The Atlantic Accord negotiating team photo. That's the real Atlantic Accord signed in 1985.
Where's John Crosbie?
Draw the obvious conclusion.
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Showing posts with label Atlantic Accord. Show all posts
Showing posts with label Atlantic Accord. Show all posts
12 June 2007
Where's John?
The Atlantic Accord negotiating team photo. That's the real Atlantic Accord signed in 1985.
Where's John Crosbie?
Draw the obvious conclusion.
08 June 2007
The disingenuous Mr. Crosbie
John Crosbie has waded into the current budget and Equalization row with the federal government.
He builds his claim on the contention that it was the intention of the Government of Canada in 1985 - when he was the Newfoundland and Labrador regional minister - to ensure that under the real Atlantic Accord the Government of Newfoundland and Labrador would receive 100% of oil and gas revenues as well as Equalization in full as if the oil revenues did not exist. He appears to be saying that it was the intention to have this situation continue in perpetuity.
Mr. Crosbie is either:
1. Extremely forgetful;
2. Deliberately misleading the people of Canada and in particular, the people of Newfoundland and Labrador; or,
3. Attempting to blame others for his own failures in 1985.
Either way, the 1985 Atlantic Accord makes no such provision as Mr. Crosbie claims.
Indeed in 1990, Mr. Crosbie himself specifically dismissed the issue - with characteristic sneering condescension - as being a case of the provincial government attempting to bite the hand that fed the province.
Mr. Crosbie's efforts at historic revisionism make Stalinist photo retouchers look like kindergarten finger painters.
Following is an extract from an unpublished follow-on paper to Which is to be master?
His own words condemn him.
He builds his claim on the contention that it was the intention of the Government of Canada in 1985 - when he was the Newfoundland and Labrador regional minister - to ensure that under the real Atlantic Accord the Government of Newfoundland and Labrador would receive 100% of oil and gas revenues as well as Equalization in full as if the oil revenues did not exist. He appears to be saying that it was the intention to have this situation continue in perpetuity.
Mr. Crosbie is either:
1. Extremely forgetful;
2. Deliberately misleading the people of Canada and in particular, the people of Newfoundland and Labrador; or,
3. Attempting to blame others for his own failures in 1985.
Either way, the 1985 Atlantic Accord makes no such provision as Mr. Crosbie claims.
Indeed in 1990, Mr. Crosbie himself specifically dismissed the issue - with characteristic sneering condescension - as being a case of the provincial government attempting to bite the hand that fed the province.
Mr. Crosbie's efforts at historic revisionism make Stalinist photo retouchers look like kindergarten finger painters.
Following is an extract from an unpublished follow-on paper to Which is to be master?
Additionally, specific sections of the Mulroney offer, and of the Atlantic Accord, deal with Equalization. It is important to note that these are not included in the section on revenue sharing in either document. Therefore, Equalization was not seen by either parties to the Atlantic Accord as representing a form of revenue to be shared among the parties. The Mulroney letter contains the sentence: “The Current [sic] Equalization provisions will apply.” This clearly established that the Atlantic Accord and any revenues related to offshore oil would be subject to the Equalization program; as such, the provincial government’s Equalization entitlement would normally be reduced by growth in offshore oil revenue.Whatever the reasons for Mr. Crosbie's claims about federal (i.e. his intentions) in the 1985 Atlantic Accord, there is no question that what he claims today is simply not true.
The Mulroney offer contained a caveat that there should not be a dollar-for-dollar loss of Equalization payments as provincial own-source revenues increased from oil production. As such the Atlantic Accord contains a section to provide a payment to the Government of Newfoundland and Labrador in the form of an Equalization offset. It is clear from the structure of this section of the Accord and of the enabling legislation that the Government of Canada and the Government of Newfoundland and Labrador accepted this offset as a temporary, transitional and declining offset.
The offset mechanism established in the original Atlantic Accord did not provide the level of Equalization protection implied in Mulroney’s letter, although it matched in general outline the declining format he proposed in June 1984. The offset provisions of the Atlantic Accord, as signed in 1985, had the effect of shielding only three cents of every dollar in oil revenue from Equalization.
This was apparent by 1989-90 and was raised publicly by the Wells administration following the signing of the Hibernia agreement. In a speech in Clarenville, Premier Clyde Wells countered arguments that Hibernia was a massive make-work scheme by pointing to the direct and indirect benefits accruing to the Government of Canada. One of those benefits was reduced federal transfer payments to Newfoundland and Labrador. John Crosbie dismissed complaints about reduced transfer payments in this way:"That’s the whole point to the [Equalization] formula… This is nothing to complain about; this is something to be joyous about. So why would they try to pretend that Newfoundland gains nothing from the royalties? I mean this is absolutely bloody nonsense…".*The Wells administration had been briefed on this aspect of the Accord prior to the Hibernia signing and a further brief was sent to cabinet in December 1990 ; it is likely the shortcomings of the federal proposal were known in 1985.
In a 1991 assessment conducted for the Institute of Social and Economic Research at Memorial University, economist Wade Locke confirmed that the Accord offset actually shielded as little as 3% of provincial revenues from Equalization. Locke had earlier cautioned against public expectation that Hibernia development would cure the province’s unemployment or debt problems. In an article published in the Newfoundland Quarterly, Locke concluded that "[w]hile it may be true that the sun will shine one day, it does not appear that have not will be no more because of Hibernia." Similar cautionary flags had been raised by Doug House and others, as early as the environmental review of Hibernia in 1983.
His own words condemn him.
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* Philip Lee, “Newfoundland Ottawa St. John’s 23 September 2004 , p. 14 [continued from page 1 under head: “Almost ‘dollar-for-dollar’ loss will leave province no better off, Gibbons claims”.
The case against Mr. Harper
"A little neglect may breed great mischief"
The Harper administration's move to alter fundamentally two bilateral agreements between the Government of Canada and two provinces is proof of Ben Franklin's age old aphorism on the great consequences bred of the seemingly smallest of actions.
Stephen Harper and his administration are neglecting the commitments not only contained in the agreements involved but the fundamental principles on which those agreements are based.
Two Travelors On the Road to Perdition
John Crosbie has waded into the affair, through private correspondence now provided to the news media, and his memoranda identify the core of the problem. Unfortunately, along the way he engages in an example of historical revisionism which would make Stalinists seem like rank amateurs at the game of altering the public record to state the opposite of what occurred. He also proposes an unduly complex series of possible actions that would, on some level, also strike the fundamental principles underpinning the agreements he helped negotiate.
For his part, Premier Danny Williams has met the Harper affront with entirely appropriate anger and indignation. Sadly, his mercurial temper has led him to run bare headed at the whole matter. In the process, the Premier has set himself on a course that cannot attain its destination.
He has set an impossible policy goal, namely removal of non-renewable resource revenues from the calculation under Equalization of a province's fiscal capacity. The results of such an approach would be to create fundamental inequities in a federal program that ought to be equitable in its treatment of all provinces. As difficult as some may find the O'Brien Equalization formula, cap or no cap, it is at least an honest compromise among contending proposals on Equalization. It's result would be fair.
