Adios to another one #nlpoli

Clyde Jackman is the latest provincial Conservative to quit politics.

That’s not surprising.  He was supposed to go in 2011 but hung around to make sure the party didn’t have to make an serious changes in people or policies.

Jackman had a few colourful moments during his political career, not the least of which was his stint as fish minister.  He scuttled an historic agreement to reform the fishery. Clyde and his colleagues couldn’t be arsed to spend money on it when they had all their cash tied up in other things.

Then there was the time Clyde and his colleagues couldn’t be arsed to fund an historic commemoration when Clyde was responsible for tourism.

Other than being part of the crowd that added more public debt to the back’s of provincial taxpayers than all the other administrations since Confederation combined,  Clyde Jackman had a relatively tame political career compared to some of his colleagues.

Now Clyde is retiring.  Not surprising really.  In 2011, he barely scraped back into office in a situation where his party didn’t face huge opposition.  Clyde wasn’t alone.  Lots of his colleagues kept their seats by only the thinnest of margins.  it’s only when you look at the numbers that you realise how just close the Conservatives came to losing in 2011. It wouldn’t have taken much,.

Good bye and good luck, Clyde.

Enjoy the grand-kids.

-srbp-

MOU PIFO

A classic Telegram editorial, your humble e-scribbler once wrote, consists of a summary of an issue concluding with a blinding insight into the completely frigging obvious.

Such is the Saturday Telegram offering, this time on the latest fisheries report unveiled and summarily rejected on Friday by fisheries minister Clyde Jackman:

Something has to be done. It may end up being a half-measure, or even less.  But the sheer size of the problem is now abundantly clear.  And for the industry, it has to be terrifying.

Four phrases.

Four penetrating insights into what is obvious to even the most casual observer of the fishery over the past 30 years.

That closing paragraph is right up there with Clyde Jackman’s claim on Friday that the MOU process was not a waste as everyone now had a detailed description of how bad things are.

Who didn’t know that already?

Well, besides Clyde Jackman, evidently. 

To be fair to both Jackman and the Telegram editorialist, though, they really are just a reflection of the fundamental problem that has plagued the fishery in this province since 1949.  People know what needs to be done to turn the fishery into an industry that is sustainable and relatively prosperous.  People in the current cabinet know.  People in past cabinets have known. Those who know and who are willing to do it are hampered by those who know nothing and others who vigorously oppose any changes at all. 

In the meantime, the only people suffering are the people in the industry.  Eventually time will take care of them.  Clyde Jackman kept mentioning that last Friday.  He really didn’t need to.

Everyone knows it.

- srbp -

Kremlinology 26: Magma Displacement

In the Hunt for Red October, a computer used by an American hunter-killer submarine to identify noises in the ocean mistakes a new type of Soviet propeller noise as a type of earthquake.

Magma displacement.

In politics, it is easy to hear a noise and think it is one thing when the cause is something else.

Take – for example – Danny Williams’ most recent petty, venomous attack on Sam Synyard, the mayor of Marystown.

Some people may think this is just Danny waging the sort of scurrilous personal attack that is his political stock-in-trade, his default setting.  And as sure as Danny Williams had nothing to do with recent oil windfalls in the provincial treasury, so too has he shown a marked preference for the political version of the hockey player’s cheap hit in the corner, the spear.

A few things about this most recent Williams smear point to another cause that produced the usual cross check. 

First, Williams noted in his remark after the cabinet shuffle that Sam Synyard complained during the early days of the Igor clean-up – according to Williams anyway -  that the provincial government had not done enough after another hurricane. That isn’t the way Synyard came across back in September. It’s also very strange that Williams had plenty of opportunity at the time to smack Synyard but didn’t. Why he brought the whole thing up three weeks later seems odd.

Second, Williams and Synyard are actually on the same wavelength.  As the Premier readily noted, the provincial government is ready to pour cash into yet another private sector company.

Third, you’ll find that not only did the Premier revisit the whole Synyard affair for a second day, Premier wannabe Darin King and his fellow cabinet minister Clyde Jackman, chimed in add their voices to the din.

These members of a Reform-based Conservative Party seem a tad sensitive. Just like the political sensitivity displayed during the Igor response.  Bridge news conferences when the news story was really somewhere else.  Cabinet ministers jumping on any signs of discontent.

And then on CBC on Thursday evening, more stories of discontent on the Burin Peninsula with the slowness of provincial financial aid for people devastated by Igor.

There’s only one more detail you need to add to get the whole picture.  Danny called Sam a Liberal.

There is the key to the whole thing. People on the Burin Peninsula aren’t happy with Danny Williams, Darin King and Clyde Jackman.  There are lots of unhappy people out there after a series of natural disasters since 2003.  That’s one of the reasons why the very first thing the provincial emergency response people made sure to tell everyone after Igor was to get their claims filed early.

You can really tell the political sensitivity because the filing claims is the thing Danny highlighted for people on the day of the storm.  He really played up the cash.  And then the day after the storm,  Danny and his merry band hopped helicopters to tour the Burin Peninsula.  That’s how they showed their concern. Even though the Bonavista Peninsula took a demonstrably harder hit, Danny showed up on the Burin. The fact that this political showboating only pissed people off more was just a bonus.

What evidently scares Danny, Clyde and Darin politically shitless is that any politician might do as Danny is wont to do and take political advantage of all that discontent.  They know, or at least they think, that this is the sort of issue that could motivate voters and turn around a couple of seats in the next election.  It only needs a politician smart enough to hit the sore point. 

Attacking Sam Synyard personally is Danny’s way of trying to drive a potentially dangerous political rival off a potentially devastating issue for the for the Conservatives. It’s that simple.

Unless you connect all the dots, though, you’d only see more of the same superficial Danny-noise.

But if you know what to look for, you’ll see the magma displacement that is causing trembling in the political earth in some places.  This is not unusual rumbling, mind you, but in the imaginary world created by Danny Williams – the world where all is perfect and he alone is master – any sign of problems, any opening for an opponent is like a hurricane, earthquake and tidal wave rolled into one.

Oh yes.  Some places, plural.

It’s not just the Burin or even the Great Northern.  Labrador West, sections of the northeast coast.  They are all places where the locals are unhappy with the current administration. To the Conservatives they are threats to life and limb.

And to the other parties they are potential opportunities.  That’s what has Danny, Clyde and Darin and all their friends so jumpy.

- srbp -

Maybe better planning would have helped...

Celebrations to mark the founding of Cupids, the first English colony in what is now Canada, are expected to generate $15 million of economic activity in the celebration year, 2010.

That's it.

$15 million.

And the nationalist-sounding, go-it-alone provincial government is willing to contribute the amazing sum of $2.0 million to the celebrations.

Whoopeee.

Yeah, Whoppee-ding.

Now, it seems that an event as significant as the 400th anniversary of the first English colony would be a fairly big deal not just locally but nationally.  The fact it happens to fall in an Olympic year doesn't bode particularly well for Cupids being the top tourist attraction in Canada that year, but it might make out all right.

It might make out if the provincial government actually paid any attention to the project.  For starters there's the tiny sum they've thrown into the planning for it.  When you are pulling in $2.0 billion in oil and mineral revenues and running billion dollar surpluses, $2.0 million bucks just doesn't say "serious".

