Big poll goose but less money for forestry than claimed

Throughout 2008 and 2009, the provincial government claimed it created a forest sector diversification program in 2008 worth $14 million, but there’s no sign in publicly available documents that the money was actually budgeted and spent until 2009.

And the amounts mentioned in different government documents, including the 2009 budget, show there was less money involved than the $14 million referred to constantly.

A news release issued in April 2008 referred to a total of $14 million in diversification funds.  That included $11 million  “to establish a diversification program that will provide for infrastructure required by industry to produce new forest products and gain access to new markets.” Another $500,000 was supposed to go to promoting the wood pellet industry.

A November 2008 news release on the wood pellet promotion also refers to $14 million and a name;  Forest Industry Diversification Program

A description on the federal government’s website claims a $14 million program was created in 2008.

But Budget 2008 Highlights don’t mention the diversification project at all.  instead there’s a reference to 

“Allocating $10 million in provincial funding to add to the $4 million in federal funding under the Community Development Trust for forest industry initiatives.”

And there’s  no such program or amount anywhere in the 2008 budget for the department responsible for the forest industry that covers the federal and provincial cash totalling $14 million or anything close to it.

That didn’t become become plain until early 2009 and the new provincial budget.

The 2009 Estimates (right)show that the government didn’t spend a nickel on the program before the end of March 2009. The “revised” column is blank.

Instead, the provincial government carried over the federal cash received but not spent in 2008 and added to it the rest of the original federal contribution for a total of $4.0 million in cash from Ottawa.

What’s more, the provincial government didn’t add either $10 million or $11 million of its own money in 2009 as it had suggested in previous news releases.   Nor did it add a second year’s provincial contribution to the first to make a program worth upwards of $25 million.

Instead, the provincial government included the extra federal cash and reduced the provincial cash to a produce a program in 2009 that had less money than earlier news releases claimed.

The tomfoolery didn’t stop there.

The 2009 budget highlight document uses a while new set of numbers that don’t match any of the others and which certainly don’t match the figures included in the 2009 budget.

Here’s what it said:

Further investment of $6 million in the Forestry Industry Diversification Fund to assist the industry in identifying new products and markets. This is in addition to the $8.5 million carried forward from 2008.

There was no new investment, of course, as the budget documents clearly show.

As it is, two sawmills gobbled up 83% of the interest-free money in the form of  loans that don’t have to be repaid for 15 years and as grants that never have to be repaid.  One received a total of $10 million while a second scarfed down $2.25 million in free government cash.  The same cash was announced several times over the course of a week during August polling season 2009.

The other money appears to have gone the wood pellet program and to hiring a marketing consultant for a project that supposedly cost – you guessed it - $14 million. 

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Carry over

One of the great budgetary practices of the current administration is something called carry over.

Projects are budgeted and announced in one year and then they don’t get started, let alone finished.

Government gets multiple good news hits out the practice. 

First, they get the warm fuzzy media coverage from announcing the spending in the first place.  Sometimes they keep announcing the spending even though it hasn’t happened.  Second, if by some chance work does start, they can announce that and keep it up until the thing is finished.  it’s not unusual to see things started four years continue to appear  in releases as if it was part of current spending.

Like say a hospital in Corner Brook that was tossed into the “stimulus” counter-measure even though it was begun and should have been finished long before anyone even thought of a recession.

Now when the project doesn’t happen, there is never an announcement of the bad news.  Not likely.  The money budgeted but not spent becomes “surplus” and is part of the announcement of the record “surplus” in the spring.

Then the project is carried over into the new budget and re-announced.

If the delay has caused increased costs, this is not something to be chagrined about.  Not on your life.  Any politician worth his or her salt will trumpet the fact the same project will now cost even more because of the delay.  If any one of us mere mortals missed the chance for a good deal and had to pay 30% more for the same thing, we’d be kicking ourselves for being so stunned.  When politicians drop the ball; and it costs you 30% more for the same thing, that is a great investment in the local community.

And if it jumps 71%, as in the St. Alban’s aquaculture centre?  Well, that is just “stimulus”.

Carry over is very big in the current provincial government administration.  They carry over lots of things. 

Like in Labrador West, where a new hospital was promised just in time for a by-election in late 2006/early 2007 and the thing is still in the planning stages the better part of three years later.

Or a new campus for the College of the North Atlantic.  Tender went out on May 4 with a closing date of June 17.  (Well, the initial news release in early May said the thing was going to tender.  A “stimulus” announcement in June said the thing would be tendered in June.)

The tender was awarded three weeks ago – i.e. about a month or more after the tender closed – and as we slide easily into Labour Day, Jim Baker, the local MHA has no idea when the thing will get started. But Baker can assure residents of the area that the project costs have climbed from $18 million to $22 million and that no steel framework will be done this year.

None.

But they might get the site prepared and concrete poured.

Maybe.

So the campus project will be carried over until next year.

Just like the hospital.

or the aquaculture centre.

When was they supposed to be finished again?

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