On Wednesday, Premier Paul Davis announced that Ken Marshall had been appointed chair of the board of Nalcor and an unspecified number of Nalcor’s subsidiaries.
Danny Williams’ old business buddy has been on the Nalcor board since 2004 and he’s been the acting chair of the board at Nalcor since earlier this year.
Note the date: 10 December 2014.
Now check out the order in council issued on 04 November 2014:
Outside the legislature on Wednesday, Premier Danny Williams had this to say about the legal and financial problems that are still hanging around after last December’s seizure of assets by the government under a hastily compiled expropriation bill.
The expropriation will come with a purchase price, but Williams said he now plans to deduct the cost of severance and environmental cleanup from the final amount.
"So, if the possible environmental exposure and, or, the severance were X amount, and the amount that the assets were valued at were substantially less, well, then obviously there would be no payments of cash from the government," Williams said.
One of the great unreported facts of this expropriation – unreported by the conventional media, that is – is that the expropriation didn’t just affect AbitibiBowater.
Nope.
Included in the seizure were assets of Newfoundland and Labrador-based Fortis Inc and an Italian company called ENEL.
The former was involved in a hydro project that supplied power to the former Abitibi mill at Grand Falls-Windsor and sold the rest to the provincial energy corporation.
The latter was involved in a hydro project at Star Lake that had absolutely nothing to do with supplying anything to the mill. The Star Lake generating plant was built in response to a call for proposals by the province’s energy corporation about a decade ago. The plant supplied power to the grid to reduce emissions from the diesel plant at Holyrood.
Now if you take the Premier’s comments at face value you get a truly amazing thing and one that is unlikely to be swallowed that easily by the companies involved.
If there are any environmental liabilities related to the Abitibi mill, it would be quite a stretch to suggest that ENEL and Fortis somehow have any responsibility for them given that their operations were not for running the mill. ENEL has got a real case in this respect, one would suppose.
By the Premier’s construction a company like ENEL could undertake legitimate business activities based on a government contract entered into in good faith by all parties only to find itself, in less than a decade, not only without the assets it paid for but without any compensation whatsoever for the government seizure.
And the excuse for stiffing them is that they somehow gained a liability for something they had no responsibility for in the first place.
This is one of those moments where you’d wonder if the Premier would be quite so calm about it all if someone were trying to pull the same stunt on him.
Meanwhile, one wonders if the rapprochement between the provincial Conservatives and their federal cousins might possibly have something to do with trying to get Ottawa to protect the Newfoundland and Labrador treasury from the fall-out of last year’s seizure. The federal government has to deal with the international repercussions – like the NAFTA challenge Abitibi filed – but there doesn’t seem to be anything stopping the feds from recovering their costs once the international bits are settled.
Of course, all of this really makes a mockery of recent efforts by the provincial government to win sympathy for its case against Hydro-Quebec.
If the Americans really started to care about it all anyway, might those same New York financiers who supposedly listened sympathetically to the luncheon speech a couple of weeks ago feel quite so favourably disposed to the Premier’s cause if they got the full story on how Fortis and ENEL got screwed over by the Premier’s seizure?
This expropriation business is a long way from settled and the bills are a long way from being paid. Something says some of the bills won’t be settled in cash, either.
Payback will be a mother.
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Consistent with government policy of selling off energy assets – converting principle to cash - clause 8.4 (A) of the Hebron Fiscal Agreement exempts the NALCOR oil and gas corporation from provisions of the agreement that allow government to treat the company differently from other offshore oil companies.
Sections 8.2 and 8.3 shall not apply to OilCo as long as OilCo is a Crown
corporation of the Province.
The words “as long as” suggest a provision to cover off the potential sale of NALCOR’s oil and gas subsidiary.
It wouldn’t be necessary unless the current administration anticipated selling the asset at some point.
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Related:
“It's giving away their future.”
__________________________________________________________________
At the heart of a little flame war last week on one local blog came a rather surprising nugget of hard news that Newfoundlanders and Labradorians likely have never seen and may well never see covered at all – let alone in depth - by local media.
