30 March 2020

All around in circles #nlpoli


Going around in circles must be frustrating.
Plummeting crude prices have dropped refining margins to negative numbers and so it isn’t surprising that Come by Chance refinery announced Sunday it is shutting down operations for upwards of five months.

The official excuse is the pandemic but the real reason is economics. There’s no point in running a business that isn’t making money.  And you cannot make money in a global market where demand for petroleum products has dropped like a stone.

The same economic reality that is hitting the oil industry is hitting governments in provinces that depend heavily on oil royalties.  In Alberta, Western Canada Select was trading at less than five Canadian dollars a barrel on Friday. 

According to the National Post, the provincial government estimates that every dollar in crude prices costs the Alberta government $355 million in lost royalties. Economist Trevor Tombe estimates the drop in crude prices thus far has cost the Alberta government about $5 billion in royalties.

Newfoundland and Labrador is in worse shape.  Going into what is now the crisis year of 2020, Dwight Ball’s Liberal administration forecast as deficit of almost $800 million.  Last Thursday, the provincial legislature approved government requests to borrow almost $3 billion dollars directly or through the provincial hydro corporation.  Finance minister Tom Osborne told reporters outside the House of Assembly he had no idea how big the 2020 deficit would be.

27 March 2020

Facing the financial wall, again #nlpoli


Newfoundland and Labrador Hydro makes money by making and selling electricity. In 2018, the last year for which we have statistics,  Hydro made about 40 gigawatt hours of electricity and sold it for slightly less than a billion dollars. Most of the electricity went to Quebec and most of the money came from Newfoundland and Labrador.

On Thursday,  the House of Assembly gave Hydro permission to borrow $500 million in 2020 to cover losses from sales.  “Anticipated reduction in revenue during the pandemic” is the way NTV’s Michael Connors described it on Twitter.

That’s half Nalcor’s income.

No one explained on Thursday during the pantomime session of the legislature why anyone expected that half of Hydro’s business would disappear during April, May, and June.  No one nows if they will lose money,  natural resources minister Siobhan Coady said in the House.  This just allows them money if they need it.

24 March 2020

Bank of Canada to help GNL make payroll #nlpoli

Bank of Canada
234 Wellington St, Ottawa
The Bank of Canada announced today that it will purchase up to 40% of money market securities with terms to maturity of 12 months or less that are  issued directly by Canadian provinces.

The Bank of Canada will make the first purchases on Wednesday, 25 March 2020.  The purchases will include treasury bills and short-term promissory notes. The Bank may adjust the percentage based on markets.

The program – called Provincial Money Market Purchase (PMMP) – will give help to all provinces.  It will be especially welcome news for the Government of Newfoundland and Labrador, which relies on short-term debt to fill in gaps in its cash flow. 

There is a relatively limited pool of capital for the provincial government anyway.  Its relatively low credit rating can make it harder for the government to borrow money at rates it can afford.  For about six months in late 2015 and early 2016, the provincial government came close to being unable to meet payroll due to a shortage of capital in the markets and uncertainty in the markets about the intentions of the provincial government after the 2015 general election.

23 March 2020

The doctor is out... of the province #nlpoli


Health minister John Haggie announced on Friday that doctors in the province could now start seeing patients remotely either by telephone or using video conferencing.

Kinda bizarre, though, given that some doctors in the province have already been doing this.

In any event, using technology to see patients remotely is a good idea not only now but in the future.

It allows doctors to treat patients in remote areas where there is a constant turn-over of resident doctors.  Last year, SRBP wrote about the potential for technology to help with the supply of family doctors

Meanwhile, last week Shoppers Drug Mart also quietly rolled out a service in conjunction with a cash-for-service doctor company called MAPLE. 

This is “virtual care”  - a truly hideous term - as well but it comes with a big twist people need to watch out for besides the cat MAPLE isn;t covered by MCP. The same twist will affect any local patients who are in Newfoundland and Labrador but wind up being treated by doctors living and working outside the province using remote communication technology.

Under a new policy established in March 2017,  the College of Physicians and Surgeons of Newfoundland and Labrador has decided that care takes place where the doctor is, not where the patient is.  Under the old policy, CPSNL held that care took place where the patient was.

Under the new policy,  a patient in Comfort Cove who sees a doctor via Skype while the doctor is in British Columbia will have to complain to the BC College and deal directly with the BC College about it.  CPSNL will pass the complaint along but after that the patient is must find their own comfort.

The policy doesn’t just cover Canadian doctors, whose licences incidentally, the local College doesn’t recognize as valid anyway.  Same thing applies for a doctor living anywhere in the world.  You see, the CPSNL policy states that the “College considers the practice of medicine to take place in the jurisdiction in which the physician resides and holds a licence.”

