CT inks Bloom Lake ore sale

Consolidated Thompson announced today that it has signed an agreement with Wordlink Resources to supply iron ore concentrates from CT's Bloom Lake mine to mills in China.

The agreement will see five million metric tons of concentrate shipped from Bloom Lake annually beginning in the first quarter of 2009.

The agreement is subject to regulatory approvals.

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More on Tilley departure

cbc.ca/nl has an updated story on the sudden resignation yesterday of Eastern Health region's George Tilley.

Meanwhile at Persuasion Business, there's a piece on credibility titled "The Gorge of Eternal Peril" that discusses the Tilley announcement yesterday and another government interview for some of the public relations implications. The reasons behind the difference in performance are not important for the purpose of the commentary. Rather, the key idea is how different approaches affect or may affect key relationships for the organizations involved. The CBC piece gives some of the vacuous answers Eastern Health and provincial government representatives used yesterday.

There'll be more as the story unfolds.

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SOL Day 13: The Love Boat!

It's a provincial government holiday in Newfoundland and Labrador, but holidays can't stop the election love machine from spreading cash and good news throughout the land.

Federal foreign affairs minister Peter Mackay and provincial tourism guru Tom "Kayak" Hedderson will host a joint news conference today to announce funding for the group that works to attract cruise ships to Newfoundland and Labrador.

Yes, it's the Summer of Love Boat!

Nearly $300K from the federal government and $100K from the provincial government, as the news release indicates.

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Tilley pulls pin

George Tilley resigned today as president and chief executive officer of Eastern Health authority, based in St. John's.

He will be replaced temporarily by Louise Jones, formerly the chief operating officer for acute care facilities in the St. John's area.

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Risk brings change to Gazprom project

Only last October, Russian gas giant Gazprom claimed it exploit the Shtokman gas field on its own.

But, Gazprom is now considering a partnership with a western private-sector petroleum company because of concerns about spiraling costs.

Observers point to the complexities of the project - including freezing weather conditions, icebergs, and lack of infrastructure to transport the gas to market - for Gazprom's shift in tone.

A Gazprom spokesman also pointed to the company's concern about the potential for operating costs to spiral, saying: "We can't afford to take those financial risks."

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Key Green provisions delayed to October 9 and beyond

Members of the House of Assembly will be spending their constituency and other allowances until after the next election as Bond Papers reported on 22 June 2007.

In addition, as The Telegram reported on Saturday, those members won't have to worry about accountability since the sections of the Green bill bringing the legislature under the province's access to information laws also won't take effect until October 9, 2007.

But even then members may not have to worry about the public discovering how they spent their allowances in the months leading up to the provincial election. Even on October 9, the access to information laws would not apply to the pre-election period. Outgoing speaker of the legislature Harvey Hodder told the Telegram:

"That has not been clarified," Hodder told The Telegram. "The intent of the legislation is that it would be on a go-forward basis."

A closer examination of the bill passed in the legislature in June 14 show that other key accountability provisions of the bill won't come into effect until October 9 or, in one case, August 2008.

The delayed provisions are:

1. October 9, 2007: Section 24, which provides a mechanism to deal with appealing expense claims that are rejected or that would allow members to obtain an opinion from the speaker on the permissibility of an expenditure before it is made.

2. August 31, 2008: Section 28(3)(l) that provides the clerk of the legislature, in his or her capacity as chief financial offer is responsible for "certifying to the commission as required that the House of Assembly and statutory offices have in place appropriate systems of internal control and that those systems are operating effectively".

Section 28(3)(h) as it relates to statutory offices is delayed until April 1, 2008. This section establishes the clerk is responsible for "authorizing and recording all financial commitments entered into on behalf of the House of Assembly and statutory offices."

