No surprise, really, that a number of other provinces are now seeking some type of Equalization side deal. The Globe and Mail and The Telegram are carrying similar stories about Dalton McGuinty complaints regarding the recent agreements between the Government of Canada and Nova Scotia and Newfoundland and Labrador.
Over at the National Post, pact-checking fell apart in their Saturday edition. The front page story on the supposed revolt turned Danny Williams from a Tory into a Liberal. Maybe that explains why the Post has been criticizing him so harshly. They got his party affiliation wrong so they just instinctively went on the attack.
He's the actual quote, which, oddly is STILL posted on Sunday morning: "Newfoundland Premier Danny Williams, who like Mr. McGuinty is a Liberal, rejected Ontario's concerns, noting that "from our own perspective, we've never objected to special funding for other provinces."
Williams is the Premier, not Tom Rideout who, until 1985, sat as a Liberal MHA before the lure of a cabinet seat caused him to run to Brian Peckford's side. There's a whole column (already written eons ago) about Newfoundland politicians and their penchant for party-switching. Not to worry about Danny Williams, Posties. He's so Tory he makes former Peckford cabinet minister Bill Marshall look like a Marxist.
Paul Wells is claiming credit for having pointed out this potential backlash some weeks ago. He rightly notes that no one objected until now, simply because every successful precedent strengthens the case for a special deal for Ottawa cash. To be fair Paul, McGuinty actually did complain about this whole side deal back in mid-October. In fact, it was his letter to the PM, PM, that led to the October federal offer to Newfoundland and Labrador containing a so-called cap on the offsets. McGuinty's position is a little different than the one taken by, say Saskatchewan or even British Columbia, but more on that to follow in a later post.
As for McGuinty's supposed endorsement of the Williams proposals earlier on, Paul does link to a CBC St. John's story. I say supposed because the whole thing was grossly over-rated by Premier Williams himself when he claimed to have the enthusiastic support of almost all the other first ministers, save the Pm himself and Bernard Lord.
The hand-written note from McGuinty was hardly high-level first ministers' official correspondence - McGuinty's office couldn't even find a copy of it in their files when media started looking for it. In this whole exercise, of course, the public has never seen any proof of the endorsements Premier Williams claimed to have. McGuinty's was the first to surface and looked a bit more like a case of "the weather is here; wish you were beautiful" throw-away platitude than a hearty endorsement for the Danny Juggernaut.
I still wonder if the note from Ralph was on a beer-stained napkin from the local steak'n'ribs place. If you wipe off the rib sauce you might be able to decipher the scrawl. Most of the rest probably looked alot like McGuinty's, if they existed at all. It doesn't really matter now though, since Danny has his deal - or does he? [See "Counting Chickens", coming later on Sunday]
On a more substantial point, though McGuinty is just flat-out wrong. He is quoted by Canadian Press as saying "[T]here was a principle that said no have-not province could have a fiscal capacity that surpassed that of the people of Ontario," said McGuinty. "In this particular case, that is exactly what is going to happen and that's unacceptable."
Under the January deal, dear Ontario Premier, the Equalization offsets stop flowing when a province ceases to qualify for Equalization. Right now that point is 10% lower than the per capita fiscal capacity of your province and it has been in that range for most of the past 50 years. So there is no fear of Newfoundland and Labrador surpassing you using Equalization and the offsets. This province will go off Equalization and likely exceed Ontario fiscal capacity the old-fashioned way - by out-performing Trillium Central on a per capita basis.
At least get your facts straight, Dalton; better still, stop listening to John Crosbie. He habitually gets it wrong even when talking about a deal he helped craft. Under the old Accord offset arrangement, a province could get offsets after it had ceased to qualify for Equalization. You and your predecessors never uttered a peep about that.
Why all the fuss now?
13 February 2005
11 February 2005
I am John Crosbie's spleen
For those who have been paying attention to the former federal emissary to Newfoundland and Labrador, John Crosbie's interventions on the Atlantic Accord dispute have been curious.
For example, here is his column from Atlantic Business Magazine. Take this paragraph as typical:
"The difference between the June 5th agreement and the proposal outlined by Minister Goodale is in the range of $4 billion. Total provincial un-clawed back revenues during the projected 21-year-life of the Hibernia, Terra Nova and White Rose Fields, based on an estimated future price of oil of $35 per barrel, would be $6.5 billion. If the present regime continues, NL will receive $2.1 billion over the 21 years when all presently known oil resources would be completely used up. If the federal suggestion of the "Ontario cap" is carried out, Newfoundland would receive another $400 million over the 21 year period. The overall division of the revenues from the offshore would then be 38 per cent for NL and 62 per cent for Canada. Clearly such an act of federal treachery and promise breaking would remove from NL its one opportunity ever to become a "have" province, as would be the case for Nova Scotia."
To be fair, at the outset, this comment from Mr. Crosbie is based solely on the October offer and Mr. Crosbie likely had to meet a printing deadline well before the December offer was made. That's one of the hazards of trying to comment on today's issue in a medium that doesn't allow some flexibility to meet for changes tomorrow or the day after.
That said, Mr. Crosbie did know certain things when he wrote the paragraph excerpted above that make his comments dubious. For example, he knows full-well that the deal he helped to craft in 1985 gave absolutely no commitment that federal and provincial revenues would be divided into any set of proportions. What he calls "federal treachery" is not something that happened since 1993 when the Liberal Party took power in Ottawa. The "treachery" to which Mr. Crosbie refers is his contained in his own deal operating as intended.
As a further example, Mr. Crosbie has known from the start that his new interpretation of "principle beneficiary" is decidedly not what was intended by the signatories to the Accord.
Yet further, Mr. Crosbie knows full-well that he makes an utterly false contention when he states that over the course of 21 years the provincial government will receive only $2.1 billion of the %6.5 billion of projected provincial revenues. As Mr. Crosbie himself described this contention in 1990, it is "absolutely, utter nonsense".
Leap ahead in time to Crosbie's assault on the Globe and Mail, this time mounted from the pages of the Sun chain. For purposes here, I'll excerpt some of Mr. Crosbie's historical and other facts and comment on them one by one:
-Extract begins-
Other historical facts that our Ontario-centric Toronto intellectual elite don't remember, if they ever knew them, are:
- Canada first took an interest in claiming our offshore resources on the east coast in 1961; [This assumes that as a matter of law, the Province of Newfoundland and Labrador owned them in the first place. What occurred was a dispute, like all disputes, in which resources were claimed by two parties, both of whom had a claim. Neither the Newfoundland Court of Appeal nor the Supreme Court of Canada accepted the proposition that the offshore resources ever belonged to Newfoundland and Labrador.]
- The Trudeau government made a reference to the Supreme Court of Canada, which decided in March 1984, that the undersea and undersoil resources off east-coast Newfoundland were owned by Canada and not Newfoundland, just as Canada had earlier owned the resources under Alberta, et. al. [For his own partisan reasons, Mr. Crosbie neglects to mention the reference by the Government of Newfoundland to the Supreme Court of Newfoundland Court of Appeal. Mr. Crosbie is also fully aware, or ought to be aware, that the legal status of the resources beneath the ground in Alberta and Saskatchewan was and is fundamentally different from the situation offshore Newfoundland and Labrador. Both courts found in favour of the federal government having legal jurisdiction, which is different from ownership.]
- It took from 1961 (mostly under Liberal governments) until the Mulroney government resolved these disputes via the Atlantic Accord signed on Feb. 11, 1985; [Mr. Crosbie neglects to mention the numerous efforts to resolve the ownership dispute and develop the fields by mutual agreement between the federal and provincial governments. Among other issues, it was the provincial government's insistence on pursuing the ownership argument that held up a deal during the Peckford administration. Such was not the case in Nova Scotia.]
- The Accord recognizes "the right of Newfoundland to be the principal beneficiary of the oil and gas resources off its shores." [Indeed it does, Mr. Crosbie, but the term is undefined in the Accord. That said, the definition Mr. Crosbie offers of the term is radically different from the benefits provided to Newfoundland and Labrador by a landmark agreement. His new interpretation does not match the public statements made by Prime Minister Mulroney and Premier Peckford when this historic agreement was signed.]
-Extract ends-
Note that nowhere in his Sun spewing does Mr. Crosbie go back and point out his revenue clawback argument from ABM and elsewhere continues to exist under the January deal he praises.