Mr. Williams has set himself on a political goal - namely defeating Harper at the polls - which is, if not impossible, one which also sets an appalling - if not downright dangerous - precedent. For the first time in recent memory, an administration of one province has set itself on a policy of defeating the administration of another jurisdiction.
Were the Premier to carry his campaign beyond a few speeches, he is unlikely to achieve that political goal either, but at the same time he has set a precedent which would justify any administration in Canada, federal or provincial, overtly or covertly conspiring to defeat Mr. Williams or any of his successors. His anti-Harper campaign is potentially as dangerous for the future of the country as the grievance he seeks to redress; while his intentions may be excellent, Mr. Williams might well find in his actions proof of another truism about the road to perdition.
Casey has it right
Of all the politicians discussing Equalization and the various accords, the only one to get it right is Nova Scotia Tory Bill Casey.
He said a Canadian signature on a contract should mean something and if the government can walk away from its commitment, what does the future hold?
“It is our reputation as a country,” he said in the House. “It is important that people around the world know when the government of Canada signs a contract, it is bullet proof, one can depend on it. It is important. It is bullet proof, solid gold.”
No one has said it as cleanly as that. Mr. Crosbie and Mr. Williams are chasing irrelevant side-issues and each does so for his own individual reasons.
Both are missing the issue of greatest importance to the people of the province. That is as unconscionable as it is unfathomable.
Section 60 of the 1985 Atlantic Accord - the real Atlantic Accord - states simply that neither party can amend the enabling legislation unilaterally. Yet that is exactly what Stephen Harper is doing in one consequential amendment in his current budget bill.
If Mr. Harper can change one provision of the Accord and get away with it, what else can he change in that deal? Management? Revenues? He can change anything he wants.
Successive Liberal and Conservative federal government's have honoured the Accord both in letter and spirit since it was signed. (Mr. Crosbie ought to know that his claims are false on this point) Successive federal governments have improved on the original deal to cope with problems. That would include, incidentally, the 2005 subsidiary agreement that delivered - apparently - what Mr. Crosbie could not get himself or - if we look to 1990 - didn't want to give the ingrates in his own province.
In the end, Mr. Crosbie seems to embody his own cheap words about cake and regurgitation. Entirely appropriate, given how many Conservatives seem to be guilty of the same failings they usually have attributed to others.
But all that ignores the very dangerous course Mr. Harper is on, one made no less perilous by the focus of both Mr. Williams and Mr. Crosbie on the irrelevant.
Changing the 1985 Atlantic Accord - the real one - can take away the very basis on which the second one even exists. Changing the original agreement can take away the entire industry, not merely the extra revenue from federal transfers.
And it's not like that thought hasn't been tossed into the public discussion. Conservative Norm Doyle told a VOCM audience yesterday that times changes and so the Accord must change as well. He warned that nothing is permanent, or words to that effect. Under pressure, it would seem that something a little closer to the truth slipped out than anything Doyle has said previously on the offshore.
Fundamentally, the case against Mr. Harper is exactly as Bill Casey has described it.
It remains a mystery why Norm Doyle and Loyola Hearn, cabinet minister's in Newfoundland when the 1985 Accord was reached, would put the whole thing in jeopardy.
Likewise, it remains a mystery why both Danny Williams and John Crosbie have each gone off
on their own tangents, ignoring in the process a simple point with potentially profound consequences.
Bill Casey figured it out.
What's wrong with the rest of them?
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25 April 2007
Terra Nova back in the cash
High oil prices mean that the Terra Nova oilfield has recovered recent refurbishment costs on the production platform and is now pumping higher royalties into provincial coffers, six weeks ahead of schedule.
The provincial government now receives 30% of the price of each barrel of oil produced under the royalty regime established with the provincial government.
Under the Atlantic Accord (1985), the Government of Newfoundland and Labrador sets royalty and other revenue rate for the offshore. It receives and retains 100% of the amount it sets. in addition, the provincial government continues to receive federal transfers for a fixed period under terms set out in the 1985 Accord and in a 2005 add-on deal between the Government of Newfoundland and Labrador and the Government of Canada.
The provincial government now receives 30% of the price of each barrel of oil produced under the royalty regime established with the provincial government.
Under the Atlantic Accord (1985), the Government of Newfoundland and Labrador sets royalty and other revenue rate for the offshore. It receives and retains 100% of the amount it sets. in addition, the provincial government continues to receive federal transfers for a fixed period under terms set out in the 1985 Accord and in a 2005 add-on deal between the Government of Newfoundland and Labrador and the Government of Canada.
21 April 2007
Fed changes to Accord cause worry
From the Saturday Telegram, Rob Antle's story on federal changes to the Atlantic Accord (1985). Antle quotes Ron Penney, a member of the provincial negotiating team 20-odd years ago.That's Penney, standing second from right in the photo.
“If they’re going to unilaterally change a provision of the Atlantic Accord with respect to the equalization phase-out, then what’s to prevent the federal government from changing other fundamental provisions of the Atlantic Accord?” Penney said.
And like you haven't heard this argument before.
19 April 2007
Did Danny consent?
Over at Offal News, Simon Lono has another take on the implications of the federal government's Equalization changes.
Lono makes the point that by changing the Atlantic Accord (1985), the current federal administration has raised troubling questions about any agreement between a provincial and the Government of Canada.
He's right.
But there's a couple of curious things about the Atlantic Accord (1985) Lono did touch on.
Let's add those in right now.
Under s. 64 of the agreement, the province may request that the entire deal be entrenched in the Constitution.
That simply reinforces Lono's content on the importance of the Accord. It isn't just any other piece of legislation that can be amended easily by one or the other party. The Atlantic Accord (1985) is about as close to a constitutional document as you can get and either party would tamper with it at its peril.
Beyond at though, there's another clause that bears on the current issue Lono raises.
So did Premier Danny Williams consent?
If the Government of Newfoundland and Labrador agreed to the changes contained in Bill C-52, then the Premier's current public posture is sheer crap. He could not have been misled since the provincial government would have been fully aware of the proposed amendments and would have had to agree to them before they were tabled in the House of Commons.
Assuming - and that's dangerous with this administration given the Hibernia South experience - that they exercised appropriate due diligence, government officials and any external consultants they hired would have assessed the implications of the changes.
Now in his scrum, Williams was clear to accuse the feds of misleading his government, but he focused the bulk of his comments on misleading a private citizen. He spent considerable time accusing the finance department of misleading the public and Wade Locke.
Now if Williams misspoke in saying he had been misled, and instead meant to focus on what happened with the public, then Williams may well have consented to the changes. He just failed to us that. If that's the case then Danny Williams is as guilty of misleading the public as anyone else.
The feds are right in that scenario: Danny is just looking for a headline. He's looking to manufacture a crisis for what many are now speculating is coming: a referendum on separation. His confrontational approach to federal-provincial relations would certainly be consistent with that interpretation. It would also fit if the same guy giving him long-term strategic advice is the same political putz who thought it was a great idea to rip down Canadian flags. Overall, it fits with Williams' record of vicious anti-Ottawa rhetoric.
Now if the feds didn't tell anyone what was going on, then Williams has a legal case to overturn at least one set of changes to C-52. Then Williams is right.
