Province's energy "plan" discussion document.
Basically, a summary of oil and gas issues that gives the ones convenient to the provincial government. More on that to come.
Doesn't give any real indication of suggested policy directions.
Two years to write a precis.
That's one reason why government "consultation" is a waste of time.
But here's a more pointed one:
PetroNewf, the province's hydro corporation cum eightth sister.
It's already underway.
The Premier is committed to it. Three people got fired to make room for the new staff. The rest of us couldn't stop this little juggernaut short of shooting people and that ain't gonna happen.
so what does the consultation document say?
"Expanding Newfoundland and Labrador Hydro
Another potential way to increase benefits from the provinceÂ’s offshore oil and natural gas sector is a direct or indirect investment in one or more of the industry sectors by Government, alone or with partners. Expanding Newfoundland and Labrador HydroÂ’s (NLH) role in energy development is a priority of this Government with the strategic objective to increase the benefits we receive from all our energy resources. This Government will work with NLH as it expands its business operations to become a broader-based energy corporation in electricity, wind-power, other renewable energy sources, and in oil and gas. This might include partnering with other oil and gas operators.
The challenge for any petroleum-producing jurisdiction, especially one in the early stages like Newfoundland and Labrador, is to decide on policies that balance fiscal and economic benefits while limiting risks to the province and its citizens. These can involve difficult choices, between policies that foster more employment and local business activities, or those that provide direct revenue to support public programs like health care and education." Newfoundland and Labrador Energy Plan Discussion Paper Page 28.
That reads like the Blue Book section: "This Government will work with..." as if it already isn't doing it. That's misleading in the extreme.
"That might include partnering with other oil and gas operators". Another vague pos statement. Don't tell me what it might mean. Tell me what you have decided already, since the decisions are already made.
The second paragraph merely repeats bland observations - typical government pap - about the theoretical and difficult policy choices.
What was needed here was two things:
1. The business case on which Dan the Man built his Plan that's already out of the can. Let's see the actual details of what is underway at PetroNewf.
which will therefore lead us to ...
2. A detailed examination of the "difficult policy choices" that are left to be made. Let's see the options before we chose. In this case it seems we ought to "discuss" the deficiencies of the discussion document rather than the "difficult policy choices".
The first one - to follow the course of a state-owned enterprise entering the private sector in an area in which it has no expertise - that one has already been made. And we can't suck that one back.
The best we can hope for at this point is damage control.
If by some miracle we could get our hands on the internal government documents, I'd lay money the bureaucrats noted somewhere that this isn't a consultation process at all.
It is a "confirmation process".
People are expected to show up and give their blessing to whatever vague things they are asked to approve.
We needn't worry our pretty heads about things.
Dissent - to use the Premier's curious term for people who don't agreement with him completely and unreservedly - is not required, and heck, may not even be permissible soon.
And from some far-off farm we can still hear the lowly animals singing...
"Say what you think
But the best thing to think
Is nothing -
That's excellent thinking."
Followed by a rousing chorus of Beasts of England.
11 November 2005
When you want people to notice something...
release it late on the day before a long holiday weekend.
That was sarcasm.
This is the release from the provincial government announcing its long-overdue energy plan consultation process.
That was sarcasm.
This is the release from the provincial government announcing its long-overdue energy plan consultation process.
10 November 2005
and the strangest things seem suddenly normal...[updated]
Today was one of those days where everything in the world seemed to burst straight out of Really Goofy Land.
One of those things was a CBC radio interview with John Efford about his health problems and recent calls for his resignation.
The bizarre part was that Efford's approach to the whole business was the same as some of those of the Conservative persuasion who blame the news media for the party's political problems.
John Efford and Liam O'Brien sharing the same headspace.
I shudder at the thought.
Anyway, Efford criticized news media for carrying stories about his health woes.
From a communications perspective, this makes just the latest of a serious of blunders by Efford when dealing with the personal attacks on him.
And here's what's wrong with his approach.
First of all, it is factually incorrect. The news media are not attacking John Boy. They are reporting other people's attacks, as they are likely to do given that controversy in politics is a big source of news copy. His credibility is not helped.
Second, John's attacks will win him no sympathizers among reporters who - despite Liam O'Brien's jaundiced view of his old trade are not universally or even generally so devoid of ethical beliefs that will knife anyone they "don't like".
Reporters are a conduit to supporters and potential supporters. They are also human so if you slag them off needlessly or pointlessly, all you do is ensure that the next coverage will show you warts and all. Reporters don't need to fabricate things or spin stories, although as Mulroney's old communications director claimed in a book, it is commonplace.
Nope. All they really have to do is report factually and accurately on your next cock-up, regardless of who you are.
Ask Brian Tobin about pissing off reporters needlessly and where it gets you.
John needed reporters to help counteract some of the partisan attacks being made on him. Instead, he just added to his woes.
Third, if you are defending yourself at least shoot in the right direction. General Custer may have been surrounded and may have died in the battle at the Little Big Horn.
Odds are good, though, that he and his troopers were shooting at the Indians around them, rather than say, at the ground or up in the sky.
This sort of stupidity - and that's really all it is - just makes you even less credible among a whole range of people that you are actually trying to win to your side.
Problem the Fourth is that Efford did the interview from Florida where he has retreated on doctor's orders in order to deal with his medical problems.
Now don't be surprised if the people taking shots at John knew full-well that he was in Florida and took full advantage of this fact to push their story when it would look the worst for Efford.
But it really just plays into their hands to respond from the sunny south, especially when the timing is so freakin' obvious.
The alternative? Take some preventive action by making it clear he was taking advantage of the little break while the Commons isn't in session to grab a bit of down time. That works better if, in the weeks before hand, local media get sick of hearing from Efford on anything and everything he can talk about to make sure people know he is on the job and doing just fine, thanks.
There are ways to handle things and not ways to handle things.
But personally, today seemed like a day in which the strange idea of O'Brien being a Connie seemed not only plausible but real.
___________
[Update: Here's a link to a Liberal blog calling for Efford's resignation. Teensy weensy print. Big message]
One of those things was a CBC radio interview with John Efford about his health problems and recent calls for his resignation.
The bizarre part was that Efford's approach to the whole business was the same as some of those of the Conservative persuasion who blame the news media for the party's political problems.
John Efford and Liam O'Brien sharing the same headspace.
I shudder at the thought.
Anyway, Efford criticized news media for carrying stories about his health woes.
From a communications perspective, this makes just the latest of a serious of blunders by Efford when dealing with the personal attacks on him.
And here's what's wrong with his approach.
First of all, it is factually incorrect. The news media are not attacking John Boy. They are reporting other people's attacks, as they are likely to do given that controversy in politics is a big source of news copy. His credibility is not helped.
Second, John's attacks will win him no sympathizers among reporters who - despite Liam O'Brien's jaundiced view of his old trade are not universally or even generally so devoid of ethical beliefs that will knife anyone they "don't like".
Reporters are a conduit to supporters and potential supporters. They are also human so if you slag them off needlessly or pointlessly, all you do is ensure that the next coverage will show you warts and all. Reporters don't need to fabricate things or spin stories, although as Mulroney's old communications director claimed in a book, it is commonplace.
Nope. All they really have to do is report factually and accurately on your next cock-up, regardless of who you are.
Ask Brian Tobin about pissing off reporters needlessly and where it gets you.
John needed reporters to help counteract some of the partisan attacks being made on him. Instead, he just added to his woes.
Third, if you are defending yourself at least shoot in the right direction. General Custer may have been surrounded and may have died in the battle at the Little Big Horn.
Odds are good, though, that he and his troopers were shooting at the Indians around them, rather than say, at the ground or up in the sky.
This sort of stupidity - and that's really all it is - just makes you even less credible among a whole range of people that you are actually trying to win to your side.
Problem the Fourth is that Efford did the interview from Florida where he has retreated on doctor's orders in order to deal with his medical problems.
Now don't be surprised if the people taking shots at John knew full-well that he was in Florida and took full advantage of this fact to push their story when it would look the worst for Efford.
But it really just plays into their hands to respond from the sunny south, especially when the timing is so freakin' obvious.
The alternative? Take some preventive action by making it clear he was taking advantage of the little break while the Commons isn't in session to grab a bit of down time. That works better if, in the weeks before hand, local media get sick of hearing from Efford on anything and everything he can talk about to make sure people know he is on the job and doing just fine, thanks.
There are ways to handle things and not ways to handle things.
But personally, today seemed like a day in which the strange idea of O'Brien being a Connie seemed not only plausible but real.
___________
[Update: Here's a link to a Liberal blog calling for Efford's resignation. Teensy weensy print. Big message]
Rightie wrongie ruminations
Regular readings of these e-scribbles will be all too familiar with the exchanges of opinion between this pile of posts and the ones at Responsible Government League.
Not surprisingly, the post about RGL's support for Jack Layton - bizarre as the concept was in the first place - garnered a response from Liam O'Brien which, again not surprisingly, seems to be arguing about something other than the point.
It is an old debating tactic to argue against a straw man: set up a completely erroneous, irrelevant or even preposterous set of ideas and then knock them down. It is also an old tactic to brand an opponent of some position as being something they aren't - like being a child molester. Or paranoid. Or accuse them of some other failing, again without any evidence to back it up.
The title of the post - "Remind me again of why we're supposed to support this government...": is a sign of what follows: a post that uses all of the same old tactics, either directly or indirectly.
Oh well.
So much for the short-lived spate of postings at RGL that were well-thought out and provocative. Now it seems to be back to warmed over Conservative Party talking points. He must be on their automated e-mail list.
I wish there was a smiley for shrugging and shaking ones head.
Not surprisingly, the post about RGL's support for Jack Layton - bizarre as the concept was in the first place - garnered a response from Liam O'Brien which, again not surprisingly, seems to be arguing about something other than the point.
It is an old debating tactic to argue against a straw man: set up a completely erroneous, irrelevant or even preposterous set of ideas and then knock them down. It is also an old tactic to brand an opponent of some position as being something they aren't - like being a child molester. Or paranoid. Or accuse them of some other failing, again without any evidence to back it up.
The title of the post - "Remind me again of why we're supposed to support this government...": is a sign of what follows: a post that uses all of the same old tactics, either directly or indirectly.
Oh well.
So much for the short-lived spate of postings at RGL that were well-thought out and provocative. Now it seems to be back to warmed over Conservative Party talking points. He must be on their automated e-mail list.
I wish there was a smiley for shrugging and shaking ones head.
Late-night Layton lamentations and "leftie" lacrymals
Over at RGL, Liam thinks it is a good idea NDP Jack wants to take the country to the polls in February.
Let's put this in context:
1. The PM has already committed to an election 30 days after Gomery's final report. That puts us into a March/April time for the writ to drop.
2. The Opposition parties screamed bloody murder for 24 hours in the wake of the Gomery report release this month only to pull their horns in within 48 hours or so after that, once their polling started showing that the government support was quickly rebounding back up to where it was. Check the publicly available polls for confirmation.
