31 October 2008

"par l'argent et par la vote ethnique" - 13 years later

Geez, it's funny how quickly some things slip by.

October 30 marked the 13th anniversary of the 1995 Quebec referendum.

What people seem to remember more than anything else is then-Premier Jacques Parizeau's speech delivered after the results poured in.

He blamed the separatist on two simple things - money and the ethnic vote - and promised that there would be another vote before long: " we won't wait another 15 years."

The video  above is a rather poor copy of the original CBC/Radio Canada broadcast. 

Still, it's worth watching a 65 year old Parizeau giving vent to his frustrations, lashing out and warning of the potential for revenge being wreaked by unnamed forces.  All the more reason, he then says to have the Parti Quebecois there to defend Quebeckers.

Threats of imaginary attacks. Ranting about "us" and "them".  Dividing the world along ethnic lines.  The need for a political force to defend - to stand up for - the province. Such familiar ideas.

For those who can't follow the speech in French, you can find the whole thing with English translation at CBC's digital archive.


Cabinet stir

Shake-up suggests a substantive change.

This is more like a minor shuffle, a bit of a stir in cabinet as a few people around the table exchanges files, switch nameplates and scrape their chairs a bit on the floor changing places around the table.

It represents some tactical shifts but the cabinet remains remarkably the same despite the dismal performance of some of the ministers.  Some of the most dismal even got promotions.

1.  Biggest Feature:  Moving Jerome Kennedy to finance from justice gives one of the heirs apparent to the Premier's job some experience in dealing with the full spread of government activities.

2. Old news to Bond readers:  At the same time, moving a strong-willed minister into the portfolio at this point should make it clear that the provincial books are going to be tightened or, at the very least, any groups looking for government cash are going to have quite a racket on their hands.

"We are also shifting gears from a prosperous time to a more stringent time, for want of a better word," said Williams, whose government projected a $544-million surplus in the spring budget, based largely on high oil prices.

"It could be a tough period we're going to go through as well," Williams added.

Could be?  More like "count on it".

3.  No surprise: Kathy Dunderdale, fronting for the premier in natural resources adds the title "deputy premier" to her list of responsibilities.  She's been acting in this capacity and the extra title is recognition of her ability to follow instructions or least be less than forthcoming with embarrassing facts.

4.  Still one short:  Susan Sullivan comes in.  Charlene Johnson takes medical leave, with her portfolio now handled by another acting minister, on a go forward basis.

5. A promotion for what, exactly? Intergovernmental affairs should be a senior portfolio, handled by an experienced minister.  The trend at both the federal and provincial levels lately has been to hand the job to second or third stringers.

In this case, it's Dave Denine whose time in municipal affairs was notorious for its embarrassing moments.

6.  Structured to underperform:  Tom Hedderson as new minister of fisheries likely ensures that Derek Butler and anyone else interested in fisheries renewal will be left SOL by the cabinet stir.

7.   Stay the course:  Ross Wiseman and Joan Burke keep their portfolios despite much speculation  - even within Provincial Conservative circles - that they would be given a rest from their burdens.

8.  Back to the sidelines:  Having come back into the limelight through the innovation and fisheries portfolios, Trevor Taylor - once a high flier  - heads off to look after snow removal. No one is going to intimidate Trevor about road work, but then again, political staff in the Premier's Office have that one under control anyway.


Friday's "Just Askin'"

With nickel prices down and the markets uncertain, would it sensible for VALE INCO to delay start of the smelter at Long Harbour and pay the penalties set out in the development deal with government?

Not cancel.

Just postpone and take the penalties in the short term?

Just thinking out loud on a Friday.

Just askin'.


The fishery: We are structured to underperform

[Note:  Following is the text of an address delivered by Derek Butler, executive director of the Association of Seafood Producers, October 30, 2008 to the Rotary Club of St. John's.

Butler's theme is both familiar and timely in light of recent decisions by the provincial government in the processing sector.  The audio of Butler's interview with the Fisheries Broadcast on the transfer of two licenses to existing plants can be found at seafoodproducers.org.]



Thank you, it is very kind of you to invite me to address you today. Good to be here, and again, I appreciate the invitation.

When a baby was killed when an airplane crash in the western USA in 1989 by being ripped out its mother’s arms and dashed up against the bulkhead, a political “solution” was proposed by having a federal law requiring babies to be strapped into their own seats on airplanes....

Well, that sounds eminently reasonable, I think we could all agree on first blush. Much of political rhetoric is based on this kind of illustration. Serious issue: step 1, identify the wrong problem, and be seen to be fixing it.

Or politics often identifies isolated problems to be solved, - not as trade-offs within an over system constrained by inherent limitations of resources, knowledge, etc.

Let’s see what happens with the airplane illustration.

…such a law, requiring parents to purchase an extra seat, would divert a portion of the traffic to cheaper alternative modes of transportation on the ground – most of which have higher mortality rates than airplanes, the result being that over a period of a decade, there would be an estimated saving of one baby’s life in airplane crashes, a loss of nine lives in alternative ground transportation, and an additional cost of $3 billion. [“An impact analysis of requiring child safety seats in air transportation,” Child Restraints Systems on Aircraft, Hearing before the Subcommittee on Aviation of the Committee on Public Works and Transportation, House of Representatives, July 12, 1990, p.215.]

The story illustrates dramatically, even graphically, the consequence of public policy defined on the basis of good intent, emotion.

Most - certainly too much - public policy is based on the intended consequence of that policy. “Save babies lives in fast braking or crashing airplanes.”

But you can only judge a policy by its actual outcomes, not by its intended consequence. The actual consequence is what counts. Sounds redundant, but it needs saying, and repeating.

Again, to quote my favorite economist, Thomas Sowell, “…the purpose of any policy tells you absolutely nothing about what will actually happen under that policy.”

The earlier example of child restraint on airplanes – which comes from his book The Vision of the Anointed: Self-congratulations as a Basis for Social Policy - leads to a new policy with a potential cost of billions, and more sadly, lives.

I am happy to say, after years of study, the FAA decided against the change, given the cost-benefit analysis above.

But that is how we too often approach things: with the intent, and often good motive, but without consideration of consequence, or outcome.

And I use it today, to illustrate a contention I’ve come to possess about how we manage and direct the fishery, in terms of public policy.

A fish plant closes?

Well, let’s save that fish plant. Noble goal, and in some sense, eminently feasible even, certainly for a given period.

A given number of actors – mayors, MHAs, ministers and union leaders, even new plant owners – can bring the forces to bear to save a given plant.

Having spent some time either working in or observing the political process – the world’s best spectator sport – I’ve come to see this as a classical political problem from this side of my career: identify the wrong problem, and then fix it or implement a policy with one intended consequence, and get an altogether different result. Ignore the result, and claim success.

Plant closes? Then let’s save the plant.

But why is the plant closing?

Is there enough resource to sustain it?

Is there a sufficient work force?

Does the plant have a procurement strategy? Is it overburdened with regulation? Does the plant have insufficient margins, squeezed between paying x for raw material, and only getting x-plus back from the market? Does it produce what the market wants, at the price point and in the quality form the market desires or requires?

We don’t often ask these important questions as much as we consider what might be the impacts on that particular plant closing on the local workforce and community.

Instead, we need to go back to the real business options, and there are just two, to maximize the value of the industry, to drive up incomes.

One, we can reduce our costs, and two, we can increase our revenues. Or we can try both.

The FFAW is on to the latter, as if that will solve all of our problems, but in a rather simplistic fashion. Just get more money out of the market. Charge more for the product. Ask for more money from those who buy our seafood.