But something says that if he had such an unequivocal case, Williams would be launching a lawsuit pretty freakin' quick. In that context, C-52 is such an incontrovertible breach of such an important agreement that every court in the land would smack Harper and Flaherty between the eyes in unequivocal terms.
All someone has to do is ask the feds and the province.
Oh yes, and ask for any documents demonstrating whichever scenario is correct. Danny Williams told us all the provincial premier's supported his 2005 deal. We still haven't seen any proof of that.
Lono makes the point that by changing the Atlantic Accord (1985), the current federal administration has raised troubling questions about any agreement between a provincial and the Government of Canada.
He's right.
But there's a couple of curious things about the Atlantic Accord (1985) Lono did touch on.
Let's add those in right now.
Under s. 64 of the agreement, the province may request that the entire deal be entrenched in the Constitution.
64. The Government of Canada agrees that should the Government of Newfoundland and Labrador achieve the requisite support among the other provinces for the constitutional entrenchment of the Accord that it would introduce a mutually agreeable resolution into Parliament.No provincial administration has made such a request. Frankly, there's no public indication any provincial government ever tried to secure such entrenchment.
That simply reinforces Lono's content on the importance of the Accord. It isn't just any other piece of legislation that can be amended easily by one or the other party. The Atlantic Accord (1985) is about as close to a constitutional document as you can get and either party would tamper with it at its peril.
Beyond at though, there's another clause that bears on the current issue Lono raises.
60. Except by mutual consent, neither government will introduce amendments to the legislation or regulations implementing the Accord.That sentence makes it pretty clear that if the federal government is altering the offset provisions of the 1985 agreement, they would need provincial consent to do so.
So did Premier Danny Williams consent?
If the Government of Newfoundland and Labrador agreed to the changes contained in Bill C-52, then the Premier's current public posture is sheer crap. He could not have been misled since the provincial government would have been fully aware of the proposed amendments and would have had to agree to them before they were tabled in the House of Commons.
Assuming - and that's dangerous with this administration given the Hibernia South experience - that they exercised appropriate due diligence, government officials and any external consultants they hired would have assessed the implications of the changes.
Now in his scrum, Williams was clear to accuse the feds of misleading his government, but he focused the bulk of his comments on misleading a private citizen. He spent considerable time accusing the finance department of misleading the public and Wade Locke.
Now if Williams misspoke in saying he had been misled, and instead meant to focus on what happened with the public, then Williams may well have consented to the changes. He just failed to us that. If that's the case then Danny Williams is as guilty of misleading the public as anyone else.
The feds are right in that scenario: Danny is just looking for a headline. He's looking to manufacture a crisis for what many are now speculating is coming: a referendum on separation. His confrontational approach to federal-provincial relations would certainly be consistent with that interpretation. It would also fit if the same guy giving him long-term strategic advice is the same political putz who thought it was a great idea to rip down Canadian flags. Overall, it fits with Williams' record of vicious anti-Ottawa rhetoric.
Now if the feds didn't tell anyone what was going on, then Williams has a legal case to overturn at least one set of changes to C-52. Then Williams is right.
But something says that if he had such an unequivocal case, Williams would be launching a lawsuit pretty freakin' quick. In that context, C-52 is such an incontrovertible breach of such an important agreement that every court in the land would smack Harper and Flaherty between the eyes in unequivocal terms.
All someone has to do is ask the feds and the province.
Oh yes, and ask for any documents demonstrating whichever scenario is correct. Danny Williams told us all the provincial premier's supported his 2005 deal. We still haven't seen any proof of that.
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Brown and browned off
Give credit for the title to CBC television's supperhour news and the banter between the anchors after a segment on Premier Danny Williams' comments on Wednesday about the ongoing racket with Ottawa about Equalization and offsets.
Williams was back in the province today after spending a couple of weeks someplace sunny.
Brown he is, thanks to a tan.
Browned off?
Well, that's a local expression for being annoyed or upset.
In a scrum with reporters on Wednesday, Williams called for finance minister Jim Flaherty to resign. Williams also tore strips off federal fish minister Loyola Hearn - the regional minister for Newfoundland and Labrador - as well as Conservative members of parliament Fabian Manning and Norm Doyle.
One of the consistent problems for anyone trying to figure out the whole issue is what the federal government has actually done. Skim through the initial budget documents and one would have a hard time finding any reference to a cap being applied to both the 1985 Atlantic Accord and to the 2005 offset agreement. What you will find is the following reference to Equalization:
It appears that Memorial University economist Wade Locke worked on the same assumption for his initial analysis, even after extensive discussions with federal officials. Danny Williams certainly appears to have taken that meaning from the federal budget. He told a CBC radio audience on March 26 that the province would likely opt for the O'Brien formula by 2009. That would be consistent with Locke's assessment, made public two weeks after Williams made those comments
It seems as well that federal fisheries minister Loyola Hearn had a similar impression. He assured Newfoundlanders and Labradorians that once they saw the details, their initial fears would be allayed. That was what he said on March 22. As recently as last Friday, he said much the same thing. Hearn is a smart old politician and he is just too smart to fall into the sort of trap that his predecessor John Efford built for himself and then jumped into.
That perspective on the offset agreements changed on Monday with Jim Flaherty's admission that in fact the federal government would be unilaterally applying caps to the agreements. Of course, in the process, Flaherty had to savage a few facts, but that seems to be a common feature of public life these days.
Taken altogether, it's easy to understand Danny Williams' latest anger. He's right, by the way: Flaherty jerked everybody around. The federal finance leprechaun has been too cute by half. Williams hasn't pointed it out - and he likely won't, but the changes to the 1985 Atlantic Accord have far more serious implications than anything else.
That deal is not just a simple piece of legislation to be changed at a whim. It represents the basis on which Newfoundland and Labrador derives all its oil and gas benefits. The federal legislation enables a landmark agreement in federal-provincial relations and the offset benefits - temporary and declining are a part of the package of financial benefits it contains. The Equalization offsets were intended to provide additional cash to Newfoundland and Labrador on a temporary basis to allow for economic infrastructure development that, frankly, hasn't really been possible until recently.
Williams winds up with a few of problems as he looks at the current federal-provincial mess.
Biggest among them is that he simply has absolutely no means of communicating seriously with the federal government. His last potential allies - the three Conservative MPs - are all dirt under his feet. Williams started the whole mess with Harper at least last October in Gander, and as much as he insists he did the right thing, kicking the Prime Minister in the crotch - publicly - isn't designed to win any friends.
And friends are needed in politics. Even if people aren't friends, you at least need them to not be enemies. Politics is about the art of the deal, about maximizing gains inside a realistic set of options. It's not about Mr. Right, to steal a phrase. Sometimes it's about Mr. Right for Now. Perfect isn't ever possible, but there are plenty of really good possibilities short of perfection. you can cut those deals - good, beneficial deals - on a range of issues if your head is screwed on properly.
But if all you do is set fire to their underwear, the odds of winning people over is slim. When you take to their Stanfield's with a flamethrower, well don't be surprised if they don't invite you over to dinner to meet the kids and the rest of the family. Be surprised if they don't look for a restraining order.
On another level, though, Williams' fundamental argument isn't designed to win converts from among the non-converts. We've said it before. For the federal government and for mainlanders generally, we need to explaining what is in it for them. The Premier hasn't been able to do that, at all.