Mr. Crosbie concludes his tirade against what he calls "central Canadian control-freaks" by encouraging them to "cease to promote incorrect, unintelligent, insensitive, ill-informed and biased views that ignore the history of the problems."
Would that Mr. Crosbie took his own advice, we might be spared his ahistorical, partisan ad hominem rantings. His own presentations are no less incorrect or ill-informed and the result of his interventions have been no less insulting to the intelligence of his readers across Canada than the opinions of others he presumes to criticize.
For example, here is his column from Atlantic Business Magazine. Take this paragraph as typical:
"The difference between the June 5th agreement and the proposal outlined by Minister Goodale is in the range of $4 billion. Total provincial un-clawed back revenues during the projected 21-year-life of the Hibernia, Terra Nova and White Rose Fields, based on an estimated future price of oil of $35 per barrel, would be $6.5 billion. If the present regime continues, NL will receive $2.1 billion over the 21 years when all presently known oil resources would be completely used up. If the federal suggestion of the "Ontario cap" is carried out, Newfoundland would receive another $400 million over the 21 year period. The overall division of the revenues from the offshore would then be 38 per cent for NL and 62 per cent for Canada. Clearly such an act of federal treachery and promise breaking would remove from NL its one opportunity ever to become a "have" province, as would be the case for Nova Scotia."
To be fair, at the outset, this comment from Mr. Crosbie is based solely on the October offer and Mr. Crosbie likely had to meet a printing deadline well before the December offer was made. That's one of the hazards of trying to comment on today's issue in a medium that doesn't allow some flexibility to meet for changes tomorrow or the day after.
That said, Mr. Crosbie did know certain things when he wrote the paragraph excerpted above that make his comments dubious. For example, he knows full-well that the deal he helped to craft in 1985 gave absolutely no commitment that federal and provincial revenues would be divided into any set of proportions. What he calls "federal treachery" is not something that happened since 1993 when the Liberal Party took power in Ottawa. The "treachery" to which Mr. Crosbie refers is his contained in his own deal operating as intended.
As a further example, Mr. Crosbie has known from the start that his new interpretation of "principle beneficiary" is decidedly not what was intended by the signatories to the Accord.
Yet further, Mr. Crosbie knows full-well that he makes an utterly false contention when he states that over the course of 21 years the provincial government will receive only $2.1 billion of the %6.5 billion of projected provincial revenues. As Mr. Crosbie himself described this contention in 1990, it is "absolutely, utter nonsense".
Leap ahead in time to Crosbie's assault on the Globe and Mail, this time mounted from the pages of the Sun chain. For purposes here, I'll excerpt some of Mr. Crosbie's historical and other facts and comment on them one by one:
-Extract begins-
Other historical facts that our Ontario-centric Toronto intellectual elite don't remember, if they ever knew them, are:
- Canada first took an interest in claiming our offshore resources on the east coast in 1961; [This assumes that as a matter of law, the Province of Newfoundland and Labrador owned them in the first place. What occurred was a dispute, like all disputes, in which resources were claimed by two parties, both of whom had a claim. Neither the Newfoundland Court of Appeal nor the Supreme Court of Canada accepted the proposition that the offshore resources ever belonged to Newfoundland and Labrador.]
- The Trudeau government made a reference to the Supreme Court of Canada, which decided in March 1984, that the undersea and undersoil resources off east-coast Newfoundland were owned by Canada and not Newfoundland, just as Canada had earlier owned the resources under Alberta, et. al. [For his own partisan reasons, Mr. Crosbie neglects to mention the reference by the Government of Newfoundland to the Supreme Court of Newfoundland Court of Appeal. Mr. Crosbie is also fully aware, or ought to be aware, that the legal status of the resources beneath the ground in Alberta and Saskatchewan was and is fundamentally different from the situation offshore Newfoundland and Labrador. Both courts found in favour of the federal government having legal jurisdiction, which is different from ownership.]
- It took from 1961 (mostly under Liberal governments) until the Mulroney government resolved these disputes via the Atlantic Accord signed on Feb. 11, 1985; [Mr. Crosbie neglects to mention the numerous efforts to resolve the ownership dispute and develop the fields by mutual agreement between the federal and provincial governments. Among other issues, it was the provincial government's insistence on pursuing the ownership argument that held up a deal during the Peckford administration. Such was not the case in Nova Scotia.]
- The Accord recognizes "the right of Newfoundland to be the principal beneficiary of the oil and gas resources off its shores." [Indeed it does, Mr. Crosbie, but the term is undefined in the Accord. That said, the definition Mr. Crosbie offers of the term is radically different from the benefits provided to Newfoundland and Labrador by a landmark agreement. His new interpretation does not match the public statements made by Prime Minister Mulroney and Premier Peckford when this historic agreement was signed.]
-Extract ends-
Note that nowhere in his Sun spewing does Mr. Crosbie go back and point out his revenue clawback argument from ABM and elsewhere continues to exist under the January deal he praises.
Mr. Crosbie concludes his tirade against what he calls "central Canadian control-freaks" by encouraging them to "cease to promote incorrect, unintelligent, insensitive, ill-informed and biased views that ignore the history of the problems."
Would that Mr. Crosbie took his own advice, we might be spared his ahistorical, partisan ad hominem rantings. His own presentations are no less incorrect or ill-informed and the result of his interventions have been no less insulting to the intelligence of his readers across Canada than the opinions of others he presumes to criticize.
A tale of two cities
It was the best of times. It was the worst of times.
For those who aren't familiar with the oil support business, there are two associations in Atlantic Canada representing businesses that supply goods and services to the offshore oil and gas industry.
In Nova Scotia, there is the Onshore/Offshore Technologies Association of Nova Scotia or OTANS. Here in Newfoundland and Labrador, we have NOIA - the Newfoundland Ocean Industries Association.
Now NOIA is the older of the two organizations, and while they publicly might deny it, there has always been a bit of a rivalry between the two. NOIA likes it place as the senior organization and the NOIA leadership gets edgy whenever it looks like OTANS is doing better than NOIA.
So it is no surprise that as details come to light of the two signing ceremonies on Monday - St. John's and Halifax - NOIA should be a little uneasy. According to some unpublished reports, it appears that OTANS is playing a prominent role in the Nova Scotia ceremony, as well should the organization that represents one of the significant ways in which that province is the "principal beneficiary" of the Nova Scotia Accord.
Over here, NOIA can come and show up with rest of us in the great unwashed mass at the ceremony in St. John's.
Now there could be many reasons for this difference. For one thing, the event in St. John's is being controlled by the provincial government. The One Who Was The Fight doesn't really need to share much of the spotlight as he claims his prize. In Nova Scotia, the whole offshore Accord fight has taken longer - Danny would have gotten nowhere with Jean Chretien any more than John Hamm did - and has been conducted with much less vitriol than the campaign from here. But more importantly, the minority Nova Scotia government will likely want to spread around some of the glow of victory to as many groups as it can.
But in the long run, aside from this ceremony, OTANS might well wind up much better off than NOIA.
In Nova Scotia, OTANS took a professional approach to government relations recognizing that long after this racket dies down, OTANS still has to maintain healthy positive relationships with both the federal and provincial governments. It has to do that in order to represent its members best interests. Check OTANS news release section on their website and you'll see plenty of releases on OTANS representing its members interest on this file or that. That's exactly what OTANS members pay membership dues to see happen.
What you won't see is what you will find on the NOIA site in October: two news releases in which NOIA blatantly sides with provincial government. In fact, the releases could have been written not by NOIA staff as one might assume but by someone working in the Premier's Office. They are full of the same blatant misrepresentations that characterized the provincial government's campaign. That was after the October Incident, the first of the great stormings, and as it turns out, a deal that wasn't apparently as bad as it seemed given the January deal.
Then there was The Ad: a full page ad complete with the NOIA logo in which the Newfoundland offshore association threw its entire support behind the provincial government and against the feds.
I wouldn't be surprised if Government of Canada officials in all the agencies on which NOIA depends moved telephone messages from the NOIA leadership farther down the pile and took just a bit longer to answer its letters.
The way bureaucrats look at things, the political fight was for the political types; the rest of the world can make arguments in private but never ever step into the bear pit of politics in public. It just isn't done among the people, public sector and private, who do the leg work on all sorts of files. They work quietly. But once you start taking sides you get treated differently because you have become different. For bureaucrats, it's ok to deal with private sector types ("us" dealing with "not us"), but it gets hinky when someone becomes political. It isn't okay for "not us" to become "them".
