CBC's "Reality Check" was so widely off base.

-srbp-

12 April 2010

The Fragile Economy: …and two steps back

In 2007, the contracts manager at Metalcraft Marine, a Kingston Ontario boat builder noticed the growing number of reports from the united States that predicted a looming downturn in the American market.

metalcraft firestorm 30 The threat was potentially devastating for a company that did 95% of its business manufacturing small patrol boats for American government agencies.

The company shifted its marketing focus to South America, the Middle East and Asia.  The work paid off:  revenues in 2010 will be 50% higher than 2007 based on new customers outside North America.

Inertia

Meanwhile, since 2007, the provincial government in Newfoundland and Labrador has been working alongside the other eastern Canadian provinces to increase trade with the United States. There is now a whole trade focus on the south-eastern Untied States complete with junkets and conferences. 

Just this weekend – April 2010 -  the Premier co-hosted the latest conference for the south-eastern project.  This is the same trade venture. incidentally, that drew Paul Oram to Georgia when he was the business minister. His grasp of recent events in the province is breathtaking.  Well, breathtaking that is, if you have no idea what he is talking about.  If you do have half a clue, you’d wonder what planet he was from to have cocked everything up so badly.

Now to be fair, the whole idea for this venture seems to have been cooked up back before 2007 when it looked to some like the growth in the United States economy would know no end. By the time the bureaucrats and politicians managed to get themselves organized, the first signs of looming trouble were showing up.  And by October 2008 when Oram was in Georgia, the entire arse had fallen out of the American economy.

By then, of course, or even by 2007, the bureaucratic juggernaut couldn’t be stopped even if someone wanted to.  And now three years after the first one, a whole bunch of people get together regularly at taxpayer expense to talk about how nice it would be if the private sector companies in the respective jurisdictions did a little business with one another. 

These trade affairs never seem to do much more than talk, of course and set up permanent offices employing public servants to help co-ordinate future meetings.  That’s what happened with the Tobin-era Irish junket-fest, revived by the Williams crew or the Team Atlantic missions to anywhere that has warmth and sun in the wintertime.  But the purpose of this discussion let’s run with the assumption used by governments, namely that these trade missions and junkets actually work.

Increasing Dependence on a Single Market

Politicians who come into office without any idea of what to do usually wind up following the flow.  This American trade idea is likely no exception. 

You see, the United States has been the province’s major foreign trading partner for decades.  In 1999, two thirds of all exports from Newfoundland and Labrador  went to the States. By 2006, that proportion had climbed to 75%.  Even in 2008 – the last year for which the provincial government provides statistics – 71% of exports from Newfoundland and Labrador went into the American market.

To put it another way, take a look at the export value compared to the province’s gross domestic product (GDP):  the  total value of goods and services produced in Newfoundland and Labrador. In 2008, about half the GDP went to the Untied States. The GDP in 2009 was 22 billion.  The drop was pretty much all due to the collapse of the American market.

Now that level of dependence is not as bad as Metalcraft's problem in 2007, but it certainly should have made someone within the provincial government sit up and take notice.  After all, the provincial government’s own statistics analysts produced the figures cited above.  The level of dependence on the American economy is not a state secret.

Rather than trying to increase trade with the United States, Newfoundland and Labrador would be strategically better advised to diversify its markets. But since 2003, the provincial government has been doing exactly the opposite. 

What’s more, the provincial government  - in an apparently capricious move -  specifically rejected getting involved with a major international trade initiative aimed at diversifying the markets for local goods and services. 

Sure Paul Oram took a jet to India in 2008, but the very next year, the provincial government rejected a major national effort designed to open the European union to free trade with Canada. A few million dollars worth of seal bits trumped what had managed to become, by 2008, close to a couple of billion dollars of trade into the European Union. The prospect of more trade with the Europeans opens opportunities for new business throughout the province not to mention offering the chance to resolve some long-standing trade issues in the fishery.

However, none of that seems to have had any impact on the group of politicians and bureaucrats determining the province’s economic policy.  So it is that the European opportunity was neglected, to put it mildly, while the American continues.

Markets?  We dun need no stinking markets?

Now this is not the first or only time such a situation has occurred since 2003.