And bear in mind that's not $2.0 million over each of the next two years.

Nope.

That's $2.0 million, in total.

Doesn't sound very serious at all.

That's why it is getting tedious to listen to tourism minister Clyde Jackman rabbit on about how tremendously important these celebrations in Cupids are and why it is so important for the federal Conservative members of parliament to stand up for their province and wrestle federal funding for the whole thing.

It's tedious just writing a sentence that encapsulates the windy minister's windy complaint.

The whole thing would be a lot less tedious, though, if Jackman's boss would actually allow him to give some serious cash to match the serious level of whining coming from the provincial tourism minister.

And that's what it is:  whining.  That's all it is.

You see if the provincial government were that serious about Cupids, it would have tossed in more cash of its own up front. There'd have been great talk three years ago about the fantabulous festival in Cupids or some such.  We'd be Cupidsed to death just as we were cabotted in 1997 or impaled on Viking helmets another year.

And there'd have been cash.  Not two million in total, but two million a year to a maximum of eight or 10 or whatever the thing would cost. 

You see, Jackman made mention several times of the Quebec City celebrations marking the 400th anniversary of that city.  Jackman mentioned it in his talk radio calls today and in a news release that popped out late in the afternoon.  Jackman noted that the federal government had contributed $110 million to Quebec City but  - up to the time he spoke - the feds just hadn't come across with the seven million Danny had decided was the "ask" for Cupids.  Yeah, Jackman actually called it an "ask".

What Jackman didn't say is that the Quebec provincial government had ponied up $110 million of its own for the celebrations. They showed they were serious with hard currency.  They didn't look on the thing as a slip-and-fall injury settlement negotiation, complete with an "ask". The feds rose to the bait and put up their own cash to match, dollar for dollar.

Clyde Jackman can make as man calls to Bill Rowe as he wants.  He can send out as many "news" releases as he wants. The bottom is that if his boss was serious at all, he would have nodded to Clyde and let him spend provincial money on the Cupids celebrations. The feds would have followed suit.  Heck, a little bit of sweet talk and salesmanship might have stroked some more money from them in an election year.  Think about it.  If such a pathetic provincial outlay could generate $15 million, imagine what $14 million in total would do for the people of Cupids.

For some entirely unexplained reason, though, the provincial cabinet doesn't seem to want to spend any money on things like the Cupids celebrations or even on fixing up hospitals, for that matter.

Wonder where all the cash is going?

-srbp-

Near the bottom of a very big rabbit hole #nlpoli

Thursday was one of those days where you felt like you had dropped down the rabbit hole with Alice.

Or maybe had indulged a bit too heavily in some mind-altering substance.

There was Lorraine Michael on the radio complaining that Muskrat Falls would likely cause environmental problems through the release of methyl mercury.  Let’s be clear:  there is nothing we know about Muskrat Falls today on any subject that wasn’t known when Lorraine endorsed Muskrat Falls. Yet, there is Lorraine trying to make it sound like she never, ever supported this megaproject.

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 King of Specious Reasoning

Specious.

Specious Reasoning.

Truth is Clyde Wells would never have made such a dubious appointment in the first place.

He understood fully the need for unquestioned impartiality in the position of Chief Electoral Officer.

Then again, his supporters never wandered around poking people in the chest reminding everyone they now lived in Clyde-stan.

-SRBP-

Fisheries agreement delayed again

Did anyone really expect that fisheries minister Clyde Jackman would actually tell the people of the province officially, with a news release that the long-awaited fisheries restructuring agreement would be delayed yet again?

Good because he didn’t.

Instead, Jackman dropped a comment to the Northern Pen, a weekly paper on the province’s Northern Peninsula.

A draft copy of Newfoundland and Labrador’s fishing industry MOU has been sent back for fine tuning delaying its release by another “two or three months”.

Speaking to the Pen on Monday, fisheries minister Clyde Jackman confirmed that he had read the 100-page document but it required some tweaking.

And if the rest of Jackman’s comments are any indication there’s no wonder the fishery is in a mess.  The fish minister doesn’t even have a sweet clue about incomes in his own industry:

One thing that really stood out was the difference in incomes for the different parties,” he said.

“In some places you have plant workers earning $10,000 and supplemented by EI while in others, they make multi thousands of dollars.”

The smart-arses can ignore the fact that ten thousand is multi-thousands.  Just note that those sorts of figures can be found readily in a report on the crab industry contained in a report government received back when Trevor Taylor was the fisheries minister.

Meanwhile, the province’s official opposition party did manage to get the story some wider coverage than Jackman may have liked.  A news release the Liberals issued did get picked up by the major media in St. John’s, likely much to Jackman’s chagrin:

“What that really means is that the plan is dead for the next year,” said [fisheries critic Marshall] Dean. “By taking another two to three months to ‘fine tune’ it, Jackman is removing the MOU from any consideration of funding in the next provincial budget, which is expected in March. If there is no funding for the plan in the budget, nothing can happen with the plan until the following year’s budget in 2012. That’s a full six months after this coming fall’s provincial general election. It looks like Minister Jackman has finally found a way to ground the MOU until after the election.”

Given this government’s handling of the MOU – which has now taken four years and gone through three different fisheries ministers – Dean thinks there is no will on the part of the PCs to deal with the fishery at all.

The story also wound up on CBC’s Fisheries Broadcast.

- srbp -

Related

-   Good to the last fish:

At the same time, there are still thousands of people in Newfoundland and Labrador trying to squeeze a very meagre living from processing fish for a few weeks a year and then collecting government hand-outs for the rest.  A report delivered to the current administration when it was still young pointed out that the typical fish plant worker made less than $10,000 a year from labour, picking up another $5,000 in employment insurance premiums.

There are still way too many of them – plants and plant workers – for them all to make a decent living from what fish, and now snails, there is to turn into frozen blocks. The only thing that has changed in the better part of a decade since that report is that the workers are finding it harder and harder to collect enough weeks of work to qualify for the EI.

-  Tom Rideout meets the Bride of Frankenstein

-  Up the creek with Jackman and Rideout

Fried Clyde dumps Danny’s fish policy

Remember earlier in the month when fisheries minister Clyde Jackman abandoned the fisheries reform process?

Let’s just take a jump back to something that stood out from his newser at the time:

What Jackman did mention one too many times for comfort was the idea that some people think time will take care of the whole thing.  In other words, in an industry dominated by people rapidly approaching retirement, most of the people who would be “restructured” will simply leave the industry on their own if nothing else happens. He also talked about signs that prices might be climbing again soon, perhaps another clue as to what some in the provincial government might be hoping for.

No surprise, then, that Jackman is on the front page of the Telegram on Tuesday with this to say:

“…how can I justify, going forward looking for $190 million dollars, to justify a 30 per cent reduction (in harvesting), when the report clearly says that if you leave it alone it will restructure to an even greater degree than the ask that the FFAW put forward?”

How indeed, except that there is a difference in sheer human cost between an organized series of cuts and the wholesale slaughter that may well leave nothing much in the fishery to restructure when it is all over. You can see the same thread running through the front end of the letter Jackman sent to the processors and the union representing fish-plant workers and fishermen, now called “harvesters” in polite circles.