In the political offices, the response might be much chillier - and justifiably so. If nothing else, NOIA's endorsement of the province's campaign to rewrite the Accord's beneficiary provisions proved that NOIA places a higher priority on provincial government revenues than on the interests of its members in getting guaranteed offshore work. In that light, why should the Government of Canada be overly concerned about whether local industries are getting their rightful share of the Accord benefits? After all, their industry association doesn't think guaranteed local industrial benefits is part of making Newfoundland and Labrador the "principal beneficiary" of offshore oil development.
To cap it all, NOIA was one of the first interest groups to rush forward with its hand out looking for, well, a hand-out from the new federal transfer. How exactly does provincial government cash benefit NOIA members in their core interests? So far no one has stepped forward from NOIA to explain their logic.
If that wasn't enough, here's the release from NOIA issued once a deal had been reached in January. The language is very interesting if you look at the "principal beneficiary" comment and the mounds of praise heaped on the provincial government [read "Danny Williams"] for "steadfast leadership" in becoming "principal beneficiary". Even typing the words, I have a hard time fighting the hoover-like suction. Look at the slight praise for the Government of Canada. Talk about back-handed compliments!
Once NOIA stepped into the political bearpit, it stopped being a non-partisan representative of its members interests and took sides in a heavy-weight political dispute.
It would be a surprise if the mouse tangled with the elephants and didn't pick up a scratch or two.
For those who aren't familiar with the oil support business, there are two associations in Atlantic Canada representing businesses that supply goods and services to the offshore oil and gas industry.
In Nova Scotia, there is the Onshore/Offshore Technologies Association of Nova Scotia or OTANS. Here in Newfoundland and Labrador, we have NOIA - the Newfoundland Ocean Industries Association.
Now NOIA is the older of the two organizations, and while they publicly might deny it, there has always been a bit of a rivalry between the two. NOIA likes it place as the senior organization and the NOIA leadership gets edgy whenever it looks like OTANS is doing better than NOIA.
So it is no surprise that as details come to light of the two signing ceremonies on Monday - St. John's and Halifax - NOIA should be a little uneasy. According to some unpublished reports, it appears that OTANS is playing a prominent role in the Nova Scotia ceremony, as well should the organization that represents one of the significant ways in which that province is the "principal beneficiary" of the Nova Scotia Accord.
Over here, NOIA can come and show up with rest of us in the great unwashed mass at the ceremony in St. John's.
Now there could be many reasons for this difference. For one thing, the event in St. John's is being controlled by the provincial government. The One Who Was The Fight doesn't really need to share much of the spotlight as he claims his prize. In Nova Scotia, the whole offshore Accord fight has taken longer - Danny would have gotten nowhere with Jean Chretien any more than John Hamm did - and has been conducted with much less vitriol than the campaign from here. But more importantly, the minority Nova Scotia government will likely want to spread around some of the glow of victory to as many groups as it can.
But in the long run, aside from this ceremony, OTANS might well wind up much better off than NOIA.
In Nova Scotia, OTANS took a professional approach to government relations recognizing that long after this racket dies down, OTANS still has to maintain healthy positive relationships with both the federal and provincial governments. It has to do that in order to represent its members best interests. Check OTANS news release section on their website and you'll see plenty of releases on OTANS representing its members interest on this file or that. That's exactly what OTANS members pay membership dues to see happen.
What you won't see is what you will find on the NOIA site in October: two news releases in which NOIA blatantly sides with provincial government. In fact, the releases could have been written not by NOIA staff as one might assume but by someone working in the Premier's Office. They are full of the same blatant misrepresentations that characterized the provincial government's campaign. That was after the October Incident, the first of the great stormings, and as it turns out, a deal that wasn't apparently as bad as it seemed given the January deal.
Then there was The Ad: a full page ad complete with the NOIA logo in which the Newfoundland offshore association threw its entire support behind the provincial government and against the feds.
I wouldn't be surprised if Government of Canada officials in all the agencies on which NOIA depends moved telephone messages from the NOIA leadership farther down the pile and took just a bit longer to answer its letters.
The way bureaucrats look at things, the political fight was for the political types; the rest of the world can make arguments in private but never ever step into the bear pit of politics in public. It just isn't done among the people, public sector and private, who do the leg work on all sorts of files. They work quietly. But once you start taking sides you get treated differently because you have become different. For bureaucrats, it's ok to deal with private sector types ("us" dealing with "not us"), but it gets hinky when someone becomes political. It isn't okay for "not us" to become "them".
In the political offices, the response might be much chillier - and justifiably so. If nothing else, NOIA's endorsement of the province's campaign to rewrite the Accord's beneficiary provisions proved that NOIA places a higher priority on provincial government revenues than on the interests of its members in getting guaranteed offshore work. In that light, why should the Government of Canada be overly concerned about whether local industries are getting their rightful share of the Accord benefits? After all, their industry association doesn't think guaranteed local industrial benefits is part of making Newfoundland and Labrador the "principal beneficiary" of offshore oil development.
To cap it all, NOIA was one of the first interest groups to rush forward with its hand out looking for, well, a hand-out from the new federal transfer. How exactly does provincial government cash benefit NOIA members in their core interests? So far no one has stepped forward from NOIA to explain their logic.
If that wasn't enough, here's the release from NOIA issued once a deal had been reached in January. The language is very interesting if you look at the "principal beneficiary" comment and the mounds of praise heaped on the provincial government [read "Danny Williams"] for "steadfast leadership" in becoming "principal beneficiary". Even typing the words, I have a hard time fighting the hoover-like suction. Look at the slight praise for the Government of Canada. Talk about back-handed compliments!
Once NOIA stepped into the political bearpit, it stopped being a non-partisan representative of its members interests and took sides in a heavy-weight political dispute.
It would be a surprise if the mouse tangled with the elephants and didn't pick up a scratch or two.
Meanwhile in the White House...
Here's a curious story from the Globe today on the recent discovery of an accredited White House reporter who turns out to be some guy working under an assumed name for a Republican activist from Texas. How the guy got accreditation as a bona fide journalist is beyond me. Toby and CJ would never let that happen.
There's a word in the story I have just discovered is my new favourite word in English: pseudo-journalist.
According to the Globe story "[o]ver the past month, there have been disclosures of three separate instances in which government agencies have given lucrative contracts to conservative, pro-Bush commentators to provide consulting services and write positive articles on the administration's pet policies, including education changes."
The sound you hear is me shaking my head in dismay at the depths to which some people in politics will sink.
There's a word in the story I have just discovered is my new favourite word in English: pseudo-journalist.
According to the Globe story "[o]ver the past month, there have been disclosures of three separate instances in which government agencies have given lucrative contracts to conservative, pro-Bush commentators to provide consulting services and write positive articles on the administration's pet policies, including education changes."
The sound you hear is me shaking my head in dismay at the depths to which some people in politics will sink.
Bill Rowe on Cable 9?
Now lemme see how this goes:
1. New programs in the works including a call-in show on Rogers.
2. Bill Rowe resigns in Ottawa.
3. Bill Rowe tells CBC that he intends to revive his media career.
4. Bill Rowe used to host a call-in show.
5. Bill Rowe likes Danny.
6. Danny likes Bill.
7. Rogers Cable loves Danny.
Hmmmmmm.
Speculation can be fun.
1. New programs in the works including a call-in show on Rogers.
2. Bill Rowe resigns in Ottawa.
3. Bill Rowe tells CBC that he intends to revive his media career.
4. Bill Rowe used to host a call-in show.
5. Bill Rowe likes Danny.
6. Danny likes Bill.
7. Rogers Cable loves Danny.
Hmmmmmm.
Speculation can be fun.
10 February 2005
The Cable Guy
The Premier's speech to the Empire club is apparently being carried numerous times by the local Rogers cable system, according to a news release from the provincial government.
Make sure you don't miss it.
And for those who don't want to patronize Rogers Cable, for some reason the Premier's Office neglected to notice that the Empire Club website has the speech (or will have it) posted on their website.
Two questions though:
1. Why is this release coming from Government and not from Rogers Cable? The government information service is there to provide information to the public and media on government activity not private sector business schedules. Can NTV get Survivor broadcast times up there now?