In his report, Chief Justice Derek Green specifically notes a failures by the Internal Economy Commission and certain officials to certify compliance with established rules and procedures:

Over the years, the House and the IEC have repeatedly emphasized a commitment to the imperatives of transparency and accountability. Yet, as the forgoing indicates, there is reason for concern with respect to the manner in which the IEC and the administration of the House has handled its important obligations with respect to: compliance, reporting and public disclosure. [Emphasis added]

3. October 9, 2007: Section 31 requiring the clerk of the legislature to be accountable to the Public Accounts Committee of the House "for measures taken to organize the resources of the House of Assembly service to deliver the programs in compliance with established policies and procedures; measures taken to implement appropriate financial management policies; measures taken to maintain effective systems of internal control; certifications that are made under section 29; and performance of other specific duties assigned to him or her by or under this or another Act in relation to the administration of the House of Assembly service and the statutory offices."

That section also enables the clerk to seek advice from the deputy attorney general or the comptroller general in instances where a disagreement exists between the clerk and the Speaker on a matter of policy.

4. October 9, 2007: Sections 35 to 42 of the ethics and accountability section of the legislation that allow for the establishment of a code of conduct for members of the legislature, give a mechanism for lodging a a complaint against a member and resolving the complaint.

In recommending this section, Chief Justice Green noted:

In making this recommendation, I recognize that there are more elaborate mechanisms employed in some jurisdictions with respect to the way in which allegations of a breach of code of conduct may be investigated and enforcement action taken. I have declined to recommend a more elaborate scheme at the present time. This is partly because the provisions of Part II of the House of Assembly Act dealing with conflicts of interest of Members are not technically within the scope of my mandate and the whole area of the code of conduct, including conflict of interest, should be reviewed comprehensively. That would require a more detailed analysis than I was able to give to the matter for the purposes of this report. I regard the foregoing recommendation, therefore, as an interim measure, but an interim measure that should be proceeded with forthwith with a view to restoring public confidence. [Bold and italics added]

5. October 9, 2007: Section 53, which establishes clear a right of any person to seek a mandatory order directing "a member, the speaker, deputy speaker, clerk, clerk assistant or the commission" to observe or comply with a duty imposed under the Green Act.

Chief Justice Green described mandamus as another layer of accountability:

It is not unreasonable, therefore, that members of the public who become aware of a major failure to comply with a statutory duty should have an opportunity, out of sense of public duty, to seek enforcement of those duties through the courts where they perceive that others in the system are not taking appropriate enforcement action. [Italics added]

6. October 9, 2007: Section 67 which brings the House of Assembly - with certain specific exceptions - under the Access to Information and protection of Personal Privacy Act.

7. October 9, 2007: The Rules, contained in the schedule to the bill that among other things, prohibit members from spending public money on partisan activities or on gifts and donations, hold members personally liable for overspending and require members to keep records of spending.

Even the manner in which the Green bill was passed, along with its amendments delaying some provisions, repeated a pattern Green criticised severely. In a section of chapter four, titled "An ever-weakening legislative framework" Green described the unsatisfactory manner in which the members of the legislature amended the rules governing House operations:

When the IEC wished to change policy, it did so. If such policy was inconsistent with the rules, it changed the rules. If such policy was inconsistent with the legislation, the legislation was amended - and amended expeditiously. Changes to the Internal Economy Commission Act tended to be made in the last day or two of a session when efforts seemed to be focused on concluding business in order to close the House. From our review of Hansard, it appears the changes would be made with the pre-approval of all parties, minimal notice, minimal debate in the House and unanimous approval. [Emphasis added]

The reality is that the normal checks and balances that are inherent in an adversarial parliamentary system do not effectively operate where the subject under discussion directly engages the self-interest of all members regardless of political affiliation. Some mechanism must be found to improve the likelihood that important changes to the legislative framework involving MHA compensation and allowances will receive considered reflective attention in the House and cannot be pushed through without debate in the rush to bring a legislative session to a close.

When the bill was hastily passed on June 14, members of the legislature who spoke publicly left the clear impression that the entire bill was in effect immediately. In the wake of the first Bond Papers report, Deputy Premier Tom Rideout initially dismissed the matter as "poppycock". Later in the day, he admitted to reporters that the rules would come into effect on October 9.

