Dunderdale admin pours more cash into Corner Brook paper mill

On top of the millions in subsidies it has already provided to Corner Brook Pulp and Paper (Kruger), Kathy Dunderdale’s administration announced on Monday that it would pay $4.3 million over three years  to help workers at the mill upgrade their skills.

The only logical step next is for Kathy Dunderdale and her cabinet to give Kruger a receipt for the whole shooting match.

After all, taxpayers basically bought the mill piece by piece.

In related news, an economics professor at Memorial University thinks these sorts of subsidies don’t work:

[Michael] Wernerheim has high praise for the province's forest management strategy and for wanting to lay out a new path for an industry in decline, such as supporting smaller operations, like saw mills, and putting a greater focus on forests as ecosystems. 

But he found the government spends too much time, effort and money on continuing to support failing ways to protect jobs in the newsprint sector. 

"These short-term initiatives to protect jobs can retard the restructuring of the industry that we all want to see happening," he said.

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Economy not sizzling in Tom Marshall’s home town

Finance minister Tom Marshall has always had a curious relationship with reality.

He likes to talk about debt reduction, for example, but he never really does anything about it, or as in his plan for Muskrat falls, he actually wants to increase the public debt by upwards of 50% of its current size.

When Marshall delivered the most recent budget – and set a record for public spending in the process – he told reporters that “our economy is sizzling right now.”

Tom must be referring to Bermuda or Barbados or wherever it is he takes the sun during the colder months.

He certainly isn’t talking about his own district of Humber East.

The Western Star reported on Thursday that the major container line serving the province is dropping Marshall’s home town of Corner Brook from its destinations.

Capt. Sid Hynes told The Western Star Thursday afternoon that export freight from Corner Brook has dropped by around 70 per cent and imported cargo has declined by about 30 per cent in the last five years.

Exports down by 70%.

Imports down by 30%.

Since 2005.

Now it surely doesn’t take an expert to tell that this is not an economy that is sizzling.

Anyone who claims it is sizzling might be fried though.

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Provincial government wakes up on EU trade

Almost two years after your humble e-scribbler pointed out the blatant stupidity of the provincial government’s decision to boycott free trade talks, the provincial government is now sorting itself out.

The provincial government trade gang will switch from observers to participants at the upcoming trade talks between Canada and the European Union in April.

The old policy  - supported unquestioningly by the same people who have now turned 180 degrees – was stupid because it jeopardized the existing and future economic interests of the province and left local industry to being left out of a new lucrative market.

What’s worse, the old, stupid policy threatened to increase the dependence of the local economy on  on the American market. As a result, the provincial economy would become even more fragile than it had already grown as a result of seven years of backward economic policy by the provincial government.

It may have taken two years but the current crowd have finally figured it out.

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The importance of education: education and the economy

The National Post’s Kelly McParland offered a colourful chart last November comparing a number of things, including federal transfers to provinces (on a per person basis), provincial gross domestic product and the amount spent per person on education.

There are also some bullet points. 

One stood out:

Newfoundland has strong investment, high GDP, generous transfers, yet still has the country’s highest unemployment and spends very little on education. Might those last two be related?

They might well be related. 

But then again, it is hard to know for sure given that the figures for per capita education spending, for example,  are from 2006 and unemployment is from 2010. There’s no indication why the figures are from different years but they are;  it’s not like the information is secret or otherwise unavailable. 

As for employment rates, in October 2010 it was around 13%  - according to the Post chart - and in October 2006, it was 14%. The participation rate is up slightly in 2010 compared to 2006 (61% versus 58-59%).

Still, it’s hard to escape the idea that there is a connection between education and economic performance.

Consider this some food for thought.

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The Fragile Economy: finance minister complains about his own policies

Finance minister Tom Marshall thinks its time for the private sector to step in and boost the economy around Corner Brook.

“Other than construction, I would like to see more economic investment; I would like to see more businesses coming in and investing here,” he said. “It is jobs ... What we have seen is government spending, in a massive way, in this area.”

That’s from a story in last Friday’s Western Star.

Two observations come readily to mind.

First of all, that’s a great big “D’uh” there, Tom.  Your humble e-scribbler has been banging out post after post after post over the past six years on this very subject.  The number of posts on it has gone up in the past two years because the fundamental situation is getting fundamentally worse. 

It is getting fundamentally worse – to hit the second point – as a direct result of government policy.  In everything from its energy policy to its disastrous seizure of private sector assets in 2008, the current administration has shown itself to be relentlessly opposed to creating an economic climate that attracts investment, promotes innovation and rewards entrepreneurship. 

The current fragile state of the provincial economy  - “fragile” is a word Tom Marshall used not so long ago, by the way - is a direct consequence of government policies.  Only a fundamental shift in those policies can move the province off the course it is currently on.

As it stands in early 2011, the current administration is firmly committed to continuing the policies that have contributed to putting the economy in its current parlous state.

We have seen the enemy, says finance minister Tom Marshall, and he is us.

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The Dismal Science: Debunking the “federal presence” fairy tale

Far from being hard done-by when it comes to federal jobs in the province, Newfoundland and Labrador is pretty much on par, according to a recent study conducted by the Frontier Centre for Public Policy, and reported by the National Post.

You can find a news release summarising the report here, while the full report is available in pdf format.

Some provinces  - Prince Edward Island, New Brunswick, Nova Scotia and Manitoba – have significantly more than the national average number of federal jobs per 100,000 population.  Quebec, Saskatchewan, British Columbia and Alberta have less.

Newfoundland and Labrador and Ontario are only slightly higher than the national average.

The study effectively refutes claims that this province is receiving something less than its “entitlement’ to federal pork spending.  The comparative figures also demolish two reports released by Memorial University’s Harris Centre in 2005 and 2006.  The provincial government has used those studies repeatedly to bolster its claims for increased federal transfers to the province to offset what turn out to be imaginary grievances.

The Frontier Centre study refers to these federal jobs as a form of “stealth” Equalization.  That is, they contend that the federal jobs serve as a type of federal transfer to the local economy in each of the provinces. More importantly, though, the Frontier Centre contends that the transfer comes in addition to the formal Equalization program and is particularly heavy in the provinces it refers to as “major” have-provinces.

The study also notes that the have-not provinces with the highest ratio of federal government jobs also tend to have higher than average reliance on provincial public sector jobs generally. They compare provinces based on the number of public sector employers as a share of the total population.  Newfoundland and Labrador is third highest on that scale, with Prince Edward Island and Manitoba coming, respectively, first and second.

Looking at the same information but as a share of the provincial labour force, Newfoundland and Labrador is by far the province with the largest dependence on the public sector.  Almost 30% of the provincial labour force is employed by the federal, provincial or municipal government.

The Frontier Centre study puts the findings into a particular context, namely transfer payment reform:

The stealth equalization of unbalanced federal employment described in this paper is part of a much bigger problem —an approach to public policy in Canada that transfers money out of high-productivity regions into low-productivity regions.

Not only is this policy approach harmful to our productivity growth, it is also, quite simply, unsustainable. Historically, the taxpayers in three provinces—British Columbia, Alberta and Ontario, have paid most of the bill for high levels of public sector employment in the have-not provinces.

At the same time, the study does point to issues that are especially relevant to Newfoundland and Labrador, even if the report’s authors simply missed the poster child for their argument of unsustainable public spending and the dangers of reliance on what the author’s call “the state driven approach to economic development”.