2. Has the Premier placed his Rogers' shares in a blind trust or is that file still open?
Make sure you don't miss it.
And for those who don't want to patronize Rogers Cable, for some reason the Premier's Office neglected to notice that the Empire Club website has the speech (or will have it) posted on their website.
Two questions though:
1. Why is this release coming from Government and not from Rogers Cable? The government information service is there to provide information to the public and media on government activity not private sector business schedules. Can NTV get Survivor broadcast times up there now?
2. Has the Premier placed his Rogers' shares in a blind trust or is that file still open?
Does Bas need a job?
Word today that Bill Rowe, former Liberal Party leader, novelist, Rhodes scholar, cabinet minister, brown envelope slider supervisor and radio talk show host has apparently packed in his gig as Newfoundland and Labrador High Commissioner to the Evil Empire of Canada.
A free beer to anyone who can find any tangible, verifiable, credible evidence that Rowe accomplished anything at all during his brief tenure. His own overweaning self-adulation nor any superlative compliments from the guy who appointed him don't count. Nor will I accept that Bill picked up the Premier at the airport a few times, let Loyola sleep on his couch, or made coffee at federal-provincial meetings as proof of a job well done. Attending receptions is not proof, either; that's a perk or a pain depending on your perspective. Nope, I want to see a file finished or even significantly advanced.
I recall back in the dark ages when I served in government that someone in the bureaucracy tossed up this idea of having a permanent office in Ottawa. As a naive young fellow I thought it seemed like a good idea on the face of it. After a bit of consideration though, I realized that we taxpayers already have a raft of people who get paid to work with Government of Canada on our behalf, day in and day out.
One more body siphoning a salary and living expenses out of my pocket wouldn't help any.
I am still not convinced it has or will.
But there's a beer in it for anyone who can prove me wrong.
A free beer to anyone who can find any tangible, verifiable, credible evidence that Rowe accomplished anything at all during his brief tenure. His own overweaning self-adulation nor any superlative compliments from the guy who appointed him don't count. Nor will I accept that Bill picked up the Premier at the airport a few times, let Loyola sleep on his couch, or made coffee at federal-provincial meetings as proof of a job well done. Attending receptions is not proof, either; that's a perk or a pain depending on your perspective. Nope, I want to see a file finished or even significantly advanced.
I recall back in the dark ages when I served in government that someone in the bureaucracy tossed up this idea of having a permanent office in Ottawa. As a naive young fellow I thought it seemed like a good idea on the face of it. After a bit of consideration though, I realized that we taxpayers already have a raft of people who get paid to work with Government of Canada on our behalf, day in and day out.
One more body siphoning a salary and living expenses out of my pocket wouldn't help any.
I am still not convinced it has or will.
But there's a beer in it for anyone who can prove me wrong.
09 February 2005
Wangersky on The Opposition - -(Not quite) 'nuff said
Read Russell Wangersky's column in the Tuesday edition of The Telegram.
I don't think anything more needs to be said.
Addendum (10 Feb 05)
Interesting to see the Fair Deal site has opened a thread on this issue and linked to this site (tip of the hat, back.)
The comments that follow are worth reading. Aside from one blatantly myopic one, it would be useful for the Official Opposition to have a look at posted opinions. True they aren't any kind of scientific sampling but these people have obviously taken some time to write carefully considered observations. Think of it as a free focus group session, guys. Fair Deal thread on Grimes
I don't think anything more needs to be said.
Addendum (10 Feb 05)
Interesting to see the Fair Deal site has opened a thread on this issue and linked to this site (tip of the hat, back.)
The comments that follow are worth reading. Aside from one blatantly myopic one, it would be useful for the Official Opposition to have a look at posted opinions. True they aren't any kind of scientific sampling but these people have obviously taken some time to write carefully considered observations. Think of it as a free focus group session, guys. Fair Deal thread on Grimes
In search of strategic strategy for strategizing
A few years ago, B schools across North America started teaching "strategic" planning and every group under the sun needed a "vision" and a "mission" and a "strategic plan". Consultants made millions working on the documents, most of which I'd venture got tossed on a shelf right after the weekend retreat or "planning session".
Now we have a government that seems to be spending all its time working on plans and strategies.
Ed Byrne is the latest one to announce a call for proposals to develop a strategy, this time on wind generation of electric power. Nice idea.
Too bad Hydro has been supporting demonstration projects since 2001 trying to see if it is feasible to generate significant amounts of wind power in the province in a way that is environmentally safe.
"In recent years, there have been some advancements in technology that could lead to opportunities to reduce the cost of producing energy by wind power. As such, we believe that it is in the best interest of the province, the ratepayer and for current and potential wind power proponents, that we step back to review the current situation to determine how best to proceed."
Psst Ed. Here's a free suggestion. A radical concept.
Let the private sector keep developing test projects. If they are feasible, then let the private sector fund and develop them and feed the power into the Hydro grid. Let the environment department keep monitoring the projects and making sure they are environmentally sound.
I the meantime find something else to announce besides yet another study and proposal for a strategy.
It's a bit like the joke about The Method actor, seeking his "motivation" to walk across the soundstage toward the camera. "Don't worry", yells the director, " I'll tell you when you get here."
What's the strategy, Ed? I'll tell you when you get here.
Now we have a government that seems to be spending all its time working on plans and strategies.
Ed Byrne is the latest one to announce a call for proposals to develop a strategy, this time on wind generation of electric power. Nice idea.
Too bad Hydro has been supporting demonstration projects since 2001 trying to see if it is feasible to generate significant amounts of wind power in the province in a way that is environmentally safe.
"In recent years, there have been some advancements in technology that could lead to opportunities to reduce the cost of producing energy by wind power. As such, we believe that it is in the best interest of the province, the ratepayer and for current and potential wind power proponents, that we step back to review the current situation to determine how best to proceed."
Psst Ed. Here's a free suggestion. A radical concept.
Let the private sector keep developing test projects. If they are feasible, then let the private sector fund and develop them and feed the power into the Hydro grid. Let the environment department keep monitoring the projects and making sure they are environmentally sound.
I the meantime find something else to announce besides yet another study and proposal for a strategy.
It's a bit like the joke about The Method actor, seeking his "motivation" to walk across the soundstage toward the camera. "Don't worry", yells the director, " I'll tell you when you get here."
What's the strategy, Ed? I'll tell you when you get here.
Paul Wells take on Danny
Don't count on too many people circulating this link.
It's Paul Well's "BackPage" column from Macleans this week. It doesn't praise Danny. It can't be misconstrued - taken wrongly - into praise for the Wunderkind.
"Danny Williams could have had this deal in October or December. He preferred to pull cheap stunts in return for cheap votes. This is the man in whom Newfoundlanders and Labradorians have put their trust. One wonders why they are celebrating."
Wonder if Paul is coming on Monday for the signing ceremony?
It's Paul Well's "BackPage" column from Macleans this week. It doesn't praise Danny. It can't be misconstrued - taken wrongly - into praise for the Wunderkind.
"Danny Williams could have had this deal in October or December. He preferred to pull cheap stunts in return for cheap votes. This is the man in whom Newfoundlanders and Labradorians have put their trust. One wonders why they are celebrating."
Wonder if Paul is coming on Monday for the signing ceremony?
Jack's Math - revised and revised again
Ok, I may have misheard this clip today, so I will check it out and post a correction if need be. [Yep, I did. So I bought The Telegram today and got a better set of quotes.]
Jack Harris, the province's New Democratic Party leader issued a news release today calling on the government to bring some good news in the upcoming budget. He noted, among other things, that the offshore deal just announced will mean the provinces books will be balanced on a cash basis this year and that over the next eight years provincial government oil revenues will be a total of about $4.6 billion. [He said $4.9 billion, and I gather he was referring to the offsets if we go the full eight years in the first offset phase.]
Excuse me, Jack? I must have misheard you. [Yeah I did, but actually what he actually said doesn't change the rest of this post.]
Even before a deal was signed the provincial government estimated its direct oil revenues would be a total of $4.94 billion. That's the total from October. When Wade Locke added up his numbers based on US$32 per bbl (barrel), he came up with an eight-year figure of $5.2 billion.
Now that was without any new cash from Ottawa.