Perhaps the most interesting thing about Jackman’s letter is that he winds up abandoning the position he and his colleagues championed for seven years. Gone is taxpayer-funded bailouts and buyouts.  In two successive federal elections, Jackman and his colleagues tried to get commitment after federal commitment to doing just that.

What’s even more bizarre  - some might say disingenuous - about the Dunderdale’s government’s supposed concern for public spending is that it doesn’t apply to things like Muskrat Falls. 

It’s also a bizarre strategy to take in an election year especially when there are so many rural seats the Tories currently hold but where their grip might be weakening a bit.

- srbp -

The value of education, redux #nlpoli #cdnpoli

The most recent report from the Council of Ministers of Education of Canada shows that Grade 8 students in Newfoundland and Labrador score among the lowest in Canada for tests of mathematics and below the national average score for English.

Education minister Clyde Jackman, a former teacher himself, has tried to shift attention away from what the results are:  yet another reminder of the dismal state of the province’s educational system.
None of this is surprising.

As SRBP noted in August 2010, the province’s population consistently scores poorly in national evaluations of reading comprehension and mathematics scores.

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.

The problem is not a lack of money.  The provincial government spends significant amounts on education.   Ask any provincial Conservative and that’s about the only bit of informational they will cite that rings true.

Other politicians want to spend even more money on education.  In a  demonstration of the findings about problems with logic and reasoning, these well-intentioned souls advocate policies that would not produce the desired result.  In fact, evidence suggests that the ideas like free university tuition would make worse the issue of access for people from low income families.

The problem is not that we don’t spend enough.

The problem is  that we do not recognise there is a problem in the first place.

Clyde Jackman’s response is typical.

Nor do we collectively seem to appreciate the extent to which education is the foundation for future success both individually and collectively. 

Social  progress.

Economic development.

Improved health.

Innovation.

All come from improved education.

The third order problem is that what changes or reforms we have pursued in the past decade have been the wrong ones, driven entirely by the wrong motive.  The collapse of the educational system in 2005 under the Conservatives to a series of five super educational districts was entirely an exercise in bureaucratic consolidation of power.

The current school districts are too large, as former education minister Philip Warren noted in 2008.  Additionally, the 2005 reforms took the community out of education.  The reforms that Warren and his cabinet colleagues initiated in the 1990s aimed at increasing local control of education and of giving parents a greater level of involvement in education.

Recent changes to the school system in the metropolitan St. John’s area are an example of the pernicious, deleterious effect the 2005 school board re-organization has wrought. Education bureaucrats in the government department and the school district concocted a plan among themselves, discarded an earlier understanding with parents and then engaged in a cynical manipulation to force their pre-conceived outcome on those directly affected by their decisions.

It is no accident that all of this took place in an environment in which political leaders and their associates took every effort to stifle debate, ruthlessly attack those who dissented and pushed attention instead toward crusades that were, in truth, little more than political Punch and Judy shows.

Some of those who fought most zealously for the political theatrics are now shifting their stories, trying to ignore their own past involvement in making the mess. Others have not. They all still rattle around in the Echo Chamber.

The state of education in our province, like the state of our politics, is a sign of the extent to which we have turned away from the values that we once shared as a society.  We have lost sight of what is valuable and lasting and replaced it with the superficial, the trivial.

The first step to changing that is to recognise there is a problem.

And with yet more evidence that the provincial education system is failing, the problem is getting harder and harder to ignore.

- srbp -

Scuttling his own political future

Senator Fabian Manning went a long way this week to ensuring he won’t be able to make a comeback in elected politics any time soon.

The guy who beat him – Scott Andrews – revealed that Manning had committed the federal government to spend a couple of million or thereabouts on a road in the eastern end of the riding Manning used to represent. 

Only problem was the money wasn’t anything close to approved when manning made the announcement in late 2007.  Not only that but it wasn’t approved until this week and hastily announced the day Andrews scored a big political smack right in Manning’s possible future.

Manning did some media interviews on the affair.  In the process, he managed to come off looking like a guy scrambling to come up with excuses for his obvious blunder.

In the story printed by the Telegram (not online), writer Dave Bartlett attributes the following to the junior senator:

The senator then explained what happened.

He said the original project was funded under the Rails for Roads agreement, but the provincial Liberal government of Clyde Wells scuttled that program in 1988.

Neat trick that would be.

The federal and provincial governments signed the Roads for Rails agreement (see page 11 of the link) in 1988.  In exchange for money to upgrade roads across the island portion of the province, the federal government was relieved of its constitutional obligation under the 1948 Terms of Union to operate a rail service across Newfoundland.

In 1998, Brian Peckford sat in the Premier’s Office.  Clyde Wells was Leader of the opposition and didn’t get to the Eighth Floor until May, 1989.

But even then, Manning’s accusation that Wells scuttled the roads deal is completely out to lunch.  From 1988 until the program ended in 2003, the roads deal paid for a host of projects all of which were pretty well mapped out at the start, the year before Wells took office.

Not only did Fabe make the blunder of announcing money he didn’t have, he then made it infinitely worse by coming up with a completely bogus excuse once he got caught.

And it’s not like Manning wouldn’t know the rights of things.  He sat in the House of Assembly from 1993 until his local Tory buddies flicked him out of caucus.  Every year , Manning would have heard announcements about roadwork paid for by the Roads for Rails agreement.

Heck, even Loyola Hearn knew that the roads deal didn’t die in 1988.  CBC quoted Hearn on the very same announcement Manning was chatting up in December 2007:

Hearn, Newfoundland and Labrador's federal cabinet representative, said it's the biggest program of its kind since the roads-for-rails agreement hammered out in the late 1980s, when the Newfoundland Railway was closed down.

All things considered, Manning would be nuts to even consider taking another run at elected politics.  Better off  to sit in the Antechamber to the Kingdom of Heaven than blow holes in your own political hull the size of that one on the CBS bypass road.

-srbp-

Trivimania: the answers to our Premier quiz

Go back here for the questions. 

Remember that for all but the last question we excluded Premiers who held the office but who did not win a general election as party leader in order to get the job.

Here are the answers (quibbles are welcome):

1.  Oldest Premier at the time of his swearing in:  Danny Williams, age 54, followed by…

2.  The second Oldest Premier at the time of his swearing in:  Clyde Wells, who was 51.

3.  The Oldest Premier on leaving office:  Joe Smallwood,  left office aged 71 years and a bunch of days.  DW is already the second oldest and he’s still in the chair.  To beat Smallwood’s age record, he’d have to last until at least 2020.  Even then DW would have to stay another six years beyond that to match or better Smallwood’s 23 years in office.

4.  a.  District represented by the most Premiers:  Humber West, which has, at various times sent Joe Smallwood, Frank Moores, and lately Danny Williams to reign over us.

b.  Only Townie Premier since Confederation:  Danny Williams, who came into the world at St. John’s in August 1949.

5.  Premiers, in order of age at time of swearing in (including Tom Rideout, Roger Grimes and Beaton Tulk):

Beaton Tulk, Danny Williams, Clyde Wells, Roger Grimes, Joe Smallwood, Brian Tobin, Tom Rideout, Frank Moores, Brian Peckford.

-srbp-

First Wells ministry, 05 May 1989 #nlpoli

May 5, 1989 was a Friday. 