He made no mention of other sections of the bill that would be delayed and offered no explanation beyond mentioning that implementation of some provisions required staff training and new software.

In addressing the issue of delayed implementation of the access to information provisions, Rideout said:"There was no recommendation (from) Green as to when it came into effect, so nobody, including myself, read anything into this...".

In fact, Recommendation 80 described the need to introduce the bill as soon as possible for debate and enactment with the attached schedule of rules being presented forthwith. "Forthwith" means "immediately; without delay or hesitation; with no time intervening."

In Rideout's view, by contrast, some provisions will come into effect today, while others will come tomorrow "and tomorrow is October 9". If tomorrow will not arrive until October 9, April 1 and, in one instance, August 31, one might wonder exactly when "today" is.

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Telegram: Legislature exempt from FOI law until after election

The Telegram
p. A1

Legislature exempt from FOI law until after election
Quiet addition to Green report

Rob Antle
The Telegram

The House of Assembly has quietly exempted itself from the province's freedom of information laws until after the October general election.

And The Telegram has learned there is confusion over whether taxpayers will be able to access any House information generated prior to that Oct. 9 implementation date.

Chief Justice Derek Green recommended in his "Rebuilding Confidence" report that the House be covered by FOI laws.

Those laws allow members of the public to obtain government documents and information.

The legislature is currently exempt - a situation Green suggested played a contributing role in the constituency spending scandal.

It will remain that way for at least a few more months.

The delay in FOI access was added without fanfare to the text of Green's suggested legislation, passed June 14. There was no news release announcing it. And figuring it out requires stitching together a number of subsections of two pieces of law.

Government House Leader Tom Rideout defended the decision, and the transparency with which it was made.

Rideout characterized it as not being a delay at all, as Green did not cite a specific implementation date. The FOI decision was made in consultation with the chief justice, Rideout said.

He denied an inaccurate impression was left with the public, and said it was unnecessary issue a news release about the later date.

"There was no recommendation (from) Green as to when it came into effect, so nobody, including myself, read anything into this," Rideout said Friday.

"Since Green didn't say the act comes into effect today, we, in consultation with him, said what can come into effect today comes into effect today, what needs time to come into effect tomorrow comes into effect tomorrow, and tomorrow is Oct. 9, 2007."

Rideout said he thought everyone was aware of that date for certain elements of the Green report's implementation.

The chief justice was not available for comment Friday.

Here is how the FOI delay became law.

On June 14, the legislature unanimously passed Bill 33, the act implementing Green's stringent new accountability, ethics and spending rules for the House.

The delay is tucked away in Sec. 72 (2) (b) of Bill 33. It simply notes that Sec. 67 of the legislation will be put off until after Oct. 9.

Sec. 67 concerns amendments to the Access to Information and Protection of Privacy Act.

Those sections of the existing FOI law deal with the public's right to access legislative documents.

It is unclear whether or not the FOI provisions will be retroactive.

Rideout said it is his understanding that they will.

But House Speaker Harvey Hodder suggested the new commission of politicians set up to govern House affairs will decide. "That has not been clarified," Hodder told The Telegram. "The intent of the legislation is that it would be on a go-forward basis."

When the new FOI law was brought into effect in 2005, however, it did apply retroactively.

But maybe not so for the House, the Speaker suggested. "To what extent it can be retroactive before Oct. 9, that has not been discussed in my presence," Hodder said.

The delay in FOI provisions is in addition to another last-second amendment that put off tough new spending rules for MHAs until after Oct. 9.

Internet blogger Ed Hollett unearthed the existence of that information two weeks ago.

There was also no news release announcing that delay.

Bill 33, including the amendments, whooshed through the House in less than two days, just before the legislature broke for the summer.

rantle@thetelegram.com

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When will Danny start blogging?

The Governor General is already ahead of him.

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SOL Day 12: Strawberry Fields Forever

Isn't it strange that in the middle of what is supposed to be a war between Danny Williams and Steve Harper, so many provincial cabinet ministers and wannabes are taking part in joint money announcements with the supposed enemy?