Well, as I’ve reminded them in collective bargaining on occasion, when they suggest that is the way to tackle our problems, it doesn’t work that way.

GM did not lose $38.7 billion dollars in 2007 simply because some guy on the lot forget to flip up a higher price on the windshield.

They didn’t lose $2 billion in 2006, because someone in accounting forget to add a bigger digit to an invoice.

They lost money for structural reasons, related to tax liabilities, pension funds, labour costs, and a host of issues.

And asking the consumer for more money for those costs is not the solution, because in a free market, something is worth what you are willing to pay for it.

That includes a room in this hotel, an apartment or house for rent, or even something less tangible, like membership in Rotary.

And same for our seafood. It is not worth what we invest into it, the cost of harvesting, or production, or inventory costs, or financing costs. It is worth what the market wants to pay, or more precisely, is willing to pay.

Same thing for every stitch of clothes on your back, and every meal you’ve ever eaten.

That’s the economics and business reality of the world, and has been some time.

And let’s not have any of that foolishness that it doesn’t work. We are richer than 98% of the rest of the population of the earth. We are healthy, well-fed, satisfied beyond belief materially.

On the real indicators that matter: caloric intake, infant mortality, maternal deaths, life expectancy, access to potable water, literacy, you name it, democracy and free markets deliver.

All this to underscore that the fishery is a business, and just like much else of what we do to make a dollar, it should be structured so as to perform in that context; we can’t just ask the market to pay for our problems.

I am new to the fishery. I worked in, as the introduction noted, a completely different field, literally and geographically. This job is my first career employment in Newfoundland, which I started in 2004 when my wife and I moved home, like so many do, or want to.

I joke I am one of the few people who has come home to work in the fishery.

But work is a stretch. That’s not to say people in my business, in processing or harvesting, don’t work hard when they work.

But we have million dollar boats, and two million dollar boats, and multi-million dollar fish plants that all work for months, if not mere weeks.

That’s underutilization, or to look at it another way, overcapitalization, monies unavailable for investment in retirement funds, tourism, small business, education or training. It’s the opportunity cost of our structure.

If any airplane flew a mere 10 trips a year, and spent the rest of the time on the ground, we’d recognize we had a problem.

If Sobey’s was open just a few months a year, we’d laugh at their chances of making a go of it.

If hotel said our rooms are only for rent April 15 through end of Sept, and we have people sitting on the lawn waiting to get in in July, who might gladly take a room in October, but we close then, all our staff are on income support, we hope they’re around again in the summer when we open, cuz we stay closed for the winter, even though people are coming, we’d rather squeeze all our business into a few months…

What would we call it? …well, we’d call it the fishery.

Because we’ve done just that. And for too long it has been good enough. FAO and the World Bank have just released a report a few weeks ago called The Sunken Billions, addressing this same problem the world over. Some $50 billion, at a conservative estimate, representing the value of the fishery gone missing from the wrong structures and overcapacity.

Our problem is we have chosen to dissipate the wealth, with our structural inefficiencies, among as many participants as possible, to ensure we keep as many people working, spread it around, save this and that town, save this and that fish plant.

Well ask yourself: is it working?

Are our young people staying around because things are so good?

Towns repopulating because the fishery is such an opportunity?

The world beating a path to our products, or are we out selling a commodity?

We not asked too much of the fishery, for too long, and now we reap what we have sown: a social programme that has said $8000 or $10000 each is enough – and now our young people are gone, and soon, an entirely new demographic will follow: people of my parents generation, who want to see the grandchildren grow up… but have to go to Alberta and other places to do it.

My contention is the fishery of today is the fruit of 30 years of social engineering, of policy intent, with unfortunate consequences. And we lost one fishery that way already.

Alberta’s boom ‘today’ is one factor in people leaving the fishery, but so is 30 years of “this” is what the fishery will be, and not “this.”

We’re not living on the entrepreneurial merits of the fishery. We’re living off the natural abundance and wealth of our location, groundfish in its day, pelagics, and shellfish today.

Despite ourselves, almost, we have made something of it.

We open the fishery, squeeze in all the product like we’re drinking through a fire hose, and pray to the heavens the market can choke it down just as fast so we don’t have to finance it over extended periods and the currency doesn’t move against us while we are waiting.

The economist Michael Gardner addressed a recent gathering of industry at the coldwater shrimp conference in St. John’s, which brought together industry players from across Canada, the US, Europe and elsewhere, to address challenges in our shrimp industry.

And he said something very stark, very true. “We are structured to underperform.”

We have a billion dollar fishery, in terms of the production value of our fishery again last year. It was never more than half that in the past, but has hit the number or surpassed it several times in recent years.

We have a wealthy industry, or rather, an industry with potential for great wealth.

But as Gardner said, we are “structured to underperform.”

We have too much processing capacity.

We have too much harvesting capacity.

All designed and encouraged by different governments and organizations and vested interests to ensure the money was spread around.

This is not a business model that can endure. We can struggle. We’ll make a go of it. If anyone can, it’s a Newfoundlander …

The earlier example of airplane safety and child restraints illustrates the stark reality of every public policy choice we face. Every public policy is a trade off. There are consequences to every action.

And the intended consequences don’t count for much.

Someone once said "Some people embrace change, some choose to fight it. The ones who embrace and adapt, win." – Unknown

Or perhaps Henry Ford captured it bet when he said if you had asked the people what they wanted, they would have said a faster horse.

We in Newfoundland and Labrador must change our approach to the fishery, fundamentally, philosophically, from 30,000 feet.

Otherwise, we risk another reality, captured by the following words:

"If you dislike change, you're going to dislike irrelevance even more." Eric Shinseki

We need change, and it needs to start with the full acknowledgement that the fishery is a business, for the sake of harvesters in it, who are losing crew now to better opportunities in Alberta and elsewhere, plant workers for whom 10 or 15 weeks work is not enough.

We have built the industry on a deck of cards. We have marginalized incomes, tried to save fish plant after fish plant, increased harvesting capacity, and what do we have at the end of the day? Mediocrity as an industry. And every intervention leads to the Hayekian conundrum: once a government does intervene, the logic of intervention forces them to keep at it, to fix the last intervention. Can any government resist that (and after what damage is done?) so that instead we might make the industry a more sustainable economic engine and contributor to Newfoundland & Labrador?

Industry – harvesters and processors – both know that we must adapt to face the new realities of a more competitive China, higher fuel prices and the stronger dollar – and the latter two have turned around of late, but only as symptoms of a bigger problem we have not yet fully appreciated.

Instead, we have gone about things as of old, and expected a different result. That's, as the saying goes, the definition of insanity.

That challenge includes requiring a fresh look at the price setting mechanisms in the industry, unique in the world (Joey Smallwood's last piece of legislation in 1972). We have a collective bargaining structure for what is essentially a business to business relationship.

Are there bright spots out there?

Yes, some new policy to address new plant licences. Light on the harvesting side, with rationalization, combining.

And the resource remains strong, more good news.

And the industry is tackling new challenges like eco-labelling with the Marine Stewardship Council certification for our northern shrimp, showing our coldwater shrimp comes from a sustainable, well-managed fishery. We are Canada’s first fishery - and the world’s largest shrimp fishery - so certified, and consumers have the right to that assurance. It will be a proud legacy of my time in the industry.

But the same can't be said for the economic viability of the industry itself, in either harvesting or processing. It may be that the challenges of industry renewal are truly intractable political problems. Fair enough, but if it's confession time, no one is on their knees - except in terms of the economics.

Remember that baby in the airplane crash. You can save that one, but in exchange for how many more, and at what cost? And is that the goal of public policy? To save one part of the business, and sacrifice so many others parts.