They also saw how many people don't want an election.
3. Jack Layton makes the absolutely bizarre pronouncement that he plans to bring down the government (maybe he found left-over Harper speaking notes in his jacket from the last trip to the cleaners)
4. In a most unseemly haste, both the chief of the Blocheads and Steve Harper denounced Layton and said they had no plans to bring down the government.
5. Layton cooks up some procedural thingy so that the Opposition can force an election around the time we are going to have one anyways and try to make it look like they have:
a. some teensy bit of control over anything;
b. some way to charge into the next election looking like they actually brought down the government.
6. What they are all showing is their complete inability to read a poll and create sensible policy simultaneously - keep the gum away from them if there is any footwork involved.
7. What they are also showing is their complete lack of a grip on the agenda. It's pretty bad when they have to make up a procedural scam to claim credit for the election that everyone knows is coming anyways.
On an unrelated subject, Liam then takes a potshot at the leftie media based on a 1982 survey done at Western Ontario's J school.
Ok.
The media basically mirrors society as a whole, just like most institutions or organizations. I can make them all look like Commies or all look like Nazis, depending on how I structure the survey.
Besides, self-identification isn't really much of a clue as to what someone actually is in terms of their political affiliation or whether they are biased against conservatives in their reporting. Those sorts of assessments are best done by some objective measures like content analysis or long-term tracking.
So, Liam, as much as you might like to think that there is some sort of leftie bias in the media and therefore that's why Connies have trouble getting a fair shake, it really isn't the issue. That's a glorious excuse copied from the American right, which has, of course, been dominant in politics south of the border since 1979. Now at the same time, if the alternative is a sudden flowering of the likes of Rush "OxyBoy" Limbaugh and Bill O'Reilly to fan the flames of Connie persecution complexes, then lemme say that I'll just take my news from the people reporting it now thanks. I can find enough different perspectives to make up my own mind - just like everyone else.
and that's really the point: reporters don't control what I think.
The real Connie political problem is comms cock-ups like the one with Dingwall. And before you see red yet again, Liam, read this carefully: HOW the Connie machine tackled Dingwall made him look like a saint and the Connies look like dorks. That was the mistake.
Making Dingwall look good is a task no Liberal comms genius could manage during the guy's entire political life. But Brian Pallister managed to do that in spades.
Media relations is like a Field of Dreams - if you build it they will come. If you bitch about them, criticize them and attack them, on the other hand, they will report that too.
And you look like an asshole.
But all the media had to do was take a picture of the orifice you presented to the camera.
Forrest Gump's mom had it right when she mused about stupid.
For the record, media analysis like the stuff Liam points to is one of the reasons why comms people shouldn't be former journalists. Funny, but many of them can't seem to make the switch to my side of the street successfully. Many do, but the failures seem to outweigh the successes on a number of fronts.
As for Stevie Cameron and Linda McQuaig, I'd give Liam two pieces of free advice:
1. Look at the Gomery report itself in detail - without the blue shades on. It isn't what you think it is. It never was
2. Stop wasting time reading people whose work is, well, boring. Stevie had a couple of good years at Brian's expense - 15 friggin years ago. Get over it. Move on. Cycle through the stages of grief over Brian's political demise, now that denial is untenable as a concept any more.
Get over the anger - it's a nasty emotion and maybe, just maybe, it could be one of the reasons why so few people are warming up to the Connies generally - too much anger.
As for Linda, no one buys her stuff outside of NDP yard sales. And there's a clue - NDP yard sales. Those aren't the votes Stevie Harper needs anyway, even if he could get them.
As for rest of the post over at RGL, I'll offer these few notes.
The link from small dead animals, - as the author of a non-partisan blog, you are aware that sda is a BIG BLUE, hardwired to 101 Connie Drive. Readin' that blog you feel like Randy Quaid riding the beam up into the alien invader ship in Independence Day. You are heading for the core and payback is a bitch.
Just wanted to make sure you knew that.
He's a [whisper]... conservative.
Not that there's anything wrong with that of course.
The new anti-media blog you linked to, Liam. Did you notice? It has no comments section.
[dramatic organ music]
Does that mean the blogger is afraid of something? Does that mean the blogger is lacking in integrity? Isn't he worthy of being slagged for this greivous sin against the 10 commandments of bloggerdom?
Hmmm?
Quel horreur.
You should actually read the media comments this guy drags out, by the way - they don't point to media bias.
They point to some of the issues as they have been framed...
by the ineptness of the Connie comms organization.
Look at it this way, Liam: John Turner's favourite game was to blame the media for his loss in 1984.
Do you want to keep repeating his mantra?
Let's put this in context:
1. The PM has already committed to an election 30 days after Gomery's final report. That puts us into a March/April time for the writ to drop.
2. The Opposition parties screamed bloody murder for 24 hours in the wake of the Gomery report release this month only to pull their horns in within 48 hours or so after that, once their polling started showing that the government support was quickly rebounding back up to where it was. Check the publicly available polls for confirmation.
They also saw how many people don't want an election.
3. Jack Layton makes the absolutely bizarre pronouncement that he plans to bring down the government (maybe he found left-over Harper speaking notes in his jacket from the last trip to the cleaners)
4. In a most unseemly haste, both the chief of the Blocheads and Steve Harper denounced Layton and said they had no plans to bring down the government.
5. Layton cooks up some procedural thingy so that the Opposition can force an election around the time we are going to have one anyways and try to make it look like they have:
a. some teensy bit of control over anything;
b. some way to charge into the next election looking like they actually brought down the government.
6. What they are all showing is their complete inability to read a poll and create sensible policy simultaneously - keep the gum away from them if there is any footwork involved.
7. What they are also showing is their complete lack of a grip on the agenda. It's pretty bad when they have to make up a procedural scam to claim credit for the election that everyone knows is coming anyways.
On an unrelated subject, Liam then takes a potshot at the leftie media based on a 1982 survey done at Western Ontario's J school.
Ok.
The media basically mirrors society as a whole, just like most institutions or organizations. I can make them all look like Commies or all look like Nazis, depending on how I structure the survey.
Besides, self-identification isn't really much of a clue as to what someone actually is in terms of their political affiliation or whether they are biased against conservatives in their reporting. Those sorts of assessments are best done by some objective measures like content analysis or long-term tracking.
So, Liam, as much as you might like to think that there is some sort of leftie bias in the media and therefore that's why Connies have trouble getting a fair shake, it really isn't the issue. That's a glorious excuse copied from the American right, which has, of course, been dominant in politics south of the border since 1979. Now at the same time, if the alternative is a sudden flowering of the likes of Rush "OxyBoy" Limbaugh and Bill O'Reilly to fan the flames of Connie persecution complexes, then lemme say that I'll just take my news from the people reporting it now thanks. I can find enough different perspectives to make up my own mind - just like everyone else.
and that's really the point: reporters don't control what I think.
The real Connie political problem is comms cock-ups like the one with Dingwall. And before you see red yet again, Liam, read this carefully: HOW the Connie machine tackled Dingwall made him look like a saint and the Connies look like dorks. That was the mistake.
Making Dingwall look good is a task no Liberal comms genius could manage during the guy's entire political life. But Brian Pallister managed to do that in spades.
Media relations is like a Field of Dreams - if you build it they will come. If you bitch about them, criticize them and attack them, on the other hand, they will report that too.
And you look like an asshole.
But all the media had to do was take a picture of the orifice you presented to the camera.
Forrest Gump's mom had it right when she mused about stupid.
For the record, media analysis like the stuff Liam points to is one of the reasons why comms people shouldn't be former journalists. Funny, but many of them can't seem to make the switch to my side of the street successfully. Many do, but the failures seem to outweigh the successes on a number of fronts.
As for Stevie Cameron and Linda McQuaig, I'd give Liam two pieces of free advice:
1. Look at the Gomery report itself in detail - without the blue shades on. It isn't what you think it is. It never was
2. Stop wasting time reading people whose work is, well, boring. Stevie had a couple of good years at Brian's expense - 15 friggin years ago. Get over it. Move on. Cycle through the stages of grief over Brian's political demise, now that denial is untenable as a concept any more.
Get over the anger - it's a nasty emotion and maybe, just maybe, it could be one of the reasons why so few people are warming up to the Connies generally - too much anger.
As for Linda, no one buys her stuff outside of NDP yard sales. And there's a clue - NDP yard sales. Those aren't the votes Stevie Harper needs anyway, even if he could get them.
As for rest of the post over at RGL, I'll offer these few notes.
The link from small dead animals, - as the author of a non-partisan blog, you are aware that sda is a BIG BLUE, hardwired to 101 Connie Drive. Readin' that blog you feel like Randy Quaid riding the beam up into the alien invader ship in Independence Day. You are heading for the core and payback is a bitch.
Just wanted to make sure you knew that.
He's a [whisper]... conservative.
Not that there's anything wrong with that of course.
The new anti-media blog you linked to, Liam. Did you notice? It has no comments section.
[dramatic organ music]
Does that mean the blogger is afraid of something? Does that mean the blogger is lacking in integrity? Isn't he worthy of being slagged for this greivous sin against the 10 commandments of bloggerdom?
Hmmm?
Quel horreur.
You should actually read the media comments this guy drags out, by the way - they don't point to media bias.
They point to some of the issues as they have been framed...
by the ineptness of the Connie comms organization.
Look at it this way, Liam: John Turner's favourite game was to blame the media for his loss in 1984.
Do you want to keep repeating his mantra?
09 November 2005
Getting sun to rise in morning biggest accomplishment
Ok. That's obviously a joke.
But if this story is correct, Premier Danny Williams' biggest accomplishment - by his own estimation - is something he really had nothing to do with. Apparently, the Premier told a party fundraising dinner in St. John's last night that the province's improved fiscal is his greatest accomplishment to date.
It's times like this that one wishes the Progressive Conservative Party website was more than just a collection of links to the government news release site.
Here's what actually happened:
Biggest thing - The price of oil went through the roof and as a result the provincial government is doing quite nicely, thank you very much, from oil royalties.
Danny Williams did not cause any increase in world oil prices.
The royalties collected by the provincial government are a direct result of two things:
1. The Real Atlantic Accord, signed in 1985 by Brian Mulroney and Brian Peckford; and,
2. A series of royalty agreements signed by previous governments.
Put it together and you get a $300 million cash surplus this year and we haven't even seen the end of it. Next year's surplus will be bigger. Much bigger.
All this government did was not spend like a drunken sailor after a year and a half at sea. While in local politics that might be worthy of a medal, in most sensible places it gets a polite round of applause.
Beyond that, the Voisey's Bay deal will cut in this year and add some more cash to the pile.
Beyond that, someone will surely point to the January offshore deal with Ottawa. But, as we have not grown too weary of saying, that deal is just a transfer payment from Ottawa worth exactly $2.0 billion dollars.
Period.
It is waaaaaaaaay less than the Premier was looking for and it is waaaaaay less than some people have tried to pretend.