Most residents of the recipient provinces are unaware of the extent to which their economies are state-driven and reliant on transfers. Beyond the official equalization money, massive amounts of revenue from elsewhere flow into these provinces from a number of different sources. Stealth equalization through federal employment is one important example—but there are others. Higher dependence on federal
government transfers to individuals and discrimination in ordinary  operating programs in favour of the have-nots are two more examples of ways Canadian public policy transfers wealth into the have-nots.

Most residents of Newfoundland and Labrador are unaware of the extent to which the provincial economy is state-driven and reliant on federal transfers in addition to overall public sector spending.

They aren’t alone, of course.  The current provincial administration operates as if going off Equalization was a tragedy of biblical proportions.

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Related: 

• Fragile Economy:  staying the course
• Fragile Economy:  reductio ad argentum
• Fragile Economy:  The public sector
• Fragile Economy: …and two steps back
• Fragile Economy: …now three steps back and loving it

Drop-out drop detail

The 2008 report on schools from the provincial education department is a wealth of useful information on one of the most important government service areas.

Chapter 10 is about school leavers.  In light of the Statistics Canada report on drop-outs, it’s worth taking a closer look at the way the drop-out rate dropped in this province.

As we know from the Statistics Canada report, 19.9% of young people dropped out of school in Newfoundland and Labrador, on average, in the three years 1991-1993.  By 1996, that figure had declined to 16.7%.

By 2006, that number was down to 8.9%. The rate was lower in 2003, continued downward for the next two years and then jumped up in 2006. The current rate  - 7.4%  - is actually about what the rate was in 2005. The table is taken from the provincial government report.

Media reports indicate that a higher percentage of males than females dropped out in this province in 2009 (103% versus 6.6%). That’s a change from a decade and more ago when the male rate was dramatically higher.  According to CBC, “while rates have declined for both sexes, the rate of decrease was faster for men, narrowing the gap between the two.”

The provincial education department has another statistic, though.  It compares rural versus urban rates of school-leaving.  Here’s the provincial government table comparing the rates for all provinces and for the country as a whole.

This sort of statistic doesn’t bode well for economic development in rural Newfoundland and Labrador. And it doesn’t get any better when one considers the trend in the Eastern district, for example, that shows those graduating high school in rural areas are more likely than urban students to leave with a general pass.  n other words, they aren’t necessarily more likely to enter post-secondary education or training.

If a provincial government could only focus on one area in order to produce economic and social benefits to individuals and to the community as a whole, improving educational performance would be it.

Now it is interesting to pick up on comments on the other post on this report.  Both noted the possible influence of the cod moratorium in 1992 on the decline.  On the face of it, the answer seems to be that the moratorium did influence the rate.  Young people in rural areas, especially males, tended to leave school since they could make a living in the fishery or other similar work with a limited education.  Without the cod fishery they might have stayed in school.

Maybe.

The idea is worth exploring but the answer is likely to be more complex. Don’t forget that about 70,000 left Newfoundland and Labrador in the aftermath of the moratorium.  While the drop-out rate declined dramatically in the period between 1993 and 2005, the persistence of a high drop-out rate in rural Newfoundland  suggests there might be other factors at work.

Still, these numbers bear further consideration.

Especially considering the literacy and numeracy rates in the province.

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When the status quo is not an option, Newfoundland and Labrador version

A year before the next provincial election and Premier Danny Williams shifted around a couple of bodies in his cabinet.

What is telling about this event is not so much what happened but what the Premier said about it. Aside from the platitudes about the three people who got new jobs, the Premier said the shuffle came as a result of the death of one of his ministers. That’s no doubt quite literally true, but the clear implication is that if Diane Whelan had not contracted cancer last year and, sadly, passed away a few days ago, he’d have left everything exactly as it is.

No change. 

No shuffling. 

No new direction.

Just more of the same.

Take that as confirmation that,as Bond Papers has noted before, we are in a strange pre-election period coupled with a pre-leadership spell. Ordinarily a party and a leader headed for his third term would already be looking at bringing in a new crop of faces around the cabinet table, working out some new ideas and, generally, laying the foundation for the future. Think of it as a sort of political version of Mike Holmes meets Sarah Richardson.

Successful political parties tend to re-invent themselves over time. In Alberta or in Ottawa, the more successful political parties have tended to shift as the public mood has shifted.  Different political challenges require different political styles.  The public likes change periodically,.  They get tired of the same crap over and over. The people themselves tend to wear out. There are a bunch of reasons  for it, but change is important if parties want to stay in power and actually do something while they are at it.

The alternative is that they get punted and the public sticks in another bunch. With the exception of Joe Smallwood, post-Confederation’s successful elected Premiers have tended to stay in office for 10 years or less.  Frank Mores left after seven years in office.  Ditto Clyde Wells.  Brian Peckford went for a decade but, realistically he was worn out after 1985 or 1986.

If the Tories had run a leadership campaign in 1986, they might well have carried on running the province forever.  But for some inexplicable reason, Peckford hung around growing increasingly paranoid or grandiose or whatever that was.  By the time he finally handed off, the party was so split up internally they settled on Tom Rideout.

In 1989, the Tories ran a crop of worn out faces who tried to pretend they represented change. Voters responded accordingly. In St. John’s, the Liberals scored historic victories in the 1989 election. Not post-Confederation historic, but historic electoral success since 1833 kinda stuff.

Failure to change is basically the story behind the Liberal defeat in 2003 as well.  One old Liberal political hand said publicly at the 2001 leadership convention that the party would have to change – to reinvigorate itself – or the voters would change for them.  He was right.

There is still time for the Reform-based Conservative Party currently running the province.  Nothing says the Old Man won’t shuffle his cabinet in the spring.  After all, there are a bunch of cabinet and caucus members looking at hanging up their skates next fall. Spring could still be a good time to put a lick of paint on the old house.  The scouts might have picked up a few local stars at the municipalities convention in St. John’s last week.  We won’t know for sure until happens.

But the trend and the attitudes suggest that what you are seeing today is what you will get to vote for next fall.  Any change will come after 2011.

The only problem is that the province needs some new ideas right now. 

The big news on Wednesday was an announcement by business minister Ross Wiseman that the provincial government will now aim cash handouts specifically to airplane operators.  Now this practice of offering cash hand-outs to businesses has a very long and sorry history in Newfoundland and Labrador. That history  - well known to anyone over the age of 30 in the province - and their own sorry-assed experience  - known to anyone who can read - hasn’t stopped the Reform-based Conservative Party led by Danny Williams from keeping up the practice.

From tossing public cash at any hare-brained scheme imaginable to unsustainable public spending to constantly looking for federal hand-outs, the current administration is an homage to every idea that never worked for this province.

The status quo is not a viable option for the people of Newfoundland and Labrador.

But the news from the provincial government today, on any front, is that we are doomed to more of the same.

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Lowering the boom

Supposedly, there’s a baby boom in the province:

After years in decline, Newfoundland and Labrador’s birth rate has been steadily increasing in recent years — and the trend is expected to continue this year.

There isn’t really.

A steady increase or a boom.

And it isn’t clear from the Telegram front page story who expects the trend to continue.

First, the numbers.

In 2008, the number of live births in the province jumped by 300 to 4,905.  In 2009,  the number went up again by 35.  That’s not a steady increase.  It’s a big jump and then a tiny increase that is actually less than 10% of the total number of live births. Put another way, that’s almost a seven percent increase the first year and a point  seven percent increase – 0.7% (less than one percent)  - the next year.

This is not a trend. 

It’s curious but it isn’t a trend.