I have to think, we can do better. I hope you do too.

Thank you for listening.


Happy Hallowe'en!

CHC wins US DOD contract in Afghanistan?

It looks like Canadian Helicopters Limited (TSX: CHL.UN) will provide helicopter support to American forces in Afghanistan, according to David Pugliese.

The company is advertising for commercial helicopter pilots able to fly the company's Bell 212 on general support missions, that is, tasks that don't involve combat flying.  Qualifications are:

Bell 212 endorsement & experience; Current mountain experience; Current slinging & vertical reference experience; Instrument experience considered an asset; Eligible for international travel; Candidates must be bondable; Screening for a ‘secret’ level security pass required; Good communication skills and a positive attitude required; Ability to work within a group environment.


A conservative tell

Every time a conservative attacks a political opponent, you know you've got the right person for the job.

When they call him or her "negative" or "unhelpful" you know they fear that person.

It's true in Canada.

It's true in the United States.


30 October 2008

Is Iceland too small to be a country?

Good question.

But no matter how you answer it, the Icelandic crisis is producing some interesting results:  Sterling Airlines is filing for bankruptcy.  It's part of of Northern Travel Group which also includes Astraeus Airlines.

Astraeus, the company that became embroiled in the St.John's-Gatwick fiasco a couple of years ago, is now out of the charter flight service and instead leases its aircraft to other companies.


Change is gonna come

The Obama campaign has transformed American politics already and there's still almost a week to go until it's over.

One of the many changes has been in campaign advertising. 

Take this spot, for example, just one of almost 1800 professional videos on the official Obama campaign youtube space.

Then compare it to anything produced locally or nationally during the recent federal election campaign.  You won't find many this simple or this effective.

Even at the local level high quality advertising is attainable.  It requires only two things.

First, there has to be a willingness within the campaign to step away from the conventional.

These sorts of spots are not expensive to produce and air time can also be purchased strategically.

Second, there has to be a willingness to take professional advice.

In an upcoming post, we'll take a look at some of the best political advertising done locally. That's one you'll want to check out.


The promise of a shift in political perceptions

Cabinet shuffles are often unremarkable events that make news simply because they occur.

Today's federal shuffle would be one of those occasions.  Yes, the people in the jobs deserve some recognition, but beyond noting that Gary Lunn received a royal demotion or that Bev Oda is still in cabinet in the same job - Heavens knows why - there isn't much in the news to deserve much thought.

From a Newfoundland and Labrador perspective, it may well be that the best news in many years to come from a federal cabinet is that there isn't a regional minister for this province who actually comes from this province.

The local cult of personality over the past five years has tended to personalize everything, including the importance of having a single individual to "fight for Newfoundland and Labrador."  That perspective led to first John Efford and Loyola Hearn being targeted for attack by a particular political faction largely because they offered a potential challenge to the existing self-described embodiment as an alternate locus of political power. [continued below]

In all important aspects of national politics, guile, compromise and a subtle kind of blackmail decided their course and determined their alliances. They appeared to discount all political or social ideologies, save nationalism. For the mass of the people the words Tory and Grit, Conservative and Liberal, referred neither to political ideologies nor to administrative techniques. They were regarded only as meaningless labels, affixed to alternatives which permitted the auctioneering of one's support; they had no more meaning than bleu or rouge, which eventually replaced them in popular speech. [They] on the whole never voted for political or economic ideologies, but only for the man or group which stood for their ethnic rights...

In such a mental climate, sound democratic politics could hardly be expected to prevail, even in strictly provincial or local affairs where racial issues were not involved....

That political frame resurrected an old collective perception of Ottawa solely as a source of dole that came from the Smallwood years.  Our expectation that political success is defined solely on a politicians ability to bring home pork for the federal larder comes from the way Newfoundlanders and Labradorians received their orientation to federal politics after 1949. The Smallwood legacy in that regard is not merely lingering, it has become once more the official view.

Now to be fair, there is a tradition of some rather powerful figures from this province, including the likes of Don Jamieson and John Crosbie.  But to be really fair, their power came from their ability to discharge their responsibilities to the country as a whole as well as their inherent political and managerial skills.

People who head off to Ottawa as provincialist representatives for their own corner of the universe, and who ceaselessly work only for that patch tend to wind up - to a greater or lesser degree - like individual Blocheads:  pretty much incapable of influencing things to any significant degree.

Newfoundlanders and Labradorians can look to their federal representatives to represent their interests in dealing with the Government of Canada and in reflecting their views on national issues debated in the national parliament.

As for provincial government issues - revealed in the begging letters to Ottawa during the last election - the job now falls to the individual provincial ministers to work with their federal counterparts as needed.  The standard for judging their performance just shot up dramatically.  They don't have that convenient scapegoat anymore and high-pitched bitching will no longer be a convincing substitute for making the case and getting the job done.

On the municipal level, the effect of the last federal election might also be sorely felt.  The folly of electing inexperienced municipal representatives, particularly ones with a tendency to play petty political games or work their partisan connections, may show itself to be useless.

The end result at the provincial and municipal level may be that the job specs get boosted up a fair bit beyond where they've been for the past number of years.

At the same time, the potential exists for a fundamental shift in how Newfoundlanders and Labradorians - individually and collectively - look at federal politics.

Maybe, just maybe, some 60 years after Confederation, Newfoundlanders and Labradorians will shuck off the frame used by generations of provincialist politicians and finally participate fully in the nation's political system as they should.

We must be masters of our own house, but our house is all of Canada.


29 October 2008

Jet Ski or Scuba Dive?

There is a radical difference in media coverage of the premier's tesitmony at the cameron Inquiry.

For the most part, the local media were caught up in the presentation, even to the point of Randy Simms gushing - there is no other word for it - over what Simms said was an apology done without benefit of highly paid consultants to craft words. 

Simms seems to base his view entirely on the fact Williams did not read from a sheet of paper.  For a veteran newsman, Simms displays an ability to come to a conclusion based on incredibly slim facts.  Neil Armstrong didn't read from a sheet of paper either, but his first words on the moon were as rehearsed as could be.

The locals may have brushed beyond the nose-pullers in the testimony like the Premier's claim that he doesn't pay attention to what is said on radio talk shows.  The Telegram added a piece in the Wednesday edition on the Premier's comments on the media but didn't poke a hole in the silliness of some of the claims. 

Instead, they snickered over the poke at the Globe and Mail and ignored the Premier's other Palinesque claim that he often used The Independent for his "own research".  Recall that he has said a number of times that he does not have time to read books.  He just reads lots of - unspecified - other things.

Check the transcript indicentally and see the number of times a guy supposedly too uber-busy to even make notes on things so important he might want to follow up about later on can conduct his "own research" into issues.

The local coverage stuck pretty much to the gainsburgers:

Premier Danny Williams apologized Tuesday for any grief and anguish that Newfoundland and Labrador breast cancer patients have suffered because of flawed laboratory tests. 
"We take this personally," Williams told the Cameron inquiry Tuesday. "We certainly take responsibility, full responsibility, for any actions ... that might have contributed to this problem."
Voice of the Cabinet Minister:
The Executive Director of the Canadian Cancer Society says he believes most people will accept Premier Danny Williams' apology, made at the Cameron Inquiry yesterday. Williams apologized on behalf of government to all who were impacted by the faulty breast cancer hormone receptor testing results. The Cancer Society's Peter Dawe says the words of remorse from the Premier seemed sincere.
The Telegram:  
“ I think it’s right I do so,” began Williams, launching into a seven-minute statement.