Telegram blog writer Geoff Meeker noted a comment by Premier Danny Williams in the House of Assembly on April 30, 2008. In answering an opposition question about putting $100 million into debt reduction for Newfoundland and Labrador Hydro, the Premier said:
It was a previous Liberal government that wanted to actually privatize Hydro. This particular government wants to strengthen Hydro, wants to make it a very valuable corporation: a corporation that will ultimately pay significant dividends back to the people of this Province; a corporation that perhaps some day may have enough value in its assets overall as a result of the Hebron deal and the White Rose deal, possible Hibernia deal, possible deals on gas, possible deals on oil refineries and other exploration projects, where hopefully we might be able to sell it some day and pay off all the debt of this Province, and that would be a good thing. [Emphasis added]
That’s right.
Danny Williams spoke publicly about selling off some or all of the province’s energy corporation to pay down public debt.
CBC’s provincial affairs reporter David Cochrane added to the discussion online and offered some additional insight into the Premier’s thinking:
We pulled him outside for a scrum to ask about it. Even before we asked a question he clarified his comments. He said he misspoke in the legislature. He wasn't talking about selling Nalcor. He was talking about selling the individual assets it acquires.
For example, if the Hebron stake is eventually worth 5-billion [sic] dollars and someone wants to buy, Williams said he would consider selling it to reduce debt.
That was consistent with past comments he had made when the government rolled out its plan to revamp Hydro into an energy company.
As established in the first part of this series – Control and Resources - that isn’t what Williams had been saying consistently at all.
To the contrary, selling any asset of the energy corporation would run directly counter to the stated goal of acquiring control over the province’s resources and hence its development and future. Being masters of our own destiny is tied directly to resource ownership.
But Cochrane was right: Williams had talked about selling some or all of the energy corporation before. As Cochrane showed, Williams had mentioned the idea in October 2005 in a story Cochrane had done on Ed Martin’s arrival as chief executive officer of the fledgling corporation that would be eventually known as NALCOR Energy:
Williams says his top priority is for the company to become an investor in every form of energy development – or, as he calls it, to get a piece of the action.
"I would like to see Newfoundland and Labrador Hydro gain a strong asset base, so in fact then the government of Newfoundland, as a shareholder, also benefits from that asset base," he said.
…
"If energy continues to grow in value as it is now, perhaps what we could now buy for a billion dollars could be worth $10- or $20 billion in 10 or 20 years' time, which means that those assets have a value whereby we could pay off our debt," Williams said. [Emphasis added]
The 2005 comment is not as clear as the 2008 version in the legislature but they are along the same lines.
And certainly in 2005, Williams wasn’t splitting hairs over regulated (electricity) versus non-regulated (oil and gas) assets as Williams apparently did in the unreported portion of the media scrum in April 2008. As Cochrane described it:
Williams did not say he would sell off all the assets (i.e power generation and transmission capacity). He was talking energy assets in the oil and gas sector.
Now while it doesn’t appear that Williams has said this “many, many times” as Cochrane asserted elsewhere in that comment, there is no question Williams has spoken of selling off some or all of the energy corporation in order to pay down public debt, if the price was right.
Nor is it the only reference to selling energy assets, even though the idea is not contained in the energy plan or the campaign manual. In a clause of the New Dawn agreement, released in September 2008, one provision covers the potential sale of the Newfoundland and Labrador interest in the Churchill Falls (Labrador) Corporation:
On the one hand, the Williams administration has a clear policy connecting the principle of control of energy resources with ownership of equity stakes in energy projects.
Yet at the same time, the Premier has spoken publicly about the potential that these assets could be sold to reduce public debt.
And on top of that, an agreement with the Innu Nation includes a specific provision covering the potential sale of the Newfoundland and Labrador majority shares in the company that operates the Churchill Falls power complex.
Clearly the two notions cannot live in the same space.