As for what will happen in 2010, look at it this way:  In 2008 and 2009, there were on average about 410 live births each month in the province, give or take.  If the same birth rate carried on into 2010, we’d expect to see about 3900 live births by  the middle of September (410 times 9.5)  As the Telegram notes, we’ve only reached 3300 or so by that time in 2010.

So unless people were making like bunnies nine or 10 months ago or there are a crop of twins and trips out there no one really has talked up, the provincial birth rate seems to be on track to come in well below the 2008 and 2009 figure. That’s even allowing that October is one of the big baby months according to some analysis. In fact, if the current trend holds, the birth rate might well be back to where it was in 2007:  around 4500 live births.

As for the Telly claim that someone expects the growth trend to continue, there’s no one quoted in the article who actually says that.  The Telly article includes a reference to a 2009 news release by the provincial centre for health information, but your humble e-scribbler had a few choice words about that piece and its dubious commentary when it came out.

The article also makes an obligatory mention of the provincial government’s breeding incentive program. That’s the one Danny Williams announced during the 2007 campaign with the infamous quote “we can’t be a dying race”, but that’s another story.

Basically, there’s a cash bounty of $1,000 for every live birth or adoption in the province. Aside from the fact these sorts of programs don’t usually work, this one isn’t likely the cause for the spike in births since it doesn’t really change what the provincial government’s own statistics agency identified as long term trends affecting the population:

The number of births has been trending downward for four decades because of declining fertility rates and, more recently, a decline in the number of women of child-bearing age.

A grand for successful copulation doesn’t really get at the core problem fewer people at the right age to have children wanting fewer children than previous generations.

Most likely, the two year increase in live birth rates came from the increase in migration that started in 2007.  All those young people who moved home to escape the recession may well have decided to carry on with their lives and have babies.  Since out-migration seems to have picked up again, it would only make sense that the birth rate is down, as the Telegram’s statistics suggest.

The real stunning figures from the Telegram article though – and in some respects the real story – are in the print edition but not in the online version.  In print, the Telly gave registered births in selected communities in 2009 and from January to September 2010.  Labrador City, with about 8,000 people there and in neighbouring Wabush saw only 88 births registered in 2009.  Bonavista had none in 2009 and has had two so far in 2010. Corner Brook (2006 population = 20,083) saw 650 births in 2009. meanwhile, St. John’s and its 100,000 or so residents registered 2629 births in 2009.  For those keeping track that was 53% of the total number of live births in the province that year.

Outside the St. John’s census metropolitan region, large swaths of Newfoundland and Labrador are basically devoid of people under 50 years of age.  Once bustling communities are collections of retirement homes. And in places like Grand falls-Windsor or Deer Lake, the local construction “boom” is pretty well all from retirees returning to the province from outside or people from smaller communities along the coast heading into the major centres.

What the demographic trends mean for the province is way more interesting than a minor – and temporary – shift in the birth rate.  It’s also a subject the local crop of politicians, from the Old Man on down, quite clearly don’t have a sweet clue what to do about.

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Economics as ideology, or, The Other Dismal Science

So at some point people thought that economists actually might be good at forecasting things.

No wait.

This is serious.

Apparently, some people actually believed that.

But only now is some mathematician figuring out there might be some doubt as to the ability of your average economist to forecast much of anything with any accuracy.

According to David Orrell:

Current economic theory is less a science than an ideology peculiar to a certain period of history, which may well be nearing an end…

All jokes aside, the Globe piece by Brian Milner is worth the time, if for no other reason than there is an audio excerpt of Orrell reading from his book, Economyths: 10 ways economists get it wrong.


While Orrell uses ideology in another sense, it is interesting that two of the economists who get the most popular attention in Newfoundland and Labrador seem to be more ideological or partisan than analytical.  To wit:

• Federal job presence,  - updated links here - 2005 and 2006  
• Historical polemics,
• Industrial development then,
• Industrial development now,
• the recession, 
• Labrador development, and,
• Equalization.

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Time to retire the old schtick

On a certain level, you can’t blame Danny Williams for saying the same stuff over and over.

After all, audiences like today’s gathering at the Board of Trade keep lapping it up.  They turned out in force, chuckling and applauding in all the right places as if they knew the script by heart.

As the scrum video shows, local reporters from the province’s two television networks never tire of asking him the same old questions over and over, getting the same old answers over and over,  and then passing them yet again to the audience at home as if they heard it for the first time.  

But while some people never seem to tire of re-runs, there are likely an ever-increasing number of people in the province for whom the province’s political news is starting to look like watching some borscht-belt comedian on a 1970s American talk show.  Decades ago, the guy had one joke that sort of worked, yet the host thinks the old codger is a comedic genius.  So he flies the guy back from Florida to inflict him on his audience over and over again.  In the two channel universe of the 1970s or even the 13 channel cable world of the 1980s, audiences didn’t really have much choice.

Just to make sure you have a clear picture in your head, though, think Bobby Bittman from The Sammy Maudlin Show.

Then think of a parody of Bobby Bittman on The Sammy Maudlin Show.

Now you are getting close to the reality that is Wednesday’s vintage Danny Williams speech.  Take an endless recitation of how much money government spent on this that or the other.  Rattle off supposed triumphs. Talk of a new attitude of “confidence, courage, maturity and integrity”. Cliches and pat phrases interspersed with random quotations from Bartlett’s.  As formulaic as The Ropers.

The result is jarring even beyond the idea that merely spending increasing amounts of cash is the only measure of success, that running massive deficits displays “fiscal discipline” or that calling Bank of Canada Governor Mark Carney “a very powerful individual” is not trite.  With all the bravado and self-praise thrown liberally around as well, one has a speech that reeks of insecurity, fear, and childishness.

For Newfoundlanders and Labradorians, the speech was surely embarrassing. What else could it be when anyone  - let alone the Premier of a province – speaks of noble virtues, promises to “take no prisoners” in a political war with Quebec over the Lower Churchill, then immediately afterward quotes Mohandas Ghandi and yet remains completely oblivious to the stupidity of doing so in such a context.

On one level no one could blame any politician for doing what appears to work politically, but on another level,  the Premier’s performance at the Board of Trade was also a sign of an administration that has – to put it plainly - run out of ideas.

That lack of ideas is hurting the province.  The Premier has neither the markets nor the money to erect his $14 billion wet dream.  If he did, then Danny Williams would be building it instead of talking about it.  In the meantime, his obsession blocks out any development of wind or other energy power in the meantime.  That – as strange as it seems – is the government’s energy policy.

What’s more, the opportunity that does exist south of the border is being squandered in imaginary political squabbles.  Neil Leblanc just finished his appointment as Canadian consul in Boston.  As he noted in a recent interview, the northeastern United States is a ripe a lucrative market. 

But, Leblanc noted, it is not good enough for Canadians to say simply that we are here so “Come buy from us”.  In other words, it is not enough to say we have the most phantasmagoric undeveloped green energy planet in all Creation.  Canadian provinces cannot sit and wait for business to fall into their laps. The New England states themselves are also building new energy sources.  Other American states are already building new generation and transmission facilities to supply the eastern seaboard.

"There is time for the Atlantic provinces and Quebec to put their best foot forward. We have a lot of natural resources here, which we can hopefully take advantage of," he said. "It's a win-win situation if we can do it."

It could be a win-win situation.

Unfortunately, as long as Danny Williams uses the same speech over and over again, the best foot is not going forward. 

Far from it.

It’s time for the old schtick to retire.