Strange isn't it?

Strange isn't that from the moment he was elected until the federal election in 2006, Danny Williams typically used the most vicious language to describe the federal government and its supposedly perfidious ways. Misrepresentations, distortions all were fair game.

Ottawa was pure evil.

But there seems to be something decidedly fake about Danny Williams and his reaction to the Equalization racket with Ottawa. Oh sure, he mouths a few words and every agrees it is a terrible slight to call the Prime Minister "Steve" - gimme a break, Simpson - but that more likely shows the generally vacuous nature of media commentary in the country.

Doesn't it?

In this the Summer of Love in Newfoundland and Labrador, it should surely be The Summer of Hell for Harper in Canada, with Danny Williams hitting every bar-b-que across the country telling people what an untrustworthy s--o-b that Steve guy is. That's the way you'd look to take out a federal politician, as Danny pledged to do repeatedly.

Pledged repeatedly, mind you.

Confirmed by Paul Oram that defeating Harper is government policy. If Oram says it, the talking point must be straight from Liz's Crackberry.

So where's the campaign exactly? Is it keeping the energy plan company?

And what's with all of these announcements with Loyola Hearn?

If the feds have doled out 32-odd million dollars, someone needs to total up the provincial share announced by this minister or that minister at the same event the federal cabinet minister attended right next to his provincial buddy.

Heck, the participation in events with Loyola Hearn must be officially sanctioned by the Premier's Office - Paul Oram took part in one.

The truth is, the whole War Against Steve is a sham. A farce. A put-on. A fake. A stunt conceived by people who spend too much time on their Crackberry.

A distraction.

Like announcing a lawsuit against the former director of the House of Assembly's financial operations the day after postponing implementation of the Green restrictions on House of Assembly spending.

Such convenient timing. People think the restrictions are in place today, but they don't realise today, as Tom Rideout seems to think, is actually tomorrow and tomorrow is October 9. And so while they are thinking the wrong thing let's launch a lawsuit - a civil suit - while the whole thing is under criminal investigation.

Looks like something is happening when in fact it isn't. no lawyer representing the poor sod at the centre of this political farce is going to let the civil suit proceed until the criminal stuff is done.

And a judge will agree.

Just like a former justice minister and attorney general, now the finance minister, could claim there would be swift action to recover all the money allegedly paid improperly to politicians. Then the lawyers asked for the documents to back the claim and the whole thing disappeared from public view until the week of the Green bill fiddling when suddenly it's the civil servant schmuck - not his political masters, any more - who is facing the law suit.

It's hard to keep track of the twists and turns of that story without being stoned. Imagine what it took to come up with it in the first place. You are either stoned or you are in government. The second one just feels like the first one sometimes.

But all that to one side. The reason Danny Williams is not really at war with Stephen Harper is that he knows one thing: if Nova Scotia gets a better deal, it automatically flows to Newfoundland and Labrador.

So the Summer of Love can roll along, including the summer of lovin' your supposed enemy while you both hand out cheques to the voters, man.

And the Green bill is there, dude, but not really. Chill, Rob. Have another brownie and share the rest with your friends in the press gallery. We just baked 'em on the Clerk's Table. Mace makes a cool whisk, man.

Anyone else got the munchies?

It's nothing to get hung about. The reporters are reporting the stuff they think is there. But it might not be, man. Might be the 'shrooms.

The whole province is living the anthem of the Summer of Love, just like 40 years ago:

Living is easy with eyes closed, misunderstanding all you see
It's getting hard to be someone but it all works out.
It doesn't matter much to me.
Let me take you down, 'cos I'm going to Strawberry Fields.
Nothing is real, and nothing to get hung about.

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Competence deficit the big one

St. John's city council has quite a few deficits.

There's the civility deficit that's been around as long as the current mayor has been serving on council.

There's the honesty deficit that afflicted at least one councillor.

Now Councillor Tom Hann is talking about a possible cash deficit on this year's budget. How dare Hann and his buddies talk about a cash shortfall then they brazenly hiked taxes last year?