It only took the couple of weeks between the election on April 20 that year and May 5 for the government to change hands between political parties for only the second time since Confederation.  The House met before the end of the month was out and before that first session ended,  the province had a new budget.

Clyde Wells was the fifth Premier after Confederation.  He was preceded by Joe Smallwood,  Frank Moores, Brian Peckford, and Tom Rideout.  

In the first 40 years after confederation,  we had five Premiers.  Since 1999 - that is, in less than 20 years - we have had eight Premiers.  Dwight Ball is number 13 in the line, the majority of whom since 1999 have served for four years or less.  We might have a fourteenth, depending on how events turn out.

The habit after 2003 has been for a majority party elected in the fall to wait upwards of six months before opening the legislature.  The initial excuse was that there was a work to do in getting ready for the House.  In 2007 and 2011,  the government was re-elected and did the same thing.  

This is the official portrait of the cabinet sworn in May 1989 by Lieutenant Governor Jim McGrath.  The photo is courtesy of Rex Gibbons, who you can see standing on the extreme left. The photographer was Don Lane.

It was a relatively small cabinet at 15. The cabinets immediately before it had had upwards of 23 members. It was also a fairly well-educated cabinet: three of the people around the table had doctoral degrees (two in education and one in geology). There were a couple of lawyers, some teachers, business owners, and folks like Walter Carter who had spent all of his working life in elected public service.

Most of them carried on in cabinet for a while after or in the House and later still went back to their old careers or took on new adventures. Five of the members of that cabinet have passed away since.

The ministry consisted of:

Standing (left to right)

• Rex Gibbons, Mines and Energy
• Eric Gullage,  Municipal and Provincial Affairs
• Walter Carter, Fisheries 
• Chuck Furey, Development  (after 1992 - Industry, Trade, and Technology)
• Dave Gilbert,  Works, Services, and Transportation
• Jim Kelland,  Environment 
• Paul Dicks,  Justice,  Attorney General
• Chris Decker,  Health
• Herb Kitchen,  Finance

Seated (left to right)

• Graham Flight,  Forestry and Agriculture
• Patt Cowan,  Employment and Labour Relations
• Clyde Wells,  Premier,  Intergovernmental Affairs
• His Honour, James McGrath,  Lieutenant Governor
• Winston Baker,  President of the Executive Council,  President of Treasury Board
• John Efford,  Social Services
• Phil Warren,  Education

-srbp-

Corrected name of Furey's portfolio, 09 May 2018)

Wells for SCC

He turned 70 last fall but he's still in great shape and his mind is as sharp as ever.

Who better for the Supreme Court of Canada than Clyde Wells, currently Chief Justice of the appellate division of the Supreme Court of Newfoundland and Labrador?  He can take the seat vacated by Mr. Justice Bastarache.

We'd suggest in the alternative Madame Justice Margaret Cameron but she's got more valuable things to do right now sorting out yet another major problem in the provincial government. 

Besides, since the mandatory retirement age for justices is 75, Madame Justice Cameron can take the spot when Wells steps down in three or four years.

I'll start working on the tee-shirt design and we'll have them at the Bond Store ASAP.

-srbp-

Hibernia at 10

The Hibernia offshore oil field produced its first oil 10 years ago this week.

The project - regarded as a gamble at the time - was never expected to achieve payout owing to its high cost and the low price of oil.  However, it will hit that milestone within the next four years.

With almost double the amount of recoverable oil first estimated to be in the field, the provincial treasury's share of the revenues will jump dramatically just as it did on the lower-cost Terra Nova project and as it will at the White Rose field. That high revenue will continue for the better part of a decade - unless even more oil is found.

It is easy to forget history, even recent history, just as the past four years of super-heated political rhetoric have shown.  Politicians, academics and journalists have all displayed an appalling ignorance of Hibernia and the rest of the offshore. Information is deliberately distorted, such as in the provincial figures cited by Canadian press in the link above. Those figures deliberately omit projected revenues flowing after payout.

Far from being the give-away some have simplistically claimed, Hibernia was a gamble by the provincial and federal governments and the oil companies on the first project in what has proven to be a solid and lucrative oil industry. Had the provincial and federal governments not provided a variety of financial breaks through taxation changes and federal loan guarantees, it is doubtful the project would have ever been started in the economic climate at the time. When oil plummeted to US$8.00 a barrel in 1992, Gulf Canada pulled out of the project.  Some of the Gulf shares were taken up by other operators but ultimately it was the federal investment and an 8.5% share that kept the project alive.

The gamble paid off for the operators and for the provincial and federal governments. The gamble is paying off each day with the millions in revenues flowing into provincial coffers from the three existing offshore projects.  When Hebron starts flowing the lion's share of the revenues from that project - royalties as well as other provincial revenues - will come from the government's generic royalty regime. 

That regime evolved from the Hibernia model negotiated first under Brian Peckford and concluded under the Clyde Wells [photo: left] administration. Wells' Liberals defeated the Progressive Conservatives under Tom Rideout [Photo: right]. Hibernia had been an issue in the election .

Seventeen years after the Hibernia deal was signed, it's interesting to go back to media reports at the time, like one from CBC television. There was optimism and there were words of caution from economist Wade Locke. Wells himself uttered both, as well, although he was criticised at the time for cautioning people that offshore oil would not produce the thousands of jobs some expected to be available in place of other industries like the fishery.

On the 10th anniversary of Hibernia first oil, it's worthwhile to consider how far the province has come economically as a direct result of decisions taken almost two decades ago. It's also worthwhile to consider how far we have regressed in other terms.

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Political impotence and the little blue pills

Fish minister Clyde “The Finger” Jackman is going to fight to save a local coast guard co-ordination centre and its dozen jobs.

Well, that’s what the torqued CBC headline says. 

The provincial government he’s a part of has a financial mess of its own creation on its hands and no plan to deal with it and Jackman has been the major obstacle to serious fisheries reform in the province but that’s another issue.

But why does Jackman have to fight for anything at all with the federal Conservatives under Stephen Harper?

After all Clyde and all his provincial Conservative buddies campaigned vigorously for the federal Conservatives in the recent general election.  Well, okay some campaigned more vigorously than others but you get the idea. 

They shouldn’t have to do anything but pick up the phone and ask their friends to fix things back up again.
Jackman’s help in the last federal election apparently counted for exactly jack-shite.  He met with his federal counterpart, uttered a few choice words and left empty-handed, much like those people in the fishery who worked hard, gave Jackman a report on restructuring and then watched the minister fling it back in their faces for no good reason.

That’s likely to be as effective as what CBC’s report quotes as Jackman’s advice to other seriously interested in this issue:

"I've encouraged people, you know, to write to the minister to do what they have to get their points across," said Jackman.

Much like the fisheries reform thingy.

But why should anyone have to do anything?  Kathy Dunderdale can just call her friend Stephen Harper and the whole thing will be solved.  After all, the Premier made her choice, is proud of her choice and thinks she did a wonderful job even if the overwhelming majority of voters – including rafts of her own supporters – went with another choice.

Kath and her Krew are rapidly becoming the poster children for political impotence.

Not the cure for it mind you.

Just fine examples of political dysfunction…

And of course how this bunch of little blue pills can’t cure it.

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Did Kathy know about JSS withdrawal in advance?