The weakness of the whole Equalization argument about clawbacks - as fraudulent as it is - takes away the one selling point: we make money; you make money. Instead, them making money becomes a crime. They - the undifferentiated foreign exploiting demons - take what is ours and, according to Williams, by God he will get it back by force if necessary. Any wonder people have tuned out?
Of course, it really doesn't help when your finance minister rejects deficit and debt fighting all the while you are holding out a big debt as one of the big reasons you need federal hand-outs.
Danny Williams lamented recently that mainlanders don't seem to understand how prosperity here benefits there, wherever there is.
Well, the real test of his abilities as a Great Negotiator and a politician will be in how he tackles that challenge.
It's his job to explain the point. He can do it.
The question is will he.
Doing an endless repetition of one of his first interviews - three freakin' years later - just isn't cutting it so far.
Williams was back in the province today after spending a couple of weeks someplace sunny.
Brown he is, thanks to a tan.
Browned off?
Well, that's a local expression for being annoyed or upset.
In a scrum with reporters on Wednesday, Williams called for finance minister Jim Flaherty to resign. Williams also tore strips off federal fish minister Loyola Hearn - the regional minister for Newfoundland and Labrador - as well as Conservative members of parliament Fabian Manning and Norm Doyle.
One of the consistent problems for anyone trying to figure out the whole issue is what the federal government has actually done. Skim through the initial budget documents and one would have a hard time finding any reference to a cap being applied to both the 1985 Atlantic Accord and to the 2005 offset agreement. What you will find is the following reference to Equalization:
A fiscal capacity cap to ensure that Equalization payments do not unfairly bring a receiving province’s overall fiscal capacity to a level higher than that of any non-receiving province.Many people in Newfoundland and Labrador - your humble e-scribbler included - took this to mean that the existing offset agreements, both of which are tied to Equalization and are limited in duration, would still operate until such time as Newfoundland and Labrador exceeded the national per capita fiscal capacity as determined by whatever Equalization formula is in effect.
It appears that Memorial University economist Wade Locke worked on the same assumption for his initial analysis, even after extensive discussions with federal officials. Danny Williams certainly appears to have taken that meaning from the federal budget. He told a CBC radio audience on March 26 that the province would likely opt for the O'Brien formula by 2009. That would be consistent with Locke's assessment, made public two weeks after Williams made those comments
It seems as well that federal fisheries minister Loyola Hearn had a similar impression. He assured Newfoundlanders and Labradorians that once they saw the details, their initial fears would be allayed. That was what he said on March 22. As recently as last Friday, he said much the same thing. Hearn is a smart old politician and he is just too smart to fall into the sort of trap that his predecessor John Efford built for himself and then jumped into.
That perspective on the offset agreements changed on Monday with Jim Flaherty's admission that in fact the federal government would be unilaterally applying caps to the agreements. Of course, in the process, Flaherty had to savage a few facts, but that seems to be a common feature of public life these days.
Taken altogether, it's easy to understand Danny Williams' latest anger. He's right, by the way: Flaherty jerked everybody around. The federal finance leprechaun has been too cute by half. Williams hasn't pointed it out - and he likely won't, but the changes to the 1985 Atlantic Accord have far more serious implications than anything else.
That deal is not just a simple piece of legislation to be changed at a whim. It represents the basis on which Newfoundland and Labrador derives all its oil and gas benefits. The federal legislation enables a landmark agreement in federal-provincial relations and the offset benefits - temporary and declining are a part of the package of financial benefits it contains. The Equalization offsets were intended to provide additional cash to Newfoundland and Labrador on a temporary basis to allow for economic infrastructure development that, frankly, hasn't really been possible until recently.
Williams winds up with a few of problems as he looks at the current federal-provincial mess.
Biggest among them is that he simply has absolutely no means of communicating seriously with the federal government. His last potential allies - the three Conservative MPs - are all dirt under his feet. Williams started the whole mess with Harper at least last October in Gander, and as much as he insists he did the right thing, kicking the Prime Minister in the crotch - publicly - isn't designed to win any friends.
And friends are needed in politics. Even if people aren't friends, you at least need them to not be enemies. Politics is about the art of the deal, about maximizing gains inside a realistic set of options. It's not about Mr. Right, to steal a phrase. Sometimes it's about Mr. Right for Now. Perfect isn't ever possible, but there are plenty of really good possibilities short of perfection. you can cut those deals - good, beneficial deals - on a range of issues if your head is screwed on properly.
But if all you do is set fire to their underwear, the odds of winning people over is slim. When you take to their Stanfield's with a flamethrower, well don't be surprised if they don't invite you over to dinner to meet the kids and the rest of the family. Be surprised if they don't look for a restraining order.
On another level, though, Williams' fundamental argument isn't designed to win converts from among the non-converts. We've said it before. For the federal government and for mainlanders generally, we need to explaining what is in it for them. The Premier hasn't been able to do that, at all.
The weakness of the whole Equalization argument about clawbacks - as fraudulent as it is - takes away the one selling point: we make money; you make money. Instead, them making money becomes a crime. They - the undifferentiated foreign exploiting demons - take what is ours and, according to Williams, by God he will get it back by force if necessary. Any wonder people have tuned out?
Of course, it really doesn't help when your finance minister rejects deficit and debt fighting all the while you are holding out a big debt as one of the big reasons you need federal hand-outs.
Danny Williams lamented recently that mainlanders don't seem to understand how prosperity here benefits there, wherever there is.
Well, the real test of his abilities as a Great Negotiator and a politician will be in how he tackles that challenge.
It's his job to explain the point. He can do it.
The question is will he.
Doing an endless repetition of one of his first interviews - three freakin' years later - just isn't cutting it so far.
17 April 2007
Facts do matter
Except to this man, apparently.From federal finance minister Jim Flaherty's latest Equalization news release:
To do so [not to alter two federal-provincial agreements unilaterally] would give Newfoundland and Labrador access to Equalization payments above all the other Equalization provinces even though its fiscal capacity is higher than Ontario's and British Columbia's, which receive no Equalization payments.If Newfoundland and Labrador's own-source fiscal capacity exceeds the national standard for Equalization, then the province doesn't qualify for either Equalization or for Equalization offsets contained in the 2005 agreement between Prime Minister Paul Martin and Premier Danny Williams:
5. If in any fiscal year in the period 2006-07 to 2011-12 the province does not qualify for receipt of an Equalization payment, no additional offset payment in respect of clause 4 will be made for that fiscal year beyond the payment specified in the existing Atlantic Accord.The federal Equalization formula currently used and the O'Brien formula contained in Flaherty's 2007 budget set the standard used to determine if a province qualifies for Equalization.
That standard in both cases is below the fiscal capacity of Ontario (the lowest non-recipient province) by several hundred dollars per person.
Yes, facts do matter, Jim.They just don't matter to the current federal administration.
Obviously.
16 April 2007
That was then. This is now.
Then, federal foreign affairs minister Peter MacKay said:
Forget a broken election promise.
Harper and his cabinet can't even stick to the same commitment over the course of four weeks.
To see the full impact of this latest revelation, compare Wade Locke's original analysis and the one based on capping what they said wasn't capped.