If residents of the city took a little trip back in time to late last year though, they'd see that any deficit comes from the generally poor way this council has been running the city's financial affairs. To be fair, it's not just this crowd. It's successive councils going back two decades or more.

But lookit: here's just one way the city could save cash.

Consider for example the sports and entertainment fiasco know to some as the Keith Coombs Money Pit. A money-losing pig of an enterprise since its inception, the project was supposedly doing better this year. So much better in fact that council increased its subsidy to the facility by 50%.

If Hann and his fellow councilors want to fix the deficit, they can start by reducing the subsidy.

Since that subsidy is only a portion of the cash poured into the Coombs money pit each year, council needs to take an axe to its relationship with the problem-plagued facility. Create a new management structure that brings in private sector partners in a manner similar to Norsk Hydro and other Norwegian Crown corporations.

There should be no council staff or councillors on the new board. Not a one.

Give the new board simple instructions: make money or break even but don't expect a penny from city coffers ever again. If the thing sinks, then it sinks.

If the city actually got rid of its subsidy and other payments propping up Mile One this year, it would immediately go from a projected $2.0 million deficit to a $1.0 million surplus.

Just to be sure that everything is indeed clearly known and that the best decisions get made, let's have the province's Auditor General review the City's operations first. It's just the kind of fiscal inquiry the city desperately needs and it would give the residents of the capital city a good base to start from: accurate information for the first time in decades coming from City Hall on the city's financial state.

Mayor Andy Wells is adamantly opposed to such a thorough, impartial review, but then again this wouldn't be the first time Andy Wells has been dead wrong about something. Let's ignore his objections - specious as they usually are - and have the AG figure out what to do.

Given the latest revelation of financial problems at City Hall, it would appear that the real problem on council is a competence deficit. The only way we'll fix that is by pulling the covers off the place and seeing where the rot has set in.

Lord knows, the place looks rotten enough when taxes get hiked and the fat budget is once again heading for deficit.

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SOL Day 10: Yet more money

It's the Summer of Love in Newfoundland and Labrador and the cash just keeps on flowing.

1. CNG and NLDG are contributing respectively $116,000 and $152,000 to the town of New-Wes-Valley to upgrade the local water supply.

2. Appleton will be getting new water storage tanks thanks in large part to cash from CNG and NLDG.

3. A heritage project in Elliston will get $230,00 from the supposedly feuding governments.

4. NLDG will spend $2.55 million on road work in InTrd minister Trevor Taylor's district. Nothing signals a pending election like the smell of paving tar.

That's four cash announcements on the Friday before a provincial government holiday weekend and it isn't even noon yet.

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SOL Day 9: More money and photogenic turds

So much for this feud between Dan Williams and Steve Harper. When there's a provincial election election campaign underway and a federal one coming, the Connies and their provincial cousins can find all sorts of ways to help each other out.

1. Both Canada's New Government (CNG) and Newfoundland and Labrador's Dan Government (NLDG) invest $250,000 to help hike interest in an international trail along the Appalachians.

Get it? Hike? Trail? The word "hike" is even italicised in the news release head in case you didn't get the creative writing.

2. CNG and NLDG drop about $1.2 million between them into an aquaculture project on the South coast.

3. CNG and NLDG spend $3.0 million on an improved water supply for Harbour Breton.

4. Then CNG and NLDG announced opening of a heritage site in Harbour Breton completed with more than $3.5 million in federal and provincial cash.

5. Even the Premier's parliamentary assistant will be able to get in on the electioneering. The last SOL release for Thursday was an announcement of a photo op involving federal fish minister Loyola Hearn and the Premier's Open Line crackie, Paul Oram.

Oram and Hearn can be photographed at a municipal water and sewer project in Oram's district, on Friday at 1:30 PM.

In an election campaign, even the crap is apparently so potentially vote-worthy that a cabinet and a wannabe cabinet minister will pose for happy snaps with it.

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Cameron inquiry to review health care PR

There's a brief post at Persuasion Business discussing two of the terms of reference for Madam Justice Margaret Cameron's inquiry into hormone receptor testing.