Premier Kathy Dunderdale sent the latest round of begging letters off to the federal party leaders on April 7, but one thing was curious by its absence. She tabled them in the House of Assembly but they aren’t online yet.

Sure there was the usual worn-out stuff stuff about federal presence, fisheries, the Hibernia shares and all Danny Williams-era list of grievances.  There’s a poke for yet more cash for Internet broadband and even a request for cash for childcare spaces.

The provincial government that spends more per person than any other one in Canada outside Alberta is looking for Ottawa to pay for stuff that is an exclusive provincial jurisdiction.

But missing from the letter sent on April 7 is any reference at all to the $35 billion naval shipbuilding contract.

Not a peep.

In a list of 14 or so specific topics.

Danny included the contract in his 2008 letter.

But Kathy Dunderdale did not even make a veiled reference to a contract that held phenomenal potential to keep Marystown working ships for years and years out beyond anything they have got currently in the pipeline.

That is really odd.

After all, Kathy Dunderdale took gigantic offense on Wednesday in the House of Assembly at any suggestion she did not understand the magnitude of the issue:

I take no lessons from you in terms of the Burin Peninsula about its communities, about its people, about its history, about its struggle, because I have been part of it all, I say to you.

That came after Kiewit Offshore shocked most of the people in the province when the story leaked out this week that the company didn’t want to pursue the $35 billion naval construction contract that the federal government is still trying to sort out. 

Shortlisted as one of five companies contending for the work, and yet the company brass said they just couldn’t come up with the professional help to put the bid together.  Didn’t feel they could pursue decades of steady work for their yard at Marystown on the Burin peninsula.  As CBC quoted a company spokesperson:

"The core Kiewit management and engineering folks that we would need for that proposal development just weren't plentiful enough to carry us through the process," said company spokesman Kent Grisham.

Big surprise to pretty well everyone earlier this week.

Fisheries minister Clyde Jackman, whose district the yard is in, told VOCM that he was a shock to him.  Here’s their short account in the event it gets disappeared from the Internet:

Fisheries Minister and the MHA for the district of Burin-Placentia West Clyde Jackman says this week's announcement by Kiewit Offshore Services to cancel its bid in Marystown for up to $35-billion worth of federal shipbuilding work came as a shock to him. He says he's as surprised by it as others, especially since the government has been working with Kiewit for the past number of years to obtain some of this work.

This is not a new project.  In fact, the whole thing is featured specifically in the provincial Conservatives’ 2007 election platform.  You can find it on the website now labelled dunderdale2011.ca:

• continue to work cooperatively with the Canadian North Atlantic Marine Partnership (CANMAP) bidding team, which includes Marystown’s Peter Kiewit and Sons, in a concerted effort to win the federal Joint Support Ship (JSS) contract for the Burin Peninsula.

This is a big project.

And, if Kathy Dunderdale’s reaction is any sign, this is a sensitive subject.

In the House of Assembly, she even tried the rather lame spin that it was wonderful the company was so flush with work that they could turn away $35 billion in long-term ship building.

But in a letter sent on April 7, Dunderdale did not mention it at all.

It sure looks like Kathy Dunderdale knew long before the rest of us that the company was bailing on the whole thing.

After all, why else would such an important project be missing from his stock letter looking for federal handouts during an election?

Knowing in advance would also explain why she has been trying on the histrionics about personal attacks rather than just answer the questions.

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Dip-Flop Fly #nlpoli

Twitter flame wars between cabinet ministers and Dale Kirby over Muskrat Falls.

Surely Darin, Jerome and Clyde have better things to do with their days.

Then again, maybe not.

But at the heart of the whole flare up was Lorraine Michael’s theatrical delivery of a letter to the public utilities board on Tuesday explaining she would not be making a presentation on Muskrat Falls.

Like they really gave a flying frig in the first place.

Right after she handed the envelope to someone from the utilities regulator, Michael took some questions from reporters.

Michael is in a bit of a political jam, you see.  Tuesday’s little bit of a show was a way to try get out of it.  Michael campaigned during the last federal election alongside Jack Layton.  The provincial and federal NDP supported a loan guarantee for Muskrat Falls.  Good for Newfoundland and Labrador (votes), as it seemed at the time, and definitely good for some votes in Nova Scotia.

That was then.

This is now.

In the meantime, public sentiment in the province has shifted against the project.  Lots of people - lots of significant people – have turned up lots of significant problems with the deal. While Michael went along with the whole thing back in 2011 when she was the lone Dipper in the provincial legislature, she now has a caucus to contend with.  Some of them don’t like Muskrat Falls.

Hence the softening of official Dipper support for the project.

But Michael still can’t get away from the unions.  They love the project.  Lots of public dollars to employ lots of unionised members and potential union members. 

Want to know how strongly the union support the project?  Check any comment by federation of labour boss Lana Payne. And when the unions want something, their political wing – Lorraine’s bunch – will have a hard time opposing them.  All of this allows for big internal divisions in the NDP caucus and that’s without getting into the egos and the ambition.

Part of what you saw in the Twitter fight on Tuesday was the Tories pounding on a wedge issue: the NDP position on da Falls.  And they were hammering the wannabe leader, Dale Kirby.  He gets on Tory nerves, big-time, for a whole raft of reasons.  There were lots of school-boy taunts about getting him in the House where people would see the Dippers for what they are.  Yada, yada yada, blah, blah, blah.

All that bravado doesn’t get away from the fact that the only caucus more fractured than the Dipper one is the Tory crew.  They’ve got splits over the fishery and the budget and Muskrat Falls.

What’s more, Kathy Dunderdale has no control over her cabinet, let alone her caucus. One day after she says that people have to put their egos aside and stop playing the blame game so everyone can sort out the fishery, former fisheries minister Clyde Jackman is out there playing the blame game on province-wide radio. 

So amid all the bluster and fury on Tuesday between the Tories and the Dippers lots of things were not as they seem.

Go read Lorraine’s letter, for example.

In effect, it is a submission to the commission review of the Muskrat Falls project.  You see, if Lorraine really didn’t want to participate in the whole exercise she just wouldn’t have shown up in the first place.

Instead she says that a presentation wouldn’t allow her to outline the NDP concerns. Then she outlines them without having to face any questions from the panel or Nalcor. 

Oddly enough, the Liberal Party’s natural resources critic managed to sit in front of the commission and lay out substantive concerns.

In the letter, Michael states the NDP criteria for a successful project;  economically viable, environmentally sustainable and beneficial to the province. Like anyone would propose an economically foolish and environmentally destructive project that would screw taxpayers to the wall.

And in the letter itself, she doesn’t say that the provincial NDP think the whole idea of the project is nutso.  Lorraine basically says that there isn’t enough information and that there should be time for a more detailed review.

“We are not yet convinced…”

She doesn’t say “not convinced”.

Lorraine says not yet convinced.

The Big Tories who have come out against the project are saying they want a proper process.  That’s so they can’t be accused of betraying the party.  No one can mistake their meaning though, even if the actual words are soft. They know Muskrat Falls is ludicrous.

The NDP use coded language, too.  But notice the difference between the Tory code and the Dipper code.  With the NDP, you really can’t see an unequivocal rejection of the project.  Lorraine left a hedge in her letter, the letter that is a submission to the review while claiming it isn’t a submission.