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Related: 

• Bury my lede at Muskrat Falls
• The Old Man, Old Habits and Old Chestnuts
• Reach for the Screech
• Five years of secret talks on Lower Churchill;  the Dunderdale audio

The value of education

Talk about putting the emphasis on the wrong syllable.

The provincial government thinks innovation is about how much money it spends on something. Take this quote from Danny Williams as being just one of many:

That is an area [innovation] we are now moving in. It is a very, very important area that we have to address and this government is committed to putting that money into that research. That is why the experience that I had yesterday was an incredible experience, but it goes to show the importance of using those monies in the proper areas so that we can prepare for the future at a time when the oil and gas is gone.

That event, incidentally happened actually two days before he made those remarks.  The province’s new research and development corporation announced $775,000 in funding for different research projects.

This emphasis on cash is not surprising. The crowd currently running the place seem to think that everything can be reduced to how much money government spends. 

But as good as it is to fund research and development, when it comes to innovation, education is the key.
When you look at education in the province, though, you don’t get a warm and fuzzy feeling.

Reading and writing is a challenge.

Almost half the adult population of Newfoundland and Labrador doesn’t have a literacy level that would allow them to “function well in Canadian society.”

Basic math skills are an even bigger problem.

Almost two out of every three adult Newfoundlanders and Labradorians don’t have the skill with numbers and mathematics – they call it numeracy – to function well in Canadian society.

Numeracy is actually a far greater problem because it involves not just an ability to add, subtract, multiple and divide.  Numeracy also involves logic and reasoning, probability, and statistics.  That's basically the ability to solve problems using  - for example - an }if this, then that" way of thinking.

The only place worse off than this one?  Nunavut.  New Brunswick is tied with Newfoundland and Labrador with low numeracy and literacy levels among adults.

Just think about it for a second:  half the workforce of the province lacks the ability to function adequately in modern society. It’s not their fault, mind you, and it certainly doesn’t mean they are stupid.  These figures tell you that the province’s education system failed them, not just in the past but in the present day.

The problem, you see, isn’t confined to adults. Student literacy is about the same as the adult scores, while student numeracy is nothing to write home about either. 

Now on the other hand, the drop-out rate has plummeted in the past 20 years. But as CBC Radio noted late last December, high school graduates in the eastern part of the province are more likely to graduate with a general pass than with the results needed to carry on to university or trades training.

You can see the consequences in the completion and participation rates. University participation is among the best in the country even if the completion rate is one of the worst. College and trade school education has a relatively low participation rate but a decent completion level.

It’s not like the connection between education and prosperity isn’t well known.  The 1992 Strategic Economic Plan included a section specifically on education reform. The premise was simple enough:

Education is the key to economic development. Studies have shown conclusively that skills, qualifications, innovation and the adaptability of individuals are critical determinants of economic performance and the success of enterprises.

The 1995 Strategic Social Plan, while never implemented, included significant reforms in our education system.

The answer to the education problem in the province is not merely about spending money, as much as the Premier likes to talk about how much cash winds up going out the door.  Nor is the answer found in issuing nonsensical news releases that claim the education department scored a goal when it didn’t.

The first step is to realise there is a problem.

And with half the work force unable to function adequately in modern society, there’s a pretty big problem going unrecognized.

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Show us the tit and we’ll suck it

Newfoundland and Labrador is the only place in the western world where private sector businesses look to the government as the key to economic diversification:*

“If we have some guidance and support, take some initiative on our own, we can grow Corner Brook,” [ the vice president of the Greater Corner Board of Trade] said. “I think it is a great time to be doing business or setting up new business in this region. If people are interested in that, have an entrepreneurial spirit, to let that take control and get that business off the ground.”

There is no entrepreneurial spirit in Corner Brook, evidently, not if the local business association thinks that increasing government spending is the way to “grow” the economy.

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*  Here’s the link left out of the original piece.  The same e-mail correspondent who pointed out that glaring error in the timed post also noted that the quote doesn’t support the government hand-out thesis.  Well, with the link to the whole story, it should now be clearer.

Diversification links to investment, but the investment sought is public cash:

Meanwhile, Goulding said it was important for these seven ministers [ on the cabinet committee] to realize the realities of the business sector in western Newfoundland and ensure that government does all it can to support business.

The vice-president said businesses need support and training in such areas as succession planning and getting business starts. In terms of attraction and retention of businesses, that is where he said the provincial government has to step up as a follow to the establishment of business retention and expansion co-ordinators and a performance management system for regional zone boards.

“What they need to do now is expand on those types of programs,” he said. “Let’s get those business retention and expansion co-ordinators out in the field, on the ground, talking to entrepreneurs and new and upcoming businesses to give them the support that they need.

Three-on-a-match and then some: another failure of taxpayer cash give-away policy

The list of failures is growing for the Williams administration give-aways of public money to businesses.

In late 2008, Progress Software received $325,000 in an interest free loan from the Williams administration.  The company was supposed to add 10 new software engineering positions to the company’s operation in St. John’s.

The company closed its St. John’s office less than 18 months later without adding any new employees.  NTV and the Telegram reported the story this month but neither version is available online.

According to the Telegram, the provincial government is looking for the money back.  The company has agreed to repay it but to date there’s no sign of any cash.

The story is all too familiar. 

In May, the Telegram reported that Kodiak received an $8.0 million interest free loan of taxpayer cash from the same government fund – the Business Attraction Fund -  to add 75 new positions at its boot-making factory in Harbour Grace.  Instead, the company slashed its workforce.

There’s no word on whether the provincial government has sought repayment of any of that money at all.

Bond Papers readers will recall SAC Manufacturing.  That company went belly up a mere four months after it received a total of $675,000 in taxpayer cash from the provincial government. 

According to the province’s auditor general, the money would likely have to be written off.  In late 2009, though, the provincial government’s audited financial statements still showed the shares in SAC manufacturing and in another failed company on its books as assets.  That fourth company – Consilient – figured prominently in an auditor general’s report criticising the way the Williams administration hands out business development cash.

Fortunately for taxpayers, sometimes these deals fall apart before the company gets the cash.Last month, taxpayers watched  - likely with jaws agape - as natural resources minister Kathy Dunderdale entertained a proposal from a bankrupt company seeking $52 million to take over the defunct paper mill at Grand Falls-Windsor.  Neither Dunderdale nor her officials seemed to know what was going on until the story broke about the bankruptcy and the company withdrew its offer.

The litany of failure stands in stark contrast to the 1995 EDGE program.  At a cost to date of $17 million, the program has produced between 1500 and 1600 jobs.

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The Cutting EDGE

Introduced in 1995, the Economic Diversification and Growth Enterprises program – known as EDGE – is the most successful economic development program currently offered by the provincial government.

According to an article in the March 20 issue of the Telegram,

The province estimates that EDGE has created 1,500-1,600 jobs over the years. The government has forked out $17 million in rebates to employers under the program. Those rebates are linked to things like provincial income tax, payroll tax and corporate income tax.

Roughly 40 municipal governments also signed on to the EDGE scheme, providing their own tax relief to qualified companies.

Within the past five years alone, 30 companies have applied for support under the program and two thirds were accepted.

Compare that to the hand-out programs introduced under the current administration.  Of the $75 million budgeted over the past three years, the programs have only managed to give away $14 million;  of that amount $8.0 million went to a company that promised to increase its workforce but in the end cut jobs.

The provincial government is reviewing the EDGE program to see how it can be improved. Currently 69 companies hold EDGE status.  A further 54 held the status at one point but no longer qualify.