The first two posts on Persuasion Business include references to the hormone testing case and there'll be more to follow as the inquiry proceeds.

You can now keep track of the recent headlines at PB using the headline animator at the right. Just click on the animator to get the posts. You can also receive them by e-mail, for free, using the Feedburner subscription service. If you just like to click on your own, then you'll find a link in the Top O' The Pile section on the right hand menu of Sir Robert Bond Papers.

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Sponsorship of Connie hypocrisy

From the Calgary Herald, news that more money was spent by Canada's New Harpocrisy on Canada Day celebrations in Quebec than in the rest of the country combined.

The bill for celebrating our birthday

Calgary Herald, July 1, 2007

OTTAWA - If today's Canada Day parties seem a bit more festive in Quebec, thank the federal government. Over half of all federal "Celebrate Canada" funding is directed to Quebec-based events, government records show.

More than $3.7 million will pay for flag-raisings, fireworks, face-painting and other projects across the province, accounting for 55 per cent of the funds channelled through Celebrate Canada.

In contrast, funding for national holiday events in the rest of the country totals just over $3 million.

Celebrate Canada was created to fund citizen-initiated events for Canada Day, Saint-Jean-Baptiste Day, Multiculturalism Day and National Aboriginal Day. The Department of Canadian Heritage says Quebec receives a larger share of money for holiday celebrations because its provincial government doesn't fund Canada Day events.

The bulk of money goes to Quebec's Canada Day organizing committee, which is set to receive $3.2 million for events in Montreal and 27 other municipalities around the province in 2007-08. The theme of the events this year is "Tip of the Hat to the Environment."

The organizing committee in Alberta, meanwhile, will receive $50,000 in federal funds. Ontario's committee will get $100,000 and British Columbia's $190,000, according to figures released by Canadian Heritage.

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Canada Day funding by province

Quebec $3,690,786
Ontario $1,013,500
British Columbia $491,250
Alberta $310,250
Manitoba $211,000
Saskatchewan $174,294
Nova Scotia $173,250
New Brunswick $172,000
Newfoundland & Labrador $148,000
Prince Edward Island $123,000
Yukon $87,000
Northwest Territories $76,650
Nunavut $64,300

TOTAL $6,735,280

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Bad timing? No. Just bad Layton policy

Forget the appalling timing of Jack Layton falsely accusing NATO forces of indiscriminately killing Afghan civilians on the same day that terrorists killed six Canadian soldiers and their Afghan interpreter.

No.

Focus instead on Layton's accusation.

He could have focused on the real problem, namely the terrorists. It's not like he used to criticize the terrorists whose suicide bombers slaughtered more innocent Afghan civilians than Canadian soldiers.

Or it's not like Jack criticized the terrorists who deliberately infiltrated Afghan villages when attacking NATO forces just so that they could produce the Afghan civilian deaths Layton is concerned about.

Afghan President Hamid Karzai is rightly criticizing NATO forces but unlike Layton, Karzai is not crassly politicking over the bodies of the dead. Karzai doesn't want the Taliban to win. The same can't necessarily be said of Layton.

And before the e-mails and comments come from NDP supporters taking exception to pointing out the appalling comments Layton made, consider Layton's own releases and their shameless partisan appeal.

From the one on Afghan casualties:

In the upcoming by-elections, voters will finally have an opportunity to have their say on Canada’s involvement in this mission.

The choice is clear.

They can vote for parties that got us into this mission, extended this mission, or who want it to go on another two years – or they can vote for the NDP.

And then from the release issued an hour later on the deaths of six Canadian soldiers:

Canadian soldiers never die in vain when they are killed in the line of duty. All Canadian soldiers deserve our utmost respect for their willingness to make the ultimate sacrifice.

Yeah, Jack, they do die in vain. Every single time a Canadian politician issues a pair of releases like these.

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Aussie oil field approved

BHP Billiton announced today that it will be developed an oil field offshore western Australia.

