Financial Fustications #nlpoli

If we had Equalization, we'd have a budget surplus.

On Friday, 20 Mar 20, Premier Dwight Ball wrote to the Prime minister to say that the financial arse was out of Newfoundland and Labrador.

Ball included in the letter not a shred of financial evidence nor did he include any hint as to what exactly he expected the federal government to do to fix this situation.

Last weekend, once the public heard about this alarming letter, the Premier was anywhere and everywhere confirming that the provincial government was mostly, completely destitute.

*This* weekend his finance minister is – not surprisingly – telling a completely different story. 

John Crosbie #nlpoli #cdnpoli

Left to Right:  Bill Doody,  Brian Peckford, John Crosbie, Jane Crosbie,
and Beth Crosbie at the 1983 federal PC leadership convention

The outpouring of praise in memory of John Crosbie, who died on Thursday, has been such a flood of cliché and, in some cases, fiction that it does a disservice to the memory of one of the most significant political figures from Newfoundland and Labrador in the 20^th century.

Remarks by Edward Roberts,  Joe Clark, and Brian Mulroney were closer to the truth of the man than most. Roberts once noted that Crosbie wanted to be leader of anything he was ever involved with, starting with the Boy Scouts. Certainly, that is a testament to Crosbie’s ambition and determination, but in his interview last week, Roberts spoke plainly of Crosbie’s considerable intellectual talents that went with his ambition and determination.  

Likewise, Clark spoke of the respect that public servants and cabinet colleagues in Ottawa had for Crosbie both for his ability and for the professional way he dealt with them.  The politicians understood that Crosbie would be tough to deal with when he wanted to get his way, but they understood that Crosbie never failed to deploy the same fierceness in defence of the team when attacked from outside. The bureaucrats appreciated someone who understood their briefs, especially in portfolios like finance.

By contrast, Rex Murphy, so long removed from Newfoundland and Labrador physically and mentally that his writings on the province are a unique brand of safari journalism, gave the National Post his trademark overwrought prose.  He appears, as well, to have used an equally overwrought imagination to cover over the considerable gaps in his memory of what actually happened now almost a half century ago.  

The one thing Murphy got unmistakably right is to credit Jane Crosbie for her role in John’s political career.  Not to eulogise her before her time but Jane is as much the political force, and understood as such, as John ever was. People in Newfoundland and Labrador today who claim they want to get more women involved in politics – many of them people who know nothing of politics in the province and care even less about it – would do well to spend some time talking to Jane Crosbie and others like her. To say that “Jane was every bit his equal” may well sell Jane short, although the crucial part is that “the only difference [between the two] being she chose the off-stage role.”

The New Welfare Bums #nlpoli #cdnpoli #ableg

Lunacy is always easier to spot in other people.

There is a Liberal conspiracy to rob Alberta of its precious fluids.

People in Newfoundland and Labrador got a taste of lunacy a few weeks ago when Albertans – including people originally from Newfoundland and Labrador – blasted them for returning six Liberal members of parliament in the general election.  Albertans took it personally since they believe there is a plot by the Liberals to rob the province of its precious fluids.

Albertans believe lots of crazy things.  Premier Jason Kenney shares the view of a raft of people in Alberta and other parts of Canada.  They think the rest of us across Canada are welfare bums. They claim that provinces that collect Equalization and other transfers from the federal government deliberately don’t develop their resources so they can sponge off Alberta and Ontario.  The money for Equalization, so this argument goes, comes from Alberta and Ontario.

Jason Kenney said it in a speech recently.  You can find examples of the same view from the Fraser Institute and the Atlantic Institute for Market Studies. They use other words for it – perverse incentives, Equalization discourages development  - but basically the message is the same.  Slash the federal handouts and the welfare bums will be forced to develop resources like Alberta did.

The ins and outs of Equalization #nlpoli #cdnpoli

Each year,  Canadian media conduct year-end interviews with politicians and every year the interviews are nothing but space fillers.

This year's version with Premier Dwight Ball  - for NTV (broadcast but not posted yet)  and the Telegram, thus far - are no exception. They asked the same questions,  got the same replies, and anyone that actually watched or read them got the political-turkey sleepies.

The only spark of life came on NTV when Lynn Burry uncharacteristically lost her composure over Equalization and the amount of money Quebec gets.  Burry got so riled up that she actually interrupted Ball just as he started to wander through an answer.