So, Jack, if we add the $2.0 billion in the new cash, the provincial government is going to have about $7.0 billion over the next eight years. That works out to be around $875 million per year on average. [If we accept Jack's idea that we get the full offset (Dream on, there buddy), then the total oil revenues plus offsets is actually........$1.25 billion per year, on average, over eight years. Of course, regular readers of this blog know the figure is likely closer to $875 million.]
And that is without considering Hebron/Ben Nevis and without the added revenue from Voisey's Bay and without the added revenue from restructured federal provincial financial for health and social programs.
Jack was right to point out that the government's finances are not in crisis, thereby acting like a proper Opposition Leader. (Why exactly was Roger Grimes out defending Fraser "Mario Andretti" March today anyway?) But Jack, b'y, at least get the math right on how much money the provincial government will have to spend.
If you put it in proper context, any idiot can see the Premier can be fiscally responsible and implement some much needed preventative health care projects like the school lunch program.
If it looks like the place is cash poor, and you are working from an equally wrong assumption, then you only fall into the trap carefully laid by that fountain of fiscal fooferah, the Minister of Decimals Loyola Sullivan: he can just dismiss you as another irresponsible leftie ready to spend us into the ground. Then he'll put everyone back to sleep with a recitation of the current budget projections, line by thousands of lines to the nearest fraction of a percentage.
(Revised 09 Feb 05)
Addendum (10 Feb 05)
Jack Harris made a guest appearance on Out of the Fog on Wednesday evening and it was repeated on Thursday. Watch for it again over the weekend. It's worthwhile to see Jack's solid performance despite the shortcomings discussed below. With a bit of work, the NDP could actually start to climb in the polls if Jack can keep it up.
A couple of things stand out. First of all Jack very clearly and concisely laid out his points in a way anyone could understand. He divided the debt into different chunks and explained his point in a way that you couldn't help but see where he was going - in a sensible level headed direction.
Second, the only one who wouldn't buy the logic was Krista Rudofsky who seems increasingly smitten with our Premier. Her tone betrayed a sketpicism seemingly the result of having swallowed Finance department news releases whole.
It's getting to the point where the CRTC should review the local cable access license for Rogers to see if they have crossed over a line on bias. If they try and pass themselves off as a current affairs or news show, then maybe there are some laws about truth in advertising that apply.
Does anyone remember Krista's fawning interview with the Premier back in January when she asked, breathlessly, "What can we do to help you, Premier?" or words to that effect. That was just one of several examples where she has failed utterly either to grasp the subject in front of her or ask the Premier or Loyola Sullivan or any Tory cabinet minister anything other than a question designed to let them slide through their prepared talking points with ease.
Danny has been on the show so often you'd swear he still owned the station. Out of the Fog is starting to sound a bit like the old Conversations with the Premier farce done eons ago with Joe Smallwood. The Premier would pull into the parking lot having been driven in by chauffeur from Roaches Line. While the car idled, a reporter would run out, stick a microphone through the open window and let the tape run as Joe pontificated about whatever was on his mind.
I once asked a reporter who had done the old Smallwood schtick and a later version done by Tobin on what he thought was the difference between the two. "With Tobin, I got to ask questions," came the reply, full of all the dry-wit experience of a seasoned and professional news veteran. There's a lesson there Krista could use because there is a difference between asking a question and feeding one.
Thankfully, Poor old Jack brushed off the light-weight questioning and got back to his point time and again. A seemingly frustrated Krista dropped it.
Any kind of bias in a public program interviewing political figures is unacceptable.
Period.
Jack Harris, the province's New Democratic Party leader issued a news release today calling on the government to bring some good news in the upcoming budget. He noted, among other things, that the offshore deal just announced will mean the provinces books will be balanced on a cash basis this year and that over the next eight years provincial government oil revenues will be a total of about $4.6 billion. [He said $4.9 billion, and I gather he was referring to the offsets if we go the full eight years in the first offset phase.]
Excuse me, Jack? I must have misheard you. [Yeah I did, but actually what he actually said doesn't change the rest of this post.]
Even before a deal was signed the provincial government estimated its direct oil revenues would be a total of $4.94 billion. That's the total from October. When Wade Locke added up his numbers based on US$32 per bbl (barrel), he came up with an eight-year figure of $5.2 billion.
Now that was without any new cash from Ottawa.
So, Jack, if we add the $2.0 billion in the new cash, the provincial government is going to have about $7.0 billion over the next eight years. That works out to be around $875 million per year on average. [If we accept Jack's idea that we get the full offset (Dream on, there buddy), then the total oil revenues plus offsets is actually........$1.25 billion per year, on average, over eight years. Of course, regular readers of this blog know the figure is likely closer to $875 million.]
And that is without considering Hebron/Ben Nevis and without the added revenue from Voisey's Bay and without the added revenue from restructured federal provincial financial for health and social programs.
Jack was right to point out that the government's finances are not in crisis, thereby acting like a proper Opposition Leader. (Why exactly was Roger Grimes out defending Fraser "Mario Andretti" March today anyway?) But Jack, b'y, at least get the math right on how much money the provincial government will have to spend.
If you put it in proper context, any idiot can see the Premier can be fiscally responsible and implement some much needed preventative health care projects like the school lunch program.
If it looks like the place is cash poor, and you are working from an equally wrong assumption, then you only fall into the trap carefully laid by that fountain of fiscal fooferah, the Minister of Decimals Loyola Sullivan: he can just dismiss you as another irresponsible leftie ready to spend us into the ground. Then he'll put everyone back to sleep with a recitation of the current budget projections, line by thousands of lines to the nearest fraction of a percentage.
(Revised 09 Feb 05)
Addendum (10 Feb 05)
Jack Harris made a guest appearance on Out of the Fog on Wednesday evening and it was repeated on Thursday. Watch for it again over the weekend. It's worthwhile to see Jack's solid performance despite the shortcomings discussed below. With a bit of work, the NDP could actually start to climb in the polls if Jack can keep it up.
A couple of things stand out. First of all Jack very clearly and concisely laid out his points in a way anyone could understand. He divided the debt into different chunks and explained his point in a way that you couldn't help but see where he was going - in a sensible level headed direction.
Second, the only one who wouldn't buy the logic was Krista Rudofsky who seems increasingly smitten with our Premier. Her tone betrayed a sketpicism seemingly the result of having swallowed Finance department news releases whole.
It's getting to the point where the CRTC should review the local cable access license for Rogers to see if they have crossed over a line on bias. If they try and pass themselves off as a current affairs or news show, then maybe there are some laws about truth in advertising that apply.
Does anyone remember Krista's fawning interview with the Premier back in January when she asked, breathlessly, "What can we do to help you, Premier?" or words to that effect. That was just one of several examples where she has failed utterly either to grasp the subject in front of her or ask the Premier or Loyola Sullivan or any Tory cabinet minister anything other than a question designed to let them slide through their prepared talking points with ease.
Danny has been on the show so often you'd swear he still owned the station. Out of the Fog is starting to sound a bit like the old Conversations with the Premier farce done eons ago with Joe Smallwood. The Premier would pull into the parking lot having been driven in by chauffeur from Roaches Line. While the car idled, a reporter would run out, stick a microphone through the open window and let the tape run as Joe pontificated about whatever was on his mind.
I once asked a reporter who had done the old Smallwood schtick and a later version done by Tobin on what he thought was the difference between the two. "With Tobin, I got to ask questions," came the reply, full of all the dry-wit experience of a seasoned and professional news veteran. There's a lesson there Krista could use because there is a difference between asking a question and feeding one.
Thankfully, Poor old Jack brushed off the light-weight questioning and got back to his point time and again. A seemingly frustrated Krista dropped it.
Any kind of bias in a public program interviewing political figures is unacceptable.
Period.
08 February 2005
Fraser should be on TV
Law and Order has been on the air since 1989.
CSI and all its spin-offs has been around for something like five years.
Fraser March needs to watch more TV. If he had, he would have known you can get the lugs from your phone to find out who you called and where you called from.
Make it easy Fraser: apologize and clean up your act or resign.
I am starting to think that Fraser and John are getting political advice from the same person.
CSI and all its spin-offs has been around for something like five years.
Fraser March needs to watch more TV. If he had, he would have known you can get the lugs from your phone to find out who you called and where you called from.
Make it easy Fraser: apologize and clean up your act or resign.
I am starting to think that Fraser and John are getting political advice from the same person.