Well, they can actually if one considers another statement by Danny Williams which describes another aspect of his political philosophy:
What I said before and I said going in, this is about principles, but it's also about money as well. At the end of the day, the promise and the principle converts to cash for the bottom line for the people of Newfoundland and Labrador.
That’s a comment Danny Williams tossed out in November 2007 during the racket about broken political promises with Stephen Harper.
Williams used the word “principles” in the familiar sense. A “principle” is a fundamental rule. A “principle” may also be expressed as a value like openness, honesty, or integrity.
The dispute was a matter of principle, in that sense; a promise made is a commitment to act that must be fulfilled. If someone breaks his or her word without good cause or explanation, the relationships between people can no longer function.
The notion is hardly surprising for a lawyer who spent a lot of time arguing for damages for his clients, even if there are few others who would – on the face of it – accept that principles of any kind can be transformed to coin.
Yet Danny Williams obviously operates on the belief that he has a political Philosopher’s Stone in his pocket. Like its legendary alchemical predecessor that converted base metal to gold, this stone would convert electricity and oil into dollars.
The curious thing is that none of this has been reported clearly and consistently within the province. It is doubtful that a majority of Newfoundlanders and Labradorians know anything but the old and familiar notion that links control of resources with the future.
Yet there is no mistaking that the Williams administration has another policy firmly in place - at exactly the same time - which would allow for the sale of resources in a fashion that directly contradicts the notion of control on which the administration claims popular support for its policies.
Little wonder in April 2008 then that Danny Williams responded so strongly when reporters asked him to scrum on his statements. Again, as the CBC’s David Cochrane described it:
We pulled him outside for a scrum to ask about it. Even before we asked a question he clarified his comments. He said he misspoke in the legislature. He wasn't talking about selling Nalcor. He was talking about selling the individual assets it acquires. [Emphasis added]
In the end, the reporters in the scrum opted to report nothing of the comments at all, including the Premier’s “clarification.”
Regardless of what the reporters decided on that busy work day, the Premier’s comments and the unsustainable internal contradiction in them are obvious in both the Premier’s criticism in the legislature of Hydro privatisation on the one hand and then the expressed interest in flipping assets to pay off debt on the other. It doesn’t matter how often the Premier said it.
The comments take on new importance though given the Premier’s recent attack on the sale of NB Power to Hydro Quebec.
And at the same time, as the province faces tight provincial finances, the question of exactly what is government policy on energy, control and sale of resources to meet financial needs deserves to be answered clearly and unequivocally.
Such a question can only be answered, however, if someone deigns to ask it.
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“Securing equity means having greater leverage to control our own destiny.”
“The principle of making our own way and taking control of our resources is the right one.”
Two quotes from the Speech from the Throne,
House of Assembly, March 2008
_______________________________________________________________
Control is a key principle in Danny William’s political philosophy.
Control of the province’s natural resources is a core point in most of his administration’s public statements on oil, natural gas and electricity.
The word occurs twice in his recent letter to Shawn Graham about the proposal to sell NB Power to Hydro Quebec. There’s the reference to “New Brunswickers who no longer control their energy destiny.” Then there’s the contrast: “ But we took control of our own destiny and Nalcor Energy is now a crown jewel in our province’s energy assets.”
Williams also raised the concern about control of transmission routes supposedly resting in the hands of Hydro Quebec and of the control of rates resulting from the sale of NB Power.
Energy and control go together, as Williams made clear when he announced in 2006 that the provincial government would “go-it-alone” on the Lower Churchill. he made the following comments in the House of Assembly on May 8, 2006:
“...but the big message here is that we are masters of our own destiny, that Newfoundlanders and Labradorians are in control of this project for the benefit of Newfoundlanders and Labradorians."
- "By taking the lead we are in full control of the project, unlike the circumstance with the last government; that project, basically, was going to be controlled by Quebec. It would have been marketed, it would have been financed, the transmission would have been done by Quebec. The control of the project, the project management, would have been done by Quebec. As well, if there had been an overrun on the project, the last Lower Churchill project that was proposed by the Grimes government, in fact, we could have lost the project; because, if there had been an overrun, we would not have been in a position to be able to finance it….”