Burry is like a lot of people, especially in the provincial petro-states across Canada,  who decided to get angry at "Quebec" for something that happens every year:  the Quebec provincial government collects the lion's share of federal Equalization transfers.  Provincial governments in Alberta,  Saskatchewan , and Newfoundland and Labrador are all in financial trouble and some of the locals, especially politicians in power, complain about what is happening in another province.

The problem with Burry's question - as with the entire Equalization outrage is that it just nonsense.  So let's just apply a little insight into the whole business and sort things out.

Bridging to Nowhere... or not #nlpoli

Since December 2015,  Dwight Ball has been talking about the federal government as the source of cash he wants to tap into.

Specifically he has been talking a lot about how Newfoundland and Labrador is being screwed because it cannot collect Equalization.  Ball's whining about Equalization is part of his strategy to avoid making any real changes to the strategic trajectory set by the Conservatives in 2007.  Essentially it is about spending as much as you can for as long as you can. 

With that in mind, here are three choice quotes from Issues and Answers'  year-ender with Premier Dwight Ball. 

After Lynn Burry points out that the provincial government pays 83% of the cost of health care, up from the days when the province and federal government split the cost 50/50 the Premier said:

"I agree the Equalization program does not work for Newfoundland and Labrador."

Three things, mostly for Lynn Burry.

1.  Health care is entirely within provincial jurisdiction under the constitution.  The federal government isn't actually supposed to put *any* money into it.

2.   The federal government covered half the cost of everything in Newfoundland and Labrador at one point because the provincial government was so poor it couldn't pay for provincial services on its own.  That's why every Premier until Danny Williams came along wanted to get Newfoundland and Labrador off the dole. Williams and every Premier since him, including the current one,  has been trying to get back on it.

3.  Federal health care funding never came from Equalization.  It has always come under a separate funding arrangement.  At one point they called it the Canada Health Transfer and it went along with social services funding in the Canada Social Transfer. Now the federal funding is combined under one thing called the Canada Health and Social Transfer.

"What is it about Newfoundland and Labrador that you can define us as a 'have' province?"

The answer is simple and, in some ways it is astonishing that over the past 15 years provincial politicians can get away with talking utter nonsense about a really simple thing like Equalization.  Politicians from all parties trot out this foolishness  and reporters just lap it up or, in Lynn Burry's case,  fuel the idiocy with questions that are just set up with the same stuff.

Equalization takes money from the federal government's general revenue and gives it to provincial governments that don't make enough money on their own to come up to a common, national income standard.   The governments use that money to deliver services that are entirely provincial under the constitution.  That means the provinces are supposed to make enough money on their own to cover those costs. 

The transfer of federal cash is based on the recognition that all provinces are not equal in their ability to raise cash, so the federal government steps in to give some a hand.  That way Canadians are not short-changed if - and here's the kicker - the provincial government spends its money appropriately.

Four provinces make more than the standard income.  They are known colloquially as "have" provinces:  British Columbia,  Saskatchewan,  Alberta, and Newfoundland and Labrador.

"Have not" means you don't bring in enough cash on your own to make ends meet and so you get a hand-out.

If Dwight Ball really speaks to the Premier of Nova Scotia and moans that this province does not get Equalization,  he's lucky Stephen McNeil doesn't punch him in the bake and then kick him in the goolies just for good measure. Like most Premiers, McNeil would give some part of his anatomy to be raking in as much cash as Dwight Ball does every year.

Newfoundland and Labrador *is* a have province by any measure.  It takes in more money per person than any government in the country save Alberta.   The problem is that successive provincial governments have spent even more than that again.  There's no good reason for the overspending.  That's why the government is in the hole all the time.

"...Equalization is not the answer to our revenue or deficit problem."

Huh?

If it is not the answer to our problem, why complain about not getting any of it?

-srbp-

If only we were New Brunswick... #nlpoli

Premier Dwight Ball has talked about it.

CBC's Peter Cowan tweeted about it Sunday night.

If only we were like all those lucky provinces that get Equalization,  we'd be right as rain.

We can allow that Peter may not understand federal-provincial finances at all, even if he does cover the legislature a lot.  If there's one thing SRBP readers will know is that most people in the country, including pretty well every reporter and politician,  hasn't got a clue about Equalization.  Well, give Peter a bit of a break but there's no excuse for cabinet ministers being stupid enough to talk about Equalization like a province was entitled to it because it was running a deficit.