The provincial government took a hand in smashing to bits the only internationally competitive fishing enterprise based in the province.  Fishery Products International continues as a brand.  The brand, along with the international marketing arm went to a Nova Scotia-based company.  Another section, a seafood marketing arm based in the United Kingdom also wound up on the block, snapped up just as quickly by someone else with far greater vision than the provincial government and the band that sliced the company to pieces.

Now it does not matter if the provincial government actively worked to destroy FPI or if it merely went along for the ride because it lacked a coherent fisheries policy of its own.  The end result is the same:  The parts of the company that could have helped to diversify markets for local seafood are gone to others.  The unprofitable and problematic bits – the processing bits – remain in the province and continue to be highly problematic  although they are now held by a smaller company with far less global clout.

The others are doing quite well for themselves.  John Risley, vilified by the Premier during the FPI debacle, personally runs a successful company that last year turned a profit of $25.8 million despite the downturn in the American market and the high Canadian dollar.  A key part of the success is the FPI stuff Risley bought with the same Premier’s agreement.

Oh to be in that room

There is no small joke in discovering that the Biloxi conference co-hosted by Danny Williams is sponsored,in part, by AbitibiBowater. Williams’ expropriation gambit of AbitibiBowater’s and other’s assets in 2008 has turned out to be a legal disaster for the provincial government and may well prove to be as big a financial mess too.

Irrespective of that, though, there is something fitting in having Williams hosting an event designed to encourage trade while it is sponsored by a company which is the poster-child for the Williams administration’s erratic, contradictory policies. 

It is one thing to sell products in another market.  Another key component of trade missions is attracting new investors.  What could more readily turn off investors than the spectacle of a provincial government seizing control of assets, revoking permits and unilaterally quashing legal action? 

Williams did not just lay waste to AbitibiBowater’s presence in the province with his December 2008 surprise.  The expropriation bill also seized assets belonging to two other companies:  the Italian multi-national ENEL and St. John’s-based Fortis.  There is still no sign of any settlement with any of the parties affected, including those like ENEL and Fortis which appear to have been collateral damage in whatever war lay at heart of the expropriation.

One step forward and two steps back

Two decades ago, the Government of Newfoundland and Labrador recognised both the problems faced in the province and the opportunities posed by changes in the global economy. The Strategic Economic Plan aimed to make fundamental changes in the economy, diversify industries and markets.  The plan was a step forward.

Two decades later, the province is two steps back.  The SEP and all the knowledge that lay behind it are tossed aside. 

As the old adage goes:  fail to plan.  Plan to fail. 

The results are there for all to see:  increasingly, the provincial labour force is dominated by people whose jobs depend on tax dollars, rather than on jobs that generate tax dollars.

 

The provincial government now accounts for almost 25% of the employed labour force in the province.  This is not just the result of the near collapse of the forest sector and the steady decline of the fishery:  public sector employment like public sector spending generally continues to grow apace. Curiously enough, the Williams administration started out with a policy of reducing the public service.

Since 2003, the only development projects that have taken place were all either begun before the current administration took power or build modestly on existing work.  Nothing new has turned up despite the creation of an entire department supposedly devoted to generating new economic development.

More of the provincial economy in 2010 depends on exports to the United States than a decade ago. About 71% of all foreign exports now head to the United States.

Oil generated one third of the provincial gross domestic product in 2009;  that’s about seven billion dollars in a $22 billion economy. Total provincial government spending for 2010 is about seven billion.  As industries like forestry and the fishery have withered or faltered, the provincial government has stepped in to take its place.

The provincial economy is increasingly driven by public sector spending which, itself cannot be sustained at current levels.

There are ways to correct the course the provincial government has currently set.

That is where this series will turn next.

-srbp-

07 July 2010

Economic recovery – not exactly as illustrated, part two

cbc.ca/nl is reporting an economic miracle in Grand Falls-Windsor.

That’s the town where the major private sector employer closed its doors and where the provincial government expropriated the mill and hydroelectric assets.

When AbitibiBowater stopped production at the mill in early 2009 there were concerns the town's economy would tank, but that hasn't happened.

This time last year, construction was started on 16 houses in Grand Falls-Windsor, but by this June, work had begun on 60 new homes in the town.

There’s even a comment in the electronic version of the story, the one that aired on the supper hour news, to the effect that uncertainty about the mill kept a lid on development.  Now that things are resolved, as it were, then people are now spending freely.

