10 May 2016

Stunnel mania #nlpoli

Right off the bat, let's fess up to a mistake.

The 2004 research into the Stunnel cost "cost a total of $351,674, with a contribution of $281,339 from ACOA and $70,335 from the province." You can find the figures in the original news release from February 2004.

That means that the latest study into the potential for a fixed link between the Great Northern Peninsula and Quebec is a bit more than double the cost of the 2004 study.  But notice that the province is going it alone this time and to the tune of 10 times what it cost the provincial government more than decade ago to get to the same place.

In other words, the fixed link to the mainland is technically feasible but economically nutty.
Folks have been turning up all sorts of old critiques of the Stunnel idea since SRBP broke the story last week about the new funding and the Conservatives brought it up in the House.  There's one from the Economist. Notice, though, that it is from November 2003,  just after the provincial election and well before the engineers finished their report on The Hole.  A few others that you will find from early 2005 make it clear the government isn't going anywhere with the idea and certainly not without federal cash.

What's hard to find, though, is anyone in 2004 who kicked the crap out of this most insane of idiotic ideas.  Well, besides the column your humble e-scribbler wrote for the first incarnation of the Independent, that is. That's interesting given that just before Danny Williams announced finding for the Stunnel study, he had slammed everyone between the ideas with bad news about the upcoming budget.

Maybe the difference in public reaction is that the provincial government didn't have much cash tied up in the original proposal back in 2004 and people hadn't heard the harsh budget that came in later that winter. Maybe the difference was because the federal government had cut Williams a cheque for $2.0 billion in January 2005 so the mood wasn't quite as gloomy as it might have been in April 2004.

The reason for the difference isn't as important to note than the fact there was a very significant difference.  That's because the ideas are not any different now than they were then.  All the claims about economic benefits were as preposterous then as now.  And in 2005 and in 2016,  the provincial government is looking to Uncle Ottawa to cough up the cash.  They didn't then and they won't now because the whole thing is just crazy.

What we shouldn't discount this time is that both the current Liberal administration seems to be just as caught up in the hype of megaprojects as the Conservatives were.  Their reasons are identical:  there is a default setting among politicians to use public money for gigantic projects in place of sustainable economic development.  Danny Williams had the disease in 2004.  It led him to the Stunnel and the Lower Churchill and a decade later, Dwight Ball has basically the same disease.

"You need to explore what options you have available," Ball said.  The quote is in a CBC story but it is the same comments Ball made in the House of Assembly on Monday. "The fixed link in Newfoundland and Labrador would be a big social and a big economic driver to the future of our province."

Danny Dumaresque, a big proponent of the Stunnel, thinks the whole thing could be built without any public money.  Sure and Muskrat Falls will only cost $5.0 billion.  Face it:  if the private sector investors thought they could build the Stunnel and make money at it, they would,  The very fact that the provincial government is looking at this tells you that the whole idea makes some kind of political sense but no economic sense.  What is drawing Ball's attention is the need to find some massive make-work project to replace the megaprojects that are about to shut down in our province.  Two of them are private sector initiatives.

The largest one, though, is funded solely by public money. There's no coincidence that Muskrat Falls is also the one that makes no economic sense on its own and is collapsing under the weight of incompetence and mismanagement.  The two go hand-in-hand not because public sector managers are dumb but because politicians are. They chase projects like Muskrat Falls for the pride, not because they want to make a buck.  There's no dollar limit when you want to fill up an emotional hole.  That's how you get into trouble in the public sector trying to do things best left to the private sector.

If pride isn't on the agenda this time, a project like the Stunnel will attract support for social reasons, as Ball puts it.  Dig into it a bit and you will probably find that those social reasons have more to do with fighting against the natural decline in some parts of the province.  That's part of a longer term social and economic change.  Rather than fight against it, we should be letting people decide for themselves where to live.  As the economy changes,  they just won't be living in remote communities whether it is along the coast of Labrador or Newfoundland.

That change has been under way for a couple of decades already. We saw it already in places like Harbour Breton.  back then, the Conservatives pushed public money into the community so that people wouldn't leave.  Danny Williams said exactly that, by the way. Pushing public money into areas where the local private sector has shut down is a running theme through local government policy since 1996.

Dwight Ball says the Stunnel is about the province's future. In truth, pursuing these sorts of hare-brained schemes is a sign of thinking lost  in the past. It's a past that never worked.  We have just seen it fail yet again, spectacularly, in a way that has driven the government to close libraries and tax books in a desperate effort to cope with a budget in which borrowing is the largest source of government revenue.  In the background lurks a crushing public debt that is 300% larger than the government's income this year.

We cannot get to the future by clinging to bad ideas from the past.  The future of our province lies in the opposite direction of where the Stunnel would - inevitably - take us.