I am optimistic, though. I still think Danny Williams is capable of and will do some impressive things; the kind of things that would warrant the judgment of some people that he is the greatest Premier in the province's history. That was actually said to me on Water Street the other day by someone who isn't a member of the Williams family or even a Tory supporter for that matter.
Personally, though, I'll wait until there is some record of accomplishment by which to measure this Prem against all the others going back to 1855.
But if this story is correct, Premier Danny Williams' biggest accomplishment - by his own estimation - is something he really had nothing to do with. Apparently, the Premier told a party fundraising dinner in St. John's last night that the province's improved fiscal is his greatest accomplishment to date.
It's times like this that one wishes the Progressive Conservative Party website was more than just a collection of links to the government news release site.
Here's what actually happened:
Biggest thing - The price of oil went through the roof and as a result the provincial government is doing quite nicely, thank you very much, from oil royalties.
Danny Williams did not cause any increase in world oil prices.
The royalties collected by the provincial government are a direct result of two things:
1. The Real Atlantic Accord, signed in 1985 by Brian Mulroney and Brian Peckford; and,
2. A series of royalty agreements signed by previous governments.
Put it together and you get a $300 million cash surplus this year and we haven't even seen the end of it. Next year's surplus will be bigger. Much bigger.
All this government did was not spend like a drunken sailor after a year and a half at sea. While in local politics that might be worthy of a medal, in most sensible places it gets a polite round of applause.
Beyond that, the Voisey's Bay deal will cut in this year and add some more cash to the pile.
Beyond that, someone will surely point to the January offshore deal with Ottawa. But, as we have not grown too weary of saying, that deal is just a transfer payment from Ottawa worth exactly $2.0 billion dollars.
Period.
It is waaaaaaaaay less than the Premier was looking for and it is waaaaaay less than some people have tried to pretend.
I am optimistic, though. I still think Danny Williams is capable of and will do some impressive things; the kind of things that would warrant the judgment of some people that he is the greatest Premier in the province's history. That was actually said to me on Water Street the other day by someone who isn't a member of the Williams family or even a Tory supporter for that matter.
Personally, though, I'll wait until there is some record of accomplishment by which to measure this Prem against all the others going back to 1855.
08 November 2005
Italian bullshit bombs
An Italian video on Fallujah is making the rounds on the Internet alleging that American forces used napalm and white phosphorus bombs in fighting there. There is a suggestion of mysterious weapons, possibly chemical weapons being used.
In a nutshell, the piece is crap.
Most of the front end is fabricated or has no evidence to support it. There is plenty of accusation, but precious little evidence.
One example: - the claim that gun-camera footage from Vietnam was suppressed so as to prevent an anti-war backlash. It is absolute nonsense. Tons of footage of napalming from Vietnam has been broadcast for 40 years. This piece of nonsense from the boot just adds California Dreamin' as a soundtrack and then claims that American pilots listened to such music. Maybe they did; maybe they didn't. But the footage is old news dolled up with some not-so-clever theatrics to make it appear new.
Then there's the interview with someone claiming to be a former American soldier. Maybe he is; maybe he isn't. The problem comes in that the questions are not the ones originally asked - they are rehashed for effect in a way reminiscent of The Daily Show. Unfortunately, this piece purports to be hard news, not parody.
And oh yeah, for the record: a 10 year-old boy carrying an AK-47 counts as a combatant if he points the weapon at me and pulls the trigger. The clever fake question doesn't mask the truth: American soldiers were not engaged in some campaign of wholesale slaughter of innocent civilians, as this piece of Italian garbage suggests.
The dead bodies presented in the video as evidence of some atrocity have a variety of characteristics, none either mysterious or apparently related to chemical weapons: some have evidently been dead for some time and are blackened and bloated consistent with leaving a corpse in the heat for long periods. Given the use of high explosives, it would also be expected to see some bodies "without a mark on them" or in which the "clothes are mysteriously intact". Overpressures from the explosives would cause internal injuries seen only on autopsy.
Other bodies, photos of which were presented by an anti-American Iraqi group to left-wing European parliament deputies also appear to have been re-dressed in immaculate clothing to create the illusion of mystery. Some of the pictures appear to be the burned corpses of American service personnel, and would be consistent with bodies burned inside armoured vehicles following a hit by anti-armour weapons. These apparent military casualties are presented as being Iraqis.
Much of the story is told by innuendo and rumour - like the stories about mosques being vandalized. The witness knew of nothing personally but heard lots of "stories".
Other parts of the piece are deliberately misrepresented for political purposes, such as the claim by an individual claiming to be a former soldier that chemical weapons were used and that white phosphorous is a chemical weapon. This is simply untrue - white phosphorous explosives are fundamentally different from chemical weapons which are weapons such as nerve gas. WP is a hideous weapon but it is fundamentally different from the terror weapons of the First World War.
In a portion of the film in which a letter from the Ministry of Defence (UK) is presented, the camera jumps around so much one cannot read the letter at all to confirm that what is translated is actually what is said. Since the letter corrected information from a previous letter, it is presented as an admission of guilt, but the context of the letter is deliberately omitted by the reporters.
This sort of stuff has been circulating for some time on the Internet. Like this piece from the UK.
Here is the official statement from the United States Department of State, including references to some sites where the chem weapons stories have been carried.
Here is some background information on the Mark 77 incendiary weapon. Here is some information on one type of white phosphorous weapons.
In a nutshell, the piece is crap.
Most of the front end is fabricated or has no evidence to support it. There is plenty of accusation, but precious little evidence.
One example: - the claim that gun-camera footage from Vietnam was suppressed so as to prevent an anti-war backlash. It is absolute nonsense. Tons of footage of napalming from Vietnam has been broadcast for 40 years. This piece of nonsense from the boot just adds California Dreamin' as a soundtrack and then claims that American pilots listened to such music. Maybe they did; maybe they didn't. But the footage is old news dolled up with some not-so-clever theatrics to make it appear new.
Then there's the interview with someone claiming to be a former American soldier. Maybe he is; maybe he isn't. The problem comes in that the questions are not the ones originally asked - they are rehashed for effect in a way reminiscent of The Daily Show. Unfortunately, this piece purports to be hard news, not parody.
And oh yeah, for the record: a 10 year-old boy carrying an AK-47 counts as a combatant if he points the weapon at me and pulls the trigger. The clever fake question doesn't mask the truth: American soldiers were not engaged in some campaign of wholesale slaughter of innocent civilians, as this piece of Italian garbage suggests.
The dead bodies presented in the video as evidence of some atrocity have a variety of characteristics, none either mysterious or apparently related to chemical weapons: some have evidently been dead for some time and are blackened and bloated consistent with leaving a corpse in the heat for long periods. Given the use of high explosives, it would also be expected to see some bodies "without a mark on them" or in which the "clothes are mysteriously intact". Overpressures from the explosives would cause internal injuries seen only on autopsy.
Other bodies, photos of which were presented by an anti-American Iraqi group to left-wing European parliament deputies also appear to have been re-dressed in immaculate clothing to create the illusion of mystery. Some of the pictures appear to be the burned corpses of American service personnel, and would be consistent with bodies burned inside armoured vehicles following a hit by anti-armour weapons. These apparent military casualties are presented as being Iraqis.
Much of the story is told by innuendo and rumour - like the stories about mosques being vandalized. The witness knew of nothing personally but heard lots of "stories".
Other parts of the piece are deliberately misrepresented for political purposes, such as the claim by an individual claiming to be a former soldier that chemical weapons were used and that white phosphorous is a chemical weapon. This is simply untrue - white phosphorous explosives are fundamentally different from chemical weapons which are weapons such as nerve gas. WP is a hideous weapon but it is fundamentally different from the terror weapons of the First World War.
In a portion of the film in which a letter from the Ministry of Defence (UK) is presented, the camera jumps around so much one cannot read the letter at all to confirm that what is translated is actually what is said. Since the letter corrected information from a previous letter, it is presented as an admission of guilt, but the context of the letter is deliberately omitted by the reporters.
This sort of stuff has been circulating for some time on the Internet. Like this piece from the UK.
Here is the official statement from the United States Department of State, including references to some sites where the chem weapons stories have been carried.
Here is some background information on the Mark 77 incendiary weapon. Here is some information on one type of white phosphorous weapons.
Tom Rideout - metaphor mangler extra-ordinary
The return of Tom Rideout to a position of considerable authority prompts an old political junkie to reminisce about some of Tom's glorious past.
Elected as a Liberal, Rideout crossed the floor in the early 1980s to sit with Brian Peckford around the cabinet table. There's an old Bill Rowe column in which he criticizes the local penchant for floor-walking among elected legislators. It used to make the rounds of local politicos every once in a while and I haven't seen it in years.
When Peckford packed it in in 1988, Rideout took a run at the leaders job and, after a hard campaign, eventually beat out the likes of Len Simms to sit in the Premier's Office. He created one of the largest cabinets in recent memory swelling the thing to 23 members, with assorted other members of caucus serving in various House positions or as parliamentary secretaries. The only legislators not receiving extra stipends had the misfortune of being in Opposition.
Rideout moved in, moved all Peckford's people out the door, and then dropped the writ in the hopes of winning a majority government against the Wells' Liberals.
Rideout lasted a total of 43 days as Premier, the shortest tenure of any Newfoundland first minister since the 1920s.
Three events or incidents stand out from 1989 that helped to define Tom Rideout in the minds of voters. I am not thinking about his incredibly awkward speaking style and his unease, nor am I talking about episodes like helicoptering into Placentia two days in a row toward the end of the campaign with nothing new to say on the second trip.
Nor am I talking about his leadership campaign chant "Ride In! Right On ! Rideout!"
Nope.
First was Tom's comment that "a skunk can't change its spots". I have long forgotten the context but the mangled metaphor has stuck with me ever since. I thought about using that in the other post but the "skunk" reference seemed an unwarranted and entirely unintended comment on character.
Second was another one of his magic moments with the English language, this time from the televised debate. At one point, with ever ounce of self-confidence he could muster, Rideout challenged Wells on some point. He finished his remarks with the immortal words: "And that's backupable."
Third was actually a preplanned bit of campaigning. Rideout and the other leaders spoke to Memorial University students, where, predictably, Rideout trumpeted his government's commitment to post-secondary students. In the queue for the microphone was a MUN student and Liberal supporter. When she got her chance, she held aloft a cucumber and asked: "Does this look like a post-secondary education student to you, Mr. Rideout?" Great laugh from the crowd. An immortal political clip and yet another smack between the eyes for a Tory campaign that seemed prone to every manner of political cock-up imaginable.
There are plenty of little ones, most of which I have long since forgotten. There is one where Tom was speaking off-the-cuff but obviously thinking of the written word "divers" or the alternate spelling "diverse". He said the same word twice as if there were two different pronunciations and meanings. It was an obscure gaff only a few of us got, but for those that did, it was hysterically funny.
Rideout may not commit any of those embarrassing gaffes anymore, but there is always the possibility he will revert to his old ways when things get heated. One thing we can all count on: Rideout is viciously partisan and like all converts - like say John Crosbie - he will never miss a chance to blame anything he can on the guys who were there before him.