Well, that’s exactly the same sort of story the Telegram carried back in February;  but then, as now, the story looks more like a contrived bit of nonsense rather than a factual appraisal.

Take for example, the thing about housing and a supposed dampening effect before the mill close din early 2009.

As the Telly reported in February,  there were 118 housing starts in Grand Falls-Windsor in 2008, but only 50 in all of 2009.  You can get links to the Telly story and other details in the Bond Papers post from February.

Based on that, the current number of housing starts in 2010 is only 20% above the 2009 level. And even if the housing starts continued at the same pace and there were another 60 houses built in the second half of the year, that would only match the last year the mill operated.

That wouldn’t be too bad, if it turns out to be correct.  But it sure as heck is a far cry from the idea that people are thinking differently now that the fate of the mill is known.

The potential cause for the resurgence  - such as it is -  can be found in the sources of cash identified in the CBC story:

The town's hospital — the Central Newfoundland Regional Health Centre — is the community's largest employer. It serves people from dozens of communities in central Newfoundland who spend money in Grand Falls-Windsor when they come for health care.

You can add to that a bunch of other government offices moved into to the town under Brian Tobin’s administration and more recently by the Williams’ one.  In other words, the town is now dependent on government spending for its major economic activity. 

And what isn’t coming from government is coming from migrant labour.  That would be former mill workers who are commuting to places like Alberta.

And lastly there’s another source of growth:  retirees flocking home after a lifetime spent working on the mainland.  Nice as that is, those retirees only add to the burden of an economy where there are fewer and fewer people earning a wage compared to those in the so-called dependent portion of the population.

If you look at it, what you see in Grand Falls-Windsor is not the picture of some sort of miracle but rather of the increasingly fragile nature of the Newfoundland and Labrador economy. No amount of spin from a local car salesman can cover over the very real problems that fragility brings for a beautiful community and for the province as a whole.

- srbp -

Audio Update:  CBC Central Morning Show.  Look at around 6:54 for the start.  The intro to one section repeats the “housing boom” – complete with the 16 to 59 numbers -  evidently because someone forgot to do a simple check of the facts.

25 July 2012

Some help for the St. John’s Board of Trade #nlpoli

…who have suddenly discovered that the provincial economy is in serious need of diversification: a 2010 series called the Fragile Economy.

If they really want to get a handle on economic diversification, BOT chair Steve Power and his colleagues could start by reading the 1992 Strategic Economic Plan.  What the Board of Trade has been slavishly been supporting since 2003 is diametrically opposite to the 1992 SEP and its call for diversification based on  – gasp! – entrepreneurship, competitiveness, and innovation.

Frankly, it’s been pretty bizarre since 2003 to have a bunch of business owners who endorsed excessive public sector spending and clammed up about entrepreneurship, competitiveness and other subversive ideas.  In November 2010, here’s what the chair at the time said:

Chairman of the Board of Trade, Derek Sullivan said government contracts give a competitive advantage for local businesses and “can be a very powerful and reliable revenue stream.”

-srbp-

23 March 2008

The power of apology

"Sorry from me, what does it absolutely mean?"

Louise Jones, interim Chief Executive Officer, Eastern Health

Some public relations practitioners specialize in reputation management.  We all do to one extent or another, but in some mystical parts of the world, there is enough business to sustain an entire practice on it.

Tiger Two is a public relations firm in the United Kingdom that, among other things, has a blog devoted to online reputation management.

Follow that link and you'll find a post summarising a recent article in the Wall Street Journal on the five typical approaches corporations take to online comments that may have an effect on the corporation reputation:

  1. The Do-Nothing Approach
  2. Putting Lawyers on it
  3. Throw Money at the Problem
  4. Invite and Engage the Critics
  5. Stop it before it Starts

Those five describe what most companies and individuals in Newfoundland and Labrador do when something out there is said which can adversely affect reputation. The Premier accuses you publicly of unfair trade practices without a shred of evidence?  Well, publicly traded Aliant opted to do nothing.

That pretty much is the anatomy of Eastern Health's ongoing breast cancer scandal. They opted to stay quiet - a form of doing nothing - and then when things got dicey, the lawyers wound up on the job.  The result of their approach is playing out on the Internet and in newsrooms right now as a result of a public inquiry into the mess. Before it is done, there'll be quite a lot of money thrown at the problem in various ways, including one suspects a settlement to the members of a class action lawsuit.

