Politics in Newfoundland and Labrador (2015) – Part 3
In the third instalment in the series, SRBP looks at the way the House of Assembly operates.Liberal finance critic Cathy Bennett’s recent op-ed piece in the Telegram said that the provincial government’s current financial mess is about more than unexpected changes in the price of oil.
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She’s absolutely right.
Bennett pointed to the Equalization offset transfers under the 1985 Atlantic Accord as the root. The provincial government got about $4.6 billion under the deal. “The province collected $4.6 billion in federal funding under the Atlantic Accord,” wrote Bennett. “A long-term financial plan should have been put in place to account for the future loss of those revenues.
Equalization transfers.
Sounds a wee bit familiar, doesn’t it?
The Finance Minister Who Loved Deficits
2011.
February, 2011, to be precise.
Then finance minister Tom Marshall spoke to a luncheon meeting of the province’s chartered accountants association. He warned that the end of federal hand-outs from the 1985 agreement, which he knew would run out anyway in 2011, might force the government to make cuts in its spending.
He pointed to it again that fall, in the 2011 “mid-year update” on the provincial budget, delivered, as usual, well after the year was half over. “The loss of offset payments under the Atlantic Accord alone will negatively impact revenues by $536.1 million annually,” Marshall said in a prepared statement. [Emphasis added]
In late 2012, Marshall pointed to the end of the federal Accord transfers as on of the reasons the provincial government was short of cash. “We were aware at budget time that revenues this year would decline,” said Marshall, “due to the planned maintenance programs for the White Rose and Terra Nova FPSO’s and the loss of offset payments under the Atlantic Accord.” [Emphasis added]
Now the fact that Marshall didn’t have money that he knew he wasn’t going to have isn’t a reason why he continued to spend more than he was bringing in.. Marshall might have credibly made that claim the year the cash ran out. But by the next year and the year after, there really wasn’t an excuse any more. Yet he continued to make it.
Now we have the Liberal finance critic saying that the provincial government screwed up by not having a plan for when that money ran out. Bennett noted in her release that the Accord transfers totally $4.6 billion. What she doesn’t mention, curiously, is that oil royalties have added up to more than five times that much. While that money will change from year to year depending on oil prices, it doesn’t have a fixed cut-off date.
The Paddon Connection
If you’ve been paying attention to the past couple of reports from the auditor general you’ll likely have noticed a similar set of comments. In 2013, Terry Paddon wrote that “the surpluses that the Province has experienced in recent years have primarily been the result of increased offshore royalties and payments received from the Federal Government under the Atlantic Accord Agreements.” Paddon repeats the same line in his 2014 report. “The net cumulative value of the surpluses less deficits for 2004-05 to 2013-14 is $4.6 billion,” Paddon wrote in 2014.
It’s pretty clear that Bennett got the $4.6 billion figure in her release from Paddon’s report. It’s also most likely where she got the idea that the Accord benefits were the key to the province’s financial mess.
Paddon is the connection between the two comments. Before he was auditor general, Paddon was the province’s deputy finance minister. He’s the guy who helped Marshall and his colleagues prepare their spending plans every year. When the old auditor general retired, Tom and his colleagues put Terry in the job.
So it is that the guy who helped make the decisions that created the current financial mess is now the guy commenting on the financial mess.
It’s a sweet gig.
Sweet for Paddon and his former bosses in cabinet.
But it’s not so sweet for the people of the province.
The PAC and the Auditor General’s Conflict of Interest
In the House of Assembly, they have a thing called the public accounts committee. It’s a group of members from both the government and opposition side who are supposed to keep an eye on how the government spends public money. It’s also the only House committee chaired by a member of the opposition.
The committee is supposed to work closely with the provincial auditor general. In most legislatures the committee reviews the auditor general’s report. The members should rely on the auditor general’s independent judgment as a source of reliable expertise.
The problem in Newfoundland and Labrador is that the current auditor general is so closely associated with the government’s financial policies that his views can hardly be counted on as independent. Terry Paddon is in a pretty serious conflict of interest. That’s not to say he is incompetent or lacking in integrity. It’s just that no one can offer a credible, independent review of his own work.
In the private sector, and in most other legislatures, financial accountability relies on the use of people completely outside the organization to review plans and operations. They judge how the government is doing against the government’s own rules – you’d be surprised how often they break them – as well as generally accepted rules and practices in other places.
The public accounts committee is supposed to offer that sort of oversight. Or at least the committee is supposed to be able to rely on that sort of oversight from the auditor general. In Newfoundland and Labrador these days, they don’t have it.