But control is not just a principle behind energy initiatives. Being “masters of our own destiny” is the same idea in other words and it crops up repeatedly in Danny Williams’ speeches and comments as an idea central to government policy.
Control is a principle of the administration’s policy. It is a guiding rule, an essential quality, or the basis for action.
The relationship between resource control and equity is established clearly in the Conservative party’s 2003 election platform.
The section on resource development puts it this way:
The power to control development of offshore oil and gas is of little value unless the Province has the know-how to deal with technical issues and field assessments equivalent to the expertise of the major oil companies, and sufficient ownership in production licences to influence development decisions.
- A Progressive Conservative government will either restructure Newfoundland and Labrador Hydro as an energy company, or create a new Energy corporation, with a mandate to retain equity in the Province's oil and gas resources. This will be done on a go-forward basis.
The relationship is mapped out more plainly in the 2007 energy plan released in time for the 2007 election campaign. So important is control that it is the second principle guiding the plan, after sustainability:
Our Principles
1. Sustainability
…
2. Control
We will exercise appropriate control over the development of our resources to ensure they are managed and used in the best interest of the people of Newfoundland and Labrador. We will assume an ownership interest in the development of our energy resources where it fits our strategic long-term objectives.
The idea is repeated again in what, by now, is a familiar formulation in a discussion of energy resource management (p.13):
We will take more control than in the past over the development of these resources and the benefits they generate.
Having identified the importance of control and the connection to management, management, the plan then re-affirms that equity stakes in energy projects are the first lever used “to ensure sound and effective management and to maximize benefits over the long term.” (p.18)
Control and equity stakes are thus intimately connected in the Conservative philosophy.
The 2003 campaign platform identified the key role to be played by a new energy corporation in holding the equity stakes and thereby serving as the means by which the provincial government would exercise the sought-after control of energy resources.
As well, the energy corporation has other key control responsibilities set out in the energy plan:
- “If the Provincial Government [sic] lifts the moratorium [on small hydro projects], it will institute a policy that the Energy Corporation will control and coordinate the development of small hydro projects that meet economic thresholds and are viable for an isolated island system.”
- “One of our goals is to maximize our benefits from resource developments. We believe this means the Energy Corporation should control the development of all small hydro developments for the benefit of all electricity users and determine whether to do this alone or with private sector partners.”
- “To maximize these benefits [from wind power], the Provincial Government believes the Energy Corporation should control the development of all wind projects and determine when to develop alone or with private sector partners.”
- “Due to the strategic importance of generation and transmission to the future of Newfoundland and Labrador, the province, through NLH [Newfoundland and Labrador Hydro], will retain ownership and control of its existing transmission and generation assets”
To anyone familiar with the Williams administration, none of this will be new. in fact, it will be so familiar that one might wonder the point of such an extensive recitation of the relationship between the principle of control and the idea of equity stakes in Danny Williams’ philosophy.
That will become clear in the second instalment of this series.
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How can it be that Prince Edward Island is getting 15% of its energy needs met by wind power but all Newfoundland and Labrador has are two small projects pumping 27 megawatts each and a“demonstration project” at Ramea?
And that’s it!
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The current issue of The Scope includes a front page feature on wind energy in the province or – to put it more accurately - the lack of any serious development of wind energy.
Maybe one of the answers is that everyone talks about an island when in fact there is a huge landmass on the mainland potion of the province that is ripe for wind energy development. Heck it’s even got a connection so people can ship the power to where it is needed on the eastern part of the continent.
There’s just one obstacle.
Care to guess what it is?
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As renewNewEngland.com reports, the Maine state legislature recently passed an initiative designed to encourage small, locally-owned green energy generation concepts. The bill was signed into law on June 26.