“I want to apologize to the patients and to their loved ones and their families for what has happened here. I apologize as the current premier and I apologize on behalf of previous governments and premiers … that if we’ve hurt these people, in some way they’ve suffered, that I can certainly assure them it was not deliberate.”

Williams said there was no intention to harm anybody “under any circumstances.”
A little distance from the subject matter  - however - gives an entirely different perspective, one that is sure to cause some controversy. 

The Globe editorial points to some issues that should serve as the basis for deeper inquiry or cause greater concern than they evidently have within the first 24 hours of post-testimony coverage. There are other aspects of the testimony which should cause news editors to send reporters digging for more details.

The bigger story lies in those details.

It's amazing what you can see when you look.

Or to borrow another metaphor, it's amazing what you find when you scuba dive, as opposed to jet ski.

Let's see if anyone bothers to don the tanks.


28 October 2008

The pain for Iceland-o-philes

For some, Iceland remains a model to emulate.

For others, not so much.

18% interest rates are a thing of the past for the rest of us.


DBRS releases detailed NL rating report

Dominion Bond Rating Service released its detailed report on Tuesday to back the changed rating for the Government of Newfoundland and Labrador.

On October 22, DBRS upgraded the province's long-term debt rating to "A from A(low)" but adjusted the trending assessment from "Positive" to "Stable".  The short-term debt rating remained at "R-1(low)" with "Stable" trending.

The detailed report cites strengths, such as the reduced debt burden, growth of the offshore and a competitive tax position.

At the same time, DBRS cites several challenges. 

Consistent with comments by the province's auditor general, DBRS notes the heavy reliance of the provincial budget on oil revenues which, DBRS says "introduces volatility to the fiscal results".

DBRS also noted unfunded pension liabilities and potential dependence on federal government transfers as issues of concern:

(3) Unfunded pension liabilities remain sizeable, projected at just over $2 billion in 2007-08. The Province has made considerable efforts to reduce these liabilities, largely as a result of the 2005 Atlantic Accord and other special contributions to help improve the funding position of both the teachers’ and public servants’ pension plans. However, declining interest rates and the recent deterioration in equity markets are likely to further add to unfunded liabilities.

(4) Through growing resource revenues, the Province has seen its reliance on federal transfers fall from greater than 40% in the 1990s to roughly 23% in 2007-08 but is nonetheless susceptible to significant changes in federal transfer programs. Any drop in resource revenues could result in a reversal of this trend and return to greater dependence on federal wealth redistribution programs.

DRBS is forecasting small surpluses through to 2010-2011 when it anticipates expenditures will outpace revenue growth. The surplus for 2008, given in the earlier release as $291 million, is actually exactly the surplus forecast by the finance minister.  DBRS appears to have included an anticipated under-expenditure on capital account which makes up the difference.

However, it is important to note the difference in the accounting method used for the DBRS report and the finance minister's statement about a surplus compared to the figures presented in The Estimates.  The premier alluded to this in an interview last week but didn't explain it.

DBRS' revenue projections report money in the year in which it was earned.  Hence, it includes revenue from the 2005 offshore deal.  However, that money was already received in 2005 and has been spent.  It can't be received and spent twice.

The provincial budget documents (particularly The Estimates) account for this by deducting that amount in its calculation of borrowing requirements. The unaudited report on the Consolidated Revenue Fund (issued in August for Fiscal Year 2007) makes a similar adjustment as it reconciles a simple statement of revenues and expenditures with the actual cash flows.  Thus, an apparent increase in revenues of $1.4 billion becomes a borrowing requirement of $110 million once all the financial transactions have been accounted for.


27 October 2008

Oil down again..and the future won't be the same

Front month light, sweet crude (WTI) settled at US$63.22 on the New York Mercantile Exchange Monday, down $1.45 from Friday's close.

Brent light sweet settled at US$60.30  a barrel down almost $27 from the provincial budget's assumed average price. Oil companies operating offshore Newfoundland and Labrador use Brent as the reference price for crude from the Hibernia, Terra Nova and White Rose fields offshore Newfoundland and Labrador.

While there is some uncertainty as to what effect falling crude prices will have on the current budget, a general recession in major markets and a lower price of oil could serious reduce provincial government revenues in 2009.

At an average price of US$60 a barrel, annual production of 120 million barrels and a dollar premium of 30%, the province's oil royalties would be something on the order of $1.5 billion.  At 100 million barrels - slightly below the current year forecast of 111 million - the royalty take would be slightly more than $1.3 billion.

That is between $200 million and $400 million below the current year royalty projections in the budget.

To put that in perspective, bear in mind that if all the budget projections came true for the current fiscal year, the provincial government would be short $414 million on current and capital account and $794 million short overall.

Given the high oil prices at the front end of the fiscal year and the healthy consumer spending, the budget may come up balanced at the end of the year.  It almost certainly won't be in a surplus as it hasn't been in surplus for the past two fiscal years by any measure most people would understand.  If you have to borrow $110 million at the end of the year to pay off the bills and settle up accounts, then there was never really a surplus of $1.0 billion of $1.3 billion as claimed.  It may have existed in some form of accounting but at the end, the budget came up cash short.

As an aside, the Premier tossed aside an opposition claim that there was confusion coming from provincial government statements on the economic crunch.  He said something to the effect that the opposition spokesman didn't know the difference between cash and accrual accounting.

That's really neither here nor there.  In his news release last week, Kelvin Parsons noted that Dominion Bond Rating Service had projected a surplus of $291 million while the provincial finance minister had forecast $544 million when he brought down the budget last year.  Both those numbers are expressed on the same basis, as is plain from the context in the DBRS news release.

In other words, DBRS is projecting a smaller surplus than the one the government had projected. That much is absolutely correct:  $544 million versus $291 million

By the same token, the comparisons at Bond Papers - which some may  be finding a bit tedious at this point - have been done on a comparison of apples with apples.

No matter how one looks at it, the odds are high that the provincial budget for Fiscal Year 2009 (starting 01 April 2009), will have to either reduce public spending or undertake some borrowing.  If the current budget were repeated exactly as is  - exactly the same spending levels - and allowing only for the reduced oil revenues, the provincial government would have to borrow almost as much money as it would take in in oil revenues in order to balance the books.

Think about that for a second.

For the past two years, the provincial government has been able to underestimate oil revenues knowing that - in all likelihood - actual revenues would greatly exceed what they forecast.  At the end of the year, they have claimed huge surpluses.  In fact, the spending projections took into account the anticipated real price for oil, as opposed to the conveniently low-balled assumption. The auditor general made reference in his report earlier this year to the tendency in recent years to inflate spending based on highly volatile oil prices.

Starting this year, however, that pattern of low-balling revenues has essentially failed.  The global downturn, now estimated to last into 2010, means that for at least one and possibly the next two fiscal years after this current one, the provincial government will be dealing with dramatically reduced revenues.  At the very least, they can't count on the conjuring trick of windfalls to get them out of the heavy level of planned spending without resorting to borrowing.

And if you consider it, borrowing even a half a billion dollars a year is not a huge amount on a budget of $6.0 billion or more.

It is a huge amount if one considers doing that for a couple of years will add a billion dollars or so to the provincial direct debt.

It is a huge amount when one considers that at the same time, the provincial government is considering launching a development project on the Lower Churchill that could add as much as $6.0 to $9.0 billion on a public debt (accumulated borrowing) which is already hovering at about $8.5 billion.

Discussing the state of the current provincial budget balance may not be as useful and exercise as forecasting for 2009. The current administration may have to actually make difficult choices, for the first time in a very long time.


26 October 2008

Christmas book list: another PM's memoir

martinNot every prime minister writes a book worth reading. 

Pierre Trudeau's memoir was nothing if not dull as dishwater.