As the Telegram described the EDGE program:

To be eligible, a company must create and maintain 10 new permanent jobs in Newfoundland and Labrador and make a minimum capital investment of $300,000 or have incremental annual sales of $500,000.

Tax incentives are provided to EDGE-designated companies for a period of 10 or 15 years, followed by a five-year period of partial rebates.

Part of the program’s enduring success is the philosophy behind it. EDGE recognised the changed global economic circumstances and placed its greatest emphasis on encouraging the private sector to develop innovative, globally-competitive industries that could survive without extensive government cash support.

The background to the program is contained in a public consultation paper released in the summer of 1994.  The main sections of that document are reproduced below.  in light of the current government policy and the review of EDGE, it would be useful if more people in the province were aware of an economic development philosophy that continues to deliver strong results almost two decades after it first appeared.

Excerpts from: 

Attracting new business investment: a White Paper on proposed new legislation to promote economic diversification and growth enterprises in the province

(June 1994)

1.0  BACKGROUND

The Strategic Economic Plan for Newfoundland and Labrador, which was released in June of 1992, outlined the economic challenges facing the Province and charted new policy directions to guide economic development over the long term.

The Strategic Economic Plan noted in particular that the globalization of economic activity and the liberalization of world trade presents significant new export opportunities for manufactured goods and commercial services. Technological advances made in transportation and communications over the past decade, combined with the shift towards a more knowledge based world economy, have also reduced the relative importance placed on geographic location for many industries and firms, and this has created further opportunity for the development of new products and services. At the same time, however, these trends have brought increased international competition for economic activity, not only in the development of new products and services, but in respect of many of our existing industries as well.

These profound changes in global trade patterns, investment flows and technology constitute the driving force behind the fundamental economic restructuring that is now occurring in many countries. In an increasingly competitive and knowledge based world economy, it is clear that we can no longer rely on traditional approaches to attract new business investment and expand existing business enterprises. We will, out of necessity, have to become more outward looking in our approach to economic development and create an appropriate investment climate that supports international competitiveness.

It must also be recognized that the private sector is and will continue to be the engine of economic growth. This is a key principle embodied in the Strategic Economic Plan and reflects the reality that the private sector is the most effective vehicle through which lasting economic wealth and employment opportunities can be created for the people of this Province. It is the role of government in this context to create the economic climate in which private sector investment can occur and be successful.

2.0       GOAL

The goal of attracting new business investment as a means to create additional employment opportunity for the people of this Province is not a new concept. Indeed, various governmental incentive programs have met with measured degrees of success over time in this regard. However, the rapidly changing global marketplace and the province-wide impact on the economy resulting from the collapse of the groundfish fishery have heightened the need to significantly improve the attractiveness of the Province to the private sector as a place to invest and prosper. New business investment directed at economic diversification and general economic growth is not only an objective but an imperative at this juncture of the Province's history.

The Government of Newfoundland and Labrador intends to adopt bold and innovative measures to transform the Province into one of the most attractive locations - not only in Canada but in all of North America - for new business investment and to take aggressive new steps to market and promote the Province's strengths in this regard on a national and international basis.

The main elements of this new program will be reflected in legislation to be known as "An Act to Promote Economic Diversification and Growth Enterprises in the Province". This legislation will be presented to the House of Assembly for its consideration in the fall of 1994 and will provide an enhanced "business friendly" regime for new and expanding business enterprises in the Province.

3.0       SCOPE OF PROPOSED LEGISLATION

3.1      Eligibility

New business enterprises wishing to establish in the Province and existing businesses wishing to expand their enterprises will be eligible to receive a range of special business development incentives, provided that certain conditions are met. These will be in addition to any other incentives the enterprise may be eligible for under other assistance programs established to encourage business development in the Province.

To qualify for the special incentives, an enterprise must meet the following tests:

• The proposed new business activity must have the potential to bring substantial new or expanded business investment and employment to the Province.  Only those projects involving capital investments of at least $500,000 and having the potential to generate incremental annual sales of $1.0 million, as well as creating and maintaining at least 10 full time permanent jobs in the Province, may apply to Government for access to the special incentives.
• The proposed new business activity must be consistent with the objectives for economic development that are embodied in the Strategic Economic Plan.
• Reasonable assurances must be available to demonstrate that the proposed new business activity, in the absence of the special incentives, would not otherwise be pursued in the Province. This test is intended to ensure that incremental economic activity will be stimulated by the new incentives.
• The proposed new business activity must not be directly competitive with or have an adverse impact on the viability of other businesses already established in the Province.   This will ensure that existing business enterprises will not be placed at a competitive disadvantage relative to those companies and investors who are able to take advantage of the new incentives.
• The proposed new business activity must have the potential to generate substantial value-added economic benefit to the Province.

Both new businesses and existing businesses expanding their operations will be eligible for the special incentives. However, in the case of existing businesses, only those elements of a company's operation which are incremental to its existing scale of operation will be eligible for the incentives.

3.2      Review and Approval Process

Companies seeking the special incentives available through the new legislation will be required to provide documentation in the form of a comprehensive business plan to allow for a thorough assessment of its proposal. The specific requirements in this regard will be outlined fully in the legislation.

Particular attention will be given during the review process to the commercial viability of the proposed business activity over the long term. It is not the intent of the legislation to artificially support new industries or new business activity in the Province, but rather to attract and assist in the development of viable and sustainable economic enterprises and employment opportunities for the long term benefit of the people of this Province.

All applications received under the new legislation will be reviewed by a committee of Cabinet Ministers chaired by the Minister of Industry, Trade and Technology, with final decisions on eligibility to be made by Cabinet. Part of the process in making a determination as to whether or not the special incentives will be granted to a company will involve a public notice procedure whereby Government will invite interested parties to make submissions respecting all proposals received. This is intended to ensure that all proposals are available for public scrutiny in respect of their potential competitive impact on existing business enterprises and jobs. Appropriate steps will be taken to protect the proprietary and commercial interests of the company when this public notice procedure is invoked.

While all proposals made to Government under the new legislation will be thoroughly assessed to protect the general public interest, Government is committed to a timely review process such that potential investors are not unduly delayed in the implementation of their business plans. Once the committee of Cabinet Ministers is satisfied that it has all the information it considers necessary to properly evaluate a proposal, a decision will be rendered by Cabinet on acceptance or otherwise of a company's proposal within 60 days.

Successful companies will be expected to enter into a formal contract with Government in which the Province will guarantee the benefits provided in the new legislation and the company will bind itself to implement the business proposal as accepted by Government. Notification will subsequently be given to the House of Assembly of all such contracts entered into, and ongoing monitoring of their terms and conditions will be carried out by senior officials.

3.3      Incentives Available through the Legislation

3.3.1    Taxation Incentives

The private sector is presently faced with a relatively high burden of taxation which impedes new investment and the creation of new employment opportunities in the Province. While a number of significant changes to the existing business tax structure have been made by Government in a number of areas in recent years, the entire taxation regime requires further attention if it is to be used as a means of promoting the Province as a highly competitive location in which to do business. Accordingly, the following taxation incentives are proposed for those companies qualifying for assistance under the new legislation:

(i) A full tax free holiday for ten years in respect of provincial corporate income tax, the health and post-secondary education "payroll" tax, and retail sales tax.

(ii) Further relief in these specific tax areas for an additional five year period on a reduced scale, commencing in the first year at 80% of total taxes payable and declining by a factor of 20% each year thereafter.