The one thing you can’t mistake though is the political turmoil in the province at the moment.  If any of it erupts into the open, this could be an amazing year in local politics.

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Privatizing Hydro: a glance back

Introductory Note:

One of the more controversial proposals over the past 20 years was the privatization of Newfoundland and Labrador Hydro.

Much of the Hydro privatization story has passed into myth, much like the Churchill Falls story. Unfortunately for anyone interested in looking more closely at the idea of Hydro privatization today, some of the documents publicly available 15 years ago are no longer readily accessible.

Following is a text of an address delivered by Premier Clyde Wells to the St. John's Board of Trade in November 1993. It is the prepared text, not a transcript of the actual speech. It doesn't need much comment; the thing speaks for itself.

In order to produce this post, the original hard copy of this speech was scanned electronically. Please note that errors in spelling and so forth may remain, despite careful editing.

Next in this series will be the 1969 Churchill Falls contract. Given the documents length, it will take some time to scan and edit and the subsequent online versions will be broken down into smaller segments.

Government of Newfoundland and Labrador

Restructuring and Privatizing the Electrical Industry
of Newfoundland and Labrador

An Address by
The Honourable Clyde K. Wells
Premier of Newfoundland and Labrador
to the
St. John's Board of Trade
November 17, 1993
Check Against Delivery

I want at the outset to express my appreciation to the Board of Trade for giving me this opportunity to advise you and through you the people of the province of the government's position with respect to privatization of Newfoundland and Labrador Hydro.

Contrary to some suggestions you have been hearing this is not a proposal intended to benefit a particular company or group of people. This proposal is intended to benefit the province and its people both in their capacity as electrical ratepayers and in their capacity as taxpayers. It is also completely consistent with the overall economic vision and goals that the government is pursuing for Newfoundland and Labrador.

In June of 1992, after nearly two years of research and extensive consultation throughout every region of this province, government released its strategic plan entitled, Change and Challenge. At that time we stated that Change and Challenge is a living document for the Newfoundland and Labrador economy in the latter years of the 20th century and beyond the year 2000. To quote:

Our economic vision for Newfoundland and Labrador is that of an enterprising, educated, distinctive and prosperous people working together to create a competitive economy based on innovation, creativity, productivity and quality.

Two of our set of eight guiding principles for economic development are worthy of repeating today:

1. The private sector must be the engine of growth. While it is a role of government to create an economic and social environment that promotes competitiveness, it is the enterprising spirit of the private sector that will stimulate lasting economic growth, and
2. Government policies and actions must have a developmental focus where the client comes first. The structure of government must be streamlined, efficient and responsive to public need and to changes in the economy.
   

As well Action Item 31 of the Strategic Economic Plan specifically commits the government to "avoid providing services where they can be provided by the private sector".

The ultimate goal of privatization and restructuring is to improve the economy as a whole. There is hardly a country in the world today that does not have a major privatization plan in hand. These plans constitute a main pillar for the future economic strategy of most governments.

December 1992 Economic Statement by the Finance Minister

As part of his address to the House of Assembly on December 4, 1992, the Honourable Winston Baker, Minister of Finance, reviewed the state of the provincial economy and outlined a number of important decisions that the government was taking to deal with our financial and economic position.

One of the fundamental policy statements articulated by Mr. Baker at that time was government's decision to review the various operations, crown corporations and agencies of government and to pursue a privatization and restructuring program for those areas presently in the public sector that could be owned and operated by the private sector. That was also consistent with the government's often stated position that scarce and difficult to raise public funds should not be tied up providing commercial type services that the private sector is prepared to provide unless there is an overwhelming public policy reason for so doing.

Since the presentation of that economic statement, we have been pursuing the privatization of several government activities including the provincially owned Computer Services Corporation, certain assets of Newfoundland and Labrador Housing Corporation, Newfoundland Hardwoods and Newfoundland and Labrador Hydro. We are currently considering other possible restructuring and privatization opportunities.

One of these has attracted a significant amount of attention in the past few weeks. That one is Newfoundland and Labrador Hydro.

A little background might be helpful to a full understanding of the issues.

In 1989, Fortis, the parent company of Newfoundland Power, approached government with a view to purchasing certain select rural assets of Newfoundland and Labrador Hydro, mainly all the lower voltage transmission and distribution assets. Government, on the advice of Hydro and others, rejected the offer. Fortis, offering slightly different terms, pursued the matter again in 1992.

Government again asked Hydro for advice. The Board of Directors of Hydro initiated an assessment of the Fortis offer. The Board also decided to review at the same time various other alternative structures for the province's electrical industry.

Hydro retained ScotiaMacLeod and RBC Dominion Securities, two of Canada's largest and most respected investment dealers. These two companies have participated in billions of dollars of successful privatization and restructuring transactions in Canada and throughout the world. It is noteworthy that they were the lead advisors in the recent successful privatization of Nova Scotia Power. They have also been the senior fiscal advisors to Hydro and the province for over ten years.

The financial advisors recommended that Hydro and the government reject the Fortis offer because it did not represent fair price and payment terms for the assets in question and was not the best strategic alternative for the future structure of the electrical industry of Newfoundland and Labrador.

Hydro's Board of Directors and its advisors pursued the assessment further and ultimately advised the government that the status quo was obviously a viable option but if the government wished to privatize it could do so successfully either by privatizing Hydro on a stand-alone basis or by first merging with Fortis and/or Newfoundland Power and then selling its shares in the merged company. They did however advise that the combination with Fortis/Newfoundland Power was preferable to a stand-alone privatization, from the point of view of government, taxpayers and ratepayers, if the combination could be effected on acceptable terms.

Government reviewed the results of this process, but before proceeding decided to further consult with experienced electrical industry experts both within and outside the province. All affirmed that in the event of privatization, merger was the preferred course and nearly all recommended privatization as the best course for government to follow. Accordingly the government decided:

1. To reject the offer from Fortis; and
2. That it was in the best interest of the people of the province to pursue the restructuring and privatization of the industry by either merging Hydro and Fortis/Newfoundland Power, or by privatizing Hydro on a stand-alone basis.
   

Shortly after making this decision, the President of Hydro, the Minister of Mines & Energy, and I met with the Chairman of Fortis and the President of Newfoundland Power. At this meeting on August 30th, we asked them if they were interested in participating in an investigative process to determine whether the merger of the two Newfoundland electrical companies into a single integrated investor owned utility might be achievable and in the interest of all concerned.

I also advised the Fortis/Newfoundland Power representatives that if satisfactory progress towards a merger that would achieve government's stated objectives could not be accomplished in a reasonable period of time, then we would proceed to privatize Hydro on a stand-alone basis.

Overview of the Negotiation Principles and Current Status

It might be helpful to review some of the major principles and objectives that we established for these discussions, and to provide an overview of the major components that will be part of any merger with Fortis/Newfoundland Power, or the privatization of Hydro on its own.