Unfortunately for Tom, as funny as it was to hear a cabinet minister from the days of the Roads for Rails deal crap on the deal he approved in cabinet, it is going to get even funnier if Tom starts blaming others for the problems he is currently facing: he's created his own problems, as usual.
Careful Tom, that might be loaded.
Elected as a Liberal, Rideout crossed the floor in the early 1980s to sit with Brian Peckford around the cabinet table. There's an old Bill Rowe column in which he criticizes the local penchant for floor-walking among elected legislators. It used to make the rounds of local politicos every once in a while and I haven't seen it in years.
When Peckford packed it in in 1988, Rideout took a run at the leaders job and, after a hard campaign, eventually beat out the likes of Len Simms to sit in the Premier's Office. He created one of the largest cabinets in recent memory swelling the thing to 23 members, with assorted other members of caucus serving in various House positions or as parliamentary secretaries. The only legislators not receiving extra stipends had the misfortune of being in Opposition.
Rideout moved in, moved all Peckford's people out the door, and then dropped the writ in the hopes of winning a majority government against the Wells' Liberals.
Rideout lasted a total of 43 days as Premier, the shortest tenure of any Newfoundland first minister since the 1920s.
Three events or incidents stand out from 1989 that helped to define Tom Rideout in the minds of voters. I am not thinking about his incredibly awkward speaking style and his unease, nor am I talking about episodes like helicoptering into Placentia two days in a row toward the end of the campaign with nothing new to say on the second trip.
Nor am I talking about his leadership campaign chant "Ride In! Right On ! Rideout!"
Nope.
First was Tom's comment that "a skunk can't change its spots". I have long forgotten the context but the mangled metaphor has stuck with me ever since. I thought about using that in the other post but the "skunk" reference seemed an unwarranted and entirely unintended comment on character.
Second was another one of his magic moments with the English language, this time from the televised debate. At one point, with ever ounce of self-confidence he could muster, Rideout challenged Wells on some point. He finished his remarks with the immortal words: "And that's backupable."
Third was actually a preplanned bit of campaigning. Rideout and the other leaders spoke to Memorial University students, where, predictably, Rideout trumpeted his government's commitment to post-secondary students. In the queue for the microphone was a MUN student and Liberal supporter. When she got her chance, she held aloft a cucumber and asked: "Does this look like a post-secondary education student to you, Mr. Rideout?" Great laugh from the crowd. An immortal political clip and yet another smack between the eyes for a Tory campaign that seemed prone to every manner of political cock-up imaginable.
There are plenty of little ones, most of which I have long since forgotten. There is one where Tom was speaking off-the-cuff but obviously thinking of the written word "divers" or the alternate spelling "diverse". He said the same word twice as if there were two different pronunciations and meanings. It was an obscure gaff only a few of us got, but for those that did, it was hysterically funny.
Rideout may not commit any of those embarrassing gaffes anymore, but there is always the possibility he will revert to his old ways when things get heated. One thing we can all count on: Rideout is viciously partisan and like all converts - like say John Crosbie - he will never miss a chance to blame anything he can on the guys who were there before him.
Unfortunately for Tom, as funny as it was to hear a cabinet minister from the days of the Roads for Rails deal crap on the deal he approved in cabinet, it is going to get even funnier if Tom starts blaming others for the problems he is currently facing: he's created his own problems, as usual.
Careful Tom, that might be loaded.
The return of Backupable Tom - update
In a surprise move, Premier Danny Williams today shuffled five of his cabinet ministers around, including appointing Tom Rideout as the new minister of fisheries and deputy premier.
Rideout's predecessor, Trevor Taylor, has been talking forthrightly for the past few weeks, including some genuinely straight talk in the wake of Derrick Rowe's departure as chief executive office of Fishery Products International (FPI).
Taylor talked himself out of a job. That's clear. But the problem is not that Taylor was wrong. Rather, it was painfully obvious that Taylor was at odds with the cabinet - especially the Premier himself - about how government ought to respond to the problems.
As the Bond Papers noted last Friday:
"Taylor has spoken openly of the overcapacity in the fishery. At the same time, Premier Williams has committed to assisting the community of Harbour Breton cope with the closure by FPI of the community's fishplant. While it is far from conclusive, these contradictory opinions suggest that there are some significant policy differences within government on fisheries issues."
Rideout's appointment is a clear signal as to how the Williams administration will respond to problems in the fishery. If the shuffle itself wasn't enough, the creation of a new portfolio in this administration, that of deputy premier, makes it clear that Rideout holds power and influence in the Williams cabinet second to none except Danny Williams himself.
Rideout was fisheries minister under Brian Peckford between 1985 and 1989 and served in the Peckford cabinet from the time he crossed the floor a few years earlier. Rideout is intimately familiar with the plans to prop up the fishery using tax dollars, rather than reform it.
More importantly, Rideout was fish minister when Fishery Products International was created out out of the collapse of smaller processing companies in the province.
All that points to a return to government intervention and government subsidies in the fishery. It reinforces the idea that the disastrous raw materials sharing program was something foisted on Taylor by his cabinet colleagues. The plan, which attempted to spread a limited resource to as many people as possible, was fundamentally at odds with the implications of Taylor's other public comments about the fishery.
The difference between now and the 1980s is that government has the cash - hundreds of millions of dollars in oil money - to pay for whatever it decides to do. But in truth, the province doesn't really have the cash - the Peckford era policies - every one of them - contributed greatly to the hideous financial mess facing the incoming Wells administration in 1989 and continues to burden the treasury in the form of the growing debt. When Tom points to previous administrations to blame, he is truthfully pointing to his own and ones of which he was a part.
All of this might turn out to be completely wrong; it's just a matter of opinion.
But given the history of this place and the people making decisions, I'd be willing to place a small wager on it:
Tom Rideout will take the province's fisheries policy back to the dismal past.
And that, to quote the former premier, is backupable.
[Update - CBC Radio's David Cochrane made a couple of observations about the big switcheroo today, which I will attempt to paraphrase below. The remarks here are mine, though. Nothing should be attributed to Cochrane in case I misquote him.
1. This is the biggest shuffle in the two years of the administration. Yep. Absolutely. The last shuffle was made because of the unbearable tension between the Premier and his former minister of health. If Trevor hadn't been shuffled he would have been Fabed, or something close to it.
2. Normally, the Premier might have waited a few months for a big shuffle. Again, spot on. No one has really screwed up here. Hedderson may have some issues about watches but unless there is something I am not seeing, the three other shuffles (Joan Burke - Tom Hedderson and Paul Shelly) are just a screen for the major one to make it look less obvious that Trevor got a kick in the crotch.
3. In this case though, as I recall David saying, this was intended to send a message to FPI communities that the fishery is important and, as proof, the second biggest guy in cabinet is in charge of the fishery. Again, right on the money. But where I'd go a step beyond is to point to the likely direction of government policy. If Williams thought the fishery was important enough to reform, he'd have left Taylor place.
What the Premier has done here - understandable politically - is to send a powerful signal that the fishery is so important, nothing is going to change. The Harbour Breton model is going to be the one at play here: pump cash in so people will not leave. Make no mistake: I think Peter Fenwick got this whole thing dead wrong when he wrote that the government policy on Harbour Breton marked a break with the past.
The fix is short-term, to be sure, but then again, that's what I meant when I based my prediction on the history of the province and how decisions get made.
There's also an element here that the Premier - this Premier - is not going to be the guy who brings bad news to anyone at all, ever, unless he absolutely has to.
Take a gander back to that Fenwick piece. Fenwick reflected a great deal of optimism six months ago and he may well hold a different view today, but there is no doubt that this government appeared headed in a much different direction on fisheries issues than it appears to be on right now. The High Liner example Fenwick notes is an example of what Taylor can do when he is allowed to work.
However, in the other cases, including Harbour Breton, the Premier took a direct interest and that's when the policies shifted from New Approach to Same Old, Same Old.
Rideout's predecessor, Trevor Taylor, has been talking forthrightly for the past few weeks, including some genuinely straight talk in the wake of Derrick Rowe's departure as chief executive office of Fishery Products International (FPI).
Taylor talked himself out of a job. That's clear. But the problem is not that Taylor was wrong. Rather, it was painfully obvious that Taylor was at odds with the cabinet - especially the Premier himself - about how government ought to respond to the problems.
As the Bond Papers noted last Friday:
"Taylor has spoken openly of the overcapacity in the fishery. At the same time, Premier Williams has committed to assisting the community of Harbour Breton cope with the closure by FPI of the community's fishplant. While it is far from conclusive, these contradictory opinions suggest that there are some significant policy differences within government on fisheries issues."
Rideout's appointment is a clear signal as to how the Williams administration will respond to problems in the fishery. If the shuffle itself wasn't enough, the creation of a new portfolio in this administration, that of deputy premier, makes it clear that Rideout holds power and influence in the Williams cabinet second to none except Danny Williams himself.
Rideout was fisheries minister under Brian Peckford between 1985 and 1989 and served in the Peckford cabinet from the time he crossed the floor a few years earlier. Rideout is intimately familiar with the plans to prop up the fishery using tax dollars, rather than reform it.
More importantly, Rideout was fish minister when Fishery Products International was created out out of the collapse of smaller processing companies in the province.
All that points to a return to government intervention and government subsidies in the fishery. It reinforces the idea that the disastrous raw materials sharing program was something foisted on Taylor by his cabinet colleagues. The plan, which attempted to spread a limited resource to as many people as possible, was fundamentally at odds with the implications of Taylor's other public comments about the fishery.
The difference between now and the 1980s is that government has the cash - hundreds of millions of dollars in oil money - to pay for whatever it decides to do. But in truth, the province doesn't really have the cash - the Peckford era policies - every one of them - contributed greatly to the hideous financial mess facing the incoming Wells administration in 1989 and continues to burden the treasury in the form of the growing debt. When Tom points to previous administrations to blame, he is truthfully pointing to his own and ones of which he was a part.
All of this might turn out to be completely wrong; it's just a matter of opinion.
But given the history of this place and the people making decisions, I'd be willing to place a small wager on it:
Tom Rideout will take the province's fisheries policy back to the dismal past.
And that, to quote the former premier, is backupable.
[Update - CBC Radio's David Cochrane made a couple of observations about the big switcheroo today, which I will attempt to paraphrase below. The remarks here are mine, though. Nothing should be attributed to Cochrane in case I misquote him.
1. This is the biggest shuffle in the two years of the administration. Yep. Absolutely. The last shuffle was made because of the unbearable tension between the Premier and his former minister of health. If Trevor hadn't been shuffled he would have been Fabed, or something close to it.
2. Normally, the Premier might have waited a few months for a big shuffle. Again, spot on. No one has really screwed up here. Hedderson may have some issues about watches but unless there is something I am not seeing, the three other shuffles (Joan Burke - Tom Hedderson and Paul Shelly) are just a screen for the major one to make it look less obvious that Trevor got a kick in the crotch.