Power corridor through Quebec?
Wait until Wednesday and you can get The Independent for free from its website.
When you do get it, or if you plunked down the buck already, check the front page story by Jeff Ducharme about the idea of forcing Quebec to let Newfoundland and Labrador build a power corridor through Quebec to let this province get its Labrador hydroelectric power to market.
Talk about living in the past, Jeff.
The idea of building power pylons through Quebec is old hat. As long as the existing grid has the physical capacity to carry the load, the Newfoundland and Labrador Hydro could wheel power across the existing lines. The link is to a United States Department of Energy website on the American electrical power system. It makes for fascinating reading; amazing thing the Internet.
This site makes for curious reading when you hear people - like Premier Williams - talking about building a single Canadian grid that runs from St. John's to Vancouver. Let's not kid ourselves: he talks about a Canadian grid as a way of getting federal money to put his Stunnel or something like it across the Strait of Belle Isle. It isn't about developing a great national project for Canada.
It is pretty clear from the DOE website that the existing North American power grid is divided into clearly defined zones that cross the border into Canada. Quebec is a separate system that includes Labrador. Newfoundland is, of course, an island and hence isn't part of the system. (Seems like an obvious point, but apparently not for some people.) The Maritimes is wired into the Eastern Interconnected Network through Maine in a system that stretches down to Florida. The so-called Anglo-Saxon route would wire us directly to that one, incidentally, albeit at a huge and likely non-viable cost. Non-viable, that is, without massive government subsidy.
The main thrust of Jeff's piece though is putting John Efford offside with local nationalists. The headline "No way" refers to John's refusal to force a power corridor through Quebec. Jeff makes a nice contribution to the "Whack John" sport that has grown up here lately, but it doesn't do much more than that...
except give us the following lessons:
1. The Indy is stuck hopelessly in the past. They might want to find a new researcher. I suspect though that they find it more useful to recycle nationalist mythology and maybe even invent some new mythology rather than deal in the here and now. If it sells papers, then they are succeeding. Why else would there be this power corridor nonsense on page one and inside a column by Ivan Morgan praising Danny Williams? Let me look again, there might be yet another column that mentions Margaret Wente and points out she was wrong. Nope. Not wrong, but there's Ryan Cleary's editorial taking Wente out of context so he can claim she too praises Danny.
Wow. Talk about getting predictable! Why isn't there a piece from Bill Rowe heaping mounds of praise of his employer? Sheesh, I should have just turned the page. Poof! There's Bill, large as life. Well, the paper is locally owned - another point made over and over - as if that affects the quality of the reporting.
2. John Efford is not up-to-speed on all his briefing books. The logical answer to a question about power corridors is not whether you would or you wouldn't force one but, "Why, Jeff, are you asking me an outdated question?" What John has done in this interview is give his political enemies yet more ammunition to use against him. Atta boy John.
When you do get it, or if you plunked down the buck already, check the front page story by Jeff Ducharme about the idea of forcing Quebec to let Newfoundland and Labrador build a power corridor through Quebec to let this province get its Labrador hydroelectric power to market.
Talk about living in the past, Jeff.
The idea of building power pylons through Quebec is old hat. As long as the existing grid has the physical capacity to carry the load, the Newfoundland and Labrador Hydro could wheel power across the existing lines. The link is to a United States Department of Energy website on the American electrical power system. It makes for fascinating reading; amazing thing the Internet.
This site makes for curious reading when you hear people - like Premier Williams - talking about building a single Canadian grid that runs from St. John's to Vancouver. Let's not kid ourselves: he talks about a Canadian grid as a way of getting federal money to put his Stunnel or something like it across the Strait of Belle Isle. It isn't about developing a great national project for Canada.
It is pretty clear from the DOE website that the existing North American power grid is divided into clearly defined zones that cross the border into Canada. Quebec is a separate system that includes Labrador. Newfoundland is, of course, an island and hence isn't part of the system. (Seems like an obvious point, but apparently not for some people.) The Maritimes is wired into the Eastern Interconnected Network through Maine in a system that stretches down to Florida. The so-called Anglo-Saxon route would wire us directly to that one, incidentally, albeit at a huge and likely non-viable cost. Non-viable, that is, without massive government subsidy.
The main thrust of Jeff's piece though is putting John Efford offside with local nationalists. The headline "No way" refers to John's refusal to force a power corridor through Quebec. Jeff makes a nice contribution to the "Whack John" sport that has grown up here lately, but it doesn't do much more than that...
except give us the following lessons:
1. The Indy is stuck hopelessly in the past. They might want to find a new researcher. I suspect though that they find it more useful to recycle nationalist mythology and maybe even invent some new mythology rather than deal in the here and now. If it sells papers, then they are succeeding. Why else would there be this power corridor nonsense on page one and inside a column by Ivan Morgan praising Danny Williams? Let me look again, there might be yet another column that mentions Margaret Wente and points out she was wrong. Nope. Not wrong, but there's Ryan Cleary's editorial taking Wente out of context so he can claim she too praises Danny.
Wow. Talk about getting predictable! Why isn't there a piece from Bill Rowe heaping mounds of praise of his employer? Sheesh, I should have just turned the page. Poof! There's Bill, large as life. Well, the paper is locally owned - another point made over and over - as if that affects the quality of the reporting.
2. John Efford is not up-to-speed on all his briefing books. The logical answer to a question about power corridors is not whether you would or you wouldn't force one but, "Why, Jeff, are you asking me an outdated question?" What John has done in this interview is give his political enemies yet more ammunition to use against him. Atta boy John.
07 February 2005
Cormorant wins job of flying US President
A consortium led in the United States by Lockheed Martin has won the contract to replace Sikorsky SeaKing helicopters in the American Presidential flight. The contract, valued at US$1.7 billion, will see the consortium supply a total of 23 aircraft to be flown by the United States Marine Corps contingent that ferries the President on short flights.
Canadians will be interested in this since the EH-101 is flown by the Canadian Forces under the name Cormorant and used for search and rescue service. The same aircraft lost a recent Canadian competition to supply 28 ship-borne helicopters to replace the SeaKing. The winner of that job was the Sikorsky S-92, a derivative of the familiar SH-60 SeaHawk/UH-60 BlackHawk helicopters built by Sikorsky.
This whole business will become more interesting to watch as the United States Department of Defense looks to replace its own SeaKings in the coming years.
Looking a little closer to home, the website for the LockheedMartin proposal, Team US101, lists two recent rescues by Cormorants from 103 Squadron in Gander as proof of the aircraft's capabilities.
They even mention that the Cormorant staged from the Hibernia rig on one mission.
The contract award was announced on January 28, 2005.
Canadians will be interested in this since the EH-101 is flown by the Canadian Forces under the name Cormorant and used for search and rescue service. The same aircraft lost a recent Canadian competition to supply 28 ship-borne helicopters to replace the SeaKing. The winner of that job was the Sikorsky S-92, a derivative of the familiar SH-60 SeaHawk/UH-60 BlackHawk helicopters built by Sikorsky.
This whole business will become more interesting to watch as the United States Department of Defense looks to replace its own SeaKings in the coming years.
Looking a little closer to home, the website for the LockheedMartin proposal, Team US101, lists two recent rescues by Cormorants from 103 Squadron in Gander as proof of the aircraft's capabilities.
They even mention that the Cormorant staged from the Hibernia rig on one mission.
The contract award was announced on January 28, 2005.
Caution: Plain Spoken Newfoundlander at work
The Sun chain, among others, is reporting today that Chief of Defence Staff General Rick Hillier has scrapped the defence policy set to be announced by the Martin administration. Officials are said to be busily re-writing the document described as "boring" in its original form.
Bill Graham, the Minister of National Defence is reported to have pushed both for Hillier's appointment and for the complete re-write.
Surprise, surprise!
General Hillier is widely known and respected for his leadership ability, sharp mind and commitment to laying the facts on the table, good, bad or indifferent. National Defence Headquarters, sometimes known as Disneyland on the Rideau among Ottawa insiders, is likely adapting quickly to Hillier's new style.
