27 July 2020

Dwight and Tom's legacy: more of the same #nlpoli

Herb Kitchen died last week.

He was the minister of finance in the early 1990s who brought down the difficult budgets, starting in 1991 that were part of a plan that turned the provincial government around.

The deficit at the time was about $300 million and the total budget called for spending of around $3.2 billion. 

Finance minister Tom Osborne announced on Friday that he will need to borrow $3.2 billion to close the gap between what the government will spend (about $8.9 billion, plus more money for Muskrat Falls) and its income.

Officially, Tom Osborne’s deficit of $2.1 billion for 2020 will be 25% of spending compared to less than 10 percent back in Herb’s day.  But if you wanted to compare apples to apples, then we should use that $3.2 billion cash figure, which works out to a deficit three and a half times the size of the one Herb Kitchen brought to the House of Assembly 29 years ago.

Thank God Herb didn't live to see what a mess the provincial deficit will actually be.

20 July 2020

Change versus more of the same: Summer 2020 edition #nlpoli




Spring 1994.

At the point Clyde Wells spoke to the graduating class of Memorial University’s business school that year, the administration he led had already started getting government spending under control and transforming the economy.  Wells goes through all of that with the class, why government was undertaking the changes, and what he hoped would be the outcome. 

Give the speech a listen.  It’s only 38 minutes and it is striking on a few levels.  First of all, think of the last time you heard a Premier speak to an audience in Newfoundland and Labrador this calmly, rationally, and with as much detail.  This is not a speech of clever quips or turns of phrase.  This is basic information.

13 July 2020

The challenge of change #nlpoli

Change is hard.

 It's even harder when no one wants to change.


Our Former
Dear Premier
Some people outside the Liberal Party have been obsessed lately with the leadership contest currently going on.  They seem to think that one person can make all the difference in how the provincial government will tackle its considerable financial problems.

Well, the belief that the Premier is the strong man or woman responsible for everything is part of our post-Confederation political culture. The strongman myth – a local version of the Latin American caudillo or the Soviet/Russian personality cults - has only grown in strength since 2003 despite the ample evidence it simply isn’t true.  There are many factors that determine what the government does and those will affect the choices the next premier and the administration he leads will make.

Rather than look at the individuals who might wind up as Premier next month, let’s take a look at those other factors.

07 July 2020

Muskrat committee flags cost risk for potential alternate transmission software #nlpoli

At the end of December 2019,  the Muskrat Falls Oversight Committee added development of alternate protection and control software for the high voltage direct current transmission system – that is, the Labrador-Island Link  - to its list of risks the committee is monitoring for potential added project costs.

Alternate software and syncronous condensers
are major project cost risks.

The reasons for the concern are contained in the section of the report on a visit by the Independent Engineer to the software development team:

“While the plan still shows expected completion of the factory acceptance tests (FAT) by June 9th, 2020, there is little confidence that the target will be met. Progress velocity remains in risk category ‘red’.”

The report received by the oversight committee in late February 2020 also noted that the number of “outstanding bugs that will be identified/ remedied at later stages presents an unknown risk to Project schedule and S/W [software?] performance.”

The Independent Engineer’s site visit to the GE development team also observed that “GE’s project plan does not include full regression testing of the completed software release or provides time allowance for bug fixes between the project phases. That raises a question if that approach will ensure full functionality of this critical component.”

The Independent Engineer was supposed to do a site visit in the first quarter of 2020, but COVID-19 forced postponement.  In the report on this period received by the oversight committee on 15 June 2020, the committee noted that the software development and schedule remained a “key project risk.”

The Q1 2020 report also noted problems with another, unrelated issue: “Soldiers Pond synchronous condensers vibration and binding issues root cause and remediation remain ongoing. When Unit 3 bearings and housing were removed corrosion and damage was [sic] observed.”

At the recent annual general meeting, Nalcor chief executive Stan Marshall apparently made no mention of the ongoing difficulties with the P and C software and the synchronous condensers.  Media reports just talked about the impact of COVID-19 that forced closure of the work site for a couple of months.

-srbp-

06 July 2020

Building on our successes #nlpoli


“First and foremost, be totally honest with the electorate,”  former Premier Clyde Wells told Anthony Germain on CBC’s Sunday Edition last weekend.  He was giving some general advice to the next Premier on how to handle the provincial government’s enormous financial problems.
SEP 1992

“Don't go sugar-coating anything. Fully disclose what you're doing [and] why you're doing it. Have a logical plan that will treat everybody fairly.”

Another part of Wells’ approach was to communicate.  Wells told Germain that he took every opportunity to explain what was going on and why it was happening to the public.  He made a couple of province-wide addresses to the public to do just that.   

People didn’t like it at first.  The opposition parties and the unions criticised everything.  That’s what they are supposed to do.  But, as Wells, pointed out, “the people of the province come around. In my case, it was proven that they come around, because in the 1993 election, after four years of the most severe cutting, we had an increased majority.”

Few Premiers have done that in Newfoundland and Labrador since 1855 and none have done it since Wells.  In 2007, with bags of cash, great times, and no opposition to speak of, the governing Conservatives won more seats than they did in 2003 but they did it with fewer votes.  In 1993, the Liberals got *more* votes than they received in 1989.

But that doesn’t really tell the whole story.