28 July 2014

Horse farts #nlpoli

If you do nothing else in the next few days,  take the time to read the decision issued Friday (via CBC) by a Quebec superior court judge in a case brought by the provincial government against Hydro-Quebec.

Judge Joel Silcoff does one thing supremely well:  he summarises about 40 years of dealings between Hydro-Quebec and the Government of Newfoundland – via first Newfoundland and Labrador Hydro, and lately Nalcor – to change, alter, adjust and otherwise frig around with the 1969 power contract originally signed by HQ with Brinco.

Silcoff actually adds a new details to the public knowledge of what has taken place between Hydro-Quebec and the Newfoundland government over the years.  Before now,  the best summary was one produced for Vic Young’s Blame Canada commission over a decade ago.

And when you are done reading the judge’s decision, you can count yourself among one of the few people in the province who have actually read it.  Never mind all the people talking about it or pontificating about what it means.  They likely have not read it, any more than they have read the decisions of the Regie d’energie or Moby Dick.

This will not stop them talking about it, of course.  They will talk about it at length but,  unless they stumble on something by accident,  their comments will be as useful as you might expect.

Even among those who have read it,  the comments will likely not help you understand the decision, in itself.   The Telegram editorial on Saturday relied ultimately on one of the oldest excuses for government’s repeated failure:  “we” cannot get a fair hearing in Quebec.  Had the editorialist had the time to really think about the decision, he or she would have realised what was the case in the Regie decisions:  there wasn’t an argument worth pursuing in the first place.

That does not mean the 1969 power contract has produced an equal result.  Hydro-Quebec is considerably better off financially than its partner in the original bargain.  Nor does that reality mean that Quebec has failed to work with the other partner in the contract to work things out.  The court decision is a recitation of the ongoing relationship between the two parties.

Silcoff can point to a considerable number of low points in the relationship,  too many of them resulting from actions by people on this side of the Falls. He can point to too few instances of amiability and co-operation.  If one takes a fair reading of the entire relationship,  though,  one can see the ups and downs that come in any long partnership. One may not like the way things turned out but there are understandable reasons why something didn’t work out.

In the early 1990s, for example,  politics on both sides of the border made it difficult and ultimately impossible for both parties to achieve any sort of agreement that might have involved one side favouring or appearing to favour the other.  Consider the reaction in Quebec, in the aftermath of Meech, if Hydro-Quebec had signed a deal that significantly improved the financial position for this province.  And then consider on the other side, the reaction if this province had – among other things – agreed to extend tax concessions after 2016 and thereby improve Hydro-Quebec’s financial position even if  there was a considerable improvement for this province as well.

Politics is the root of the problem in the relationship and it will be at the root of the relationship, as it has been since the Newfoundland government took control of the private sector company that owned the majority of shares in the Churchill Falls (Labrador) Corporation.  Politics lay at the heart of this recent law suit.  Silcoff notes who has been driving this suit and paying for it.   And the sort of distorted decisions that come from purely political considerations will keep it going until “we” win or until the provincial government simply can’t afford this sort of thing any more.

The distorted decision-making we are talking about here is the sort offered by both Nalcor boss Ed Martin and Tom Marshall on behalf of government and opposition leader Dwight Ball on the other. Once you’re in it, they said,  you have to keep going to the end. The potential win,  noted Marshall, is so big that “we”  would be foolish not to keep going.

No.  Once you are started down a losing course, there is no reason to keep sending good money after bad.  In this instance, there is even less reason to keep going.  Silcoff dealt with the “novel” theory on which the Newfoundland case was based  - Ed Martin was wrong about that – and he found it wanting.  It was a long shot from the start and the odds were against it succeeding from the start.

That’s not hindsight.  Your humble e-scribbler said as much when it started.  The decision on Friday confirmed that the odds were against the provincial government not because Quebec courts are biased but because the case was a load of shite from the outset. 

“There simply is no end to the amount of money Quebeckers can make off the Falls,” SRBP noted in 2010, “and by Jingo, there is no shortage of public cash a local politician of any stripe would be ready to pay them to prove it.  Go big or go home as they say and there is no limit to big when the tab isn’t being covered by your own pocket.  We’ll fight your case until we win or your bank account is dry, whichever comes first.”

What the politicians are saying about this law suit is a version of what they are saying about Muskrat Falls.  It is a variation on the sunk cost fallacy. In itself,  the sunk cost fallacy is really just a dolled up version of what the truly sick folks at places like the Halifax Casino who, after blowing their entire paycheque and emptying the bank account, start to consider auctioning off body parts to feed the slot machine because,  you know,  they feel like things are about to turn around.

When you put it like that,  hearing Tom,  Ed, and Dwight say “Let ‘er ride!” doesn’t quite sound nearly as rational, does it?

That’s why you need to read Silcoff’s decision.

Odds are good that Tom, Ed, and Dwight haven’t.