Hillier first gained wider public prominence during the Ice Storm in 1998 when his 2 Canadian Mechanized Brigade Group oversaw the military support to civil authorities in Eastern Ontario. Some may recall that 129 soldiers from the local garrison in St. John's spent a couple of weeks just outside Ottawa working for General Hillier. They were in the air before many local reserve units mobilized and they did such a fine job that the company-sized organization wound up taking some 70 military engineers from Ontario under command. The Newfoundland reserve soldiers came from 1 Royal Newfoundland Regiment, 36 Service Battalion and 56 Field Engineer Squadron, with vehicle transportation being supplied by soldiers from 31 Service Battalion in Saint John New Brunswick.
True to form, Hillier came out personally to thank the soldiers as they waited at Ottawa airport for airlift home. He insisted on having his picture taken with them as a souvenir. That's the same approach he has taken in all his jobs.
Basically, it hasn't taken very long for the guy one Ottawa-based defence analyst called a "plain spoken Newfoundlander" to make his presence felt. That line apparently got knickers in a knot at one television program here in St. John's, where the crowd that put the show together took offense at the remark. Seems they were desperately looking for yet another slight to rant against in the wake of Margaret Wente.
Chaulk one up for Rick.
Chaulk one up for Bill Graham.
Now we just have to watch for the plan when it finally emerges.
Bill Graham, the Minister of National Defence is reported to have pushed both for Hillier's appointment and for the complete re-write.
Surprise, surprise!
General Hillier is widely known and respected for his leadership ability, sharp mind and commitment to laying the facts on the table, good, bad or indifferent. National Defence Headquarters, sometimes known as Disneyland on the Rideau among Ottawa insiders, is likely adapting quickly to Hillier's new style.
Hillier first gained wider public prominence during the Ice Storm in 1998 when his 2 Canadian Mechanized Brigade Group oversaw the military support to civil authorities in Eastern Ontario. Some may recall that 129 soldiers from the local garrison in St. John's spent a couple of weeks just outside Ottawa working for General Hillier. They were in the air before many local reserve units mobilized and they did such a fine job that the company-sized organization wound up taking some 70 military engineers from Ontario under command. The Newfoundland reserve soldiers came from 1 Royal Newfoundland Regiment, 36 Service Battalion and 56 Field Engineer Squadron, with vehicle transportation being supplied by soldiers from 31 Service Battalion in Saint John New Brunswick.
True to form, Hillier came out personally to thank the soldiers as they waited at Ottawa airport for airlift home. He insisted on having his picture taken with them as a souvenir. That's the same approach he has taken in all his jobs.
Basically, it hasn't taken very long for the guy one Ottawa-based defence analyst called a "plain spoken Newfoundlander" to make his presence felt. That line apparently got knickers in a knot at one television program here in St. John's, where the crowd that put the show together took offense at the remark. Seems they were desperately looking for yet another slight to rant against in the wake of Margaret Wente.
Chaulk one up for Rick.
Chaulk one up for Bill Graham.
Now we just have to watch for the plan when it finally emerges.
Monday morning smile - here's the real can opener joke
Just to make sure we are all on the same page, here are some versions of the classic Can Opener joke.
Version 1.
Three people are stranded on a small island. One is a physicist. One is a circus strongman. One is an economist. After a few days of surviving on fruit, they discover a cache of canned food, and they have to decide how to open it.
The physicist says to the strongman "Why don't you climb that tree, and smash the cans down on the rocks, and burst them open?"
The strongman says, "No, that would spatter the stuff all over. I can open the cans with my teeth!"
The economist says "First, we must assume that we have a can opener."
Version 2.
Two economists are trapped on an island with only a can of beans. They've tried everything they can think of to open the can of beans: sticks, rocks, their teeth, etc.
So the two economists are sitting around dejected when one of them yells, "I GOT IT!" [Remember they are economists, not grammarians]
The other economist gets excited and sits up with anticipation, the other tells him, "Let's just
assume we have a can opener!"
Version 3.
A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Let's smash the can open with a rock." The chemist says, "Let's build a fire and heat the can first." The economist says, "Let's assume that we have a can-opener..."
and just for the variety, here is one of my all time favourite economist jokes:
It seems to capture the essence of many things.
A mathematician, an accountant, and an economist apply for the same job.
The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."
Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."
Then the interviewer calls in the economist and poses the same question "What do two plus two equal?"
The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says "What do you want it to equal?"
Version 1.
Three people are stranded on a small island. One is a physicist. One is a circus strongman. One is an economist. After a few days of surviving on fruit, they discover a cache of canned food, and they have to decide how to open it.
The physicist says to the strongman "Why don't you climb that tree, and smash the cans down on the rocks, and burst them open?"
The strongman says, "No, that would spatter the stuff all over. I can open the cans with my teeth!"
The economist says "First, we must assume that we have a can opener."
Version 2.
Two economists are trapped on an island with only a can of beans. They've tried everything they can think of to open the can of beans: sticks, rocks, their teeth, etc.
So the two economists are sitting around dejected when one of them yells, "I GOT IT!" [Remember they are economists, not grammarians]
The other economist gets excited and sits up with anticipation, the other tells him, "Let's just
assume we have a can opener!"
Version 3.
A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Let's smash the can open with a rock." The chemist says, "Let's build a fire and heat the can first." The economist says, "Let's assume that we have a can-opener..."
and just for the variety, here is one of my all time favourite economist jokes:
It seems to capture the essence of many things.
A mathematician, an accountant, and an economist apply for the same job.
The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."
Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."
Then the interviewer calls in the economist and poses the same question "What do two plus two equal?"
The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says "What do you want it to equal?"
Second, we assume a can...
Now that I have had some time to go through Wade Locke's slides on the Atlantic Accord, I have a better idea of what he said last week in the"independent" assessment of the Accord deal. The slides and some other documents can be found at the Harris Centre website, along with a bunch of other interesting reading. This follows on my other post on this, First we assume a can-opener.
I've also checked a couple of details on my earlier postings. Apparently, Locke he does include higher revenues for Terra Nova in his projections, but it still seems he does not include Hebron or other revenue sources in his projections of whether or not the province will qualify for Equalization at any point under the January agreement. I am curious about the Terra Nova thing, though, since Locke's version of the revenue chart actually is more extreme than the provincial government one. It has an oddity, too. As revenues get higher and, in one Locke slide, as oil prices get higher, provincial oil revenues drop. There must be something I am missing.
If you check the Terra Nova site, for example you will see there is a plan to plateau production for a period. Logically one would accept that this should be a fairly steady revenue stream, assuming, as Locke does, that oil stays at constant price. Why the big peak, then?
Why the big peak, too, if we are actually bringing on fields in sequencerather than simultaneously?
Admittedly, I am working without the benefit of his actual comments on the night so I may misunderstand some of his points. That said, with his slides and with the media reports, I think I can offer some further observations on his presentation.
Generally, his comments are accurate but that is so solely within the information, context and assumptions that he uses. Shift any of those and his comments are anything from less accurate to completely off base.
Let's just take some key issues:
1. A logical comparison would be between what was sought and what was obtained. Wade Locke deliberately avoided this comparison and the reason is by no means obvious. There is no logical or legitimate reason to do so. He can easily model what was sought. It was a simple proposition: double revenues for the life of oil production. Poof! Instant slide. Then compare that to the January deal. Poof! Instant set of lines on instant chart. Compare both. Measure gaps, if any. Make observations. Make it more complex. Compare the pre-June 5 proposition: double oil revenues for eight years. Poof! Another instant line for comparison. Repeat measurement and observation steps above.
Locke didn't do that, though. Nope. Instead, he looked at each of the federal propositions. This presents some difficulties. The biggest one is that Locke isn't actually making a solid judgment on the apparent success or failure of the Premier's campaign. It would seem like both the most logical comparison and the most productive one for people looking for an independent assessment on which to base their personal judgment. It is curious that he wound up with a presentation that joins the chorus of cheers, hence my suggestion in an earlier post that Locke situated the estimate.
The next biggest difficulty is that Locke is working without the benefit of all the deals, details and counter details. One can only make the kind of observations Locke did make - like that each proposal was better than the one before - if he actually had details of every single nuance and detail in the discussion. For example, we know the Premier had some kind of long-term deal in June which he repudiated by his letter of January 10. Locke doesn't discuss this idea at all, preferring to completely ignore this deal. Locke also ignores the changing provincial position too. These considerations all call his final assessment into serious doubt.