So if the local patient winds up dealing with a doctor in the United States,  Mexico, Sri Lanka, or India, the complaint will have to go to whatever country the doctor is in.

These days, technology allows doctors from anywhere in the world to treat patients anywhere else.  It’s a common practice in commercial shipping where doctors work for international contractors.  Got a problem on a rig offshore or a ship at sea and you could find the captain calling a doctor in Europe whose company has the contract to supply health care to the ship owner’s crews. 

But people living in Arnold’s Cove are not used to that.

Patients need to look closely at the contracts they sign for medical service under virtual care by doctors not living in Newfoundland and Labrador.

And, of course, no one from the provincial government or the College of Physicians and Surgeons has told the public about this let alone warned them of the implications should something go wrong.  

After all,  there really isn't anyone in the province responsible for protecting the public in these sorts of things, is there?

-srbp-


Experience Counts - COVID Economic Balls-Up Edition #nlpoli


On Friday Premier Dwight Ball took a question from reporters about the Liberal leadership that is still underway.

In a moment of egotistical boasting, Ball said it “takes experience to get through this crisis that we're dealing with. Someone said to me this morning it takes experience to do that job, and not often do you see a card on the back of a fire truck saying 'Novice Driver’”.

On Friday,  the provincial government issued an order under the Public Health Protection and Promotion Act that directed individuals entering Newfoundland and Labrador from out of the province – either originating or returning – to enter a mandatory period of isolation for 14 days regardless of whether they were exhibiting symptoms of COVID-19 or not.

Problem:  The Friday order, as written, effectively shut down the provincial economy and cut the province off from supplies of food and fuel.
All individuals arriving in Newfoundland and Labrador from outside the province must self-isolate for 14 days, including those individuals arriving from other provinces and territories in Canada.
The original order applied to *everyone*:
  •  crews on Marine Atlantic ferries,
  • tanker crews, including the folks coming to Come by Chance and the refinery, 
  • OCEANEX crews and other shipping companies that bring food, fuel, and essential supplies into the province,
  • people who work on one side of the border in Labrador and live on the other,
  • people involved in supplying electricity to the province, 
  • crews working on and supplying the offshore platforms,
  • medical personnel arriving to help treat patients or back-fill positions, 
  • airline crews and passengers of all kinds,
  • helicopter crews servicing the offshore rigs, which are outside the three-mile limit that is the province's jurisdiction, and
  • truck drivers who bring everything and anything into the province and who take manufactured goods out again.
No one in the provincial government, least of all the people who wrote up the order or the ones who approved it, realized what they were doing.

And so, after some uncertainty in the world outside government and a bunch of frantic calls and emails, the provincial government issued a second order the next day exempting all those people needed to keep the province running and keep people fed.

Someone check for a Novice Premier sign on the back of Dwight's car.

-srbp-



11 March 2020

Cleaning up the mess of Muskrat Falls #nlpoli


There are a couple of points in his 1,000 page report where commissioner Richard LeBlanc refers to politicians and other officials of the Government of Newfoundland and Labrador as being naive in their dealings with Nalcor officials about Muskrat Falls. He says Ed Martin took advantage of the politicians and bureaucrats.

It is arguably one place and perhaps the only place where LeBlanc is wrong in his description of Muskrat Falls and how it came to be.

Muskrat Falls was, from the outset a political project, initiated and then relentlessly pursued by a group of politicians for their own reasons.  Their leader, Danny Williams, selected Ed Martin to work with him on the Nalcor project, chiefly to build something on the Lower Churchill as Williams’ legacy.

Martin told LeBlanc that he had one job – to build the project – and that was all of it. But Martin did the job for Williams.  Along the way Williams recruited to his circle senior bureaucrats who also actively collaborated in the project for their own reasons.  It was this circle that met in April 2010 at The Rooms and decided to plunge ahead with the redefined project now known as Muskrat Falls.

They were not naïve.  They were not duped.  They did not care.  They had one goal. They worked together to achieve it from the time Williams launched the venture in 2006 until thd last of them resigned in 2016.

Muskrat Falls was the bastard child of ego and ambition, nothing more.  All the other ideas associated with it, such as retribution for the 1969 power contract, were never anything more than lies – rationalisations to gain support for the project.  The cabal from The Rooms deceived the public and they deceived themselves.

They wanted it built and nothing would stop them.

10 March 2020

NL after the oil boom and hydro bust #nlpoli


Newfoundland and Labrador Historical Society

George Story Lecture and Annual General Meeting

Marine Institute - Hampton Hall


The Return of History?