3. In this case though, as I recall David saying, this was intended to send a message to FPI communities that the fishery is important and, as proof, the second biggest guy in cabinet is in charge of the fishery. Again, right on the money. But where I'd go a step beyond is to point to the likely direction of government policy. If Williams thought the fishery was important enough to reform, he'd have left Taylor place.
What the Premier has done here - understandable politically - is to send a powerful signal that the fishery is so important, nothing is going to change. The Harbour Breton model is going to be the one at play here: pump cash in so people will not leave. Make no mistake: I think Peter Fenwick got this whole thing dead wrong when he wrote that the government policy on Harbour Breton marked a break with the past.
The fix is short-term, to be sure, but then again, that's what I meant when I based my prediction on the history of the province and how decisions get made.
There's also an element here that the Premier - this Premier - is not going to be the guy who brings bad news to anyone at all, ever, unless he absolutely has to.
Take a gander back to that Fenwick piece. Fenwick reflected a great deal of optimism six months ago and he may well hold a different view today, but there is no doubt that this government appeared headed in a much different direction on fisheries issues than it appears to be on right now. The High Liner example Fenwick notes is an example of what Taylor can do when he is allowed to work.
However, in the other cases, including Harbour Breton, the Premier took a direct interest and that's when the policies shifted from New Approach to Same Old, Same Old.
07 November 2005
The FPI-competitor myth and one of the real problems
Among the many things said about Fishery products International over the past few days has been the replay of the old myth from 2001 that the company was now run by its competitors who were, according to some versions of the myth, bent on destroying it.
A simple review of the company's annual reports since 2001 will show just exactly how untrue that little story is.
Since 2001, Eric Barratt of Sanford Limited has had a seat on the FPI board. FPI and Sanford don't fish the same waters.
John Risley of Clearwater and someone from Icelandic Freezer Group got a seat on the board after 2001. Both companies own shares and would be expected to sit on the board. They represent FPI competitors in some senses, but in the highly competitive world - or anywhere else except crowd that are Number One on the Grassy Knoll in VOCM Valley, it could be a good sign that FPI was attracting interest from other companies looking to compete collectively in a highly competitive world.
But lookit - three is the tops. Three directors connected to other fishing companies. That's it.
The rest of the board, i.e the other nine too a dozen all come from other backgrounds having little to do with fish other than to buy it and fry it up in a pan, barbeque it or feed it to the cat.
The problems at FPI have a lot more to do with three other issues.
First, there is the highly competitive fishing industry globally and the decline of fish stocks around the world.
Second, there is the problem locally with way too many people chasing way too few fish.
Third is the provincial government. Gerry Reid and Danny Williams fit into the same box in my view, although neither is going to feel to comfortable as a result. Both Reid, when he was fish minister, and latterly Danny Williams, as Premier, have needlessly interfered with FPI's corporate business. Each, in their own way, prevented FPI from taking sound business decisions and as a consequence they cost the company millions of dollars.
Don't even get me started on the ludicrous idea that one from cabinet has offered up that we should nationalize FPI. Holy heck. That sort of thinking is how we got into the debt/deficit and economic underdevelopment mess in the first place.
But, look, if people want to find someone to blame for FPI's woes, they don't have to invent conspiracies of foreigners.
Locals have done a fine job of shagging up the fishery...yet again. Most fish ministers and premiers over the past 25 years have done more to screw up a decent industry than enough. The more recent ones, like say Gerry Reid or Danny Williams are just the latest in a long line of people who treated the fishery as a social program instead of a proper business. They stand in the way of sound decisions. Like Reid, this evening, they appear to gloat at having blocked FPI. And true to form, they typically have found a few hundred millions in scarce tax dollars to pave over their mistakes.
Let me point once more to the debt/deficit, in case you didn't catch my drift.
Like Rideout's Political Patronage Follies - otherwise known a road work contracts - the pavement is as exceeding thin on the fishery's potholes as it is on the province's high roads.
Truthfully, though, we don't need to waste time pointing fingers.
Now is the time to get on with solutions.
One of the first would be a repeal of the Fishery Products International Act. It's left over from the stoned age of Newfoundland public policy and, as such, long since overdue for repeal.
I called for it earlier this year in the midst of the crab fiasco.
With any luck it isn't too late to get the provincial government out of the fish company business now.
A simple review of the company's annual reports since 2001 will show just exactly how untrue that little story is.
Since 2001, Eric Barratt of Sanford Limited has had a seat on the FPI board. FPI and Sanford don't fish the same waters.
John Risley of Clearwater and someone from Icelandic Freezer Group got a seat on the board after 2001. Both companies own shares and would be expected to sit on the board. They represent FPI competitors in some senses, but in the highly competitive world - or anywhere else except crowd that are Number One on the Grassy Knoll in VOCM Valley, it could be a good sign that FPI was attracting interest from other companies looking to compete collectively in a highly competitive world.
But lookit - three is the tops. Three directors connected to other fishing companies. That's it.
The rest of the board, i.e the other nine too a dozen all come from other backgrounds having little to do with fish other than to buy it and fry it up in a pan, barbeque it or feed it to the cat.
The problems at FPI have a lot more to do with three other issues.
First, there is the highly competitive fishing industry globally and the decline of fish stocks around the world.
Second, there is the problem locally with way too many people chasing way too few fish.
Third is the provincial government. Gerry Reid and Danny Williams fit into the same box in my view, although neither is going to feel to comfortable as a result. Both Reid, when he was fish minister, and latterly Danny Williams, as Premier, have needlessly interfered with FPI's corporate business. Each, in their own way, prevented FPI from taking sound business decisions and as a consequence they cost the company millions of dollars.
Don't even get me started on the ludicrous idea that one from cabinet has offered up that we should nationalize FPI. Holy heck. That sort of thinking is how we got into the debt/deficit and economic underdevelopment mess in the first place.
But, look, if people want to find someone to blame for FPI's woes, they don't have to invent conspiracies of foreigners.
Locals have done a fine job of shagging up the fishery...yet again. Most fish ministers and premiers over the past 25 years have done more to screw up a decent industry than enough. The more recent ones, like say Gerry Reid or Danny Williams are just the latest in a long line of people who treated the fishery as a social program instead of a proper business. They stand in the way of sound decisions. Like Reid, this evening, they appear to gloat at having blocked FPI. And true to form, they typically have found a few hundred millions in scarce tax dollars to pave over their mistakes.
Let me point once more to the debt/deficit, in case you didn't catch my drift.
Like Rideout's Political Patronage Follies - otherwise known a road work contracts - the pavement is as exceeding thin on the fishery's potholes as it is on the province's high roads.
Truthfully, though, we don't need to waste time pointing fingers.
Now is the time to get on with solutions.
One of the first would be a repeal of the Fishery Products International Act. It's left over from the stoned age of Newfoundland public policy and, as such, long since overdue for repeal.
I called for it earlier this year in the midst of the crab fiasco.
With any luck it isn't too late to get the provincial government out of the fish company business now.
04 November 2005
FPI changes may signal massive problems in fishery
Derrick Rowe's departure from his job as chief executive officer of Fishery Products International may well signal wider problems in the local fishing industry.
There are already the problems in the crab sector and in shrimp, as reported widely during the summer. Add to that the chronic problem noted by provincial fisheries minister Trevor Taylor. Clear-eyed Taylor points to the fact there are simply too many people and too many plants in the province for the volume of fish out there. Add behind all that the growing competitiveness of the fishing industry and the province is set for some heavy changes to an industry that holds the status of being not so much as business as the religion of the place.
One of many things some people in the province refuse to acknowledge is that a company like FPI can actually ship fish to China, process it and bring it back to market in North America for less than it would if the fish were processed in Newfoundland and Labrador.
FPI's financial situation, including an additional $90 million in its debt load as reported by CBC Radio's David Cochrane, may have a spillover effect into the wider market. FPI is not only the major fish company in the province; it also supports smaller processors in a variety of ways.
The fall and winter may well be extremely difficult politically for the provincial government.
Taylor has spoken openly of the overcapacity in the fishery. At the same time, Premier Williams has committed to assisting the community of Harbour Breton cope with the closure by FPI of the community's fishplant. While it is far from conclusive, these contradictory opinions suggest that there are some significant policy differences within government on fisheries issues.
If real, they would only complicate a looming problem in the fishery that needs to be addressed decisively.
There are already the problems in the crab sector and in shrimp, as reported widely during the summer. Add to that the chronic problem noted by provincial fisheries minister Trevor Taylor. Clear-eyed Taylor points to the fact there are simply too many people and too many plants in the province for the volume of fish out there. Add behind all that the growing competitiveness of the fishing industry and the province is set for some heavy changes to an industry that holds the status of being not so much as business as the religion of the place.
One of many things some people in the province refuse to acknowledge is that a company like FPI can actually ship fish to China, process it and bring it back to market in North America for less than it would if the fish were processed in Newfoundland and Labrador.
FPI's financial situation, including an additional $90 million in its debt load as reported by CBC Radio's David Cochrane, may have a spillover effect into the wider market. FPI is not only the major fish company in the province; it also supports smaller processors in a variety of ways.
The fall and winter may well be extremely difficult politically for the provincial government.
Taylor has spoken openly of the overcapacity in the fishery. At the same time, Premier Williams has committed to assisting the community of Harbour Breton cope with the closure by FPI of the community's fishplant. While it is far from conclusive, these contradictory opinions suggest that there are some significant policy differences within government on fisheries issues.
If real, they would only complicate a looming problem in the fishery that needs to be addressed decisively.
FPI's Rowe departs
Derrick Rowe announced today that he will be stepping down as chief executive officer of Fishery Products International (FPI), effective 31 December 2005.
Rowe's departure coincides with announced a net loss in the third quarter 2005 of CDN$5.1 million. This compares with a net profit of CDN $4.9 million for the same period of 2004. Check the news release, linked above, for a detailed discussion of FPI's announcement.
The announcements of both the third quarter loss and Rowe's departure are accompanied by news that FPI will undertake a further review of its so-called primary group operations to reduce costs and increase productivity. The primary group includes FPI's fish harvesting, processing and marketing operations.
The Ocean Cuisine International division matches seafound demand from customers in the foodservice, retail and industrial sectors with suppliers globally. In September, FPI purchased The Seafood Company, a United Kingdom importer, harvester and processor of shellfish and rebranded the company Ocean Cuisine Europe.
In October, FPI deferred a plan to create an income trust using Ocean Cuisine International, attributing the deferral to a review being undertaken by the Government of Canada of income trusts. The plan originated in 2003, however, ongoing discussions with the Williams administration over the subsequent 18 months delayed implementation of the income trust proposal.
Rowe's departure coincides with announced a net loss in the third quarter 2005 of CDN$5.1 million. This compares with a net profit of CDN $4.9 million for the same period of 2004. Check the news release, linked above, for a detailed discussion of FPI's announcement.