You can find a summary of Equalization from SRBP last January. You can find an earlier dose from 2005. That should give you the basic understanding Dwight and Peter evidently lack. But for the fun of it, let's look at how we might fare if we were the same as New Brunswick as far as Equalization is concerned.

Population density and just dense #nlpoli

The Government of Newfoundland and Labrador is in financial trouble.

It will spend this year about $3.0 billion more than it will take in.  In fact,  this year, as last year,  banks and other sources of borrowing will be the largest single source of income for the provincial government.

Newfoundland and Labrador is not a poor place, not by any stretch of anyone's imagination.  In absolute terms, the government will bring in more than twice as much than it did 25 years ago.  Inflation has not doubled in that same period.

Leave out the borrowing for a second. On a per person basis, the provincial government will bring in more revenue this than any other province in the country, bar none.

The problem we have is that government will spend so much more than it brings in.  That's what a deficit is:  spend more than you make.    Simple idea.

And yet so many people just keep trying to blame our problems on the federal government for not giving us handouts.

General Ignorance: Economic Version #nlpoli

Of all the people in Canada who know something about the Equalization system,. none of them sit in the House of Assembly.

Item:  Kevin Hutchings, a former cabinet minister, asked the finance minister why the provincial government had not gone to war with Ottawa to get some Equalization. Hutchings had a letter in the Telegram on Monday confirming for its subscribers that he hasn't got a clue.

The Tories tweeted this:

MHA Hutchings "why have liberals not worked to secure modernized equalization formula tied to fiscal capacity?"

Okay.

Equalization is a program introduced in 1957 to make sure that all provincial governments have at least the same basic fiscal capacity to deliver provincial services.

Since 1957.

Based on provincial fiscal capacity.

The federal government figures out an average for provincial governments. Fall above the line you get squat. Fall below the line you get cash. The work out the fiscal capacity as being so many thousand dollars per person in the province.

Item:  In reply to the question,  finance minister Cathy Bennett says the provincial government has been talking to Ottawa about bigger hand-outs and, oh yeah,  the current Equalization formula is the one Hutchings and his crowd negotiated.

On that second point,  errr,  no.

The federal government puts the thing in place.

There are no negotiations.

Item:  For the record,  the provincial government doesn't get Equalization because it makes too much money.  We are a "have" province.

As the governments own visiony documenty thing stated just last week:  "Even in 2016-17, Newfoundland and Labrador has the highest per capita revenue ... among provinces."

That is supposed to be a good thing.

And it is.

Our government brought in more money per person than Alberta.

The problem is that bit where the three dots were in the original quote.  We also spent the most per son of every government in the country.

On what basis does a politician from this province think for one second that we have a right to be like Danny-Williams-rich and then go looking for welfare because we couldn't make ends meet AND get pissed off when they don't give it to us?

Seriously.

Item:   "Mary Shortall, president of the Newfoundland and Labrador Federation of Labour, says cutting back at this time is not the right approach. She says the public service is the main driver of the local economy." [VOCM]

The provincial government is in financial trouble *because* "the public service is the main driver of the local economy."

But Mary wants to keep going down a road that ends in catastrophe for everyone, including all the people in Mary's unions.

If you want to understand why the government is a mess, you now have a really good idea.

-srbp-

The inexplicable persistence of nonsense #nlpoli

“There was a very good job done … of boxing this province out [of the Equalization program] a few years ago,”

That was Premier Dwight Ball talking to reporters on Tuesday after the Throne Speech that set the agenda for his new administration. He was talking about the prospect that he might get some cash from Ottawa to cover the province’s massive deficit.

What Ball said isn’t true.

It’s hard to know why the false version of events lives on, but it does. All sorts of intelligent people continue to believe – and repeat – the story that Equalization reforms made in 2007 were designed to screw Newfoundland and Labrador.

But it is most emphatically not true.

Uncle Ottawa's cash #nlpoli

The federal government would run a deficit this year three times larger next year than the one the Liberals expected during the election campaign.  The deficit this year is running slightly north of $18 billion and while the Liberals expected to run deficits of around $10 billion each year, the current projection puts the deficit at something around $30 billion.

The economy, it seems, is in significantly worse shape than it was last November.