Not even every politician's memoirs are worth the cost of first printing.

Who was smart and waited to get Tobin's thingy in the remainder bin?

From the reviews, Paul Martin's book won't fall into the dull category.

The blurb:

Paul Martin was the Prime Minister we never really knew — in this memoir he emerges as a fascinating flesh and blood man, still working hard to make a better world.

“The next thing you know, I was in a jail cell.” (Chapter 2)

“From the moment I flipped his truck on the road home to Morinville. . .” (Chapter 3)

“When I came back into Aquin’s headquarters I had a broken nose.” (Chapter 4)

These are not lines that you expect in a prime ministerial memoir. But Paul Martin — who led the country from 2003 to 2006 — is full of surprises, and his book will reveal a very different man from the prime minister who had such a rough ride in the wake of the sponsorship scandal.

Although he grew up in Windsor and Ottawa as the son of the legendary Cabinet Minister Paul Martin, politics was not in his blood. As a kid he loved sports, and had summer jobs as a deckhand or a roustabout. As a young man he plunged into family life, and into the business world. After his years as a “corporate firefighter” for Power Corporation came the excitement of acquiring Canada Steamship Lines in Canada’s largest ever leveraged buy-out, “the most audacious gamble of my life.”

In 1988, however, he became a Liberal M.P., ran for the leadership in 1990 and in 1993 became Jean Chrétien’s minister of finance, with the country in a deep hole. The story of his years as perhaps our best finance minister ever leads to his account of the revolt against Chrétien, and his time in office.

Great events and world figures stud this book, which is firm but polite as it sets the record straight, and is full of wry humour and self-deprecating stories. Far from ending with his defeat in 2006, the book deals with his continuing passions, such as Canada’s aboriginals and the problems of Africa.

This is an idealistic, interesting book that reveals the Paul Martin we never knew. It’s a pleasure to meet him.


You know it's bad when...

the Republican presidential and vice-presidential candidates are taking potshots at each other, even if it is through their staffs.


25 October 2008

Christmas book list: Public broadcasting in Newfoundland

webb - bcn Jeff Webb's The Voice of Newfoundland: A Social History of the Broadcasting Corporation of Newfoundland, 1939–1949 is in bookstores now.

The blurb:

Similar to the CBC and BBC, the Broadcasting Corporation of Newfoundland was a public broadcaster that was at the centre of a cultural and political change from 1939 to 1949, during which Newfoundland faced wartime challenges and engaged in a constitutional debate about whether to become integrated into Canada. The Voice of Newfoundland studies these changes by taking a close look at the Broadcasting Corporation of Newfoundland’s radio programming and the responses of their listeners.

Making excellent use of program recordings, scripts, and letters from listeners, as well as government and corporate archives, Jeff A. Webb examines several innovative programs that responded to the challenges of the Great Depression and Second World War. Webb explores the roles that radio played in society and culture during a vibrant and pivotal time in Newfoundland's history, and demonstrates how the broadcaster’s decision to air political debates was pivotal in Newfoundlanders’s decision to join Canada and to become part of North American consumer society.

An engaging study rich in details of some of twentieth-century Newfoundland’s most fascinating figures, The Voice of Newfoundland is a remarkable history of its politics and culture and an important analysis of the influence of the media and the participation of listeners.

Put it on the Christmas gift list of someone you know who wants an insightful look at an aspect of broadcasting in pre-Confederation Newfoundland and Labrador.

Don't mind the University of Toronto Press website that says the book is not yet published or the price, listed at $65.00 cloth.

You can find it in local bookstores now, in paperback for under $30.


24 October 2008

Simple: Obama's in front by a mile

Sometimes newspaper stories on political polls are amusing if only because they go to great lengths to explore a relatively simple thing.

Like say, a story in the Globe and Mail that makes it sound like there is some confusion in polling results such that no one knows whether Barack Obama is leading John McCain or vice versa.

The Associated press poll this past week showing Obama and McCain ina dead heat is an outlier.  It's wrong. It's Dewey beats Truman all over again.

Pretty well every other national poll in the United States has Obama significantly ahead of McCain.

And if you want a look at all the polls - national and local - trending over time, try the really neat interactive display the New York Times posted online.


Premier's comments on public finance confusing; likely no clarity until late November

One the one hand, Premier Danny Williams believes the provincial government will be able to avoid slipping into deficit in this fiscal year:

"I'm confident we will be OK. Now look, if oil drops to $10 a barrel, that is a whole different situation, but we certainly don't see that happening," he said.

In the same interview with CBC's David Cochrane, he said this:

"So if we're [$]120 on the front end and we're [$]60 on the back end, we end up exactly where we budgeted," he said.

"Exactly where we budgeted" is a $414 million deficit on the combined current and capital account and a further $380 million in borrowing to cover other financial transactions for a grand total of $794 million in new debt.

That's not the $544 million surplus the finance minister mentioned in his budget speech.

It isn't the $291 million surplus Dominion Bond Rating Service projected just this week.

And it sure as heck isn't anything close to meeting or exceeding the surplus projections.  In early October, Memorial University economist Wade Locke predicted that the provincial government "should have a budget surplus even bigger than they what they had forecast." That wasn't even likely when he made the prediction.

Oh, by the way, the shortfall last year - covered by new borrowing - amounted to $110 million, not the $88 million reported in the spring budget.  You'll find the revised figure in a report on the government spending for Fiscal Year 2007 published quietly - without a news release or a mention in public - last August.

The confused picture of the provincial government's financial state won't be made any clearer until late November - or maybe early December - when the finance minister issues a "mid-year" financial update. 

The middle of the fiscal year is October.


A lighter moment

While the news contains more details of the global financial crisis, let's just enjoy some accounting levity from an earlier time.

The Crimson Permanent Assurance, in two parts.

23 October 2008

Province slated to post another deficit

Dominion Bond Rating Service said on Wednesday that Newfoundland and Labrador is expected to post a current and capital account of surplus of $291 million.

DBRS did not point out in its news release that even with that current and capital account surplus, the provincial government would need to borrow about $90 million to meet all its budgeted financial obligations.

That means that for the third year running, the provincial government is on track to post a deficit at the end of the fiscal year.

The bond rating agency also did not say that the $291 million figure is well below the $544 million surplus originally included in the budget speech.  DBRS did note that:

while the recent sharp downturn in oil prices introduces uncertainty in the fiscal outlook, the Province’s conservative oil price assumption (US$87 per barrel), the recent depreciation of the Canadian dollar and the fact that oil prices were well above budget throughout the first six months of the fiscal year should help ensure that fiscal targets can still be achieved.

Of course, the DBRS version of the surplus (restricted to capital and current account, not all financial transactions), is closer to the Bond Papers version than it would be to the opinion offered recently by Memorial University economist Wade Locke.

You may recall he predicted that the province was poised to produce a surplus "even bigger than what they had forecast."

The most curious part of the DBRS assessment is this:

Despite near-term challenges, DBRS notes that the Province has accumulated a reasonable cushion to sustain a slowdown in resource activity, including another sizeable surplus foreseen next year. Nevertheless, further improvement in Newfoundland’s ratings will likely depend on the Province’s ability to turn its newly developed resource wealth into sustainable economic growth and maintain fiscal discipline.

Accumulated a reasonable cushion?

That's a bit hard to do if every nickel has been spent over the past few years. 

It's also interesting - if that's even an adequate word - to see a forecast surplus for next year, let alone one that is "sizeable". 

See if you can find any public statements by the provincial government that they will experience a surplus next year.