Objectives Established

Before any discussions began with Fortis/Newfoundland Power, government established its set of overall objectives for any merger between Hydro and Fortis. In summary, these objectives are:

1. To get the highest reasonable price possible for its hydro assets;
2. The elimination of the guaranteed debt of Hydro from the Province's financial statements is to take place as soon as possible, and the government is to have no future financial responsibilities.
3. To achieve the most efficient and effective provincial electrical industry.
4. Either by restructuring the industry or privatizing on its own, government would intend to divest itself fully of its shareholdings in the electrical industry (except for its investments in Churchill Falls (Labrador) Corporation, the Lower Churchill Development Corporation and the Gull Island Power Corporation) as soon as practical, by way of a broad public offering of common shares in Newfoundland, the rest of Canada and possibly elsewhere.
5. Discussions are to proceed in an appropriate and orderly manner and both parties are to observe confidentiality until an understanding in principle can be disclosed, or negotiations are discontinued. This is normal and necessary in a negotiation of this nature.
6. The initial executive management team and the initial board of directors of the merged company would require input and approval of government.
   
7. Ownership, voting and possibly other restrictions would apply to the shares of the new merged entity to ensure the electrical industry is widely held and not controlled by a small number of individuals or corporations, nor controlled by foreign investors.
8. To ensure the restructured and privatized industry is well capitalized and credit worthy so that it will be able to finance the Province's future electrical requirements, and
9. To achieve stable or improved revenues for the provincial treasury from the electrical industry.
10. Within the context of these objectives to minimize the rate increases charged industrial, commercial and domestic customers in the immediate and longer terms.
    

A few days after the initial meeting with Fortis representatives, the Chairman of Fortis informed me that they were interested in participating in such discussions. Accordingly it was agreed to establish negotiating teams to start the discussions. It was also agreed that the public and Fortis shareholders should be made aware of what was occurring. This was done by a joint news release on October 1st. These discussions are now proceeding but they are still at a very preliminary stage.

Fortis has not yet agreed to fully meet the requirements of government, that I have just outlined, to ensure that what occurs is not a take over by Fortis but is genuinely a merger of the two corporations with the final structure reflecting the level of assets and strengths each of the two parties will bring to the merged company. Unless such requirements are met there will be no merger.

Major issues to be addressed

Recent public commentary has raised a variety of questions. Valid or not these questions should be addressed. I will do so by posing the questions that have been raised and providing government's answer.

Why is the proposed transaction a merger?

1. The only way to effectively eliminate the duplication that presently exists and would continue to exist if Hydro were simply privatized on a stand-alone basis would be a merger. All of the expert advice available to government recommends such a merger.

2. The newly merged company would be neither Fortis, nor Hydro, but a true combination of the people, assets and shareholdings of Hydro and Fortis.

3. The percentage of the new entity that is coming from the government's ownership of Hydro is the majority interest in the new company, and will then be sold to investors in Newfoundland and Labrador, throughout Canada and the world by a public share offering.

Why is Hydro and Government negotiating only with Fortis?

1. Newfoundland Power, a company wholly owned by Fortis, is the only other electrical utility in the province and it distributes electricity to 85 % of all electrical customers in the province. Any effort to restructure the industry in the province must include Fortis, and only Fortis.

2. The advisors and government are of the opinion that the most efficient operating structure for the electrical industry is to have a fully integrated operation for the generation, transmission and distribution of the product to the customer, and that can only be achieved by negotiating with Fortis.

3. We do not want control to be with another corporation outside the province and we do not want private interests, either within or outside the province, to buy Hydro. Therefore, it is not appropriate to seek bids for Hydro. The interests of the province will be best served if its electrical industry is a widely held public company that cannot be controlled by any group either within or outside the province and can raise the capital required for future growth of the industry.

Will the Government get fair value for its investment?

1. Most definitely, Hydro and government's financial advisors are among the best in the world. Their projections indicate a very attractive value can be achieved and that there will be a profit to the people of the province from the privatization of their investment in Hydro.

2. The government will not privatize Hydro, either in a merged entity or on a stand-alone basis, unless the value received is fair and is consistent with values other governments have received in similar privatizations.

3. The government will only agree to proceeding with a transaction with Fortis if the proceeds are at least equal to or greater than would be received by privatizing Hydro on a stand-alone basis.

4. Government will obtain an opinion from recognized investment bankers that the proposed transaction is fair to the taxpayers of the province. Without such an opinion there will be no merger.

How will the province's financial position be improved?

1. The guaranteed debt of Hydro represents approximately 18% of the total direct and indirect debt of the province. This will be significantly reduced immediately, and completely eliminated over the longer term. Hydro's current debt and equity today is approximately $1,250,000,000.

2. The province will receive a substantial amount of cash from the profitable sale of the securities that it will receive in the privatized company. This cash will be used to reduce the province's debt by lowering our future borrowing requirements, thus saving current account interest expense, which means avoiding tax increases and/or government program cuts that would otherwise occur.

Will this mean that there will be an increased outflow of capital from the province through payment of dividends?

I believe the answer is NO. More than 90% of Hydro's current interest payments are to institutions outside the province. While part of the debt will be converted to equity, dividend payments won't make us worse off. Thousands of Newfoundlanders and Labradorians will be encouraged to invest in the shares of the new entity, thus keeping more dividends in the province. In addition the retained profits in the new utility will be reinvested in new fixed assets within the province, no different than what occurs now. In total, more money will remain within the province.

Will this assist the province's credit rating?

1. The major U.S. credit rating agencies, Standard & Poors and Moody's visited with me and senior ministers and officials earlier this year. They were strongly supportive of government's plans to restructure and privatize various crown agencies including Newfoundland and Labrador Hydro, as well as our other financial management initiatives.

2. The province's total direct and indirect debt as a percent of gross provincial product is 61.5%, the highest in Canada. Financial institutions frequently emphasize this when commenting on the province's financial state or its credit rating. The elimination of the Hydro debt and the reduction of future debt and borrowing requirements from privatization can only be positive, and will result in improved creditworthiness.

What will be the government's on-going role in the electrical industry?

1. The new company will be totally subject to regulation by the Public Utilities Board in respect of all of its electrical utility activities.

2. Government will still be responsible for the regulatory policy regime of the electrical industry. We will be introducing a new Electrical Power Control Act that will ensure the people of Newfoundland and Labrador, and specifically the consumers, will continue to have an efficient, fair and reliable electrical industry.

3. The restructuring and privatizing of the industry will be governed by a Privatization Act which will outline the policies under which the new company will operate. This Act will cover major policy issues such as ownership rules, to ensure regulation and management of the industry remains within the province and not with other organizations in Canada or foreign countries.

4. The government will continue to control and be responsible for the development of future electrical development because it will retain ownership of Churchill Falls Labrador Corporation, The Lower Churchill Development Corporation, all other Labrador water rights, all undeveloped island water rights, and the policy direction for non-utility independent generators and alternate power sources.

Will electrical rates increase?

1. Rates in the future, as now, will only be set after hearings by the Public Utilities Board. Under any of the alternatives of the industry, including leaving things as they are today, rates will increase as costs increase.

2. Privatization, whether by merger or on a stand alone basis, will cause some additional rate increase beyond that which would otherwise occur in the first five years. That additional increase due solely to privatization should average about 1 % per year or less. Merger and privatization should result in lower rate increases beyond that five years.

3. Any rate increases must be considered in light of the benefits to the provincial treasury of privatization. Generally speaking the more the people as taxpayers get from the sale the more the same people as ratepayers will have to pay in the future. Government's objective will be to achieve the greatest fair return we can get while at the same striving to keep any increase at a minimum.