Municipalities will also be given the necessary legislative authority to grant full property and business tax exemptions on the same basis as outlined in (i) and (ii) above with a majority vote of the respective municipal council. At present, municipalities do not have the legislative flexibility to offer tax relief to individual companies to the extent contemplated herein.

3.3.2    Productivity Incentive

All new and expanding business enterprises experience a significant "learning curve" during the formative years of their operation. Part of this process inevitably results in a productivity "loss" that is incurred by the company at all levels in the organization.

To offset part of this productivity "cost", the Province will provide financial assistance to new and expanding business enterprises in an amount of $2,000 for each full time job created in the Province during its initial five year operating period where the company employs a resident of the Province to permanently occupy the job from the time of its creation.

Appropriate provisions will be included in the legislation to protect the pubic interest in the event of failure by a company to fulfil the conditions upon which the productivity incentive has been granted.

3.3.3    Labour Relations Incentives

A new approach to labour-management relations is required to attract new investment and stimulate new business enterprises in the Province. Government remains fully committed to ensuring that adequate safeguards are in place to protect the legitimate interests of employees and unions. However, it is in the broader public interest to achieve this objective in a balanced manner that also assures those who wish to make new business investments and provide economic opportunity in the Province have a reasonable prospect of receiving an acceptable level of return on their investment without undue risk from uncertain labour relations conditions.

Pursuant to a commitment made in the Strategic Economic Plan, Government is presently developing a comprehensive consultation document which will address various concerns respecting the general labour relations regime in the Province. While the intent will be to develop consensus on changes necessary to make the general labour climate more favourable for all businesses, Government believes that extraordinary measures are required beyond this if new business   enterprises   are   to   be   stimulated   in   the   increasingly competitive global economy.

Government's proposal in this regard is to make available different Labour Relations Act provisions to new enterprises wishing to establish in the Province and to do so in a manner that will not affect the application of current labour legislation to existing businesses. As well, any existing business where a bargaining agent has been certified for the employees of that company prior to the time it wishes to expand and take advantage of the special incentives under the new legislation will not be eligible for the labour relations provisions of the legislation. Considerable difficulty from a number of perspectives would be encountered in applying two different labour relations regimes to a single business operation, as one firm could have two separate collective bargaining processes, labour contracts and wage rates applying to employees doing the same kind of work. Accordingly, the labour relations provisions of the new legislation will apply to new business start-ups only.

The main  features of the proposed  new labour relations provisions are as follows:

a.  All collective agreements entered into between a company and the bargaining agent for the employees will remain in force for a period of at least five years, unless the contract entered into between the Province and the company in respect of the business undertaking as a whole expires in a period of less than five years.

b.  In circumstances where a company and a bargaining agent engage in collective bargaining but are unable to reach a collective   agreement,   a   special   panel   consisting   of   a representative   appointed   by   each   of  the   parties   and   a chairperson appointed by the Minister of Employment and Labour Relations will establish a collective agreement by addressing those specific matters in dispute at the time the matter is referred to the panel.

c.  Where a company and a bargaining agent are unable to conclude a collective agreement and the matters in dispute are referred to a panel, the company will not be permitted to lock-out the employees and the employees will not be permitted to strike.

d.  A panel, in concluding a collective agreement, will take into account the following factors:

(i) the overall policy objective of the new legislation which is to create conditions favourable to the establishment of new businesses and the expansion of existing businesses in the Province (this factor will be given paramount consideration by the panel);

(ii) the effect of the agreement on the profitability of the business;

(iii) the terms and conditions of employment of employees in occupations in the same or similar businesses both within and outside the Province, with consideration to be given to geographic, industrial, economic, social and other variations that the panel considers relevant;

(iv) the need to establish terms and conditions of employment that are fair and reasonable in relation to the qualifications required, the work performed, the responsibility assumed and the nature of the service provided; and

(v)      the needs of the employer for qualified employees.

e.  An agreement concluded by a panel will be binding on all parties.

f.  The panel will be required to conclude an agreement no later than 90 days after disputes are referred to it for resolution.

g.  Every collective agreement entered into between a bargaining agent and a company, including an agreement concluded by a panel, will contain provisions:

(i) requiring the application of progressive work practices in the work place including the use of composite crews;

(ii) relating to wages and to wage increases of employees during the term of the agreement, but those increases will not be permitted to exceed the percentage rise in the consumer price index as reported by Statistics Canada for that area; and

(iii) respecting the final and binding resolution of disputes without work stoppage.
Notwithstanding the provisions outlined above, where a company and a bargaining agent both agree that it would not be in their collective interest to apply the labour relations provisions of the new legislation in its entirety or in part, then those provisions will not apply to the parties concerned. Similarly, in circumstances where a panel has concluded a collective agreement, the parties concerned may, where they mutually agree, vary any term or condition the panel has applied, provided that such agreement does not offend other applicable provisions of the new labour relations regime.

3.3.4    Access to Crown Land

Crown land that a company may require to implement its business plan as approved by Government will be leased to the company for a nominal sum of $1.00.

3.3.5    Appointment of a Facilitator

Upon the request of a company, Government may appoint a person, either from within or outside of Government, to assist the company in obtaining governmental permits, licenses, options for use of Crown assets, and any other authorizations that the company may be required to obtain in connection with its business. This will expedite the processing of all applications for regulatory approval of the business plan and thereby allow the business plan to be implemented in a timely manner. The responsibility for actual decision-making in these areas will, however, remain with the appropriate regulatory agency.

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Fragile Economy – The Public Sector

Last week, labradore comments on the size of the provincial labour force occupied by the provincial government public sector.  He capped it off with a chart (below) showing a comparison for all 10 provinces over the past decade.

All this brings home one of the points made here earlier this year in a series of posts on the increasingly fragile state of the provincial economy. More the provincial economy is dependent on trade with a single market, namely the United States.  There are fewer private sector industries driving the economy and, at the same time, provincial government spending has assumed an increasingly large role in the economy as a whole.

If you extend the picture back over the three decades for which data is available, you can see both the persistent over-reliance in Newfoundland and Labrador on public sector labour compared to the situation in other provinces as well as the increase in the public sector labour force over the past three years.

These charts go a long way to demonstrating the extent to which popular perceptions of local prosperity  are entirely wrong.  Whatever is going on locally is most certainly not the result of private sector economic development.

Rather there are more public servants making more money, 20% more, in fact over the most recent four year contract.  Couple this with the dramatic increase in overall provincial government spending – upwards of 60% in four years – and the picture is unmistakeable.

Those who want to talk about prosperity in the province or those who want to celebrate the province’s “have” status would do well to look at the three provinces with the smallest proportion of their labour forces working for the provincial government.  It is no coincidence that those provinces with the strongest economies are also ones in which the public sector labour force is a relatively small proportion of the overall working population.

That doesn’t mean that public servants and public services are unimportant.  Rather, the situation in Newfoundland and Labrador demonstrates the extent to which successive provincial governments in Newfoundland and Labrador – but most particularly the current one – have failed to create the climate in the province for sustainable economic development let alone diversification of the local economy.

What makes the current administration stand out, though, is that increasing the role of the public sector in the economy, whether through NALCOR or through admittedly unsustainable growth in public spending, is openly stated as the goal.

The fact that observers outside the provincial government have repeatedly failed to notice that this is occurring is another matter.  No surprise, though, that if they cannot even correctly identify the trend to growing fragility, they may not pay any attention at all to the very serious implications from policies that promote the hollowing out of the province’s economic underpinnings.

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The energy hub and the loose wheel

Summertime is the season when politicians get to travel.