Newfoundland and Labrador 
after the Oil Boom and the Hydro Bust


Dr. Jerry Bannister
April 30, 2020


Building on the themes established in A river runs through it (2012), Dr. Bannister will explore the changing roles of history since the province’s economic downturn. 

He will trace patterns in political culture and collective memory from the Williams era to the present day, as the province experienced the end of triumphalism and the return to a politics of loss. 

In discussing the causes and consequences of the Muskrat Falls crisis, he will examines the ebb and flow of Newfoundland nationalism over the past 20 years. Is this province breaking with its past or returning to its 20th century narrative?

A graduate of Memorial University and the University of Toronto, Dr. Jerry Bannister is an associate professor of History and Acting Director of the Marine Affairs Program at Dalhousie University.   

Born and raised in Newfoundland and Labrador, he is a past member of the Executive of the Newfoundland and Labrador Historical Society.

Recent books:
  • Elizabeth Mancke, Jerry Bannister, Denis McKim, and Scott See, eds., Violence, Order, and Unrest: A History of British North America, 1749-1876. Toronto: University of Toronto Press, 2019.
  • Melvin Baker, Jerry Bannister, and Christopher Curran, eds., Essays on the Legal History of Newfoundland and Labrador. St. John’s: Law Society of Newfoundland and Labrador, 2019.
  • Jerry Bannister and Liam Riordan, eds., The Loyal Atlantic: Remaking the British Atlantic in the Revolutionary Era. Toronto: University of Toronto Press, 2012
  • William R. Keylor and Jerry Bannister, The Twentieth-Century World: An International History. First Canadian Edition. Toronto: Oxford University Press, 2005.
  • Jerry Bannister, The Rule of the Admirals: Law, Custom, and Naval Government in Newfoundland, 1699-1832. Toronto: University of Toronto Press, 2003.
-srbp-

09 March 2020

Remembering Simon Lono #nlpoli

Today is Simon Lono's birthday.

He would have been 57.

This coming Saturday there's a celebration of his life.

Drop by and share in the memories.

And if you cannot make it but want to remember Simon, consider making a donation to the Newfoundland and Labrador Speech and Debate Union.













-srbp-

02 March 2020

Oil, Premiers, and Coming Soon #nlpoli

Impact of Hebron flat royalty at prices below US$50
click to go to 2015 post
West Texas Intermediate and Brent crude were both trading below US$50 last week.

Oil from the Newfoundland and Labrador offshore sells for Brent prices.  

If it is down, then government makes less.  Bit of an offset potentially in the exchange rate but they key thing is that when oil is worth less, the government makes less.

WTI price is important because it affects payment of a super-royalty on some projects that have already hit pay-out. 

With oil prices lower across the board,  the provincial government takes in less money.  Month-to-month that might not be a lot but over time it can add up. 

Watch out for the impact of lower oil revenues on the 2019 fiscal year, just coming to an end on 31 March.

... and...

Watch out for the forecast for oil prices in the 2020 budget.  

The provincial government already forecast a deficit next year of about $800 million (accrual).  That’s about 50% higher than the forecast deficit in 2019, once you take out the accounting for the Hibernia royalty transfer deal that keeps getting called the Atlantic Accord.

24 February 2020

On the need for politics #nlpoli


Politics [is] the art of pursuing common interests through ...active listening, advocacy, public persuasion, compromise and negotiation.

William Ford Coaker,
the father of the Commission
The people from Newfoundland and Labrador quoted in the Globe and Mail on Friday described the problem facing the province today.

We are not talking about chronic overspending, an aging population that will need more health care, or the impact of Muskrat Falls.

The problem is the shared attitude among the province’s opinion leaders  - the ones quoted by the Globe and many more besides - that *any* solutions to the province's financial problems are bleak and politically unacceptable.

Here are the bits from the Globe and Mail piece, ironically by some guy named Greg Mercer, a name he shares with the current Premier’s chief of staff:

  • Political science professor Amanda Bittner: “You’re going to be making some tough choices that nobody is going to be happy with, and it’s probably going to be miserable.”
  • Lawyer and cable television show host Melissa Royle Critch described the problems as “daunting” and said the debt problem was “insurmountable.”
  • Progressive Conservative leader Ches Crosbie: “We are in a death spiral.”
  • Outgoing Premier Dwight Ball said that borrowing to cover continued deficits will be the major challenge facing his successor.
  • Economics professor Scott Lynch said,” [Dealing with the financial problem is] going to be a nasty situation. These cuts will be extremely painful.”
We can add to that finance minister Tom Osborne who recently dismissed out of hand a proposal to put the government’s liquor corporation in the private sector, like Alberta did more than 20 years ago.  The result would create jobs,  preserve provincial tax revenues, and bring in a couple of billion dollars in the sale.

But Osborne, like all the others leading the province will brook no change in anything.