The new law establishes a six-year pilot program to encourage the development of community-based renewable energy in Maine, defined as a majority locally-owned facility that generates electricity from an eligible renewable resource. The pilot program has an overall program cap of 50 MW, 10 MW of which is reserved at the outset for projects that have a generating capacity under 100 kW or are located in the service territory of a consumer-owned utility. To be eligible for the program, renewable energy projects must (1) have a generating capacity of 10 MW or less, (2) secure a resolution of support from their local community (projects with a capacity of less than 100 kW are exempt from this requirement), (3) be connected to the grid, and (4) have an in-service date of September 1, 2009 or later.
This has all the hallmarks of a growing trend south of the border to focus on private sector development of small energy developments. It’s based on the belief – apparently - that small is not only less harmful to the environment but that local initiative and local capital can successfully combine to meet a portion of the nation’s energy needs. The approach is supposed to create jobs and, since it is handled by the private sector and costs are relatively small, stimulate the growth of local businesses.
Compare that to the official philosophy in Newfoundland and Labrador that is touting an energy megaproject that thus far has no customers outside the northeast Avalon peninsula. Incidentally, even your humble e-scribbler’s sister missed the point that the infeed the provincial government is trying to ram through Gros Morne is designed to bring power to townies, not Yanks.
There is no plan in public at this point to extend any power lines south of the island of Newfoundland. There likely won’t be if customers can’t be found for the juice. Anyone who has read any part of the environmental review documents for the infeed to Soldiers Pond will understand that the thing is justified entirely on a supposed power shortfall on the island within the next decade.
They plan to meet that supposed need with Lower Churchill power at a cost of $6.0 to $9.0 billion. As the 2007 energy plan puts it:
This demand is forecast to grow at a fairly steady, moderate pace over the next several years. This would result in a need for new sources of supply on the Island prior to 2015, and later in Labrador. As a result, we plan to develop the Lower Churchill project, which will include a transmission link between Labrador and the Island.
Anyone reading the environmental impact documents will also realise that the provincial government’s energy company has effectively ignored the potential for small hydro developments or other small electricity projects to meet local need. Even when an energy corporation official talks about wind power, it is obvious the corporation is fixated on the export market. And when they think exports, big is all they seem to see.
There’s been a moratorium on small hydro projects in the province since the late 1990s. While the provincial government committed two years ago to make a decision on the moratorium this year, odds are the decision won’t be made on time. Even if it is made, the energy plan links the Lower Churchill and alternative sources for the island in an “either/or” proposition. If the government proceeds with the Lower Churchill, alternatives are dead issues. If the Lower Churchill dies, then small generators are the way to go.
As for private sector capital investment, you only have to consider that one of the effects of the expropriation bill last December to see the official attitude to the private sector. While everyone fixated on Abitibi, the expropriation also included seizing control of just exactly the kinds of small hydro that Maine and others are encouraging and hand them over to the provincial government’s energy corporation. Star Lake - totally unrelated to the Abitibi mill - was one of the casualties of the expropriation, as was the Exploits River partnership, a joint venture between Abitibi and locally-based Fortis.
If that doesn’t convince you, consider that in the event small hydro projects go ahead, the energy plans mandates that only the provincial government energy corporation will be involved:
If the Provincial Government lifts the moratorium, it will institute a policy that the Energy Corporation will control and coordinate the development of small hydro projects that meet economic thresholds and are viable for an isolated island system.
And it’s not like the energy corporation has been very efficient at exploring alternatives to its current obsession with megaprojects. The earliest proposals for wind energy farms on the island turned up over a decade ago. However, it took another six years for a small project to start on an isolated island and another seven years for a report to examine the issues involved in wind generation and another two years after that before the first larger demonstration project started.
If Newfoundland and Labrador followed the approach of other jurisdictions, the people of the province could reaping the big economic and environmental benefits of innovative, small energy generation.
Unfortunately, the provincial government’s energy plan is fixated on government monopoly and megaprojects. The only things big in that are costs and - of course - project delays.
The Lower Churchill was supposed to start in 2009. By the latest estimates, the earliest it could start construction is after 2011.
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The Exploits Regional Chamber of Commerce is very concerned about the benefits from seized hydroelectric assets going somewhere other than the region of the province in which they are located, according to the Grand Falls-Windsor Advertiser.