You might also scratch your head at the portion of the release that indicates:

A moderate rebound [ in gross domestic product growth] is expected for 2009, driven by additional oil production and further progress being made on large capital developments, although the rapid deterioration in global economic conditions maintains uncertainty in the outlook.

Large capital developments like the second refinery at Come By Chance?  Or Hebron, which is not yet sanctioned?  This sounds a bit like the TD Economics forecast that had Hebron pumping oil in 2014, a physical impossibility if ever there was one.

Something suggests this decision by DBRS will be revisited in the next quarter, as the global economic situation shifts.


22 October 2008

NL economy growth forecast to shrivel

TD Economics latest forecast for provincial economies has the Newfoundland and Labrador economy growing at less than one half of one percent in fiscal 2008, the lowest growth rate of any province in the country.

The quarterly forecast, issued October 16, puts real growth in gross domestic product only slightly behind that of Ontario and projects 2009 growth as being about 1.3%.

However, if the oil comments in the forecast are anything to go by, there is reason to doubt the validity of the TD Economics forecast:

After super-sized growth of 9.3% last year led by offshore oil output and exports, the Newfoundland & Labrador economy will struggle to expand, on an annual basis, in 2008. While high oil prices have helped to boost incomes (wage growth is running at 8.7% year-to-date), oil extraction is depressed due [to] the maturation of the oil fields. This will continue into 2009 and 2010. Expansions at the Hibernia and White Rose fields could help level off output, but a sustained rebound in oil production is not in the cards before 2014, which is when the Hebron project could come online.

Hebron won't start construction until about 2013/2014 - according to the project partners - and that assumes the project is sanctioned within the next 12 months.

First oil is not currently expected before 2018, assuming a very short construction.

Even at that point, Hebron will will merely replace production from some existing fields which at that point will likely have been all but exhausted.

MainEconomicIndicators-smTD Economics' forecast for Newfoundland and Labrador matches almost exactly the projections by RBC Economics. Scotiabank's 2008 forecast is higher, at 1%,  while its projection for 2009 matches the TD and RBC projection exactly.

The provincial government's budget forecast [left, Budget Speech]including a 2% shrinkage in real GDP in 2008, growth in 2009 now three times higher than that of private sector forecasters, followed by -2.8% in 2010.  The provincial government forecasts nominal GDP growth at -1.9% in 2009 and -5.0% in 2010.

The province's finance minister hasn't indicated when he will issue a mid-year economic update. He has been portraying the gloomy private sector forecasts as an improvement on the provincial government's own budget estimates.  At the same time, he hasn't reconciled his glowing revenue forecasts with the budget numbers. The contradictions remain unexplained.

While both the Premier and Memorial University economist Wade Locke have given rosy projections for the province's ability to avoid any dramatic consequences from the global crisis, it seems unlikely the Newfoundland and Labrador economy will be able to sustain Locke's pollyannaish claim that government's projections of a half billion dollar surplus will be met or exceeded.

On Wednesday, the Ontario government revised its budget estimates and is now projecting a half billion dollar shortfall for fiscal 2008.


Crude drops. Major projects threatened?

Front-month crude oil settled at US$66.73 a barrel in trading Wednesday.  The rate for the benchmark West Texas Intermediate fell more than five dollars over the day.

Brent, the benchmark for light, sweet crude offshore Newfoundland and Labrador, finished trading at US$64.52 per barrel on the New York Mercantile Exchange. Reduced demand is the key factor in the lowered prices.

Some analysts are speculating that major international projects such as oil sands and deep water offshore major be jeopardized by the falling oil prices. However, Husky Energy's John Lau is quoted by the Globe and Mail's Report on Business:

"I'm quite sure major developers with deep pockets will continue to focus on oilsands development," Mr. Lau said. "Oil sands developments are very special projects. [But] in view of the high costs and also labour shortage, most of the of the small projects are facing a lot of challenges."


Danny's up

At the Cameron Inquiry, that is.

Not much work will be done across Newfoundland and Labrador that day as eyes will be tuned to televisions and to the live stream on the Internet.

Mark the date:  October 28.

There's a bit of history to this, with Williams lashing commission counsel and the commissioner herself after members of Williams' staff gave testimony earlier this year.


20 October 2008

The Big Blue Suck

BGGFWDanny Williams told Provincial Conservatives on the weekend something to the effect that the federal Liberals in the province were bouyed up by Provincial Conservatives.

He said something about Liberal's claiming there was a Red Tide - which no one has been talking about - being the result of some Blue bubble or other.

Nothing could be further from the truth, as he likes to say.

hsbbvFor your edification, amusement and general annoyance, here are the vote results for the ridings held before this last election by the same Liberals who won them again.

Note that the only significant variation - almost the only variation at all, in fact - was in the near complete collapse of the Conservative vote.

And that's all thanks to the Family Feud.

labradorBonavista-Gander-Grand Falls-Windsor?  Scott Simms increased his vote share as he has done in each election since 2004, but the Blue guys sank.

Ditto Humber-St. Barbe-Baie Verte where the family Feud just killed off Connies.  It didn't migrate appreciably to anyone else.

And then there's Labrador.  You needn't worry about the smaller parties. 

Just look at the Blue Line.

Almost too small to even notice.

In many parts of the province, the only noise in the election was a big sucking sound for the Blue team.

Comfortable words

According to the provincial premiers, "Canada's economic fundamentals are sound".

Like we haven't heard that one before, and not from Dubya and Steve, either.

There's nothing like an international economic crisis to end the go-it-alone talk, either.

"We're here to indicate to Canadians that we're prepared to act as a united front. We're in good shape, which is not to say there aren't problems, but we're in the best situation in the world."

The premiers apparently agreed to drop inter-provincial trade barriers as one sign of viewing the country as a whole.

People in Newfoundland and Labrador are all too familiar with the go-it-alone stuff, but they've grown so used to the contradictions between the words and the actions, they'll likely wonder how come the two have suddenly matched up on the "we are all Canadians" side.

It's like telling a crowd of Provincial Conservatives in Corner Brook that "[t]his great provincial party has taken our province in a whole new direction towards 'have' status and self-reliance. No more give aways, no more begging from others.…" right after sending the latest round of begging letters to Ottawa.

Jack Harris coined a phrase that will go down in local political history.


The Big Blue Shaft

After this week's Provincial Conservative convention in Corner Brook, there can be no doubt who approved the Blue Shaft for the opposition caucus budget.

"...So prepare yourselves Yvonne and Lorraine, 'cause the honeymoon is over."

Bond Papers readers won't be surprised by this.  As pointed out in September, the Family Feud caused dissension in the ranks and no one had to eavesdrop on Timmies customers to pick up the disgruntled views of Provincial Conservatives.  Some were fried at the idea of turning on their federal cousins, brothers and sisters. Others thought the Feud would only strengthen the provincial opposition.

Premier Danny Williams put those fears to rest by calling off the Feud the day after the election at the same time as three of his senior caucus mates gave the Shaft to the opposition.

It didn't take long for the conciliatory tone and the shift in Williams' targeting to resonate with Conservatives in the province:

"I'm glad we're turning a corner there," O'Brien said. "It would be nice for him to finally just say it: a Conservative is a Conservative is a Conservative, a Tory is a Tory is a Tory, [and] not constantly distinguish between the two.

"The provincial party and the federal party have slightly different names, but it's the same people, the same family."

Uh huh.

The same family. 

Like some of us didn't know that already.

Williams event went so far as to claim that the Williams Family Feud  caused the Liberal victories in the recent federal election;  he attributed the Liberal rise to a deep blue wave of Provincial Conservatives.

Not exactly.

West of Goobies, the only impact the Feud had was to suppress Conservative votes in the province.