That's the same thing that Premier Dwight Ball is saying but we should note one very importance difference.  Newfoundland and Labrador was already in a bad financial spot last spring.  By the time Ball took office in the fall things were twice as bad as they had been when he'd promised to get rid of the teensy sales tax hike.  So while the federal situation may now find itself well up the proverbial river of excrement,  they are still looking at our backside as we blaze a trail to the headwaters.

Pressure #nlpoli

A curious thing happens in societies where a huge amount of the collective income derives from outside the local economy and the local tax base.

They do not see a connection between the money they receive and the action of earning it.  The money that flows into the collective pot – the government treasury – seems to appear by magic.

That might sound a bit odd but if you think about it this way, you may get the idea.  Whatever you did for your first paying job, you could see a direct relationship between the labour you expended and the cash you received in exchange.  Painting a fence earned you an amount of money. 

Paint two fences and you could get twice as much money. Or paint another bigger fence and you could get a bit more, Depending on how big the fence was and how much more paint you needed and how much more time it took you to finish painting, as a result,  you could get more money for painting the fence.

And if everybody in your community painted fences or had the same basic connection between labour and reward,  you could all understand it when someone asked you to give a bit of your fence-painting money so that you could buy a fire-truck to fight fires in your town.  That extra bit of money for the community is a portion of your individual earnings from fence-painting or ditch-digging or tree cutting, or whatever it was that you did to make money. 

But what about a place where, in addition to that cash, you all shared in something like money that came from producing oil?

Equalization... again #nlpoli

Equalization is a really simple idea.

In order to ensure that Canadians across the country have access to comparable services regardless of where they live,  the federal government sends money to provinces that don’t make enough on their own.

The federal finance department website describes the scheme pretty well.  We’ve reformatted the website version to take out the bullets.

The uncivil Civil War #nlpoli

At the heart of the ongoing civil war between Danny Williams’ provincial Conservatives and Stephen Harper’s federal Conservatives is the claim by Williams that Harper broke his 2006 election promise on Equalization.

Williams wrote to each of the federal party leaders and asked the leaders to state their party’s position on Equalization.

Edging #nlpoli

Over at cbc.ca/nl, John Gushue has an excellent column on the recent prosperity, in particular the apparent contradiction between a supposedly booming economy and the government cuts or the sense some people have that they aren’t part of the boom.

Take some time and go read John’s observations, if you haven’t already.  You will always be rewarded by John’s accessible style that reveals some very sharp insights.

For all that, though, there’s a sense that there’s something missing from Gushue’s column.  The piece gets right up to the edge and then just doesn’t bring the thing to a satisfying conclusion.

Never fear.

The relentless labradore fills in the bit John missed.

Equalization Changes and Hydro-Electricity #nlpoli

The federal government is considering changes to the Equalization program and the way it assess revenue from hydro-electricity, according to documents obtained by PostMedia News under the federal access to information system.

The changes would apparently take into account revenue from hydro-electric corporations in provinces like Manitoba, Quebec and Newfoundland and Labrador where a portion of the revenues from provincially-owned hydro corporations are sometimes passed directly to consumers in the former of lower electricity rates.

“Potentially, it’s a huge issue,” said Al O’Brien, chairman of the federal government’s 2006 expert panel on equalization, which examined hydroelectricity revenues as part of its analysis of the broader national program. “It will be controversial.”

He believes governments in Quebec and Manitoba recognize their fiscal capacity, or revenue-generating ability, is underrepresented in the current system.

However, any changes to how hydroelectricity is calculated in equalization could have a “huge impact” on how much — if any — a province receives from Ottawa in equalization, he explained. For example, some studies have suggested Quebec could lose billions of dollars in equalization payments if the true value of hydroelectricity were calculated in the program.

-srbp-

Pick a position, any position

Over at nottawa, Mark draws attention to the most recent provincial government position on the federal shares in Hibernia, namely that the provincial government would be willing to pay cash for them.

This, Mark notes, is in stark contrast to the government’s original position, which he cites in a letter dated in 2008.

And indeed it is.

Like Sands Through the Hour Glass…

But in 2005, the provincial government’s letter to Santa put it differently:

The paragraph preceding that specific question puts some other colour in it.  The provincial government recognizes that the federal government had recovered its initial investment.  The provincial government expected anything beyond that to accrue to the provincial government.