The list above was compiled in order of popularity.  If you check with a public relations practitioner, especially one who specializes in reputation management, the first one they'd suggest if the fifth one on the list.

That's why we've observed both here and at Persuasion Business that the entire breast cancer scandal would have turned out much differently if Eastern Health nd the provincial department to which it reports handled things differently at the outset.

Truth be told, if Louise Jones had offered a simple apology on behalf of the organization she leads, she might have started the long journey out of what must surely be a very dark place for a great many people.  One of the reasons her organization is in the mess it is in at the moment stems from the largely impersonal, bureaucratic way which the organization as a whole relates to the people who come to them for care.

That's what they are:  people who come to a hospital for care. They are weak, emotional, confused and often fragile and vulnerable, none moreso than a woman facing breast cancer.

The old word for them is patient and while it is an old word, it carries with it the old attitude of care and of a strong personal relationship between the healer and the person seeking healing.  Doesn't matter if the healer is a doctor, nurse, or pharmacist or one of a raft of other health professionals. Old isn't a bad thing, in this case.

But to Eastern Health, as an organization, they were and are clients. Jones referred to them in her scrum as clients, as cold and impersonal a term as anyone ever imagined to describe sick people. It's not Jones' fault.  Her training and her professional and work environment adopted that term some time ago,  Some people in the health care business use it instinctively and often without much consideration. 

The fact that so impersonal a word came to her so effortlessly tells a lot about where her head is, that is, as the person who singularly speaks for the entire regional care system.  It sets the tone at the top, or, in this instance, perpetuates it.  A leader sets the standard for the behaviour of those below in the organization. Even in the bits we've seen thus far, the tone at the top was often wrong.

It still is.

Impersonal and bureaucratic pretty much sums up the response thus far to the scandal. You see, to some, an apology might be seen by some as an admission of liability.  The lawyers (and the government) would scream at the prospect of what, to their way of thinking, increases the payout. Saying nothing and doing nothing is the traditional strategy designed to minimize legal risk and with it, the assumption goes that financial risk is limited as well.

Sounds logical and obvious enough, but in this instance, an apology is all many of the witnesses called to testify at the inquiry so far were looking for. They sought any indication that someone actually cared.  Cared enough to tell them up front that mistakes had been made.  Cared enough to tell them in a timely way, let alone at all what was going on.

That sounds even more logical and obvious: a patient looking for some sign of caring from a health organization.

An apology is also a sign of responsibility.  Someone apologizes and takes responsibility even if if he or she personally did not make the mistake.  Taking responsibility for other people's cock-ups comes with a leader's job.  The tone at the top of the top doesn't encourage that behaviour these days - taking responsibility -  but that's another story. 

Suffice it to say that in her poorly considered comments last week, Louise Jones set entirely the wrong tone in relation to this inquiry and the breast cancer issue. She set the wrong tone for many of the people who work under Louise Jones, diligently labouring every day to deliver care despite working environment both physical, and one suspects mental.

Again, she's not alone in setting the wrong tone. Ross Wiseman's easy condemnation of a doctor who, we learned this week threw a sheet of paper at a patient, screams Ross Wiseman's complete lack of appreciation - former health care, human resources bureaucrat that he is - for the stresses and strains physicians and others have been working under as a direct consequence of the laboratory cock-ups.

Imagine for a moment, the doctor, who is foremost in delivering care for extremely sick patients, who trusts that labs are working properly and makes a treatment recommendation based on those lab results only to find that the whole thing was wrong. He made a mistake  - not his fault - and his patient suffered, in some cases suffered grievously, as a consequence.

And if that weren't enough, because of management decisions made way above his head in the organization, a patient who ought to have been contacted by someone else is now sitting in front of him demanding answers he cannot give. 

Wiseman is lucky that all doctors, nurses and lab staff have done  - let alone patients in this case - is toss the odd piece of paper.  Wiseman is lucky too, to be so far out of touch, so distant and removed from the human issues in the breast cancer scandal that he can willingly, almost cavalierly condemn another but hold himself as somehow a model of virtue in the process.

Ask Fred Kasirye about Wiseman's virtue.