East of Goobies, the Feud suppressed Conservative votes in Avalon to the point where Scott Andrews took the seat with a tiny increase in the Liberal vote. In St. John's East, Provincial Conservatives turned out en masse to back New Democrat Jack Harris, Williams' former law partner.

Harris enjoyed public declarations of support from the Provincial Conservative caucus, as did St. John's South-Mount pearl Liberal candidate Siobhan Coady.  So pronounced were the Provincial Conservatives' declarations of support for specific candidates in the two St. John's ridings one could easily imagine a list had been drawn up and handed down.

However, in St. John's South-Mount Pearl, Coady wasn't the beneficiary of any influx of Blue voters. In a result that could almost be seen as local Conservatives thumbing their nose at the Feud's preference, New Democrat Ryan Cleary picked up twice as many new votes as did his Liberal rival.  Coady still won the seat but the race was nip and tuck through most of the evening as returns poured in.  If those votes were Conservatives, twice as many voted for Cleary than Coady and more even stayed home than Coady polled in new votes compared to her previous outing in 2006.


Early cabinet shuffle...by CBC NL Online

A provincial cabinet shuffle has been in the works for a while.

Ministers like Kevin O'Brien have made themselves practically a public nuisance on any call-in show imaginable in the past few weeks to pay homage to the backside of their boss, all in hopes of getting a plum at the next cabinet table.

O'Brien, you may recall, was handed a demotion not so long ago, going from the business department to being the fellow who oversees the people who hand out permits and licenses. It's all good stuff but hardly the kind of position for a minister with ambition.

merv wiseman2Merv Wiseman, recently a federal Conservative candidate shafted by the provincial agriculture federation in a tasteless display of partisan politics, managed to best O'Brien, at least as far as CBC Newfoundland and Labrador's website was concerned.

An eagle-eyed reader noticed a blurb on the right hand side, took a screen capture and even circled the thing to make sure no one would miss it.

In the ongoing nurses dispute, CBC has video of cabinet ministers "Tom Marshall and Merv Wiseman" giving the government response to the nurses' contract demands.

That should have read Ross Wiseman.

Meanwhile, keep trying Kevin. The Premier says there's two weeks left before he gets around to sorting out the cabinet seating plan. He's had other things on his mind of late.

A tip of the soft cap to EM. At this rate, we'll have to start offering prizes. Stay tuned, on that front.

Update: The CBC webmaster corrected the blurb at some point on Tuesday morning.


...and then there's advertising

which tells a story.

Like in this 1973 advert for Hovis, a bread maker in the United Kingdom.  Directed by Ridley Scott, the television spot has been a persistent favourite in Britain and has been voted as the best television ad of all time.

Look at it.

Feel it.

That's what you do with anything by Ridley Scott.

You see it and feel it and, in 45 seconds or so you feel you want a slice of the bread.

Scott might have difficulty making the same spot today, given that the changes in Britain have likely made it hard for a goodly chunk of the audience to understand broad Yorkshire.

Hovis is currently running a new television ad, also directed by Ridley Scott, that plays off a element of the original. The full length spot runs two minutes, but it also exists in shorter versions more likely to wind up on the telly.

There's not a clothesline in sight, at least not as the feature carrying the thing.

This is another advertisement built on a story and on a feeling.  Men of any age or background can relate to running an errand to the store, of kicking a can or to the thrill of being overflown by a Spitfire.

The feelings of nostalgia and warmth of home are key elements of Scott's two minutes.

Imagine what he could do if they gave him 113.


There's advertising...

Ad agencies from across Atlantic Canada took home awards at the annual ICE awards held in Halifax on October 16th.

Expect to see a news release from the provincial tourism department any day now claiming that the ad program - as opposed to the marketers' creativity - is winning awards for the pitcher plant logo brand thingy.


19 October 2008

Hugo under pressure

Venezuela must be experiencing severe economic difficulties.

Hugo Chavez wants the Organization of Petroleum Exporting Countries to cut production in an effort to get oil prices about US$80 a barrel.

Good luck with that, Hugo.


What's up now, Doc?

A policy windsock, that's what.

Supposedly the chief Family Feud campaigner, Danny Williams, and the entire Provincial Conservative caucus understood that if no Conservative seats in Newfoundland and Labrador meant that there would be no member of parliament would take up the cabinet job of being the province's regional representative in the event the Conservatives were re-elected.

Of course, Williams understood:

But Williams is not worried about the lack of representation. He said the three previous government MPs failed to advance major issues such as custodial management of the fishery and a loan guarantee for the Lower Churchill River hydroelectric project in Labrador.

He said the province will now have seven strong Opposition MPs at the federal level.

People who supported the Family Feud - including Provincial Conservatives like St. John's mayor Doc O'Keefe - understood that as well.

So how come Doc is now trying to orchestrate a campaign to undo the situation that he and his party leader created in the first place?

If Doc feels some obligation to stick his municipal nose into federal/provincial relations now that the election is over, he had an obligation to his honker into the campaign a few weeks ago pointing out the gigantic problem - apparently as he finds it now - inherent in the campaign against the federal Conservatives run by their Provincial Conservative confreres.

Instead of that, O'Keefe and his Provincial Conservative mates on council were doing their own little bit of partisan campaigning against the Liberal Party.

No one should be surprised by this at all, given O'Keefe's record on council for shifting positions more often than most of us change underwear.

Nor, for that matter, should anyone be surprised that the Premier himself appears to be taking an entirely new position on the issue of cabinet representation from the one he held a few days ago:

Premier Williams says it is the Prime Minister's perogative to make cabinet appointments. However he notes, Prime Minister Stephen Harper has a couple of options. He says the Prime Minister could appoint Senator Ethel Cochrane to the Senate or he could fill the vacancy in the Senate and then appoint that person to cabinet.

For his part, the Prime Minister has already said he will appoint a regional minister from among the elected members of his caucus. in other words: no senate appointments.

That makes eminent sense, given that this is exactly what defence minister Peter MacKay said plainly during the campaign and the Prime Minister has spoken about senate reform as a priority for his new administration.

Now five years into the current provincial administration, one gets the sense that major items of public policy are made up on the fly. Positions are shifted based on something other than a sound and detailed analysis.

If memory serves, this is a point made before here at Bond Papers and elsewhere.

This tendency for policy to follow the whim of the moment is ultimately what undermines the effectiveness of the provincial government. People don't know which statement is the real statement.

Is the Prime Minister a man not to be trusted, as Danny Williams said up until Tuesday's vote or is the war over, as he said on the day immediately after the vote?

Is it now possible for the Premier to do business on Wednesday with a kitten-eating lizard from outer space who had to be stopped on Tuesday?

It doesn't take much imagination to realize there is a,problem with consistency here. That problem - and it isn't new - causes people to tune out. They stop listening. If they aren't listening, then the Premier has a gigantic problem.

It's a problem entirely of his own making however.

What's more the rest of us have to hope we all don't pay a price for the windsock follies. The Premier worked the Feud to make sure he was the only spokesperson for the province.

He got what he wanted.

So we must all wonder why he and his political associates are suddenly uncomfortable with their victory.

Hang on a second.

Check the wind.

It might not be such a problem after all.


It shifted direction again.

Problem back.

Ooooh. Hang on.

No problem, again.

You get the picture.


18 October 2008

Random-Burin-St. Georges: a quick look at the results

 RBSGRandom-Burin-St. Georges is a relatively new seat resulting from re-apportionment before the 2004 election.

However, the seat continues to trend as a decidedly Liberal seat, carrying on the trend pre-2004.

The 2008 result is not the one to look at closely here.  rather we need to look at 2006. 

That was the year the Provincial Conservatives threw their political weight behind the federal Conservative party.