But that question refers to the whole silly business of being “kept whole”.  In effect, such a phrase commits the province to ensuring the federal government recovers not only its investment but what they anticipated getting back as well.  it’s a bit of a nebulous idea but there should be no doubt about it:  If the reserves have grown  - as expected - and the potential federal return on investment has grown – as expected – the the question actually lays claim to zilch.

And as a consequence there wouldn’t be any purchase of shares.  Indeed, there would be no claim to the shares in the first place.

… so shifts the Demand of the Day

Now the rather quaint convention of meaning what you say and saying what you mean has always been no never mind for the current provincial administration.  Take for example, the varying positions on Equalization. One day the provincial government wanted 100% inclusion of natural resources revenues.  The next day, it demanded 100% exclusion.  One November, it was great to province that was not getting any Equalization.  Two months later, not getting hundreds of millions in Equalization that year and the year after was a betrayal of historic proportions.

Or for that matter the political racket that wound up with the one-time transfer of federal cash to the provincial government.  The provincial government’s initial position would have produced that single amount in one year.  Ultimately they caved and said yes to way less than they originally demanded.

Whatever position the government took before or takes now actually doesn’t really mean very much of anything at all. 

So right now there’s talk of paying cash for the shares.

What comes out the other end of the process – if anything comes out at all – may wind up looking a lot different from whatever has been said or written until now.

-srbp-

To Have and Have Not

Listening to Tom Marshall blame the current provincial government budget deficit on the federal government’s changes to Equalization last winter brought to mind an old story which hasn’t been properly told.

You may recall that in November 2008, Premier Danny Williams called a surprise news conference one Monday evening to proudly announce that the provincial government no longer qualified for Equalization.

Everyone cheered.

Williams himself used the news as a key part of a party fund-raiser a few days later.

Some people made a video of the speech.

The whole thing made the national news.

Then in January there was the great meltdown on top of all the other Equalization meltdowns.

What didn’t make the news was that the provincial government had actually been working a plan – all along – that would have kept the provincial government receiving Equalization in 2008 and 2009. There’s nothing new in that.  Successive provincial governments have ensured that Equalization decisions worked to bring the provincial coffers the most cash.

The start of the tale is the 2007-2008 mid-year fiscal update, issued in December 2007.  The document has mysteriously disappeared from the provincial finance department’s website, but as BP quoted it when the update first appeared:

…the province can optimize cash revenues in 2007-08 by electing to move from the fixed framework Equalization formula to the new formula [O’Brien] this year…

The provincial government made a decision on the formula in March 2008 but by that time, they’d changed position:

We conducted a thorough review of this updated information, and determined that it was no longer in the long term financial interest of Newfoundland and Labrador to elect the new formula for 2007-08. … Provincial analysis indicates that, based on the legislation as amended, we would expect to receive an overall positive impact on the Newfoundland and Labrador treasury of over $300 million for the five-year period ending 2011-12…

That’s actually consistent with something the Premier told Jeff Gilhooley in March 2007.  Danny Williams said the provincial government planned to flip to O’Brien in 2009 in order to maximise revenues. And Williams noted the same decision in his November 2008 scrum.

How lucrative that plan could have been only came to light in January 2009 when the federal government unveiled a budget originally readied on a contingency basis the previous December.

A one-page analysis released by the provincial finance department in early 2009 shows the provincial government’s plan would have delivered almost $900 million in Equalization in 2008 through a combination of the O’Brien formula and the 1985 Atlantic Accord Equalization offsets clause.

The number marked with a red exclamation point in the picture at right is next to a line labelled “EQ[ualization] previous year (Actual FF or pre-cap OB)”.

“Previous year” would mean 2008.

That means that in making the calculation for 2009 to show how much was being lost, the finance officials actually showed how much the provincial government had been hoping to collect in 2008, the year the Premier had already declared the provincial government would no longer receive any Equalization.

And just to reinforce the point, that newser took place the better part of a year after the provincial cabinet decided to delay switching to O’Brien in order to maximise its Equalization cash.

Now in November, the Premier answered a direct question from a reporter directly. He said the decision had not yet been made. And that was strictly true. Of course that was after saying the province would no longer qualify for Equalization, supposedly under any circumstances.

In the event, the provincial government made an election in early 2009 and received $116 million in Equalization.

That’s right.  In the year the provincial government supposedly no longer qualified to receive it.

-srbp-

Freedom from information: Talk about low-balling

Oil production in the first four months of fiscal 2009 is down about 23.5%  - on average - compared to the same period in 2008.