Development cost is estimated at slightly less than US$2.0 billion. The field - called Pyrenees - holds an estimated 120 million barrels of recoverable oil. It will be developed using a floating production,storage and offloading vessel (FPSO). The field has an estimated lifespan of 25 years, based on production of 96K barrels per day.

Note that Pyrenees was discovered in 2003 and that with a development decision taken in 2007, the field will achieve first oil in 2010.

Time from discovery to production is seven years.

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SOL, Day 8: More money from Ottawa

Who says the provincial Progressive Conservatives and the federal Connies are on the outs?

Pish posh old boy.

Not when there's an election to be won.

There's transportation infrastructure money to be announced in Corner Brook on July 4. The feds will be represented by Loyola Hearn, fish minister and in this case stand-in for Lawrence Cannon. Apparently, Fabian Manning - who has been known to take Cannon's seat in the Commons from time to time - was unavailable for this guest shot.

The province won't be represented by provincial transportation minister John Hickey or even the alternate minister of transportation.

Nope. The provincial government will be represented by finance minister Tom Marshall, whose district just happens to be getting the cash.

They'll both be accompanied by the mayor of Corner Brook. Now is Charles Pender thinking of leaping to provincial politics this fall, alongside former Reform/Alliance-dallier and former Liberal candidate wannabe Steve Kent and how many other municipal councillors and mayors eager for an MHAs salary?

Time will tell.

But hey, it's the Summer of Love.

Even supposedly mortal enemies can kiss and make up when there are votes to be courted with public cash.

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Persuasion Business Update

A discussion of reputation, titled "Actions speak louder than words", the latest post at Persuasion Business.

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The Real Change: 1991 and changed provincial government attitudes

Think profits, Wells urges Newfoundland
The Ottawa Citizen.
Sep 11, 1991
Page. D.3

ST. JOHN'S (CP) _ Newfoundlanders have to start thinking more about profits and less about handouts if they're ever going to catch up with other Canadians, Premier Clyde Wells said Tuesday.

''We have to recognize that profit is not a dirty word,'' Wells said after releasing a discussion paper his government is using to develop an economic strategy for the country's poorest province.

''Our whole approach to being jealous or envious of somebody or feeling somebody's made too much has got to change. We've got to think in terms of providing opportunities for our people to increase their wealth.''

The governing Liberals are facing an age-old problem - diversifying Newfoundland's economy to make it more self-reliant in the face of an ailing fishery and a far-flung population.

But there's new urgency to the task, said Wells, given lower-than-expected transfer payments from the federal government in recent years.

''Our future is essentially at stake,'' said Wells. ''We're at the end. The federal government can't go much further.

''We cannot continue to prop up any fishing businesses that, in the end, do not contribute to the economy.''

The 65-page consultation report suggests some means of spurring growth, including tax breaks for investors and foreign trade zones for Newfoundland ports of entry where goods may enter and leave without paying duty.

The report will be used to solicit public input this fall and help shape a final plan - due early next year - to enliven the province's fortunes.

It was immediately slammed by Opposition members as a rehash of old ideas and a breach of Wells's 1989 election promise to put an economic recovery plan in place right away.

''Nothing new is happening at all,'' said Tory Leader Tom Rideout, who is stepping down this week. ''We're going back over the same territory . . . completed six years ago.''

Wells brushed off criticism, saying it's a new approach that relies heavily on the public and will serve the province for decades down the road.

Analysts have painted a rosy picture of Newfoundland's economy this year, mostly becuase of the giant Hibernia offshore oil project.

But Wells said it will likely take some 25 years of staying several percentage points ahead of the country's growth in gross domestic product before Newfoundland reaches the national average.

''The most we could do is put us on that road and have us well along the road,'' said Wells.

Some good fortune could cut down on that time-frame, including more oil ventures and signing a deal with Quebec to develop hydroelectric power on the lower Churchill River. A resurgence of dwindling cod stocks would also help recovery.

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Plus ca change: 1987 version

First there was 30 years ago.

How about 20 years ago?