What will be the impact on the employees and the unions?

1. One of the objectives of the industry restructuring is to improve operating efficiencies. Merging two large utilities such as Hydro and Fortis/Newfoundland Power will result in the elimination of certain areas of duplication in management, administration, and maintenance. These will be identified and a fair and equitable program will be developed to accommodate early retirement, voluntary severance and position redundancies.

2. The Unions will be involved in the merger process if a transaction is agreed upon. So will the non union employees.

3. It is premature to speculate on numbers or specific areas of operating efficiencies that will result.

Concluding comments

On October 1st when we announced that we were beginning discussions with Fortis/Newfoundland Power, we stated that any transaction would have to meet three objectives:

1. To create a more efficient electrical industry.

2. To be fair to the current public shareholders of Fortis and Newfoundland Power and to the electrical utility ratepayers of the province, and

3. To maximize the proceeds of privatization of Newfoundland Hydro for the people of this province.

I hope my comments today have helped explain how we arrived at the strategic decision to begin a restructuring process for the electrical industry; that we are going about it in a careful and responsible way; and that the achievement of our objectives will be in the best interests of all the people of Newfoundland and Labrador.

The restructuring and privatizing of the electrical utility industry is not being done behind closed doors. I advised the people of the province as soon as the basis for negotiations was decided upon by both parties. We have considered many different alternatives; sought advice from the industry experts; and engaged highly respected and experienced financial advisors, before deciding to restructure and privatize the industry. We will keep the public and House of Assembly fully informed as discussion progress. In any event no such privatization can be completed without full debate and passage of the necessary legislation by the House of Assembly.

The government's stated policy is that we will privatize and restructure government operations, crown corporations and agencies where there is no overriding public policy purpose for government to remain as an owner. The electrical industry meets this policy criteria.

The province is being affected by the profound economic and financial forces which are impacting the economies of all countries of the world. These forces make it imperative that we make wise use of investment capital and that the electrical industry, and for that matter, all sectors of our economy, be operated in the most productive fashion possible. That is what we are seeking to achieve.

Thank you very much.

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Kremlinology 36: Thinking with your ass

We’d all like to think that political ideas come out of politicians’ heads after careful thought and lots of research.

In Newfoundland and Labrador, government ideas tend to spring from the ass.

A whole bunch of people in the province are not happy with federal plans to close a coast guard emergency call centre and shift the work to the Joint Regional Search and Rescue Centre in Halifax.  Those people think the federal Conservatives pulled that idea out of someone’s ass.

Organized labour in the province is screaming blue murder about the decision.  The opposition parties in the provincial legislature are raising a stink.    They wanted to have an emergency session of the legislature and pass a resolution condemning the action.  Kathy wouldn’t do it.

Meanwhile, Premier Kathy Dunderdale has been taking her time trying to figure out out to get in front of this issue politically while not pissing off the guy on whom she is dependant for a loan guarantee to help finance her mega-debt project slash election gimmick, better known as Muskrat Falls.

Premier Kathy Dunderdale told reporters last week that someone in her office was trying to get a telephone call through to the Prime Minister. 

And a week later, she had to stand in front of reporters and tell them she was still trying to speak with her pal Steve on the telephone.

Well, either that or arrange a meeting whichever came first.

But on that most 19th century of technologies?

Nada on the telephone hooking up thingy.

The message is getting through, though, Kathy assures us.

And pressure is being applied using that passively voice sentence.

How, exactly is it getting through asked the brazen fish broadcast host Brian Callahan of fish minister Clyde Jackman?  No call.  No meeting.  How is the word getting through from the provincial government to the federals?

Jackman didn’t know.

He just said we’d all know soon what the feds decided to do for sure on the call centre. 

Now just to put that in perspective for those unfamiliar with anything that happened in the world before say 1999, that isn’t the way these things work usually. 

Even in the darkest hours after the collapse of the Meech Lake Accord, Brian Mulroney would still answer the phone even if he knew Clyde Wells was on the other end. 

The day Igor ripped through the province, Stephen Harper called Danny Williams to offer up whatever help Dan-o wanted.  That’s right.  Dan didn’t even have to wait to get his call returned.  he got one free from Steve.  Now Dan might have reportedly said no thanks because he didn’t want Peter Mackay to horn in on the credit for saving Danny’s bacon, but at least he actually did get the Prime Minister himself on the horn.

So Kathy’s message obviously isn’t getting through to the federal government on anything.  Her loan guarantee is looking a bit more dodgy than before, she doesn’t really have anything to offer as a distraction and her poll results are still sucking worse than the St. John’s sewerage treatment plant on full reverse.

Not a good place to be in politically, especially for a party that used to thrive on issues just like this. 

So what to do?

Offer to take over some bits of search and rescue in the province from the federal government.

Never mind the constitution.

Never mind that for decades provincial premiers have been fighting to keep the feds from dumping their responsibilities into provincial laps free of federal charge.

Never mind the cost to the public purse.

Never mind the fact mismanagement by Kath and her predecessor have left the government in a rough financial spot despite unprecedented government revenues  such that the next decade could make everyone look longingly on the 1930s.

Never mind, even, that Kath and her mates buggered up the Igor thing that looked suspiciously like an emergency of the searching and rescuing type so that you’d wonder if they could actually find each other in the dark, in a closet with both hands and a flashlight.

No.

Faced with being outflanked politically by her local opponents, Kath opted to show how much she is different from every other politician in a long, sorry line of politicians in this province.

She decided to think with her ass.

In the past week, she could have fired off a strongly worded letter to Ottawa.

She could have sent a fax to Peter Penashue, the regional minister who is also the intergovernmental affairs minister.

She could have told reporters that she had made clear the views of her government that this was just not on.

When asked about it, she could have gone for the sophisticated answer and pointed out that the loan guarantee was another issue and that she would always look out for the best interests yada, yada, yada.

Instead, she opted for the ass-thought.

And to make matters worse, Kathy blathered on in public to reporters about her blatant political impotence by telling them that she has been a week trying to figure out how to get Steve to call her back but without success.

You don’t have to look at her possible motives for offering to take federal responsibilities off their hands and pay for them with provincial cash to boot.  Nor do you have to look very hard to find the considerable numbers of flaws in her political bungling of what should have been a relatively small political issue.

What you can see pretty clearly is that Kathy Dunderdale and her political staff came up with this idea on the fly in a desperate attempt to be seen to be doing something on the issue.  All they’ve really done in the process is show seasoned observers that they really don’t have a clue.

It is also pretty clear that they really don’t have any sense of direction, generally.  That’s not surprising, mind you, given that when Danny did a runner, Kathy was only supposed to keep the office warm for a few months until his permanent replacement showed up. They’ve been coasting for a while.

But you would think that when the governing Tories decided to keep Kathy on a bit longer than originally planned, they’d have given her a set of ideas and some people who could actually manage these sorts of issues for her. That’s what experienced, seasoned political parties should be able to do after only seven years in office.

Should be able to do, but can’t in this case.

And just other other governments that couldn’t manage the small stuff, they went to the usual repository of Newfoundland political brilliance:  the ass.

After a mere seven years in office.

Not a good sign.

Not a good sign at all.

- srbp -