But Hibernia payout and current oil prices mean that the offshore oil patch is on track to deliver about the same revenue to the provincial coffers in 2009 as it did last year.

That’s $2.5 billion for those who are keeping score.

Compare that to the $1.2 billion in oil revenues forecast in Budget 2009.

That also means the provincial budget will be on balance overall.

Of course,  that also means the provincial government still has a couple of billion sitting in the bank doing nothing but collecting modest interest.

So why exactly is the provincial government still opposed to a setting up a sovereign wealth fund  - like Norway or Alberta - to ensure the people of the province get the maximum benefit from their resources?

When you think about it, that makes it hysterically funny  to see the federal Dippers trying to buy votes in the province by talking about “fairer” Equalization.  Are they promising Alberta Equalization hand-outs too?

-srbp-

Trade deals and petards

The premier’s excuses for not participating in talks on a European trade deal just get more bizarre as time goes by.

First there was the whole idea that Stephen Harper can’t be trusted to look after Newfoundland and Labrador’s interests so the best solution – according to Danny Williams’ logic – is to let Stephen Harper look after Newfoundland and Labrador’s interests.

Then there was the whole idea of a side deal which, of course is impossible constitutionally, not to mention practically.  As a European Union spokesperson put it:

"The Government of Canada is the only government with the authority to conclude international treaties under the Canadian constitution, so our interlocutor and negotiating partner will be the government of Canada,"…

The spokesperson indicated she’d apparently met with Our man in a Blue Line Cab to talk about seals.

But apparently, nothing else.

Then there was the whole go-it-alone thing, which consisted of nothing more grand than sending Tom Hedderson off to talk to a few ambassadors in a hastily arranged series of meetings on seals.

Now there’s this little gem, from Question period in the House of Assembly on Monday:

So there are other bigger issues. There is also the whole issue of the Atlantic Accord and what is going to happen when European countries do business in Newfoundland and Labrador.

What issue is he talking about? 

Or more accurately, which Atlantic Accord?

The 2005 one – the only one he usually talks about – doesn’t have anything to do with Europeans or trade.

The 1985 one – the real one – establishes a local preference policy for Newfoundland and Labrador companies doing business offshore.  The only way to get rid of that would be for the federal and provincial governments to agree to eliminate it.  That’s because the deal can’t be amended unilaterally.

Well, it isn’t supposed to be amended unilaterally.

Under section 60 of the 1985 Accord, neither party could amend the enabling legislation unilaterally. Until 2007, no one thought they might.  Then Stephen Harper amended the offset provisions in a rather sneaky way.

But the really odd thing is that the provincial government did not raise a single objection  - beyond some generalised gum-flapping about Equalization - to the amendment of the 1985 deal. 

Not a one.

No letters of protest.

Nada.

To the contrary, when they opted for O’Brien 50 this past winter – and pocketed  Equalization cash in the process – they accepted the federal Conservative’s 2007 amendment as part of the deal.  In fact, as the premier has indicated recently, the provincial government decided at least as long ago as early 2008 to flip to O’Brien/50 in early 2009 in hopes of pocketing Equalization cash. Heck, they might have even signalled that privately at the time to the federal government.

So maybe the real reason the Premier is in a snit is because he’s worried that through all of this he’ll just be hoist by his own clever Equalization petard.  Rather than see the local preference rules of the 1985 deal preserved to the benefit of local companies, we’ll see them disappear.

That would go a long way to explaining the sudden about face the provincial government did on this deal back in February.  Maybe the feds made it clear that the local preference provisions of the 1985 deal were up for consideration and one of the things the feds could throw back in the Premier’s face was his own acceptance of the unilateral changes to the 1985 Atlantic Accord.  You can almost imagine the conversation:  “Danny, it doesn’t matter if you show up or not.  We can change the thing by ourselves if we have to – you just told us we could when you accepted the changes from 2007.”

Still, though, it doesn’t explain why he would sit on the sidelines rather than become personally involved.  After all, as he told the legislature: :[w]e are going to do what we have to do here to protect the interests of Newfoundlanders and Labradorians, and I could not care less what the rest of them do, I have to be quite honest with you.”

Well, to be quite honest with you, if the provincial government was really hell-bent on protecting Newfoundland and Labrador interests, the place to do that is at the table, inside the Canadian negotiating team.