If the provincial government had waited until the evidence was amassed, the impact of this Conservative perfidy would hav been plain for all to see.
"It is important to note that if Nova Scotia opts for the new system, it doesn't have to give up its Accord–in fact, the Accord will be fully respected and continue to provide benefits to Nova Scotia," said Minister MacKay. The Accord provided Nova Scotia with $830 million immediately upon signing.Then - a mere few days ago - federal fish minister Loyola Hearn told reporters much the same thing:
Hearn insists the Atlantic Accord, which the province and Nova Scotia negotiated with the former Liberal government in 2005, is safe.Then, Prime Minister Stephen Harper told the House of Commons:
"Are we going to get screwed? The answer is no, we're not," Hearn told reporters Friday.
"Are we going to be disadvantaged … by a billion dollars or by a dollar? The answer to that is no, because the government of Canada committed that we would not be disadvantaged."
"The Premier of Newfoundland and Labrador asked repeatedly that this government reject the recommendation of the O'Brien commission that would have put a cap on the equalization benefits of the Atlantic accord," Harper said to the House.Now, finance minister Jim Flaherty admits that his budget caps Equalization offset payments in both the 1985 Atlantic Accord and a supplementary deal in 2005:
"The Atlantic Accord is preserved in this budget and is preserved due to the good work of the minister of fisheries and oceans and of course other members of our Newfoundland and Labrador caucus. Promise made and promise kept."
The province will also have the right to opt permanently into the new, improved, Canada-wide Equalization system. This choice provides the province with flexibility for the future and improves Newfoundland and Labrador's chance of qualifying for an extension beyond the existing system. If the province chooses the new Equalization system, it is only fair that the whole package would apply, including the fiscal capacity cap, to ensure fairness. In this case, it would not be just to other provinces if only Newfoundland and Labrador is allowed to double-dip or cherry-pick only those parts of the new Equalization program that will benefit the province.To apply the cap, the Government of Canada is unilaterally amending both the 1985 Atlantic Accord signed by Prime Minister Brian Mulroney and Premier Brian Peckford and the 2005 deal between Prime Minister Paul Martin and Premier Danny Williams.
To do so would give Newfoundland and Labrador access to Equalization payments above all the other Equalization provinces even though its fiscal capacity is higher than Ontario's and British Columbia's, which receive no Equalization payments. [Emphasis added]
Forget a broken election promise.
Harper and his cabinet can't even stick to the same commitment over the course of four weeks.
To see the full impact of this latest revelation, compare Wade Locke's original analysis and the one based on capping what they said wasn't capped.
If the provincial government had waited until the evidence was amassed, the impact of this Conservative perfidy would hav been plain for all to see.
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Connies write off three NL ridings
A news release like this one virtually guarantees the seven seats in Newfoundland and Labrador will represented by someone other than a Conservative after the next federal election.
It confirms that federal government will be altering the 1985 and 2005 offshore agreements if and when the Newfoundland and Labrador government adopts the new Equalization program, something they never mentioned until caught at it last week.
How many times have the federal Conservatives said there were or would be no caps on the Atlantic Accord?
Surprise.
It isn't a cap.
It's a hood.
Around Bond Papers, we've been callin' 'em Connies for a couple of years.
Seems they are Connies.
Trying to con people into giving them votes.
Danny Williams must be especially rotted, seeing as he threw his lot in with these guys, even though it was painfully obvious at the time what the result would be.
Danny Williams even attributed things to Harper that Harper never even said, all in an effort to get Harper a few seats.
Wow.
That's gotta hurt.
It confirms that federal government will be altering the 1985 and 2005 offshore agreements if and when the Newfoundland and Labrador government adopts the new Equalization program, something they never mentioned until caught at it last week.
How many times have the federal Conservatives said there were or would be no caps on the Atlantic Accord?
Surprise.
It isn't a cap.
It's a hood.
Around Bond Papers, we've been callin' 'em Connies for a couple of years.
Seems they are Connies.
Trying to con people into giving them votes.
Danny Williams must be especially rotted, seeing as he threw his lot in with these guys, even though it was painfully obvious at the time what the result would be.
Danny Williams even attributed things to Harper that Harper never even said, all in an effort to get Harper a few seats.
Wow.
That's gotta hurt.
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Update: Among the others like Danny Williams smarting at the latest Harper political shaft must be the local talk show maven who sometimes calls herself Hydroqueen.
She spent a lot of time shilling for Steve Harper and his local candidates during the last federal election.
She even invented bizarre political theories to bolster her argument. Hydroqueen was wrong in the theory and, as it turns out, in the practice as well.
Maybe we need to start a special Homer Simpson gallery of people who backed Harper in 2005, lambasted any Liberal in sight on a purely partisan basis, and who today are feeling just a wee bit used.
Update Update: Yet another person who fell for the Connie job. Well, "fell" doesn't accurately describe someone who actually reworked reality in an effort to back his cause, but let's be generous.
She spent a lot of time shilling for Steve Harper and his local candidates during the last federal election.
She even invented bizarre political theories to bolster her argument. Hydroqueen was wrong in the theory and, as it turns out, in the practice as well.
Maybe we need to start a special Homer Simpson gallery of people who backed Harper in 2005, lambasted any Liberal in sight on a purely partisan basis, and who today are feeling just a wee bit used.
Update Update: Yet another person who fell for the Connie job. Well, "fell" doesn't accurately describe someone who actually reworked reality in an effort to back his cause, but let's be generous.
Goodale calls Harper move "betrayal" of NL and NS
From Canadian Press.
"The worst betrayal of all was the barefaced failure to tell the truth on the issue of equalization and the Atlantic accord," he told Liberal MP Geoff Regan's nomination meeting.
15 April 2007
The change Locke found
In Wade Locke's original analysis, he used the assumption that Equalization offsets provided for in the 2005 offshore revenue agreement and enabled by the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act, S.C. 2005, c. 30, c. 85, would continue as originally intended.
Under that Act as it currently stands, the additional offset is calculated based on the difference between what the provincial government received in Equalization under the formula in use at the time.
The Equalization changes contained in the 2007 budget gave the Government of Newfoundland and Labrador an option of which Equalization formula would apply.
However, s.84 of the budget implementation Act (C-52) makes a significant change to the 2005 implementation Act by imposing a definition of the Equalization system in use at the time to mean the O'Brien formula.
As a result, even in a year in which the province used the existing Equalization system (100% of resource revenues included), the additional offsets would be reduced since the O'Brien formula already offsets half of resource revenues.
Additionally, the use of the O'Brien formula, which includes a cap on payments, the proposed changes in the budget implementation legislation would change the meaning of s. 22 of the 2005 implementation Act. Under the current meaning of that legislation, no additional offset payment would be received if the provincial government did not receive an Equalization payment.
In the operation of the Equalization system and the offsets agreements as currently in effect, no payment would be paid if the province did not qualify for Equalization. However, under the O'Brien formula, the province may qualify for Equalization, but receive no payment in years where a combination of all revenues (own source plus Equalization plus Equalization offsets) exceeds the per capita fiscal capacity of the lowest non-recipient province.
Given the amendments contained in Bill C-52, Newfoundland and Labrador would actually receive no offsets at all in any year where its Equalization payment were reduced to zero as a result of the O'Brien cap.