Does he forget the facilities report scandal?  A guy who all but lied about hospital facilities reports to the media and the public has nothing to be the least bit proud of. Hypocrisy just isn't a strong enough word for it and goodness knows, Wiseman and his colleagues have made "hypocrisy" a cliche these days in many cases on many issues.

A simple apology could have done so much:  changed tone, showed an acceptance of responsibility, given a sign, no matter how small, of humanity instead of cold bureaucracy.

Unfortunately, Louise Jones was right in some of her other remarks to reporters outside the inquiry hearings.  She said  "the story [of what occurred] is not going to be told for some time."  It isn't.  That's largely because the organizational culture led to a do-nothing strategy at the front end and that same impersonal management culture still pushes for doing the least at every step. 

Take Jones' comments on the value of an apology that the bureaucratic culture is firmly entrenched, despite the revelations so far. If at the end of this inquiry, the patients involved in this scandal receive an apology only after the legal bills have been tallied, then nothing will have changed at all.

At that point, "I'm sorry" will truly have no meaning.

Here's hoping that in the time it takes for the story to unfold, someone somewhere in the health ministry or Eastern Health learns the simple human value of simple human words:  "I'm sorry."

-srbp-

06 January 2011

Just imagine…

For some reason, the Conservative government of Danny Williams wanted to smash Fishery Products International and sell off the bits and pieces.

FPI used to be a large and successful fish processing company based in Newfoundland and Labrador.
Now it doesn’t exist any more and the most lucrative bits and pieces wound up in the hands of people who don’t do much business in Newfoundland and Labrador.

Just imagine if certain powerful interests in the province hadn’t destroyed the company.  FPI might be doing what one of its former competitors is now doing:  trying to buy into the Iceland fish business.
High Liner announced late Tuesday that it made an unsolicited offer worth ¤340-million ($445.4-million) to acquire Icelandic, one of the three biggest value-added seafood processors to the U.S. food service market. It wants the company simply to bulk up its own business.
That wouldn’t normally be front-page news. But in this case, it was the main story in at least two major media outlets. Why? Because Icelandic is owned by a public pension consortium run by the FramtakssjĂłdur ĂŤslands fund. And the owners have excluded the Canadians so far from the takeover process. High Liner piping up publicly was akin to a foreign company telling Iceland’s politicians to smarten up and open up the sales process to more bidders.
There’s a fascinating story in the Financial Post on the whole thing.

The world is only as small as people imagine themselves to be and, for the past seven years, this province has been dominated by people whose vision is incredibly myopic.

The consequences of such limited thinking are all around us, from the fragile economy that worries the cabinet minister who helped create it to this sort of lost opportunity in the fishery.

- srbp -

15 July 2010

The Fragile Economy: hard numbers

As labradore has been putting it in a series of posts, the provincial public service in the first half of 2010 comprises 53,780 people working directly for the provincial government, the university and public colleges, health care authorities and public school boards.

That works out to 26.2% of the working people of the province.  That’s double the comparable percentage for all 10 provinces.

And here’s the truly unsettling bit:

In the thirty years in which Statistics Canada has measured public sector employment, the percentage of employed people in Newfoundland and Labrador labour force who are employed in the provincial public sector has never been this high.

Those 53,780 comprise 21% of the entire labour force and, once again, that’s the highest this percentage has been in the three decades that Statistics Canada has been measuring public sector employment.

And they make up about 10% of the entire population of the province.

That’s a pretty sharp contrast to the talk in 2004.  As CBC reported, Danny Williams’ first budget forecast a cut of 4,000 public service positions.  By 2005, that planned cut disappeared. The planned cuts have evidently been replaced with a pretty hefty hiring plan.

Now if the private sector had grown at a similar or greater pace, there wouldn’t be so cause for concern.  As the job numbers show, though, the proportion of the labour force employed in the public sector has grown to an amazing level. in some regions of the province – like, say, Grand Falls-Windsor -  the provincial public service is the major employer.

- srbp -

15 September 2007

A genuine defence of democracy

From the eloquent pen of Mark Watton comes a letter in the Friday Western Star criticising the special ballot provisions of the Elections Act, introduced just this past spring in time for the election.

For those who may not be aware, balloting actually began on August 20 even though the election proclamation will not be issued until September 17.

Interestingly enough, Elections NL is running radio spots on VOCM trumpeting the ease of voting by special ballot, presumably as opposed to the usual trip to the polling station. These are not awareness spots; these radio ads aim to increase the use of special ballots by all voters even though special ballots were intended only for those who are unable to attend at a polling station on polling day.