Even if the auditor general wasn’t the former finance minister, the committee hasn’t been working all that well lately. Chief Justice Derrick Green reviewed the PAC as part of his investigation of the House of Assembly patronage scandal. He found that in “the seven years from 2000 to 2006 the PAC has met an average of about four times a year.” The committee didn’t meet at all in 2001 and 2004 and both 2005 and 2006, the committee met exactly once each year.
Things weren’t any better by 2012. As CBC reported in February that year, in “2007, the PAC met just twice; the next year, three times. The committee was most active — albeit in private — in 2009 and 2010, meeting seven and six times respectively. But last year, the committee met just once, in February. It has been dormant since.”
The outgoing chair of the committee told CBC that the majority on the committee – all government members of the legislature – refused to hold meetings in public. Roland Butler said that he didn’t make a fuss because he felt that whatever work the committee did would be lost as a consequence.
Since 2012, the committee has been meeting on average about six times a year. They’ve been reviewing activities in specific departments but their work is based on the auditor general’s reports. The committee clearly still has a way to go. After all, it only meets six times a year for a couple of hours each time.
Controlled by the cabinet, which means the Premier
Even if the members of the House of Assembly who don’t sit in cabinet had some idea they wanted to do more, they’d have a tough job trying to do it. That’s because the House is controlled by the cabinet and more particularly by the Premier.
The Premier controls the House in several ways.
First, he or she is the head of the majority party in the House.
Second, as head of the government, the Premier controls the budget. It’s a simple matter of following the money.
Third, the Premier controls appointments. He controls appointments to cabinet and parliamentary secretaries. Both offer a cash incentive for loyalty, if nothing else.
The Premier also controls appointments in the House. She choses the Speaker, the deputy speaker, and the chairman of committees.
Control of the Speaker has proven to be especially useful. The Speakers since 2003 have been distinguished by both their obvious partisan bias, despite the tradition of Speakers being the servants of the whole House. Harvey Hodder, for example, surrendered control of the patronage scandal response to the Premier, without hesitation.
Aside from being notoriously partisan and incompetent in the running of the House, Roger Fitzgerald sided with the two cabinet ministers on the House management committee to deprive the official opposition of money recommended by an independent consultant.
Ross Wiseman was perhaps the most biased Speaker in recent member, despite the Olympian achievements of his predecessors in setting new standards for bias. In the most outrageous example of his bias, Wiseman cited an opposition member of the House for contempt without any evidence save for the ridiculous accusations of Wiseman’s fellow Conservatives.
When it comes to voting in the House, the Premier can command the loyalty of a majority of the House solely by virtue of these additional appointments that she alone makes.
In addition, the Premier controls the appointment of so-called statutory officers such as the auditor general or the child and youth advocate. The result has been to deny the opposition members of the House with the independent, professional advice and support they should be able to rely on in order to review and critique government policy and actions.
The Premier controls cabinet. Cabinet decides when the House meets. Cabinet determines what proposed laws The House meets these days about half the number of days it met in the 1980s and 1990s. According to Memorial University political scientist Alex Marland, the current sitting schedule is comparable to the House record in the 1950s. As Marland also notes, the reduced schedule for the House allows the Premier to avoid “providing an institutional forum for opposition.”
Marland notes that government backbenchers and the opposition members normally have one day of the four day legislative week in which they can discuss business they bring to the House. Marland incorrectly calls this business “private bills.”
A private bill is a proposal for a law that deals only with a specific individual, group, company, or association. A public bill applies to everyone. Private Members’ Day in the House of Assembly is the one day in a week when ordinary members of the House can bring business to the floor of the legislature.
The Wednesday Sideshow
The House of Assembly follows the same practices and customs as the House of Commons. Private members of the Commons can introduce all sorts of proposed laws. They seldom get debated but once in a while something comes up that way that the government latches onto and supports. If nothing else, a private member’s bill can be a way of drawing public attention to an issue the government doesn;t have on its agenda. That’s one of the major things the House is for: the public’s business.
In theory, private members of the House of Assembly could propose all sorts of laws of their own. The only practical restriction is that the private members’ proposed law cannot cause the government to spend money.
That’s the theory. In Newfoundland and Labrador, the House standing orders don’t even expressly acknowledge that the order of business for the Wednesday private members’ session can include a public bill. They only discuss the useless motions that get debated every Wednesday, on rotation among the three parties.
What we are speaking about here is a public bill such as one the whistleblower law that the provincial government refused to introduce for years. We could also be talking about a simple amendment to the Memorial University Act to change who appoints the president. In truth, there are all sorts of things a private member could bring up this way. One could do it in any legislature except the one in Newfoundland and Labrador.
Even if an ordinary member of the House of Assembly wanted to do a better job, he or she would have a hard time. The whole place is set up to make that almost impossible to do.
-srbp-
Friday – Government by Committee: A glimpse of the possible future, one without a House of Assembly or political parties.