There is no obvious reason for making this change. If the federal government wanted to give effect to both the 2005 agreement and the 2007 budget - allowing for choices - Bill C-52 would necessitate only modest changes, if any, to the implementation acts for 1985 Atlantic Accord and the 2005 agreement.
Under that Act as it currently stands, the additional offset is calculated based on the difference between what the provincial government received in Equalization under the formula in use at the time.
The Equalization changes contained in the 2007 budget gave the Government of Newfoundland and Labrador an option of which Equalization formula would apply.
However, s.84 of the budget implementation Act (C-52) makes a significant change to the 2005 implementation Act by imposing a definition of the Equalization system in use at the time to mean the O'Brien formula.
84. The definition “fiscal equalization payment” in section 18 of the Act is replaced by
the following:
“fiscal equalization payment” means (a) for the purposes of section 22, the fiscal equalization payment that would be received by the Province for a fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act; and,
(b) for the purposes of sections 24 to 26, the fiscal equalization payment that would be received by the Province for a fiscal year under Part I of the Federal-Provincial Fiscal Arrangements Act if the Province’s total per capita fiscal capacity were the amount determined by the formula
A + B + (C / F)
where
A, B, C and F have the same meaning as in the definition "total per capita fiscal capacity" in subsection 3.5(1) of that Act.
As a result, even in a year in which the province used the existing Equalization system (100% of resource revenues included), the additional offsets would be reduced since the O'Brien formula already offsets half of resource revenues.
Additionally, the use of the O'Brien formula, which includes a cap on payments, the proposed changes in the budget implementation legislation would change the meaning of s. 22 of the 2005 implementation Act. Under the current meaning of that legislation, no additional offset payment would be received if the provincial government did not receive an Equalization payment.
In the operation of the Equalization system and the offsets agreements as currently in effect, no payment would be paid if the province did not qualify for Equalization. However, under the O'Brien formula, the province may qualify for Equalization, but receive no payment in years where a combination of all revenues (own source plus Equalization plus Equalization offsets) exceeds the per capita fiscal capacity of the lowest non-recipient province.
Given the amendments contained in Bill C-52, Newfoundland and Labrador would actually receive no offsets at all in any year where its Equalization payment were reduced to zero as a result of the O'Brien cap.
There is no obvious reason for making this change. If the federal government wanted to give effect to both the 2005 agreement and the 2007 budget - allowing for choices - Bill C-52 would necessitate only modest changes, if any, to the implementation acts for 1985 Atlantic Accord and the 2005 agreement.
13 April 2007
Premature gasket-blowing
From Tom Marshall, minister of finance:
As Offal puts it:
Wade Locke's latest analysis is interesting for two reasons.
First, it suggests that there is an interpretation of eligibility for Equalization offsets which is different from the one used in his original presentation. More will follow on that in a separate post.
Specifically, Locke quotes this section of an e-mail from an unnamed senior federal finance official:
What Locke has done here is identified a potential issue. It is far from proven conclusively. As well, the provincial government appears to have blown a gasket before conducting its own review. Tom Marshall stated in a number of interviews that his officials were still seeking clarification on the issue, he had endeavoured to have the issue clarified with his federal counterpart and that provincial justice officials were reviewing the federal legislation. In one interview it appeared that Marshall was entirely unaware of this issue until Locke brought it to his attention sometime before Locke's news release today.
The one thing that can be concluded from this entire episode over the past 24 hours is that federal-provincial relations are at an all time low state. Marshall's inflammatory news release, done with the full approval of the Premier presumably, will not help resolve this matter successfully.
Claiming to be misled is one thing, if you have evidence and can prove it. Flaming the federal government - or anyone, for that matter - without substantive evidence is grossly unprofessional.
Dr. Locke has provided an invaluable public service with his analysis. Would that the politicians acted with the same professionalism he has displayed.
The Honourable Tom Marshall, Minister of Finance and President of Treasury Board, today confirmed that the federal government has misled the Provincial Government and the people of Newfoundland and Labrador regarding the true implications of the new equalization program as outlined in its 2007 Budget.However, as Simon Lono points out at Offal News, there is something odd about Marshall's release in that it provides no provincial government calculations. Indeed, the provincial government has thus far provided not a shred of information or analysis to back its original contentions on Equalization. Ditto for the federal government, represented in this case by federal fish minister Loyola Hearn.
As Offal puts it:
You would think the Hearn would release numbers of his own to defend the federal position. He does not. Instead he's reduced to a weak claim that no province will be harmed.Apparently not.
But does he actually have any real idea whether the province will be harmed? Apparently not.
As for Marshall, he's definitely on the warpath now. And you can expect the Premier to be leading the barbarians at the federal gate as soon as he gets home.
But didn't Marshall already know that Locke's numbers were off in the first place?
Wade Locke's latest analysis is interesting for two reasons.
First, it suggests that there is an interpretation of eligibility for Equalization offsets which is different from the one used in his original presentation. More will follow on that in a separate post.
Specifically, Locke quotes this section of an e-mail from an unnamed senior federal finance official:
In effect, NL would be eligible to receive Equalization and offsets as long as long its own-source per capita fiscal capacity (including non-resource yields and 100% of resource revenues) is not equal to or greater than the own-source per capita fiscal capacity of the non-receiving province with the lowest per capita fiscal capacity. [Italics in original]On the face of it, this section does not contradict what appears to be the intention of the 2005 offshore deal or the 2007 federal budget as announced.
What Locke has done here is identified a potential issue. It is far from proven conclusively. As well, the provincial government appears to have blown a gasket before conducting its own review. Tom Marshall stated in a number of interviews that his officials were still seeking clarification on the issue, he had endeavoured to have the issue clarified with his federal counterpart and that provincial justice officials were reviewing the federal legislation. In one interview it appeared that Marshall was entirely unaware of this issue until Locke brought it to his attention sometime before Locke's news release today.
The one thing that can be concluded from this entire episode over the past 24 hours is that federal-provincial relations are at an all time low state. Marshall's inflammatory news release, done with the full approval of the Premier presumably, will not help resolve this matter successfully.
Claiming to be misled is one thing, if you have evidence and can prove it. Flaming the federal government - or anyone, for that matter - without substantive evidence is grossly unprofessional.
Dr. Locke has provided an invaluable public service with his analysis. Would that the politicians acted with the same professionalism he has displayed.
Wade Locke's latest analysis
Wade Locke has graciously provided his latest news release, which is reproduced below in its entirety:
Updated Estimates of
Table 1: Updated Estimates Based on Accord Eligibility Criterion Contained in the Budget Implementation Act for the Impacts of the Equalization Options on the NL Treasury from the 2007 Federal Budget - 2007/08 to 2019/20
| | Status Quo | 50% w Cap (original estimate) | 50% w Cap (updated estimate) |
| Period 2007/08 – 2011/12 | |||
| Oil Revenue | $7.30 B | $7.30 B | $7.30 B |
| Accord Payments | $2.51 B | $2.37 B | $1.72 B |
| Equalization | $0.59 B | $0.76 B | $0.76 B |
| Combined | $10.40 B | $10.43 B | $9.78 B |
| Period 2012/13 – 2019/20 | |||
| Oil Revenue | $7.37 B | $7.37 B | $7.37 B |
| Accord Payments | $0.0 B | $4.96 B | $0.0 B |
| Equalization | $0.76 B | $0.0 B | $0.35 B |
| Combined | $8.13 B | $12.33 B | $7.72 B |
| Period 2007/08 – 2019/20 | |||
| Oil Revenue | $14.67 B | $14.67 B | $14.67 B |
| Accord Payments | $2.51 B | $7.34 B | $1.72 B |
| Equalization | $1.35 B | $0.76 B | $1.11 B |
| Combined | $18.53 B | $22.76 B | $17.50 B |
On
Given the sensitivity and the emotion surrounding this particular issue, I feel it is important to document how things have evolved to this point. This should enable others to judge the credibility of the approach and the results derived there from.