The announcements of both the third quarter loss and Rowe's departure are accompanied by news that FPI will undertake a further review of its so-called primary group operations to reduce costs and increase productivity. The primary group includes FPI's fish harvesting, processing and marketing operations.
The Ocean Cuisine International division matches seafound demand from customers in the foodservice, retail and industrial sectors with suppliers globally. In September, FPI purchased The Seafood Company, a United Kingdom importer, harvester and processor of shellfish and rebranded the company Ocean Cuisine Europe.
In October, FPI deferred a plan to create an income trust using Ocean Cuisine International, attributing the deferral to a review being undertaken by the Government of Canada of income trusts. The plan originated in 2003, however, ongoing discussions with the Williams administration over the subsequent 18 months delayed implementation of the income trust proposal.
The future would be dramatically different...
Check this suggestion from Responsible Government League (RGL) that calls for, among other things, dismantling the provincial Department of Innovation, Trade and Rural Development.
By the by, the department is commonly known as In Turd, which just proves once again that people need to think long and hard before they develop an acronym for an organization.
RGL's suggestion is radical and worth considering.
Don't hold your breath though. With no signs of radical changes in government policy in the wake of the last election, it is unlikely such a dramatic move will come now that everyone is settling in on The Hill.
By the by, the department is commonly known as In Turd, which just proves once again that people need to think long and hard before they develop an acronym for an organization.
RGL's suggestion is radical and worth considering.
Don't hold your breath though. With no signs of radical changes in government policy in the wake of the last election, it is unlikely such a dramatic move will come now that everyone is settling in on The Hill.
The federal provincial balance - a snapshot [amended]
In late 2004, I attempted to estimate the federal-provincial revenue balance, taking into account taxation, government to government transfers as well as government to individual transfers (Employment Insurance).
Transfers to persons, by province, was not available and has not been included in this assessment. Note however, that in some recent years, published reports put the amount of Employment Insurance payments made within Newfoundland and Labrador at more than $900 million.
[Amendment: Lo and behold an e-mail arrived shortly after this was posted giving federal transfers to individuals in the province, as well as other calculations. In the table below, I have added in the transfers to individuals only. The table I received included a raft of other payments, although it didn't include actual federal spending on salaries, procurement etc.]
The data that resulted, while estimated, provided a very interesting snapshot for one year for which information was readily available. The results yield a number of interesting observations:
Observation 1. In FY 2002, the federal and provincial governments generated approximately the same level of taxation revenue from Newfoundland and Labrador. Each order of government derives tax revenue and other revenue from economic activity within a province intended to fund programs and services of that order of government.
For the purposes here, consider that the federal taxation revenue is intended to be the contribution of Newfoundlanders and Labradorians toward the operation of all federal programs and services.
Observation 2. From its own-source and transferred federal revenues, the Government of Newfoundland and Labrador received 79% of all government taxation revenue in FY 2002. See Note 2, below.
Observation 3. This assessment does not take into account federal spending in Newfoundland and Labrador for program and service delivery, including Employment Insurance. Therefore, if the value of federal salaries, capital spending, purchase of goods and services and transfers to individuals exceeds $1.057 billion, then it can be reasonably concluded that Newfoundland and Labrador was a net beneficiary of federal-provincial transfers in FY 2002.
In other words, Newfoundland and Labrador, its government and residents, received more from the federal government than it contributed in locally derived taxation income.
Observation 4. This assessment does not include non-domestic taxation, such as NavCanada fees. These have been the source of some controversy. It has been noted elsewhere, such as an assessment prepared for the Government of Newfoundland and Labrador, that these fees do not provide a net profit to the Government of Canada and its agencies.
Observation 5. It would be appropriate to provide a balance of payments assessment for Newfoundland and Labrador to determine a more detailed perspective on the provincial economy. This is beyond the scope of this posting, but would incorporate a more detailed assessment of federal and provincial taxation and transfers, as well as import/export data, debt, debt servicing etc.
New - Observation 6. From Line G, it is clear that Newfoundland and Labrador received from the Government of Canada almost $1.0 billion more in FY 2002 than it contributed in taxation and other similar revenues. More money comes into the province than goes out.
It is important to remember that, as a general approach, half of taxation and other revenues in the province should represent the revenue to operate the provincial government, while the remainder represents the amount that is Newfoundland and Labrador's contribution to operating the federal government.
Newfoundland and Labrador Government Revenues (Estimate) FY 2002
(Source: Dept of Finance, Government of Canada; Dept. of Finance, Govt of Newfoundland and Labrador)
A. Total Federal Revenue (All tax sources):
$ 148, 577, 000, 000
B. Federal Tax Revenue per capita:
$ 4, 951 Note 1
C. Total Federal Tax Revenue, NL:
$2, 584, 352, 686
D. Federal Transfers to Government NL :
$1, 526, 900, 000Note 2
E. Balance:
$ 1, 057, 452, 686 Note 3
F. New - Federal Transfers to Individuals:
$1, 997, 859, 000
G. New - Net (surplus)/deficit:
($940, 406, 314)
H. Total Provincial Revenue (Own-source):
$2, 521, 010, 000
I. Total Fed + Prov Revenues:
$5, 105, 362, 686
J. Total Provincial Expenditure:
$5, 012, 981, 000Note 4
Notes:
1 The federal per capita revenue likely exceeds the actual figure for Newfoundland and Labrador since the figure used here for total revenue was derived on a national basis.
2 Equalization plus CHST. Gov NL received 79% of all government revenues (Fed Tax Rev + Provincial Own Source) from within Newfoundland and Labrador in FY 2002.
3 Balance represents any amount remaining in federal tax revenue from Newfoundland and Labrador once transfers have been removed.
4 Gov NL total expenditure represents 98% of all government revenues from sources within Newfoundland and Labrador.
Transfers to persons, by province, was not available and has not been included in this assessment. Note however, that in some recent years, published reports put the amount of Employment Insurance payments made within Newfoundland and Labrador at more than $900 million.
[Amendment: Lo and behold an e-mail arrived shortly after this was posted giving federal transfers to individuals in the province, as well as other calculations. In the table below, I have added in the transfers to individuals only. The table I received included a raft of other payments, although it didn't include actual federal spending on salaries, procurement etc.]
The data that resulted, while estimated, provided a very interesting snapshot for one year for which information was readily available. The results yield a number of interesting observations:
Observation 1. In FY 2002, the federal and provincial governments generated approximately the same level of taxation revenue from Newfoundland and Labrador. Each order of government derives tax revenue and other revenue from economic activity within a province intended to fund programs and services of that order of government.
For the purposes here, consider that the federal taxation revenue is intended to be the contribution of Newfoundlanders and Labradorians toward the operation of all federal programs and services.
Observation 2. From its own-source and transferred federal revenues, the Government of Newfoundland and Labrador received 79% of all government taxation revenue in FY 2002. See Note 2, below.
Observation 3. This assessment does not take into account federal spending in Newfoundland and Labrador for program and service delivery, including Employment Insurance. Therefore, if the value of federal salaries, capital spending, purchase of goods and services and transfers to individuals exceeds $1.057 billion, then it can be reasonably concluded that Newfoundland and Labrador was a net beneficiary of federal-provincial transfers in FY 2002.
In other words, Newfoundland and Labrador, its government and residents, received more from the federal government than it contributed in locally derived taxation income.
Observation 4. This assessment does not include non-domestic taxation, such as NavCanada fees. These have been the source of some controversy. It has been noted elsewhere, such as an assessment prepared for the Government of Newfoundland and Labrador, that these fees do not provide a net profit to the Government of Canada and its agencies.
Observation 5. It would be appropriate to provide a balance of payments assessment for Newfoundland and Labrador to determine a more detailed perspective on the provincial economy. This is beyond the scope of this posting, but would incorporate a more detailed assessment of federal and provincial taxation and transfers, as well as import/export data, debt, debt servicing etc.
New - Observation 6. From Line G, it is clear that Newfoundland and Labrador received from the Government of Canada almost $1.0 billion more in FY 2002 than it contributed in taxation and other similar revenues. More money comes into the province than goes out.
It is important to remember that, as a general approach, half of taxation and other revenues in the province should represent the revenue to operate the provincial government, while the remainder represents the amount that is Newfoundland and Labrador's contribution to operating the federal government.
Newfoundland and Labrador Government Revenues (Estimate) FY 2002
(Source: Dept of Finance, Government of Canada; Dept. of Finance, Govt of Newfoundland and Labrador)
A. Total Federal Revenue (All tax sources):
$ 148, 577, 000, 000
B. Federal Tax Revenue per capita:
$ 4, 951 Note 1
C. Total Federal Tax Revenue, NL:
$2, 584, 352, 686
D. Federal Transfers to Government NL :
$1, 526, 900, 000Note 2
E. Balance:
$ 1, 057, 452, 686 Note 3
F. New - Federal Transfers to Individuals:
$1, 997, 859, 000
G. New - Net (surplus)/deficit:
($940, 406, 314)
H. Total Provincial Revenue (Own-source):
$2, 521, 010, 000
I. Total Fed + Prov Revenues:
$5, 105, 362, 686
J. Total Provincial Expenditure:
$5, 012, 981, 000Note 4
Notes:
1 The federal per capita revenue likely exceeds the actual figure for Newfoundland and Labrador since the figure used here for total revenue was derived on a national basis.
2 Equalization plus CHST. Gov NL received 79% of all government revenues (Fed Tax Rev + Provincial Own Source) from within Newfoundland and Labrador in FY 2002.
3 Balance represents any amount remaining in federal tax revenue from Newfoundland and Labrador once transfers have been removed.
4 Gov NL total expenditure represents 98% of all government revenues from sources within Newfoundland and Labrador.
Measuring up - Kiwi-style
Courtesy of an unusual blog, here is a link to a recent installation of artwork in a men's lavatory in New Zealand.
Seems it is a trend in some places to entertain or otherwise distract gentlemen answering nature's call.
This particular installation demonstrates an accurate assessment of male psychology.
Seems it is a trend in some places to entertain or otherwise distract gentlemen answering nature's call.
This particular installation demonstrates an accurate assessment of male psychology.
A trading nation - Newfoundland and Labrador trade with the world
Export Development Canada [EDC] predicts that exports from this province will fall by 5% in 2005 from 2004, with a forecast for further declines through the years beyond.
Energy accounted for 52% of exports in 2004 and is expected to decline by 6.7%. EDC forecasts oil prices to average between US$55 and US$65 per barrel in 2006. The forecast also notes that while high oil prices will continue to benefit the province, a shift in markets from some oil from foreign to domestic Canadian markets will reduce the export value. Domestic exports are obviously not included in the forecast since it is a prediction of non-Canadian export activity, but EDC is careful to note that this is merely an accounting issue, not a signal of any weakening of the provinces oil and gas exports overall. Export of refined crude from Come by Chance is reportedly down 10% over the same period in 2004.
The value of fish exports, which make up the bulk of the provinces agri-foods exports, is expected to fall to 0.2% of exports, down from 22.6% of total exports in 2004.
