There's an acronym among the amateur computer programmers out there: GIGO. It stands for Garbage In; Garbage Out. In other words if you start off wrongly, then odds are what comes out the other end of the process will be wrong, too.
It really applies to just about any process. Like say an editorial which is ostensibly about the current racket over Equalization and political promises made and broken:
Welcome to the nation's capital, where it doesn't take long to discover why Newfoundland and Labrador's fight for offshore revenues is such a hard sell.
There's the garbage in and here's the garbage out:
Just informing people in other provinces about the nuances of this debate is nearly impossible, and in the absence an understanding of the nuances, you end up sounding like an oil reactionary of some kind, lathering up about federal unfairness while everyone else is waiting for the next dish to arrive.
You see there is no "fight for offshore revenues". There hasn't been since 1984 when the federal and provincial government signed the real Atlantic Accord.
The current political racket isn't about offshore revenues; the provincial government gets them and spends them, just as it has since oil started flowing in 1997. All of them too, just like in any province where the oil and gas is on land. Just like the minerals on land in Newfoundland and Labrador. it doesn't lose a nickel of offshore revenues the province is supposed to collect and when it comes to royalties - the rent paid to the resource owner for the right to develop them - the provincial government is the only one collecting them and spending them.
The current racket is about something else and, to be brutally frank, it isn't clear what the row is about beyond some need for political theatre.
On the face of it, the fight is about Equalization and how to treat revenue going to the provinces from non-renewable resources, things like minerals and oil and gas. So let's consider the provincial government position in that light and see what happens.
Equalization is a top-up scheme. Provincial governments that don't collect enough revenues from their sources to meet a national average get a transfer from the federal government. The money doesn't come from other provincial governments. It comes from federal revenues, from things like personal and corporate incomes taxes. That's your pocket and mine, whether you live in Petawawa or Pasadena.
If we ran the program based on the official provincial government position in 2005/2006, Newfoundland and Labrador wouldn't get a nickel of top-up after next year. Every penny of oil and mineral money would be counted. The provincial government would collect more revenue than the national average and therefore, there'd be no more top-up.
Incidentally, the provincial government here currently spends more than all but two other provincial governments, calculated on a per person basis, but that's another issue.
As for Equalization offsets, the federal government would have paid out more in its $2.0 billion transfer in 2005 than the famous 2005 transfer deal (called the Atlantic Accord to be deliberately confusing to most of us) would have generated between 2004 and 2009 without the up-front cash.
On the other end of the spectrum, leaving all the oil and mineral revenues out of the calculation might well have delivered more than the $10 billion the Premier and his supporters are currently focused on. That figure came from a calculation that used an average price of oil that is now $25 to $30 per barrel lower than current prices. It also cut out in 2020-2021. Carry it on past that date and the potential top-ups go way beyond the Premier's adopted figure.
The problem with that scenario is at the heart of the current dispute.
Provinces looked to change Equalization a few years ago because they felt the existing system treated them unfairly. The expert panel set up to study it agreed. They concluded the provincial government's approach worked against it and favoured provinces that had little or no revenue from non-renewable resources. Those with non-renewables wouldn't catch a break and would have to spend that cash to pay the day-to-day bills without being able to create some sort of long-term benefit from them that would be felt once the resources were gone.
By the same token, the other scheme, in which non-renewables were left out, worked against the provinces without much cash coming from things like oil wells and mines. Both schemes - all in or all out - didn't seem fair across the board. none of this was a secret, especially to provincial governments which, in the case of the local one, opted for some reason to hitch its political future to a promise that was known to be as much of a dead issue as the system as it existed.
Instead the experts came up with the current system. They argued their system was fair because, if nothing else, it balanced out the advantages and disadvantages of the all-in or all-out options. Argue with it all you want; that's the rationale they offered.
There's something compelling about the argument, though, given that the 10 provincial governments couldn't come to any agreement among themselves on all-in or all-out or on anything else except the need for some change. The Equalization program that we have is one that is in effect, a compromise between the first version of Danny Williams' Equalization idea and the one he now has latched onto.
No surprise either, that many people outside Newfoundland and Labrador, like a great many inside the province, don't quite get the idea Danny Williams is pushing.
After all, he's basically arguing that every taxpayer everywhere in Canada should funnel cash into the local provincial bank account based not merely on a political promise but because this province deserves it somehow. Spending more money per person than seven other provinces, Newfoundland and Labrador wants more still. And that's despite reaping huge windfalls from high oil and ore prices.
The debt, you say? Well, those same taxpayers from St. John's to Victoria can also see the same provincial government doing nothing of consequence about its own debt burden. There may be something coming in the next budget but they likely heard loudly and clearly the recent admission by finance minister Tom Marshall that they'd done very little - some might say nothing - to reduce the provincial debt load despite running surpluses and still boosting public spending over the past couple of years well beyond the rate of inflation.
The garbage out part of the editorial is the idea that some mainlanders - people in Ottawa especially - are somehow blind to reality, that they sweep aside the little things that are really important just like - as the metaphor goes - those little sidewalk sweeper machines in Ottawa flick away snowflakes.
Not really. They just aren't confuddled by the latest political blather being offered, the kind that would claim - for example - that St. John's city sidewalks are already cleaned of snow magically overnight and that Mile One Stadium is not an economic sinkhole.
After all, if you believe this row with Ottawa is about offshore revenues, you'd likely be willing to believe just about anything.
-srbp-