In any empirical assessment, it is necessary to make assumptions about how elements of each province’s fiscal capacity are expected to evolve over time. The assumptions used in the Locke analysis are clearly specified in the original presentation and interested individuals are referred to www.arts.mun.ca/arts to view the original presentation. While different assumptions will yield different specific results, they are unlikely to change the basic finding listed in Table 1. However, I would encourage both officials in Finance
The crucial assumption utilized in the original presentation was the eligibility criterion for payments under the Atlantic Accord. Specifically, the original analysis assumed that, under the 50% option,
The specific questions asked and the responses received were:
Question #1: In calculating the accord under the new arrangement, is it the case that NL receives the accord if it qualifies for equalization on the new arrangement prior to the cap being imposed? In other words, while the cap can remove all equalization payments, but before that happens, the province could qualify to receive equalization pre-cap and as such be eligible to receive the accord. Is that correct?
Question #2: In calculating the accord under the new arrangement, it is my interpretation that the province is entitled to receive the accord so long as it qualifies for equalization before the cap is imposed, rather than after. Is that correct?
Response #2: The legislation before the House proposes that under the new arrangement, the test for determining whether or not NL qualifies for the 2005 Accord is whether or not it would receive Equalization payments under the base O’Brien formula – that is, 50% inclusion of resources plus the cap. If it receives EQ under that formula, then the next steps are taken to determine how much. In this case, the offsets are determined before the cap is applied.
At that point, I had asked for the specific legislation so that I could review it myself. I received it the next day after my presentation and reviewed it on Easter weekend. However, between 4:40 pm (the time of the email) and 7:00 pm (the scheduled start of the presentation) it was impossible to re-analyze the data with the alternate eligibility assumption. Instead, I modified the original presentation to flag the crucial assumption about Accord eligibility. I, as well, indicated in the presentation that if the eligibility assumption was changed, then the estimates under the 50% option would have to be modified, not realizing the extent of the change that would be required.
Economics: the dismal science
Wade Locke has adjusted his assumptions.
Now he says that what was originally a big gain for the province is in fact a loss.
Yes, the 50% exclusion now goes from being a six billion dollar gain for Newfoundland and Labrador over the status quo becomes a one billion net loss.
That's with a change in the assumptions, or more specifically, as CBC's David Cochrane described it, a reading of the budget implementation legislation. He referred to a "stricter" interpretation of what it would take for the province to qualify for Equalization in the future and there
fore how the offshore offsets deals would be affected.
Some quickie observations, before getting Locke's revised views:
1. Economics is a dismal science. After all, if adjusting some assumptions produces a variation of $7.0 billion - your entire Equalization and offsets work, incidentally - then you have some basic problems. Makes you wonder what it would take to have the Danny Williams option turn into a pig.
2. For all the big numbers, remove $14.7 billion. Locke includes offshore revenue in each of projections, for some inexplicable reason. Lop out that specific figure and you'll see the specific effects of Equalization changes and the offsets. That is assuming that Locke's assumptions on any given point are valid. That's not a sarcastic comment; it's a caveat.
3. The cap in the original 2005 deal obviously exists in one way or another. No matter how you look at it the cap built into the original deals - qualifying for Equalization or not - is still active. The real question Locke seems to be grappling with is when that cap cuts in.
4. Yes, there is a cap in the original deal. The offsets only flow as long as the province qualifies for the Equalization hand-out.
And for the record both for Mainland readers and the locals, Danny Williams' original goal in 2004 - not the one he settled for in January 2005 - was for a doubling of oil and gas revenues in perpetuity.
5. The original 2005 deal did not deliver as promised. Said it before. Say it again.
6. Wade Locke still hasn't assessed the other Harper option that still exists, i.e. 100% exclusion of non-renewables with a cap. Too bad Locke is apparently hauling ass out of the debate now that he's stirred it up. Maybe he got some angry phone calls from Florida or wherever the Premier is.
To be complete though, Locke should have assessed that variation since it is on the table.
And if 100% exclusion of non-renewables is such a good idea, then maybe applying the cap is better than what we have now.
At least according to the latest numbers, based on the latest assumptions.
7. Danny Williams had numbers like the ones Locke released initially. On March 26, Danny told CBC radio's Jeff Gilhooley that in all likelihood the province would shift to the 50% exclusion option within a year or two, i.e. by 2009, based on the government's analysis.
Now he says that what was originally a big gain for the province is in fact a loss.
Yes, the 50% exclusion now goes from being a six billion dollar gain for Newfoundland and Labrador over the status quo becomes a one billion net loss.
That's with a change in the assumptions, or more specifically, as CBC's David Cochrane described it, a reading of the budget implementation legislation. He referred to a "stricter" interpretation of what it would take for the province to qualify for Equalization in the future and there
fore how the offshore offsets deals would be affected.
Some quickie observations, before getting Locke's revised views:
1. Economics is a dismal science. After all, if adjusting some assumptions produces a variation of $7.0 billion - your entire Equalization and offsets work, incidentally - then you have some basic problems. Makes you wonder what it would take to have the Danny Williams option turn into a pig.
2. For all the big numbers, remove $14.7 billion. Locke includes offshore revenue in each of projections, for some inexplicable reason. Lop out that specific figure and you'll see the specific effects of Equalization changes and the offsets. That is assuming that Locke's assumptions on any given point are valid. That's not a sarcastic comment; it's a caveat.
3. The cap in the original 2005 deal obviously exists in one way or another. No matter how you look at it the cap built into the original deals - qualifying for Equalization or not - is still active. The real question Locke seems to be grappling with is when that cap cuts in.
4. Yes, there is a cap in the original deal. The offsets only flow as long as the province qualifies for the Equalization hand-out.
And for the record both for Mainland readers and the locals, Danny Williams' original goal in 2004 - not the one he settled for in January 2005 - was for a doubling of oil and gas revenues in perpetuity.
5. The original 2005 deal did not deliver as promised. Said it before. Say it again.
6. Wade Locke still hasn't assessed the other Harper option that still exists, i.e. 100% exclusion of non-renewables with a cap. Too bad Locke is apparently hauling ass out of the debate now that he's stirred it up. Maybe he got some angry phone calls from Florida or wherever the Premier is.
To be complete though, Locke should have assessed that variation since it is on the table.
And if 100% exclusion of non-renewables is such a good idea, then maybe applying the cap is better than what we have now.
At least according to the latest numbers, based on the latest assumptions.