The province appears to be moving closer to a mail-in balloting system without the idea being proposed and properly discussed by voters. That alone should be a cause of public concern as the formal election begins since mail-in ballots favour incumbents to an extent that the very idea of elections is undermined.

Watton makes a compelling argument in defence of some of our fundamental rights as citizens in a democracy.

The Western Star (Corner Brook)
Opinion, Friday, September 14, 2007, p. 6

Changes to Election Act are ill-conceived

Mark Watton

Dear Editor: On Oct. 9 and 10, voters in Newfoundland & Labrador and Ontario will cast ballots under new "fixed election date" regimes. For the first time, the date of each election has been known well in advance, set by legislated changes to each province's elections act.

While campaigning is officially underway in Ontario, the writ has yet to be issued in Newfoundland and Labrador. With the shortest required writ period in Canada at 21 days, candidates will have to wait until next week to officially hit the hustings. After all, the election, despite its predetermined date, has not officially begun. Surprisingly, however, voting already has.

That's right. In an election which is not yet official, in which candidates can not yet legally be nominated, it is not only possible to obtain a ballot already, it's legal to cast it. Valid votes in an election not yet called have been cast since Aug. 20. In all other jurisdictions where mail-in ballots are allowed, such ballots are requested only after the writ has been issued. Manitoba is one exception, where voters may request such ballots before the writ, but as elsewhere will only receive them afterwards. Some provinces are subsequently required to provide these voters with a list of registered candidates when nominations are filed.

There is no reason why similar provisions could not have been incorporated in our Elections Act. No reason, except for a succession of partisan Chief Electoral Officers, and the unabashed self-interest of the current Members of the House of Assembly.

The rationale behind fixed election dates was to curb the advantage of incumbent governments using hastily called elections to pre-empt their opponents. In recent memory, Ontarians punished Premier David Peterson for attempting such a stunt in 1990, while in Newfoundland and Labrador, electors went to the polls in three times (1993, 1996, and 1999) in a span of less than six years.

In Newfoundland and Labrador, the current Elections Act has replaced this perceived advantage for a governing party with a profound advantage for incumbent members of all party stripes. No wonder it was passed with little debate and virtually no opposition.

Similar to their quiet deal to continue the flow of maligned members' allowances through to the election, MHAs did not flinch when presented with an opportunity to use their name recognition and stuff the ballot boxes before any opponents could even register as candidates.

Ten years ago, in Libman v. Quebec, a unanimous Supreme Court of Canada stated: "Elections are fair and equitable only if all citizens are reasonably informed of all the possible choices and if parties and candidates are given a reasonable opportunity to present their positions..." More recently, in Figueroa v. Canada, they ruled that provisions of Canada's Elections Act which effectively ensured "that voters are better informed of the political platform of some candidates than they are of others" violated s.3 of the Charter and struck them down.

It is hard to imagine a greater democratic injustice than rules which permit incumbent candidates to campaign (and do so free from electoral spending scrutiny) and collect votes while their potential opponents cannot even register.

This ill-conceived and poorly-drafted legislation raises many issues of contradiction and disparity. It allows some individuals to receive votes under a party name while others can only receive votes under the name of a candidate, an impossibility given that individuals are not considered candidates until they meet the criteria - several weeks later.

In Haig v. Canada, the Supreme Court ruled that the Charter requires electoral laws to "grant every citizen of this country the right to play a meaningful role in the selection of elected representatives", an impossibility in a province without any means of preventing a determinative number of ballots being cast in a district before candidates are even nominated.

In 2000, the world was stunned as the fate of its only superpower was decided by hanging chads, inoperable voting machines, and a myriad of electoral inconsistencies. A handful of Florida counties reminded the outside world just how fragile democracy could be. The sad truth is we only cared about the flawed process because the result was close. Had either candidate won by a large margin, the inadequacies of America's electoral system would have been swept under the rug for another four years.

The "fixed" election results of 2007 in Newfoundland and Labrador likely won't be as close as those we witnessed in Florida in 2000, nor as consequential. But there's no reason to be any less concerned.

Mark Watton is a Newfoundlander studying law at Dalhousie University. He is a former political staffer residing in Halifax.
-srbp-