Seal-bashing just doesn’t seem like a reason enough to turn down the invitation to sit on the team.  And like we’ve said before, if custodial management and shrimp tariffs are so important – and they are – the place to deal with those is at the negotiating table.

And look, if you really want to get a sense of how much is at stake for the province just look at what the Premier said himself in the legislature:

There are also a lot of very big, multinational, European companies that want to do business in Newfoundland and Labrador, because of our minerals, because of our oil and gas, because of our fishery, and we have to take the abuse from these hypocrites basically saying that we act in an inhumane and a barbarian manner, when they chase bulls through the streets in Spain, and matadors pierce bulls in a Roman type atmosphere, and we are out trying to earn a living.

So  - if we try and follow the Premier’s own logic – a vote by the European parliament that affects maybe a few million dollars that comes to the province from seal-bashing is way more important than billions in new economic development throughout Newfoundland and Labrador that would come from participating in the trade deal negotiations.

Okay.

That makes sense.

Not.

-srbp-

The notional national media

Go to the Globe and Mail website.

Try and find a story from the February 11 edition by Rheal Seguin on a supposed border flap between Quebec and Newfoundland and Labrador.

You’ll to look a bit.  For some reason a story that was prominent is now buried away on the “Others” page instead of on the national politics section where it was.

The story is bogus.  There is no border dispute.  The matter was settled in 1927 and the Romaine river hydro-electric project isn’t even close to the 1927 boundary.  This is another of those Sasquatch hunter things about the Labrador border:  people keep hunting because they know it’s there but the only “proof” turns out to be fiction.

That’s because the border controversy, like the Sasquatch, is made up.

And the story is one of the problems when you drop into Newfoundland and Labrador every once in a while rather than pay attention to what is going on here on a regular basis.

You wind up hunting Sasquatch instead of looking at the case of a real undefined border – this one in the Gulf of St. Lawrence – which is impeding exploration for and development of oil and gas resources.

Meanwhile over at the National Post, a editorial on the latest federal transfer racket contains an astonishing amount of stuff that is not true.

Now Mr. Williams and his government have calculated that switching to the new formula would be better for the coming fiscal year — netting Newfoundland’s treasury and extra $1.3-billion to $1.6-billion — so they want to switch. However, in January’s budget, federal Finance Minister Jim Flaherty eliminated that option.

Not so.

The amounts quoted were totals over three years, not one.

More importantly they are estimates.

The only figure that seems to be plausibly correct is about $400 million that won’t flow in 2009 but even that is based on:

1. Estimates. 
2. Projections based on current knowledge instead of the actual financial situation in February 2010 when Newfoundland and Labrador will chose which of two Equalization options it will pick for 2009.
3. A set of choices that wouldn’t have existed at all if the current provincial government in Newfoundland and Labrador had gotten its way at any point in the recent past.

The National Post editorialist didn’t stop with those untruths.  It went farther with other things it actually labelled as true when they aren’t:

It’s true Mr. Flaherty and the Harper government eliminated the switching option without first consulting their colleagues in the Williams government. It is also true that this policy change only affects Newfoundland, even though the province is not singled out by name. And it is true the Harper government is tired of Mr. Williams and the constant bashing they take from him, all of which could lead to the conclusion that this is what Mr. Williams claims — an act of vengeance aimed at him and his province.

1. It’s not really clear that the feds didn’t consult.  The provincial officials knew something was up in November last year.  What happened after that is a bit murky.
2. The policy change affects all provinces receiving Equalization and provinces like Newfoundland and Labrador that are still affected by the program.  Ontario and Quebec aren’t going to draw as much from the federal teat as they would have under the program from 2008.  That’s been covered in other conventional news media.  Heck.  The changes are being made expressly to limit the impact on the program of having Ontario now drawing Equalization.

Now that last part – about being tired of the tirades  - is probably true. It’s quite the stretch though to go from that to suggest that this was a policy designed to screw over one province when the facts – as previously reported – show something else.

The relationship between the current provincial administration and the federal government – irrespective of political stripe – is dysfunctional.  It got that way as the result of a lot of hard work after 2003.  The dysfunction may be deliberate or it may be an accidental by-product of old-fashioned political posturing. That part doesn’t matter.  The fact is the dysfunction exists.

It can only change if the people  - it takes two to tango - who are causing or contributing to the dysfunction change their behaviour.

That change isn’t helped by newspapers that are notionally national printing bogus information as if it were fact.

-srbp-