7. Danny Williams had numbers like the ones Locke released initially. On March 26, Danny told CBC radio's Jeff Gilhooley that in all likelihood the province would shift to the 50% exclusion option within a year or two, i.e. by 2009, based on the government's analysis.
11 April 2007
How much is enough? Part Two
St. John's mayor Andy Wells backs Premier Danny Williams unequivocally on whatever policies Williams espouses.
No surprise there, since Williams gave Wells the best part-time job he'll ever have.
Of course, Wells can't explain the Williams policies any better than the Premier can himself.
To wit:
The Government of Newfoundland and Labrador already has a seat at the table when the big decisions get made.
In fact, as the provincial government has demonstrated at Hebron and Hibernia South, there isn't anyone else sitting at the table.
Nobody else is even in the room.
That's because, under the 1985 Atlantic Accord, the provincial government sets royalties for the offshore. If it doesn't get the deal it wants, there's no project.
Similarly, as in Hibernia South, the government can simply sit back and veto a project, despite having failed to exercise any diligence in collecting information before a decision was required.
What is Mr. Wells talking about? He evidently doesn't know and therefore no one else can figure it out either.
The Accord establishes that the provincial government already has extensive control over the offshore. Some might even call it unreasonable control given that the provincial government can apparently neglect its responsibilities for over a year on Hibernia South and then simply veto the project on the flimsiest of excuses.
As for information, Mr. Wells could easily consult with the Newfoundlanders and Labradorians at the offshore board. They already know far more than Mr. Wells or his advisors could know about any aspect of the industry.
What's Mr. Wells talking about? It isn't clear again that even he knows.
Bond Papers has discussed it extensively. It centres on a simple matter of conflict of interest.
But, let us assume that the cost of the thing was an issue.
The so-called equity position was described by the premier as having a total net value to the provincial treasury of a mere $1.5 billion over the 20 year anticipated lifespan of the project. Put that against the estimated provincial revenues of $10 billion.
The premier also said that the tax concessions sought by the companies had a total cost to the treasury of $400 million. Total. Not annual. Total.
The premier said this amount negated the value of the rest of the deal.
Aside from the problems with math evident in the premier's comments - $400 million is less than $1.5 billion - it is difficult to imagine how that sum could obliterate all the benefits of having what Mr. Wells describes as a seat at the table where the big decisions are made, of having information and a "reasonable" level of control.
Leaving even all that aside, though, perhaps Mr. Wells could explain to us how much the Premier offered to pay and how he proposed to pay for it, given that the provincial treasury is stretched a bit thin.
What is Mr. Wells talking about here? Again, one suspects that even he doesn't know.
If - by some chance - he does, then perhaps Mr. Wells would be good enough to enlighten the rest of us.
Otherwise, all we have in this Telegram story is another example of Mr. Wells saying one thing now, when he said something different before.
When the provincial government moved taxpayers out of his jurisdiction to other parts of the province, Mr. Wells thought the idea silly. The prospect of fat federal job s being transferred to his jurisdiction last year had him signing a different tune.
In 1997, six months engineering work was a monumental loss to the province. Now, the loss of innumerable high-paid jobs and the larger value of continuity resulting from the Hebron and Hibernia South projects, is simply the short-term pain for some undefined long-term gain.
What we actually have here is most likely the pain - short- and long-term from Williams' decisions and the equally large pain of Wells' vague comments.
No surprise there, since Williams gave Wells the best part-time job he'll ever have.
Of course, Wells can't explain the Williams policies any better than the Premier can himself.
To wit:
Wells says a seat at the owners' table of major offshore projects is the only way to get an inside view of the industry.Under the Atlantic Accord (1985), the Government of Newfoundland and Labrador has all the rights of the resource owner to set royalties and to approve or disapprove of projects.
"It's important that we have a presence at the table when the big decisions are being made."
The Government of Newfoundland and Labrador already has a seat at the table when the big decisions get made.
In fact, as the provincial government has demonstrated at Hebron and Hibernia South, there isn't anyone else sitting at the table.
Nobody else is even in the room.
That's because, under the 1985 Atlantic Accord, the provincial government sets royalties for the offshore. If it doesn't get the deal it wants, there's no project.
Similarly, as in Hibernia South, the government can simply sit back and veto a project, despite having failed to exercise any diligence in collecting information before a decision was required.
What is Mr. Wells talking about? He evidently doesn't know and therefore no one else can figure it out either.
"You've got to fundamentally establish your right to a reasonable measure of control over the industry. I want to see a situation where we do have the information and we do have the presence and we do have the right - that's what this is fundamentally all about."Mr. Wells really does need to read the 1985 Accord, perhaps for the first time. He certainly needs to listen to the briefings offered up to board members at the offshore regulatory board.
The Accord establishes that the provincial government already has extensive control over the offshore. Some might even call it unreasonable control given that the provincial government can apparently neglect its responsibilities for over a year on Hibernia South and then simply veto the project on the flimsiest of excuses.
As for information, Mr. Wells could easily consult with the Newfoundlanders and Labradorians at the offshore board. They already know far more than Mr. Wells or his advisors could know about any aspect of the industry.
What's Mr. Wells talking about? It isn't clear again that even he knows.
"I consider it fundamental that this issue of equity - the 4.9 per cent - be satisfactorily addressed. I don't understand the companies' reluctance with respect to this issue, particularly considering the premier's not asking for it for free."If Mr. Wells does not understand the position taken by the oil companies perhaps he might take some time to enlighten himself on the matter. It has been well-covered in the news media and company officials are quite willing to make their position known.
Bond Papers has discussed it extensively. It centres on a simple matter of conflict of interest.
But, let us assume that the cost of the thing was an issue.
The so-called equity position was described by the premier as having a total net value to the provincial treasury of a mere $1.5 billion over the 20 year anticipated lifespan of the project. Put that against the estimated provincial revenues of $10 billion.
The premier also said that the tax concessions sought by the companies had a total cost to the treasury of $400 million. Total. Not annual. Total.
The premier said this amount negated the value of the rest of the deal.
Aside from the problems with math evident in the premier's comments - $400 million is less than $1.5 billion - it is difficult to imagine how that sum could obliterate all the benefits of having what Mr. Wells describes as a seat at the table where the big decisions are made, of having information and a "reasonable" level of control.
Leaving even all that aside, though, perhaps Mr. Wells could explain to us how much the Premier offered to pay and how he proposed to pay for it, given that the provincial treasury is stretched a bit thin.
What is Mr. Wells talking about here? Again, one suspects that even he doesn't know.
If - by some chance - he does, then perhaps Mr. Wells would be good enough to enlighten the rest of us.
Otherwise, all we have in this Telegram story is another example of Mr. Wells saying one thing now, when he said something different before.
When the provincial government moved taxpayers out of his jurisdiction to other parts of the province, Mr. Wells thought the idea silly. The prospect of fat federal job s being transferred to his jurisdiction last year had him signing a different tune.
In 1997, six months engineering work was a monumental loss to the province. Now, the loss of innumerable high-paid jobs and the larger value of continuity resulting from the Hebron and Hibernia South projects, is simply the short-term pain for some undefined long-term gain.
What we actually have here is most likely the pain - short- and long-term from Williams' decisions and the equally large pain of Wells' vague comments.
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