17 November 2014

Myths, then and now #nlpoli

You really do have to wonder how anyone could be expected to keep things straight when the people they rely on to help them understand keep changing their statements.

Take, for example,  the fight between the provincial Conservative administration in Newfoundland and Labrador a decade ago over offshore oil royalties and Equalization. 

Just to remind everyone,  the first one is set entirely by the provincial government as a result of the 1985 Atlantic Accord. That unprecedented agreement lets the provincial government here treat offshore oil as if it was on land and, therefore, entirely within provincial jurisdiction.

The second one is a federal transfer scheme to provinces that takes federal government cash and shifts it to the provinces who fall below a national average.  It’s a top-up arrangement, meaning that as a government has more money of its own, the payment goes down.  Once a government is above the average – so-called “have: status – the money cuts off.

Well, here’s what the Telegram said in its editorial on Friday:

…oil royalties weren’t even up for negotiation. Because the province already received every last cent of oil revenues through the original Atlantic Accord. The issue was equalization payments, or rather, the lack thereof.

Absolutely true.

Oil royalties are one thing.  The provincial government received every penny, without reduction of any kind.

The fight was about Equalization,  Specifically, the provincial Conservatives wanted to get an annual payment from the federal government equal to -and in addition to - the value of oil royalties in that year. 

So what was the Telegram editorial line at the time?  Well, that’s where it gets interesting.  In December 2004,  at a supposedly crucial moment in the talks, the Telegram waved its editorial handkerchief at the Glorious Leader of the province as he rode off to do battle with the evil federal government:

And what is just is to award this province 100 per cent of the royalties due from its offshore, none of it clawed back in a complex equalization formula, none of it capped in a deal based on Ontario's economy.

You can see the two things don’t match. The Telegram crowd will have to explain why they argued one thing then and another thing now.

What we do know is that the position the Telegram supported in that editorial 10 years ago was the position presented by the provincial government.  It was also the popular position.  Lots of people believed that the federal government took away provincial government money, that is, the royalties. They believed it because politicians said it was true.  They believed it because supposed experts supported the provincial government.  And they believed it because – as we can see plainly in that 2004 editorial – the editors of the province’s major daily newspaper told them it was true.

Except that it wasn’t true.  The provincial government claim was a lie. As they subsequently admitted in January 2005, the provincial government set and collected all the royalty from the offshore without a single penny in reduction  - ever - by the federal government. 

That wasn’t a secret.  Plenty of people knew it, including your humble e-scribbler, who said so publicly at the time.  The problem was that everyone else, especially those in positions of authority and influence, were repeating the lie over and over that the federal government was taking away something from the province to which it was entitled. 

The repetition of false information didn’t stop in 2005.  You can see plenty of false information in the Friday editorial.  For example, the editorialist created a new version of what happened back then:  “Williams, among others, argued that the loss of Equalization] negated the advantage of oil wealth.”  The editorial even likened the combination of royalties and Equalization to an effort to keep getting unemployment insurance while having a job.

That’s a pretty accurate analogy, accurately.  But back then,  anyone who said that sort of thing publicly could expect to get attacked pretty swiftly for being a traitor. 

More importantly, that description of what Danny Williams and the provincial government argued back then just isn’t true, either.  Williams claimed consistently that the federal government actually took provincial royalties.  That’s what the whole “claw-back” argument meant.  The provincial government was entitled – according to Williams and the Conservatives – to get both Equalization and royalties at the same time.  Instead, the provincial government got its oil royalties and then the federal government clawed the money back – took it away, in other words – by reducing Equalization. 

To try and get around the obvious effort to get EI and keep their salary at the same time – to borrow the Telly’s own analogy – the provincial Conservatives insisted that the new payment they wanted wasn’t Equalization. It was something else  covered in a deal strictly between the provincial government and the federal government. They never did say what it was, except that it was an offset, which was an offset to Equalization drops, of course, so they wound up hoist on their own clever petard.

“It was a defensible argument,”  the recent Telly editorial claims, because “[u]nlike other provinces, Newfoundland and Labrador lacked jurisdiction over its primary resources.”  Under the Terms of Union, Newfoundland had complete control over all the resources it control before Confederation. The 1985 Accord gave the provincial government control over resources offshore that weren’t in its jurisdiction at all either before 1949 or after. 

The supposed lack of jurisdiction remains a popular argument for some people, especially people who want to justify provincial government decisions of one kind or another.  But, like the thing about royalties, it just isn’t true. 

The position Williams argued wasn’t defensible. It wasn’t plausible and it never stood up to even the most cursory scrutiny.  That’s why it never worked, ultimately.  What happened in January 2005 was that Williams got essentially what the federal government had offered about a year earlier.  There was an additional set of payments like the offsets from the 1985 Accord and, like the original offsets, they were tied to Equalization.  Once the province didn’t qualify for Equalization, the offsets would stop.

That’s not what Williams set out arguing for and what he ranted and shouted and pulled down flags about.  The only major difference between the federal government’s October offer and the one in December, both of which Williams rejected, and the final deal was the amount of money Williams got up front as a sort of lump sum settlement.  The federal government used one assumed price for oil in October and used another one in January. 

That wasn’t a “down-payment” as the Telegram editorial last Friday termed it. Nor did Williams “broker” a deal.  Williams had started the new year of 2005 flatly rejecting any federal proposal.  He’d also hauled  down Canadian flags in what proved to be one of the most disastrous political blunders in Canadian history.  The flags wouldn’t go back up and he wouldn’t resume talks until the federal government caved in to Williams’ demands.  As Williams, own polling revealed,  though, Canadians firmly disapproved of his flag stunt.  And even in Newfoundland and Labrador, where the public almost unanimously supported his effort to get more cash from Ottawa,  they did not support his flag stunt  with equal vigour.

With the Nova Scotians busily negotiating an agreement, and with his public support largely gone, Williams made a frantic telephone call from his winter retreat in Florida to the Prime Minister’s Office begging the federal government to restart talks. The deal Williams accepted in late January was the one he’d rejected three weeks earlier.

The cheque Williams got as part of the deal was a lump sum settlement.  It represented roughly what the provincial government would have collected between the time they signed the deal and the time the provincial government expected the provincial government would hit “have” status.  In the end,  Williams and his associates could only apply the internationally recognised salve of the loser to their wounds:  they claimed a moral victory.

Historian Jerry Bannister noted in a comment on a post last week that when it comes to Danny Williams, “the point has been reached where there isn't anything to say that hasn't already been said.”  That’s certainly true.  Since his time in office is over, we’ve actually got all the major bits of it done with.  As far as SRBP is concerned, you can go back to the beginning in January 2005 and see that your humble e-scribbler has dissected all those details.  So yes,  there likely isn’t anything to say that hasn’t already been said time and again.

There is a need to state the rights of things yet again, though, so long as people continue to repeat the misrepresentations from the past or, as in the Telly editorial on Friday, invent new misrepresentations about the recent past and what happened.