They simply want someone else to pay the bills.

17 February 2020

Settlement in ExxonMobil dispute #nlpoli

CNLOPB regulates the Newfoundland and Labrador offshore
The Government of Canada and ExxonMobil have reached a settlement in the oil company's 16-year-old dispute over the Canada-Newfoundland and Labrador Offshore Petroleum Board's requirement for spending on research and development.

In the settlement, reached in January,  the Government of Canada will pay ExxonMobil CDN$35 million to end an arbitration under the North American Free Trade Agreement. 

ExxonMobil challenged a CNLOPB requirement that offshore operators of producing fields spending an amount of the earnings on research and development in the province.  ExxonMobil challenged the requirement in 2004 and in 2011 won an arbitration that found the requirement violated ExxonMobil's rights under NAFTA.  The award in the first claim was $17.3 million.

The second claim was for damages incurred between 2012 and 2015 not included in the first award. Before an amended version of the claim proceeded, the parties reached a settlement.

-srbp-

11 February 2020

Interesting news, buried under bull #nlpoli

There are two aspects to Monday’s announcement about Muskrat Falls and electricity rates:  political and practical items related to Muskrat Falls.  

Another set of decisions are actually related to the provincial government’s non-Muskrat Falls finances.

And then there’s a little tidbit about how far behind Muskrat Falls is.

Political - If this is how Dwight treats his friends…

Monday’s announcement was a political stunt pulled purely for the province's benefit apparently to cover over the fact that there was no agreement as Dwight Ball had promised before Christmas.

The announcement came front-end-loaded with the sort of ego stroking and puffery that is not merely unnecessary but tends to turn off audiences listening for a major announcement about arguably the most pressing public issue.

10 February 2020

The Rate Mitigation Circus of Horrors #nlpoli

Late Friday evening, the Muskrat Falls rate mitigation circus came to town.

Again.

Around 7:40 PM, long after everyone with sense had gone home for the day, natural resources minister Siobhan Coady released the last report from the Public Utilities Board review that started in 2018.

As expected, it told us nothing more than what we already knew.

That didn't stop people from getting upset, yet again, at the prospect of electricity rates twice what they are currently paying if no one does anything about it.

We got this reminder because the charter Dwight Ball gave the PUB was to repeat precisely what Ball knew his officials had already done in 2017.

It was like another pathetic re-run of the ploy from 2011 when Kathy Dunderdale – just as jammed up then as Dwight Ball was in 2018 – asked the PUB to look at Muskrat Falls using all the same assumptions and limitations that led the government to endorse the project in the first place.

In this case, Ball was in a pickle – and likely a rage - because he and his star by-election candidate at the time stood in front of a crowd during a by-election, promised everyone they wouldn’t have to pay for Muskrat Falls,  and then watched everyone burst out laughing since the two obviously had no idea what they were talking about.

So, someone in the political back room came up with the novel idea of bringing the PUB in to repeat exactly what the officials had already done.  When something works the first time, it is always smart to do it again. /sarcasmfont

You cannot make this shit up.

So here we are on Monday morning, precisely where we were before.

03 February 2020

Sliding by #nlpoli

Sliding b'ys.

During the recent emergency in eastern Newfoundland and Labrador, both the provincial government and the City of St. John’s denied the public access to basic information about the emergency.

Instead, they both preferred either self-serving political messages – “all is well.  We are doing great job” – or authoritarian edicts and directives -” stay off the roads”.

The City news release quoted in last week’s post typify this.

Supposedly it was about the lifting of some restrictions on the public. 

That’s what the headline said.

But the first sentence - supposedly the most important information in the release was a self-serving statement:

City of St. John’s snow clearing crews continue to work around the clock to clear streets for regular traffic.
The middle bit contained short statements about what stores could open for a few hours.

31 January 2020

City bungled emergency. Residents paid price. #nlpoli

EOCs bring key people together in one spot  with the
information needed to make crucial decisions
during an emergency.
Now we know why the City of St. John's emergency response was as disjointed and chaotic as SRBP described last Monday.

The City decided not to activate its emergency plan even though they declared a state of emergency.

Here's the way CBC described the decision in a comment buried way down in story on the disastrous disaster response:

The provincial government ran its own emergency centre, and while St. John's has its own emergency operations centre, Mayor Danny Breen said it wasn't activated because communication with various channels such as city staff and first responders was able to be done over the phone.
"If we had opened the emergency operation centre and sent everyone to one place, first of all we wouldn't be able to get them there, and the resources to get them there would have been taken away from what the problem was at hand," he said.
Breen's comments don't make sense given the City had a week's warning of the huge blizzard that swept eastern Newfoundland on January 17, 2020.