The chamber estimates that based on electricity used by AbitibiBowater (54 megawatts), savings to Newfoundland and Labrador Hydro in excess of $70 million annually are being realized.
The chamber wrote the CEO of Nalcor in May to try and meet to discuss how the Exploits region could benefit from being adjacent to the source of the power. While the letter was copied to local MHAs and members of the provincial Ministerial Task Force set up to deal with the closure of the mill, Nalcor has not responded.
NALCOR is the provincial government energy company which took control of the assets earlier this year. They were seized by the government from three companies: AbitibiBowater, ENEL and St. John’s-based Fortis.
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New Brunswick premier Shawn Graham issued a warning to Rodney and Danny about any plans they might have for energy development involving his province:
Premier Shawn Graham sent a shot across the bows of his Atlantic Canadian counterparts Tuesday, saying the other three provinces cannot simply expect to build new energy projects and then ship the electrical power to the United States through New Brunswick's power grid.
Then he made it plain:
For example, he [federal defence minister Peter MacKay] pointed to Newfoundland and Labrador's hydro projects at Lower Churchill Falls.
The Newfoundland government's hydro corporation is currently in negotiations with several utilities in the Maritimes, discussing the possibility of bringing that electricity to the region via sub-sea cable.
Not so fast, Graham said Tuesday.
The premier, at an event in Toronto promoting his tax reforms, said he was "surprised" by MacKay's comments.
While Graham said he will co-operate with Ottawa and the other provinces, he warned that New Brunswick won't be taken advantage of or pushed aside.
In a follow-up interview, he went further.
"That energy has the potential to flow through our province, but we want to make sure it doesn't jeopardize the projects that we're trying to achieve here," he said.
"The marker that we're putting in the ground is: we're not just going to (allow) the erection of lines for electricity transmission in New Brunswick that benefit other regions, but not (us)."
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Some curious details lay in the clauses of an agreement announced today between the provincial government energy corporation and representatives of the Innu people of Labrador. Any lawyers out there who want to offer a different view or take issue with the following are welcome to do so.
CFLCo Privatization: In the Upper Churchill section, for example, there is reference to a potential sale of the Newfoundland and Labrador interest in Churchill Falls Labrador Corporation to as yet unknown private investors. The "parent company" is the province's energy corporation.
For all the nationalist posturing by the current administration, it's curious to see a contingency established for the sale of such an important asset. Language referring to the privatization of public companies exists in the energy corporation legislation.
Just the existing project: The compensation payments to the Innu apply only to the existing physical plant of CFLCo. Any expansions in the future aren't subject to the agreement.
Don't count your Chickens: Clause 2 (a) establishes an annual payment of $2.0 million paid by the provincial government to the Innu Nation but it only begins on ratification and execution of the impact and benefits agreement...for the Lower Churchill project. No Lower Churchill; no cash
Don't count your Chickens 2: Clause 2 (b) provides for an additional 3% of dividends received by the provincial government "directly or through a corporation owned by the Province." Someone might want to double check. The Province - i.e. the provincial government - doesn't get CFLCo dividends directly.
As for a corporation "owned by the Province", that would refer to Nl Hydro, the company that holds the provincial government's 65% interest in the company that runs Churchill Falls. It used to be held by NL Hydro and that company didn't declare any dividends in 2007. Three percent of zero is...well... zero. Let's not even get into a discussion of the express statement that the percentage would only be paid on dividends on common shares.
Count those Upper chickens for the last time: The payments under Clause 2 (a) and (b) are effective only if the Innu agree to give up any and all claims past, present and future related to aboriginal rights on the Churchill Falls project.
Don't count the Lower chickens either: Any payments are expressly tied to the sanction of the Lower Churchill project.
Don't count your chickens 3: The energy corporation will pay a minimum of $5.0 million annually to the Innu Nation from the period between first project sanction and first commercial power. The payments run for a maximum of 10 years and can stop if the project stops for some reason.
After first commercial power, the energy corporation will pay the greater of the minimum payment and five percent (5%) of annual Net After Debt Cash Flow.