For example, take the annual meeting of governors from the New England states and premiers from the six eastern Canadian provinces.  They got together from July 11 to 13 in Massachusetts for a series of meetings. 

Not much came out of the meetings  - there were a couple of initiatives they all agreed to implement  but then again, these things are seldom about solving big issues.  You can get an excellent sense of how little of substance ever gets done at these meetings by taking a look at the rather vague news release from the Premier’s Office on the meetings. And if that isn’t enough, look at the equally vacuous collection of scripted quotes issued by the four Atlantic Canadian premiers.  One of them, incidentally wasn’t even at the meeting, but he did get included in the quote-fest.

Much like trade shows, these sorts of big meetings are not the places to cut deals.  They are the places to sign deals worked out well in advance.

For example, Maine and Nova Scotia signed an agreement during the meetings to work jointly on development of ocean energy.  That’s tidal power or wave power.

New Brunswick premier Shawn Graham even got a public endorsement from three New England governors for the proposed second nuclear reactor in new Brunswick. The governors of Maine, Rhode Island and Vermont support Lepreau 2.  In fact, Rhode Island Governor Donald Carcieri thinks that nuclear energy must be part of the mix for the region’s future energy supply.

Heck, even away from the conference regional energy deals are in the news. Nova Scotia Power and New Brunswick Power are working a deal on the 4200 million intertie upgrade Bond Papers mentioned last week. Daewoo will be building a wind turbine manufacturing plant in Nova Scotia, as well.

Conspicuously absent from all this concrete talk of energy deals is the place its own premier now describes as “a significant energy player” in North America. 

Not energy hub.  That job is now taken by New Brunswick.

No longer an energy warehouse.

Just a player, albeit a supposedly significant one, whatever that means.

The only specific reference to a project or initiative in Danny Williams vague news release was to the Lower Churchill.  As readers of this space know, this project is now pretty much dead in the water.  Mo markets, no money and  - especially at an estimated cost $14 billion and counting - no sign of anyone willing to underwrite the whole thing. It is now obviously what it always has been all along:  a mere political prop.

That’s what comes of putting every egg into a single basket. While other jurisdictions are allowing many different ideas to move simultaneously, the current administration in Newfoundland and Labrador is sitting as an obstacle to innovation. It’s obsession with a single megaproject  - laid down in the official energy policy itself - prevents other ideas from getting any serious consideration.

Newfoundland and Labrador is being rapidly left behind in energy development.  Despite abundant energy, a skilled work force and ample resources, new energy developments are happening somewhere else. Compare Grand Falls-Windsor to Trenton, Nova Scotia, for instance.  The wind turbine plant is expected to employ 120 in its first year and upwards of 400 at peak. What’s likely to happen any time soon in the central Newfoundland town?

The Maritime provinces are becoming an energy hub.  Newfoundland and Labrador is looking more and more like the loose economic development wheel.

The cause is flawed policy.

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Are you smarter than a cheese grater, now?

Remember that fisheries research cash announcement that seemed to have been cobbled together within the past six weeks?

Well, there’s a bit more evidence of the whole thing was baked up in a few weeks.  The evidence comes from the release of a consultation document to support development of a coastal and oceans management strategy by the provincial governments.

Environment minister Charlene Johnson is in the thick of it, once again, with this quote from the news release:

“Our oceans play a very valuable role in our ecosystems and it is important that we employ an appropriate policy framework for their management,”…

Charlene has an interest in and jurisdiction over the ocean.

Interesting.

In late May – about six weeks ago – she sure didn’t.

That’s because, according to Johnson, “if the Leader of the Opposition was so concerned about the environment and offshore she should have asked me a question where jurisdiction does fall under my department and that is when the oil reaches the land, Mr. Speaker.”

In that same session, natural resources minister Calamity Kathy Dunderdale went so far as to put a specific delimitation on where the shore began: the “Minister of Environment and Conservation … has no responsibility beyond the high water mark.”

Dunderdale – who is also Danny Williams’ hand-picked choice as second in command on the good ship Williams – also had no trouble defining where the fisheries minister stood:  his “did not go any further than that either as far as the offshore was concerned.”

How truly odd, then, that the other minister involved in the oceans strategy consultation was none other than Clyde Jackman, minister of fisheries and aquaculture.

Now we’ve already had more than a few chortles  at Dunderdale’s expense over this whole issue of jurisdiction. Okay so maybe there were a few guffaws too. But for an administration  whose deputy premier only a few weeks ago was adamant that  ministers had absolutely no responsibility for what went on below the high water mark on the shore, this new document is a gigantic change of direction.

All in six weeks.

But that’s not the end of it.

This new strategy is supposedly about…well, let’s let Charlene tell us:

“Our goal is sustainability and ensuring we use our resources effectively…”

Laudable stuff, indeed.

The word “sustainable” occurs no fewer than 36 times in the consultation document itself, usually in conjunction with the word “manner”, as in things must be done in a “sustainable manner”.

The responsibility for this sustainable stuff rests with none other than Charlene Johnson and her intrepid little department:

The Department of Environment and Conservation is responsible for developing and implementing the Sustainable Development Act, the Sustainable Development Strategy, and coordinating interdepartmental interests. It supports the Sustainable Development Roundtable, comprised of stakeholders from around the province, and
the development and monitoring of indicators to ensure development adheres to the principles of sustainability. (p.13)

Sustainable Development Act?

Yes, that would be the same piece of legislation that was part of the Tory campaign platform in 2003, passed into law in early 2007 but never implemented.

The roundtable?

Doesn’t exist, apparently.

And that sustainable development strategy?  Well, if the Act had been put into effect, then the whole thing would already exist. Instead, government is trotting out yet another consultation to develop yet another strategy on things which apparently are beyond its ministerial competence and all of this is being done before they bother to put into an effect a commitment made in 2003.

For those who are counting that is a total of seven years to get exactly nowhere.

The Sustainable Development Act required that cabinet approve a comprehensive strategic environment management plan for the whole province within two years of the Act coming into force.  In other words, if this Act had been put into effect the year it was passed, the entire province – including the fisheries related bits – would already have a plan.

And then five years after that, the whole thing would be reviewed again complete with public consultation.

To put it bluntly, had the current administration done what it committed to do in 2003 and what it finally got around to passing through the House of Assembly in 2007, this entire business and a whole lot more besides would already be done or well under way.

As it is, one has to wonder why the SDA remains in mothballs and why this  particular “consultation” appears now, out of the blue, and focuses – as it appears – on areas over which the provincial government has no legislative jurisdiction.

Taken together with Friday’s announcement, it looks a we bit curious if not downright suspicious.

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Related:

• “Your serial government at work” (2007)
• “To listen to old, archived messages, press 2…” (2006)
• “Res ipsa loquitur, once more” (2005)  a.k.a. “…and there shall be plans, and planning for plans and plans to co-ordinate the plans of the planning for plans…”

We thought *you* had jobs for *us* - Russian version

The St. Petersburg International Economic Forum is about encouraging foreigners to invest in Russian development.

The focus of this year's forum will be Russia's modernization, which is captured in its slogan, "Laying the foundation for the future." There will be a special emphasis on making deals with energy and high-tech companies, as well as large financial corporations, Presidential Aide Arkady Dvorkovich said during a news briefing at RIA Novosti on June 15.

So why exactly is a Canadian politician desperately looking for investment in his own province headed all the way to the former Russian capital for a conference about expanding the Russian economy?

Good question, especially considering he is just another one of the thousands headed there as attendees.

Not a keynote speaker.

Not an organizer.

Just another nametag in the room.