As EDC notes: "The drop in 2005 is driven mostly by lower prices; however, volumes are slightly lower as well. Crab prices have weakened considerably since 2004. Export volumes will be down this year as well, with a slight reduction in quota and a late start to the year.
In 2006, crab prices are expected to rebound, with volumes also set to increase. Shrimp prices remain low as they have for some time now. The availability of shrimp is good -– shrimp landings were very favourable last year and the stock appears healthy. We expect landings in 2005 and 2006 to be on par with last year'’s performance and our base case scenario has prices holding steady in 2005 and increasing slightly in 2006.
There remains a downside risk in that if prices fall any further some fishers may choose to leave shrimp in the water. After the large drop in exports anticipated for 2005, EDC Economics expects fish and fish products exports to rise 8% in 2006. The Canada-US exchange rate continues to be a key forecast risk since most of the province'’s seafood exports are priced in US dollars." [Paragraphing changed from original]
On forestry, it is worth quoting EDC forecasts in their entirety, especially in light of the recent provincial government subsidy to Abitibi Consolidated.
"Newsprint exports for the first 7 months of 2005 are down 4% over the same period in 2004 even though prices increased 9% during the same time frame. In addition to sluggish sales, newsprint producers face higher energy and input costs. Fibre costs are up, due in part to a 20% harvest reduction in Quebec, which impacts Newfoundland'’s ability to source fibre.
This year [2005] has become a critical year for the industry in Newfoundland as Abitibi, a key industry producer, announced in July that it was closing a mill in Stephenville, effective in October. Abitibi also announced the closure of one 60,000-tonne machine in Grand Falls-Windsor, leaving one machine in operation. Abitibi is planning to take out 500,000 tonnes or 4% of its North American capacity by the end of 2005 in an attempt to push up prices, and half of that value rests in its Stephenville and Grand Falls-Windsor operations.
EDC Economics estimates this could reduce Newfoundland'’s newsprint output by as much as one third. There will be some newsprint reduction taking place in 2005, but most of the volume decrease is expected to happen in 2006. As a result, forestry exports are set to decline by 3% in 2005 followed by a much bigger drop of 18% in 2006." [Paragraphing changed from original. Emphasis added]
Export and import statistics from the Government of Newfoundland and Labrador add some colour and context to the EDC assessment.
The United States was the destination for most local exports, amounting to $2.7 billion in 2004 and includes exports of oil, refined petroleum products, newsprint and fish. That is down from $3.2 billion in 2003 and a peak of $4.1 billion in 2002.
China, Spain, Germany and the United Kingdom round out the top five export destinations. Ireland doesn't make the top 10 list presented by the provincial government.
Import information may surprise some people. Iraq is the number one source of imports, by dollar, coming to about $1.082 billion in 2004. This is entirely comprised of oil that is refined in the province and exported, primarily to the United States.
Russia, the Republic of Korea, the United States and the united Kingdom round out the top five sources of imports, with Russia accounting for almost half a billion Canadian dollars worth of imported goods and services in 2004.
Overall, Newfoundland and Labrador has a trade surplus with destinations outside Canada. The province imported slightly more than $2.5 billion of goods and services in 2004, compared to total exports of more than $4.5 billion.
Energy accounted for 52% of exports in 2004 and is expected to decline by 6.7%. EDC forecasts oil prices to average between US$55 and US$65 per barrel in 2006. The forecast also notes that while high oil prices will continue to benefit the province, a shift in markets from some oil from foreign to domestic Canadian markets will reduce the export value. Domestic exports are obviously not included in the forecast since it is a prediction of non-Canadian export activity, but EDC is careful to note that this is merely an accounting issue, not a signal of any weakening of the provinces oil and gas exports overall. Export of refined crude from Come by Chance is reportedly down 10% over the same period in 2004.
The value of fish exports, which make up the bulk of the provinces agri-foods exports, is expected to fall to 0.2% of exports, down from 22.6% of total exports in 2004.
As EDC notes: "The drop in 2005 is driven mostly by lower prices; however, volumes are slightly lower as well. Crab prices have weakened considerably since 2004. Export volumes will be down this year as well, with a slight reduction in quota and a late start to the year.
In 2006, crab prices are expected to rebound, with volumes also set to increase. Shrimp prices remain low as they have for some time now. The availability of shrimp is good -– shrimp landings were very favourable last year and the stock appears healthy. We expect landings in 2005 and 2006 to be on par with last year'’s performance and our base case scenario has prices holding steady in 2005 and increasing slightly in 2006.
There remains a downside risk in that if prices fall any further some fishers may choose to leave shrimp in the water. After the large drop in exports anticipated for 2005, EDC Economics expects fish and fish products exports to rise 8% in 2006. The Canada-US exchange rate continues to be a key forecast risk since most of the province'’s seafood exports are priced in US dollars." [Paragraphing changed from original]
On forestry, it is worth quoting EDC forecasts in their entirety, especially in light of the recent provincial government subsidy to Abitibi Consolidated.
"Newsprint exports for the first 7 months of 2005 are down 4% over the same period in 2004 even though prices increased 9% during the same time frame. In addition to sluggish sales, newsprint producers face higher energy and input costs. Fibre costs are up, due in part to a 20% harvest reduction in Quebec, which impacts Newfoundland'’s ability to source fibre.
This year [2005] has become a critical year for the industry in Newfoundland as Abitibi, a key industry producer, announced in July that it was closing a mill in Stephenville, effective in October. Abitibi also announced the closure of one 60,000-tonne machine in Grand Falls-Windsor, leaving one machine in operation. Abitibi is planning to take out 500,000 tonnes or 4% of its North American capacity by the end of 2005 in an attempt to push up prices, and half of that value rests in its Stephenville and Grand Falls-Windsor operations.
EDC Economics estimates this could reduce Newfoundland'’s newsprint output by as much as one third. There will be some newsprint reduction taking place in 2005, but most of the volume decrease is expected to happen in 2006. As a result, forestry exports are set to decline by 3% in 2005 followed by a much bigger drop of 18% in 2006." [Paragraphing changed from original. Emphasis added]
Export and import statistics from the Government of Newfoundland and Labrador add some colour and context to the EDC assessment.
The United States was the destination for most local exports, amounting to $2.7 billion in 2004 and includes exports of oil, refined petroleum products, newsprint and fish. That is down from $3.2 billion in 2003 and a peak of $4.1 billion in 2002.
China, Spain, Germany and the United Kingdom round out the top five export destinations. Ireland doesn't make the top 10 list presented by the provincial government.
Import information may surprise some people. Iraq is the number one source of imports, by dollar, coming to about $1.082 billion in 2004. This is entirely comprised of oil that is refined in the province and exported, primarily to the United States.
Russia, the Republic of Korea, the United States and the united Kingdom round out the top five sources of imports, with Russia accounting for almost half a billion Canadian dollars worth of imported goods and services in 2004.
Overall, Newfoundland and Labrador has a trade surplus with destinations outside Canada. The province imported slightly more than $2.5 billion of goods and services in 2004, compared to total exports of more than $4.5 billion.
A trading nation - Newfoundland and Labrador trade within Canada
Interprovincial trade and Newfoundland and Labrador
Newfoundland and Labrador has always been a trading nation and it remains so after Confederation. The local population is too small to enable the local economy full use of all resources within the province. Therefore our economy, and our prosperity, is built on trade.
Figures from the Government of Quebec (Fiscal Year 2001), bear this out. There may be more recent figures but these are the ones that were most readily available.
Newfoundland and Labrador exported $3, 003.2 million of goods and services to other provinces in Fiscal Year (FY) 2001. The destination of most of those goods was Ontario, which imported $1, 132.5 million of locally produced goods and services. Quebec was next with $646.8 million, followed by New Brunswick with $641.6 million.
The province imported $5, 390.5 million worth of goods and services from the rest of Canada in FY 2001. Newfoundland and Labrador imported $2, 342.4 million in goods and services from Ontario, the largest provincial trading partner. Quebec was next, at $1, 172.4 million, followed by Nova Scotia at $686.2.
Within Canada, Newfoundland and Labrador experienced a trade deficit that year, importing $2, 387.3 more than it exported.
Newfoundland and Labrador has always been a trading nation and it remains so after Confederation. The local population is too small to enable the local economy full use of all resources within the province. Therefore our economy, and our prosperity, is built on trade.
Figures from the Government of Quebec (Fiscal Year 2001), bear this out. There may be more recent figures but these are the ones that were most readily available.
Newfoundland and Labrador exported $3, 003.2 million of goods and services to other provinces in Fiscal Year (FY) 2001. The destination of most of those goods was Ontario, which imported $1, 132.5 million of locally produced goods and services. Quebec was next with $646.8 million, followed by New Brunswick with $641.6 million.
The province imported $5, 390.5 million worth of goods and services from the rest of Canada in FY 2001. Newfoundland and Labrador imported $2, 342.4 million in goods and services from Ontario, the largest provincial trading partner. Quebec was next, at $1, 172.4 million, followed by Nova Scotia at $686.2.
Within Canada, Newfoundland and Labrador experienced a trade deficit that year, importing $2, 387.3 more than it exported.
Behind the Green Curtain - amended - Updated
Sullivan financial statement masks deeper issue
Finance minister Loyola Sullivan today released an update on the province's fiscal position. This was done outside the legislature; no word yet on when the session will begin but guesses are that it won't be much before the end of November.
Sullivan said that a combination of increases in different revenues plus changing the way offshore revenue money is accounted have reduced last spring's budgeted deficit of $492 million and turned it into a modest surplus of about $1.5 million.
Other changes to the financial situation include marginal declines in revenue from gasoline taxes and equally marginal increases in operating budgets due to increased gasoline and heating oil prices.
In the news release and actual statement, government is claiming credit for greatly improved finances on the one hand and warning that a major problem remains in the form of the provincial government's $12.0 billion debt.
What all that means is actually pretty simple. If we add up all the provincial government's assets and liabilities on an annual basis, we wind up $1.5 million to the good.
Look more closely at the financial statement and something else pops up: if all other things stay the same, when Loyola Sullivan checks his bank balance next March, he'll find over $300 million in cash he didn't plan on having at hand.
The forecast accrual deficit - the $492 million figure - was comprised largely of unfunded pension liabilities. In other words, the provincial government forecast that while prudent financial management would see government setting aside over $450 million to cover future expenses from public sector pension plans, it wasn't able to do so.
Therefore, there was a large deficit totaling almost $500 million. Just remember, though, that this is a theoretical deficit annually; no money was borrowed to cover it - government actually planned to borrow only $62 million in new money to pay for day-to-day operations.
Remember as well, that with all the new revenue, government hasn't really put anything toward dealing with the unfunded liabilities beyond the modest amounts already negotiated. Nor has government done anything at all to deal with the $12.0 billion accumulated debt other than use it as a boogey man to frighten people who might ask for extra spending this year.
That is the deeper problem with Loyola Sullivan's financial management over the past three years.