Province seeks focus for action
Financial Post
Jun 1, 1987
p. 16

Regional development programs here, as elsewhere, suffer from lack of focus.

Provincial officials complain they can't plan development properly because there is little co-ordination in Ottawa of the many federal aid programs (although there is a local federal co- ordinator). In fact, each program has to be dealt with separately.

It is possible this problem will disappear with creation of the Atlantic Canada Opportunities Agency, which is expected to be announced by Prime Minister Brian Mulroney this week. This agency will likely bring most federal-originating regional development programs in the Atlantic provinces under one authority, perhaps a cabinet minister. That should clear up some confusion.

The provincial government itself is not innocent of confusion. Its departments sometimes work at odds with one another, following different ideologies (some favor co-operatives, some don't) and different game plans. The province has never provided an overall development plan to Ottawa, with the possible exception of "managing our resources," which ended in 1985.

Disdainful treatment

In Newfoundland's case, however, there are mitigating circumstances. The province has a unique culture and a distinctive economic history, but it is not master in its own house.

Its people complain the province is treated with disdain by the federal system and by some provinces. The reasons, they say, are: the smallness of Newfoundland's population (580,000), its dependence on Ottawa (49% of revenues come from this source), and its relative lack of power in the House of Commons (seven seats out of 282).

In addition, the province has little or no control over three major resources:

- Fisheries, which accounted for 44% of the average annual employment in the goods producing sector in 1986, are a federal responsibility.

Recently, Ottawa conceded to France various fishing rights off Newfoundland and Labrador, at the expense of Newfoundland fishermen. The idea was to bring France to the table over fishing rights in the disputed St. Pierre and Miquelon waters.

Newfoundland, which had attended Canada-France negotiations for eight years, was excluded from the key meeting in which the concessions were given.

- Offshore oil is governed jointly by Canada and Newfoundland under the 1985 Atlantic Accord. But when federal Energy Minister Marcel Masse came to St. John's recently to announce PetroCanada's intention to drill its Terra Nova field, he did not feel it was necessary to inform Newfoundland in advance.

- Hydroelectric generation in Labrador is held up indefinitely because Quebec will not allow Newfoundland to send power through Quebec's grid to U.S. markets. As a result, a Lower Churchill River generating facility is not feasible.

Newfoundlanders ask why gasoline can be transported interprovincially in road tankers, and natural gas can travel the TransCanada PipeLine, but electricity can't move interprovincially without the provinces' consent.

In the past 13 years, Newfoundland has been forced to spend $800 million on thermal plants and small, expensive hydro generators. As a result, the price of its electricity is the second highest in Canada (after Prince Edward Island). The high cost of power is one deterrent to badly needed economic growth.

Newfoundland has been the helpless victim of outside economic forces for generations. The growth of technology, for example, has lured Newfoundlanders into wanting higher incomes in order to buy glamorous cars and televisions. At the same time, it has robbed them of jobs.

Newfoundland fishermen no longer make their own nets and hardware, but import plastic ones manufactured "from away." Mechanical tree harvesters, built on the mainland with non- Newfoundland labor, have replaced teams of men with axes.

The statistics tell a grim tale. In 1987, Newfoundland is in much the same condition relative to Canada as it was when it joined Confederation in 1949.

In the past 20 years, the gap in personal income per capita between Newfoundland and Ontario hasn't changed much (see chart). Official unemployment statistics are bad enough (see chart) but if discouraged workers are included, the jobless rate is about 33%.

Low incomes and high unemployment generate lower tax revenue for the provincial government. Newfoundland tries to compensate through its retail sales tax, at 12% the highest in Canada. That tax generates $436 million, 37% of provincial revenues. (In comparison, Ontario's 7% tax produces $5.4 billion, 19% of provincial revenues.)

Newfoundland's tax base is so poor, its revenues have to be matched almost dollar for dollar by Ottawa, which in 1986-87 is expected to provide $1.1 billion.

However, Newfoundlanders feel such huge payments are not less than their due; they see them as returning the federal taxes paid on the large quantities of mainland goods sold in the province.

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