The plan is to sign more agreements and memoranda with foreign partners at this year's forum than ever before, Mr. Dvorkovich said.

"We expect that you won't be able to count the signed investment agreements on even two hands," he said, adding that European investors plan to announce a "significant expansion" of investment in Russia.

Something says someone got confused about which St. Petersburg the forum was in.

This one isn’t conveniently close to home.

-srbp-

Related:

• Takogo, kak Danny
• Takogo, kak Hickey

Reach for the Screech

In a couple of weeks time, the Memorial University political science department is holding a reunion.  The thing is timed to coincide with the spring convocation.  A bunch of alumni will be there, none of whom has written – as best as your humble e-scribbler can determine – what we used to joke was the definitive doctoral thesis on local politics.

The influence of rum on Newfoundland public policy.

That was the working title.

On the surface, it would be a piece about the triangle trade and especially the exchange of salt fish with Caribbean countries in exchange for that magical elixir.

But on the more cynical level it was supposed to be a work that noted the number of times local politicians made decisions that seemed – in the cold light of morning – as if they’d been tanked up on the dark liquid at every stage from the moment the idea popped into someone’s head until someone scrawled the last  signature across the last contract.

Rum, it would seem, played a role in a few of the more colourful events in local political life.  Elections sometimes turned on the number of swallies doled out in the right districts. Fistfights in the legislature sometimes came complete with their own aroma – essence of the captain – to cover over the smell of blood and snot on the curtains behind the Speaker’s chair from the odd poke in the snoot one gave another.

Heck, so pervasive is the rumoured connection between politics and the bottle that the current Premier – the Old Man Hisself – could not help but make a half-joking reference to it.  That was back in 2004, incidentally, in an editorial board meeting with the crowd at Macleans. 

But while tippling on the job fell out of favour a few years back, few would blame the current crowd were they to ever to be found seeking comfort with a reach for the Screech. 

After all, they have not had a good political day in the better part of a year:  Resignations, the stunning loss of a by-election, public finances in a mess, caught frigging with the 1961 Churchill falls lease and then forced to hold an emergency session of the legislature to clean up the mess of that, the shagged up expropriation of Abitibi’s polluted properties, pollution reports they tried to keep secret.

And still no Lower Churchill.

The finest undeveloped hydro project in North America, as the Old Man likes to call it.  The phrase is getting a little shop-worn by the way, since it was first called that way back before the provincial government nationalised BRINCO in the mid-1970s. 

40 years later, still undeveloped but still the finest.

Once said to be Hisself’s legacy project.  Staying until it as done, he said.

But now things are so dark that even Hisself apparently doesn’t like to talk about legacies anymore.

Don Martin, still desperate to see his 2004 “Harper wins majority” headline used as something other than a joke, took a trip to the far east to chat with the Old Man. The account of the visit – or a least the sampling of the local heart-stopping cuisine – is in the weekend National Post.

"I hope my own legacy -- which is a stupid term but it's in vogue so I'll use it -- is that we can keep this feeling of pride and respect and self-confidence, that we're as good as anybody else.

"For the longest time we were perceived by Canadians as second-class citizens. Those who knew us knew it was bum rap, but it was an overall perception that's changed dramatically. When you've got young people from other parts of the country coming here, not just for an education but also to stay and work, it shows we have a real good future."

There it is:  Williams wants to be remembered for something he didn’t do.  Williams has nothing to talk about except a throne speech from five years ago:

This is a speech which claims credit for finding that which was not lost. It praises the lustre restored to that which had not been dulled. It lauds the cleansing of that which is not sullied. It remembers what was never forgotten. This speech sings hymns of praise to its authors unhindered by modesty or fact.

Williams chose to call his 2005 hand-out from Ottawa the “Atlantic Accord” and not surprisingly it is often confused with the real accomplishment of the same name done by someone else 25 years ago.  It shouldn’t be surprising he now wants his legacy to be claiming credit for something Newfoundlanders and Labradorians never lacked:  confidence in their own abilities. Forget what others thought.  Self-confidence and ability is something the people of this province have always had, in spades.

But look at Danny Williams’ comments in this Martin column and you can see the state of affairs almost eight years after he took office.  We need to be masters of our destiny Williams says, or more like it: masters of our domain as a budget speech two years ago put it.  “Need to be”, as if we aren’t now and never have been.

Again with the false goals.  Newfoundlanders and Labradorians have always been masters of their own fate.

The problem they face today is that as they roll up on the end of the period Williams used to say was the time frame for his plan to take effect, things are not looking all that good.

The local economy seems more dependent than ever before on public spending.  The Conference Board of Canada predicted last week that the provincial economy would grow by 2.4% in 2010 based mostly on public infrastructure spending. But the government budget last year was short by a half a billion dollars, one of the largest cash deficits in the province’s history.  The forecast is that it will be short again by at least that much, if not more. If growth depends on the public purse, then this province is in for a hard time any day now.  

Williams came to office promising ”jobs, jobs, jobs” that he would create based on his proven ability as a local businessman. A new department – with the creative name “business”  - sprang up to to channel his genius. 

After a couple of years, no one  - least of all Danny - had any idea what the department was supposed to do.  Scuttlebutt had it that his own deputy minister couldn’t get to see him for months on end. The only thing that piled up were claims about how many files from companies sat on someone’s desk.

By the time someone figured out what the “plan” might look like, Williams had long since handed over his own personal department to first one and then another and then another of his ministers. Other things needed the Old Man’s attention more urgently than did his own personal department.

The “plan”  - as the successors finally hit on it in 2007  - would be to hand out free cash to any company that would come here to do business.  The only thing missing from this revolutionary, never-before-seen concept was the Latvian crook to run around clicking his heels together with a snappy “Yes, My Premier” at the prospect of yet another rubber boot factory or eyeglass plant.

Not content with just that bit of genius, after threatening expropriation a couple of times and then finally doing it to no fewer than three companies, the current crowd put in authority over us have so fouled the investment climate in the province that they cannot even pay companies to come here and create jobs. 

Think about that for a second.

Out of $75 million budgeted for the give-aways since 2007, the business department has handed out only $14 million of it.  Some went to set up a marine service centre in  a land-locked town. Half the cash they did dole out went to a company – itself a descendant of the Latvian legacy – that promised to add 50 jobs but instead cut nearly twice that. No word if they’ll still get all the cash.

The Tories said “no more give-aways” but somehow this doesn’t seem to be what they had in mind.  Things have changed on many fronts, alright, but not in the way people might have expected.

The government backbenchers don’t talk so much any more about how great things are across the province.  Their speeches in the legislature these days are more likely than not great homages to their glorious leader.  They offer paens to his posterior that seem to be either laying the groundwork for his departure -  he is, Martin tells us, “mindful of being closer to the end of his political career than the beginning”  - or coded, panic-stricken pleas for him not to shag off permanently to the new digs in Florida. 

It’s likely been a bit jarring for the poor dears to poke their heads out of the fog of their prepared Open Line talking points only to discover that they are not – in fact – just coming up on the New Jerusalem as foretold in the speaking notes;  they are in fact currently midway up shit creek and none of Danny’s potential replacements appears to know where he keeps the batteries for the GPS, let alone have a clear idea of how to work it.

And that original eight year plan, the one it took them four years just to figure out?

Even that has changed:

But that's just the beginning of his 30-year plan to harness offshore oil and gas, wind and hydro electric power into Newfoundland's shield against buffeting by external forces.

It’s enough to make anyone reach for the Screech.

-srbp-