Under the Williams administration, Newfoundlanders and Labradorians have no idea what the government will do with the extra cash. In fact, the way Loyola Sullivan likes to report the numbers, he is actually hiding the true picture, all the while claiming he is not telling the fables of some previous provincial finance ministers. He isn't - that much is true. Sullivan simply tells other fiscal fibs.
When the federal government ends up with massive annual surpluses, it has already told people how that money will be spent. Since the late 1990s, the surpluses that in some years add up to almost the total debt in this province have been spent paying off Ottawa's own debt, increasing spending on programs like health care or a combination of the two.
Predictably, Liberal leader Gerry Reid wants to spend the money on something here and now. He has spoken of running small deficits on a cash basis.
In doing so, Reid plays right into Loyola Sullivan's hands. Sullivan's presentation of the province's finances is designed to hide the extra cash in the bank every year. By calling for deficits, Reid allows Sullivan to simple hold up the debt-on-a-stick, wave it about and frighten people, all the while shaking his head at how the approach Reid proposes is what created the province's financial mess in the first place. Sullivan can and will heap praise on himself for having balanced the provincial books in two years when they predicted it might take eight years.
The balanced-books miracle is entirely made up, of course, at least insofar as Sullivan and Premier Williams claiming credit for it is concerned. The PriceWaterhouseCoopers report two years ago deliberately underestimated the short- and medium-term provincial revenues to make the province's financial problems look far worse than they are. The revenues we have actually seen were predictable, even two years ago and even on a conservative - i.e. prudent - basis.
The source of the added cash is also worth noting. The new money does not come from the January deal with Paul Martin. The added money, both the royalties and the added corporate taxes, come entirely from the Real Atlantic Accord from 1985. The royalty regimes put in place by successive Liberal governments, building on the landmark deal under the Peckford Conservatives is pushing the provincial government well into the black. Taken together, the Real Atlantic Accord will add $302 million to the provincial accounts. On an accrual basis, those figures will total at least $330 million above the numbers in the spring budget. Note that this is almost bang on the offshore revenue projections made previously on the Bond Papers.
In fact, aside from the annual draw-downs allowed under the January deal, the interest income from the federal Equalization-like transfer payment is entirely absent from this little financial up-date. Media reports have quoted provincial officials to the effect that the interest on this money is accumulating at a rate of $5.0 million a month. That works out to about $45 million by the end of the fiscal year and that money, in its entirety is available for the province to spend.
Sullivan makes no mention of it at all.
Both Reid and Sullivan miss the point, however, the latter by obvious design.
The public discussion should be about how to be dispose of that cash in the long-term interest of the province. Loyola Sullivan's statement should have contained an honest presentation of the province's finances and a clear statement of what government will do with the hundreds of millions in extra money it has and will have year after year into the future.
Instead, most Newfoundlanders and Labradorians will be bamboozled by numbers. They will be denied the chance to participate in a substantive public policy debate. In the end, and from the perspective of truth in accounting, it is hard to distinguish Sullivan from some of his immediate predecessors.
If past experience is any guide, though, we can make a reasonable prediction as to what government will do with its added cash. Come January 2006, there will be a spending spree, as there was in January 2005. What is genuinely a significant cash surplus will be spent on one-time projects, some of which may be of dubious long-term value. The penchant of this government for quick cash-fixes has been noted here on previous occasions.
And the long-term debt?
It will remain at $12.0 billion, growing steadily each year, all so that Loyola may have a boogeyman with which to frighten the natives.
Update - TD Waterhouse's senior economist made a number of interesting points, but also a number of errors in his comments on CBC radio this morning.
1. As noted above there has been NO action by the provincial government to date to reduce the debt load. The Grimes administration actually managed to retire some of the province's direct debt - a figure the economist referred to when he spoke of a debt t- GDP ratio of 20%. Total and accrual indebtedness continues to climb and will continue to climb under the Conservatives unless corrective action is taken.
2. The January deal is worth more than $2.0 billion. No way. As long as the provincial economy pushes the province off the Equalization rolls, the provincial government will get nothing from the January deal beyond the $321 million already drawn down. The only way to make the deal worth more than the initial hand-out is if oil prices fall well below the TD predictions, i.e. well below US$35, rebounding to US$50.
Finance minister Loyola Sullivan today released an update on the province's fiscal position. This was done outside the legislature; no word yet on when the session will begin but guesses are that it won't be much before the end of November.
Sullivan said that a combination of increases in different revenues plus changing the way offshore revenue money is accounted have reduced last spring's budgeted deficit of $492 million and turned it into a modest surplus of about $1.5 million.
Other changes to the financial situation include marginal declines in revenue from gasoline taxes and equally marginal increases in operating budgets due to increased gasoline and heating oil prices.
In the news release and actual statement, government is claiming credit for greatly improved finances on the one hand and warning that a major problem remains in the form of the provincial government's $12.0 billion debt.
What all that means is actually pretty simple. If we add up all the provincial government's assets and liabilities on an annual basis, we wind up $1.5 million to the good.
Look more closely at the financial statement and something else pops up: if all other things stay the same, when Loyola Sullivan checks his bank balance next March, he'll find over $300 million in cash he didn't plan on having at hand.
The forecast accrual deficit - the $492 million figure - was comprised largely of unfunded pension liabilities. In other words, the provincial government forecast that while prudent financial management would see government setting aside over $450 million to cover future expenses from public sector pension plans, it wasn't able to do so.
Therefore, there was a large deficit totaling almost $500 million. Just remember, though, that this is a theoretical deficit annually; no money was borrowed to cover it - government actually planned to borrow only $62 million in new money to pay for day-to-day operations.
Remember as well, that with all the new revenue, government hasn't really put anything toward dealing with the unfunded liabilities beyond the modest amounts already negotiated. Nor has government done anything at all to deal with the $12.0 billion accumulated debt other than use it as a boogey man to frighten people who might ask for extra spending this year.
That is the deeper problem with Loyola Sullivan's financial management over the past three years.
Under the Williams administration, Newfoundlanders and Labradorians have no idea what the government will do with the extra cash. In fact, the way Loyola Sullivan likes to report the numbers, he is actually hiding the true picture, all the while claiming he is not telling the fables of some previous provincial finance ministers. He isn't - that much is true. Sullivan simply tells other fiscal fibs.
When the federal government ends up with massive annual surpluses, it has already told people how that money will be spent. Since the late 1990s, the surpluses that in some years add up to almost the total debt in this province have been spent paying off Ottawa's own debt, increasing spending on programs like health care or a combination of the two.
Predictably, Liberal leader Gerry Reid wants to spend the money on something here and now. He has spoken of running small deficits on a cash basis.
In doing so, Reid plays right into Loyola Sullivan's hands. Sullivan's presentation of the province's finances is designed to hide the extra cash in the bank every year. By calling for deficits, Reid allows Sullivan to simple hold up the debt-on-a-stick, wave it about and frighten people, all the while shaking his head at how the approach Reid proposes is what created the province's financial mess in the first place. Sullivan can and will heap praise on himself for having balanced the provincial books in two years when they predicted it might take eight years.
The balanced-books miracle is entirely made up, of course, at least insofar as Sullivan and Premier Williams claiming credit for it is concerned. The PriceWaterhouseCoopers report two years ago deliberately underestimated the short- and medium-term provincial revenues to make the province's financial problems look far worse than they are. The revenues we have actually seen were predictable, even two years ago and even on a conservative - i.e. prudent - basis.
The source of the added cash is also worth noting. The new money does not come from the January deal with Paul Martin. The added money, both the royalties and the added corporate taxes, come entirely from the Real Atlantic Accord from 1985. The royalty regimes put in place by successive Liberal governments, building on the landmark deal under the Peckford Conservatives is pushing the provincial government well into the black. Taken together, the Real Atlantic Accord will add $302 million to the provincial accounts. On an accrual basis, those figures will total at least $330 million above the numbers in the spring budget. Note that this is almost bang on the offshore revenue projections made previously on the Bond Papers.
In fact, aside from the annual draw-downs allowed under the January deal, the interest income from the federal Equalization-like transfer payment is entirely absent from this little financial up-date. Media reports have quoted provincial officials to the effect that the interest on this money is accumulating at a rate of $5.0 million a month. That works out to about $45 million by the end of the fiscal year and that money, in its entirety is available for the province to spend.
Sullivan makes no mention of it at all.
Both Reid and Sullivan miss the point, however, the latter by obvious design.
The public discussion should be about how to be dispose of that cash in the long-term interest of the province. Loyola Sullivan's statement should have contained an honest presentation of the province's finances and a clear statement of what government will do with the hundreds of millions in extra money it has and will have year after year into the future.
Instead, most Newfoundlanders and Labradorians will be bamboozled by numbers. They will be denied the chance to participate in a substantive public policy debate. In the end, and from the perspective of truth in accounting, it is hard to distinguish Sullivan from some of his immediate predecessors.
If past experience is any guide, though, we can make a reasonable prediction as to what government will do with its added cash. Come January 2006, there will be a spending spree, as there was in January 2005. What is genuinely a significant cash surplus will be spent on one-time projects, some of which may be of dubious long-term value. The penchant of this government for quick cash-fixes has been noted here on previous occasions.
And the long-term debt?
It will remain at $12.0 billion, growing steadily each year, all so that Loyola may have a boogeyman with which to frighten the natives.
Update - TD Waterhouse's senior economist made a number of interesting points, but also a number of errors in his comments on CBC radio this morning.
1. As noted above there has been NO action by the provincial government to date to reduce the debt load. The Grimes administration actually managed to retire some of the province's direct debt - a figure the economist referred to when he spoke of a debt t- GDP ratio of 20%. Total and accrual indebtedness continues to climb and will continue to climb under the Conservatives unless corrective action is taken.
2. The January deal is worth more than $2.0 billion. No way. As long as the provincial economy pushes the province off the Equalization rolls, the provincial government will get nothing from the January deal beyond the $321 million already drawn down. The only way to make the deal worth more than the initial hand-out is if oil prices fall well below the TD predictions, i.e. well below US$35, rebounding to US$50.
03 November 2005
Yet another who are you quiz
Since this show first aired, I have been a big fan.
Turns out I match up to the guy who is now a congressman (at least on the show).
Of course, these days I am seldom younger than everyone else. *sigh*.
[via John Gushue, aka Toby Zeigler]
The idealistic speechwriter is well-liked by just about everyone. He's known for his excellent writing, sense of humor, and tendency to be clutzy. Although being younger than the rest of the staff, he's often treated as so, much to his dismay.
:: Which West Wing character are you? ::
Turns out I match up to the guy who is now a congressman (at least on the show).
Of course, these days I am seldom younger than everyone else. *sigh*.
[via John Gushue, aka Toby Zeigler]
The idealistic speechwriter is well-liked by just about everyone. He's known for his excellent writing, sense of humor, and tendency to be clutzy. Although being younger than the rest of the staff, he's often treated as so, much to his dismay.
:: Which West Wing character are you? ::
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