Sounds wonderful, except for two things. At the front end of this project - if it even starts in the first place - that net after debt cash flow might be a really tiny number. It could be a negative number. Read the definition of net after debt cash flow contained in the agreement and you can see the only thing not included in the calculation is the proverbial kitchen sink purchase and operating costs on the outhouses at the site, amortized over the life of the project and including an allowance for annual kitchen sink replacement, repair, refit, redesign and eventual decommissioning.
That would be very bad for the Innu because of the second thing. Clause 3(c)(ii) states that 10 years after project sanction, that minimum payment of $5.0 million is equal to zero. Nada. Zip.
And remember, the clock starts ticking from project sanction, not from construction. If it takes the project 10 years to get on stream, the Innu could wind up receiving nary a penny once the power starts flowing.
The ghost in the turbines: Talk about your Churchill Falls. Oy vey!
Even with that deal the provincial government gets something. In this case, the Innu will have to settle all claims for the promise of getting $50 million ($5 million a year for $10 years). And at the point power starts flowing? Potentially receiving absolutely nothing at all or a trifling amount for an unknown point beyond that.
Of course, if the corporation is sold off in the meantime, then the whole thing stops anyway. The agreement is oddly silent on that eventuality but odds are the clever legal bunnies working for the energy corporation know that not much would come of an Innu legal challenge.
In order to get the first cash, they have to sign away all future claims and indemnify the energy corporation to boot.
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Newfoundland and Labrador's new oil company - doing work offshore as partner on the multi-billion dollar Hebron and White Rose projects - will be paying more corporate taxes to the federal government under a New Democrat federal government.
According to the Telegram, Layton hit one of those points during a campaign stop in St. John's on Friday:
Layton said one promise he is making is a rollback on corporate tax cuts to banks and oil companies, which he says both the Conservatives and Liberals have supported.
Layton used the example of Exxon, but evidently he didn't realise the provincial government under Premier Danny Williams is now one of the oil companies he plans to tax more heavily.
In a separate campaign appearance, Layton pledged to "honour the Atlantic Accord", apparently in reference to the 2005 federal transfer side deal between the federal and provincial governments.
But his blanket pledge also included the real Accord, the 1985 deal signed by Brian Mulroney and Brian Peckford that establishes joint management of the offshore between St. John's and Ottawa and which sees the provincial government collect 100% of royalties from the offshore as if the resources were on land.
Under clause 41 of the 1985 Atlantic Accord, provincial or federal Crown corporations are taxed like all other companies:
Crown corporations and agencies involved in oil and gas resource activities in the offshore area
shall be subject to all taxes, royalties and levies.
OilCo, the oil subsidiary of the province's still unnamed energy corporation, is incorporated like all other corporations in the private sector, even though its shares are owned 100% by the Crown. The company also isn't a Crown agent.
While in St. John's, Layton also pledged to transfer federally-owned shares in the Hibernia project to Newfoundland and Labrador "over a period of time" [Telegram story on Layton at Memorial University, not online. CP story here.]
Those shares, representing 8.5% of the project, would also be handled by the province's energy corporation. They would also be subject to the NDP's increased taxation.
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The directors of the Oil and Gas Corporation of Newfoundland and Labrador (OilCo) include some familiar names from the energy corporation board, one of the Premier's former law partner and the head of the Steele Communications.
John Ottenheimer is a former provincial cabinet minister currently serving as chair of the board for the province's energy corporation and its Hydro subsidiary.
Fellow board member Ken Marshall - the Rogers Cable boss in the province and a former business partner of the Premier - also sites on the new OilCo board, along with Gerry Shortall, a former Hydro board member appointed by the Williams administration.
Glen Roebothan is a senior partner with Roebothan, McKay and Marshall, the Premier's former law firm.
John Steele is the surprise. He's the head of Steele Communications, parent corporation of VOCM.
OilCo was incorporated in August 21 under the Corporations Act as a subsidiary of the provincially-owned energy corporation.
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