The Blue team ran a staunch Provincial Conservative closely associated with the Premier. 

She had campaigned relentlessly between 2004 and 2006 against the incumbent, largely by using a refugee family's plight in a church basement as a rod with which to beat the incumbent and his party.

It apparently escaped her notice that the party she ran for had a policy diametrically opposed to her own stated position on this issue. In the end, her campaign was also caught up in the in-out scheme even though, as these results show, Random-Burin-St. Georges was not a lost cause for the Blue team.

The New Democrats ran a candidate from outside the riding in that election.  Not surprisingly, she fared considerably worse than the popular fisheries activist the NDP had run in 2004.

In that race, the Conservatives appear to have pulled voters who had voted NDP in 2004 and added a few thousand more besides.  The Liberal candidate - Bill Matthews - also increased his vote share.  Overall, turnout in the riding increased by slightly less than 4,000  voters.

What we don't see here is a collapse of the Conservative vote.  Rather, in 2008, it sank back to what essentially appears to be its core. The New Democrat vote declined by 3244 but did not slip back to its 2006 level.  The Liberal vote declined by 1100 votes.

Overall, it would appear that the New Democrats in 2008 had picked up some soft vote that in 2006 had gone to the Conservatives.  The bulk of the 2006 Conservative vote stayed home.

More than in some others, the vote pattern in this riding may have been affected by the remittance labour force from the Burin Peninsula currently working in Alberta. Without more detailed analysis it is difficult to know how much of this vote pool actually turned out and if it did, how it voted.

Even though the 2006 incumbent did not seek re-election, this is not a riding that was affected by Family Feud as obviously as in the three ridings on the Avalon peninsula.

It is interesting to speculate, though, what might have happened had the Provincial Conservatives taken an entirely different approach in 2008.


17 October 2008

Friday Follies: a round-up of the week's odds and ends

1.  Pete didn't get the memo:  Peter MacKay apparently didn't hear about the kiss-and-make-up comments from his boss the Prime Minister and Danny Williams over this whole Family Feud thingy.  Speaking with the Chronicle Herald, the guy touted as being minister responsible for Newfoundland and Labrador laid it on the line:

“I think he’s just cooling his jets until his next blow-up," said Mr. MacKay. “He’s got a mercurial personality and all indications are that the next time that the wind changes or he feels offended, he’ll go off like a mad hatter again."

Mr. MacKay, who will likely end up as Newfoundland and La­brador’s representative at federal cabinet, said the premier of Newfoundland and Labrador “has lost the plot."

“It did become so irrational and personally vindictive on the part of a Conservative premier," he said.


It wasn't the Mad Hatter that went about shouting "Off with her head."

2.  That's so 1960s:  Also in the Chronicle Herald, the accumulated wisdom of a few of Halifax's advertising geniuses.  Like, for instance, Don Veinish from Cossette Atlantic:

Danny Williams’s ABC campaign sure seemed to work, but I have to plead ignorance on whether it involved advertising or not.

Thanks for paying attention, Donny.

Then again, you just about prove the point you made:

People these days are exposed to the best of everything in the communications arena, including advertising. OK-ish ad efforts aren’t OK because they don’t meet the standard and tend to be disregarded or entirely disdained. Bottom line: If advertising had made much of a difference, there would be a difference today. There isn’t.

Speaking of not meeting the standard and tending to be disregarded, wonder how Don would feel about the idea of a billboard on the Gardiner? 

3.  Dons and Peelers:  Turns out that both some local bands of bobbies as well as Oxford University (as well as 11 other universities and assorted government entities) were stunned enough to squirrel away money in Icelandic banks.

4. Suck AND Blow:  New Labour starts to look a lot like old Conservatives, right down to the complete absence of logic:

[Culture (!!!???) secretary Andy] Burnham said that the "online challenge" had resulted in two dangerous tendencies emerging.

Firstly he criticized the burgeoning tendency in television to mimic the user-generated, "here's my blog" feel of much of the Internet, particularly in current affairs and news.

"The Internet as a whole is an excellent source of casual opinion," he said. "TV is where people often look for expert or authoritative opinion."

The second reaction to the rise of the Internet has been a "tendency towards safety first and the tried-and-tested, and way from innovation, risk-taking and new talent", he argued.

So on the one hand television is tending toward innovation, risk-taking and new talent by aping the Internet but at the same time, television is tending away from innovation, risk-taking and new talent.

The only challenge here would seem to come for Andy when thought is involved in his activities. [h/t to Guido Fawkes]

5. Blow and Suck:  Also from Guido, the story of a pollster in a conflict of interest.  Speaking of conflict of interest, thank heavens no pollsters in eastern Canada would do work for government and at the same time release poll results without disclosing that government had helped fund the poll on local politicians' popularity or lack thereof. 

Like say upwards of four times a year?


Could never happen.

russell gone 6.  Blown away?  A google blog search for "danny williams + intimidation" turned up two links to a blog by Paul Russell from Newfoundland and Labrador called Life, Writing and Everything Else.

They contained two references to alleged political intimidation.

Click on the link and you'll find that...

wait for it...






The blog's gone.


Not just the posts.

The whole blog.


Now it's not like he violated the broadcast prohibitions under the Canada Elections Act like at least one local blog did on Tuesday night.

Even if that were the case, the worst that could happen would be a fine.

A big fine.

But not death to the entire operation.


Paul Russell, if you're out there, drop us a line and let us know what happened to your blog and those posts.

After all, they're just allegations and as long as they are labeled as such and unless and until someone brings forward evidence to back up the claims, no one should have a problem with it.


Auspicious beginnings

1.  Useful in a Conservative campaign news release with a quote critical of your own party that gets

2.  Highlighted by the Conservative's national newspaper in a story that mentions his

3.  Attack on the leader of his party [Hint: The Lampoon  love quoting Liberals knifing other Liberals in the back] and

4.  the guy's not even sworn in yet.

Yes, with fresh ideas like this, Liberals are well on their way back to power.


Avalon: a quick look at the results

avalon If there ever was a campaign which showed the power of negative campaigning, it's Avalon.

From a time well before the writ dropped, incumbent Conservative Fabian Manning received countless vicious personal attacks.

That includes a reference to Manning as a "traitor" by no less than Premier Danny Williams. That savage rhetoric continued throughout the campaign from many quarters, including from a strong supporter of the Andrews and Harris campaigns.

Liberal Scott Andrews, the only serious competitor piled on relentlessly, lightening up only for the last week or two.

That didn't mean the attacks stopped since the Family Feud deployed at least three cabinet ministers to the area north of the Trans-Canada Highway to work their persuasive magic on local Provincial Conservatives.

Through all that, Manning did phenomenally better than his colleagues in the St. John's ridings. In St. John's East, the Conservatives captured only 20% of the vote from 2006.  In St. John's South-Mount Pearl, 26% of the vote held.

In Avalon, Manning held on to about 60% of his vote from 2006.  Still and all, he lost 7590 votes.

Interestingly enough, the drop in voter turn out and the increased vote for Green, Liberal and New Democrat candidates totals 7582.  That's not likely a coincidence.

What's noticeable in Avalon is that the lost votes didn't migrate to another party. They appear to have just stayed home in large numbers.

Scott Andrews increased the Liberal vote by 4%, or 548 votes. 

The largest jump in votes for any candidate was in the New Democrat column which saw a 70% jump (2343 votes). If those votes came from disgruntled Provincial Conservatives, the attractiveness of New Democrats would largely be defined by one quality:  they aren't Liberals. The same quality likely had a strong influence on Blue voter choice in the St. John's ridings for those who came out to vote.