What we wind up with is a case where our economist not only assumes a can-opener, he also assumes a can of beans. He then proceeds to open then figuratively and reveal their magical contents. No matter how you look at, Wade Locke's entire approach doesn't add up to a genuinely thorough assessment of the provincial position. We still have imaginary beans and a can opener
2. Locke concludes (if I gather correctly) that each federal offer from October to January got better, to the point where the province accepted the last one.
Well, as the post from Thursday shows, on paper there is actually very little difference between December and January. There was noticeable improvement from October to December after much negotiation, but the variations between December and January are anything but big. I'll highlight some specifics.
- In the core issue, the federal position remains the same: collect revenue plus offsets until past the Equalization threshold. After that, the existing Accord provisions apply. This is emphatically not what the provincial government sought in any of its three proposals and this is a point Locke apparently does not make at all. This leaves a huge gap in Locke's presentation.
- The lump sum payment concept is simply an adaptation of an October concept to the new deal. It doesn't materially enhance the January offer since, as I have argued elsewhere, the October deal could have netted out the same cash - if they tried for it. December was an improvement on October, but there was very little of substance changed between the December offer and January. The second-phase could be seen as unattainable, depending on your assumptions about economic performance that far out (2010-2012). Therefore, October might not have been that bad after all.
- The cash value of the deal in the short-term and long-term fluctuates with the price of oil. Therefore many of the deal's benefits are simply theoretical. It all depends on which scenario plays out; it's based on which can-opener you assume.
Of course, Locke has conveniently ignored the most obvious point: Danny Williams said yes to less despite his claim that he woudn't.
3. In order for this deal to pay off as Locke projects, oil prices have to remain at or below $32 a barrel for the life of the agreement, especially in the years when oil revenue supposedly peaks (06-08 depending on pricing). Locke's assumption appears to be based on an average price per barrel of oil. fair enough; most projections work this way. However, over the span of eight years, the average price could be US$32, with a low period at the beginning and peaks in between such that it averages out at $32. Unfortunately, if those peaks also push the province beyond the Equalization threshold, this deal won't pay off in the way Locke suggests. Assume a different can opener and you might not be able to open the can of magic beans.
4. Locke appears to assume no other economic activity exists. It is obvious from the slides that Locke assumes no Hebron/Be Nevis development and it would appear he also assumes no other projects such as Voisey's Bay will impact on provincial own-source revenues. As such, other economic activity could make this a really short-term deal as I have said elsewhere. In that case, Locke's praise of this deal would be...Well...Premature.
5. Clawbacks, clawbacks, clawbacks. Locke persists in the clawback mythology which only serves to confuse the issue and mask what actually occurs. For example, in slide labeled "What was the January Offer Worth?", Locke's presentation makes it appear that the maximum revenue is the red line, the oil revenue line. In the scenario being described, though, the revenue is actually cumulative and would be considerably higher than the $1.1 billion shown at peak. The oddest part of Locke's presentation is his claim that even though the supposed "clawback" climbs steadily from 14% currently toward 100%, at some magical point, when the province no longer qualifies for Equalization, the "clawback" magically disappears. What should be a 100% clawback, as Danny Williams logically used to argue, Locke says the clawback disappears. What a crock!
6. Problems/Uncertainties magically disappear. There is precious little difference between the December and January offers. Yet, Locke makes different conclusions on each. For example, in the slide "Issues with Respect to the December Agreement in principle", Locke lists as his first point that the province might not qualify for Equalization after 2006 depending on oil prices and "other things going on in the province". While this acknowledges one of the major shortcomings of Locke's assessment the same could be said of January as well. Where did you concern go, Wade? It's not like this is a minor issue.
7. Funky Math and Funkadelic Logic. In the slide on what was achieved in the January deal, there is some funky math. The "upfront payment" does not have a value of up to $400 million per year as Locke suggests. It is only $250 million for sure; any other value, such as interest, will vary widely depending on how the money is used. That looks like funky math to me.
As for funkadelic logic, Locke praises the change in the criteria for qualifying for the second eight-year phase of the offset deal. He apparently didn't notice that an "either/or" provision - meaning the province met one of two criteria, suddenly became an "and" criteria - meaning the province will have to meet two criteria simultaneously. Add in a more realistic assessment of the economy over thee next eight years and you can start to see some difficulties with hitting both criteria that we wouldn't have had with hitting one.
As for his comment about a clause for Phase 2 preventing the province from "falling off a cliff", Locke knows that the existing Equalization program has sufficient insurance against this ever occurring. It was a cute phrase Danny liked to used - maybe he got it from Wade - but it is a dubious concept at best. Of course, it won't be a benefit at all if, as Locke noted in his critique of the December deal, the province doesn't qualify for Equalization anyway.
Nasty things, those funkadelic assumptions.
I wish I'd ame the session at Memorial last week, if for no other reason than I could have heard the comments from political scientists Steve Tomblin and Chris Dunn. As it is, from Wade Locke's slides and his media interviews, I'd say his "independent" assessment fell as far short of the requirement as that offered by most news media in the province.
Too bad, really. It is difficult to have a participatory democracy when people are fed assumptions in place of analysis.
06 February 2005
The Current and the EU
If you have never seen it, I strongly suggest you check out The Current, a monthly tabloid format newspaper printed in St. John's.
It's kinda edgy, sometimes funny and perhaps is the only newspaper in the province gutsy enough (by local standards) to print Josey Vogels' column, My messy bedroom.
This month's issue has a couple of interesting features. There's a bit on Icelandic independence. Odd no one ever asks if Icelandic fisheries is a business or a social program to keep people in "traditional" ways of life. There's also a bit on Margaret Wente, but to be honest, she is getting way more ink than she deserves. To make matters worse, The Current piece is lame and way beneath their usual satirical standards.
What I thought was hysterically funny was yet another mock government call for proposals. This time it is for a process whereby this place can leave Canada and join the European Union. The last fake call at least made some sense. This one is about as realistic as Newfoundland and Labrador applying to hook up with Djibouti. It's also kind of disappointing given that one of The Current's writers is Greg Locke, staunch nationalist. Does this means he now advocates trading in Confederation for cuddling up with Malta and Latvia?
When you're finished with The Current, you might just want to visit the European Union website. We'd have some difficulty qualifying as "European" in any meaningful sense of the term so the whole scheme would be moot anyways. But more to the point, since everyone - especially the nationalists - likes to rant about foreign overfishing and blames Canada for what the Spanish are doing (Go figure that one), proponents of the EU option might just want to have a look at the EU fisheries page. Maybe it won't be foreign overfishing if the overfishing is done by our EU partners. We can then say we ended foreign over-fishing by making them not foreign.
That would sound like Gwynne Dyer's claim a few years ago that war as we know it was gone after the collapse of the old Soviet Union, even though there were still civil conflicts going on within states like Yugoslavia. Talk about semantics. Interstate warfare was over, therefore everything was peachy. Unless you were a Tutsi or a Chechin. But be happy knowing you were not slaughtered in a war. Nope, it was a civil disorder.
But back to the point, just to get a genuine taste of the EU fisheries policy, here's the main quote on the introduction page:
"The EU fishing industry is a major source of employment and food. It is therefore important to prevent over-fishing by some to the detriment of all. The European Union has a common fisheries policy (CFP) in order to manage the industry for the benefit of both fishing communities and consumers."
Hold on to your turbot-on-a- stick.
While you are surfing through the EU sites, just take a look at the other member states, not the new ones, but the ones with real clout. Like Spain.
And Portugal.
And France.
Now imagine President Danny Williams in Brussels trying to convince them to stop devastating a fishery that is - oooh easily half a freaking world away from them and a place they used to plunder when it was their colony.
You think we have troubles being heard in "colonial" Ottawa. Bring on the Mannequin Pisse!
Now, let me just check and see if the United Federation of Planets has an opening for new members.
It's kinda edgy, sometimes funny and perhaps is the only newspaper in the province gutsy enough (by local standards) to print Josey Vogels' column, My messy bedroom.
This month's issue has a couple of interesting features. There's a bit on Icelandic independence. Odd no one ever asks if Icelandic fisheries is a business or a social program to keep people in "traditional" ways of life. There's also a bit on Margaret Wente, but to be honest, she is getting way more ink than she deserves. To make matters worse, The Current piece is lame and way beneath their usual satirical standards.
What I thought was hysterically funny was yet another mock government call for proposals. This time it is for a process whereby this place can leave Canada and join the European Union. The last fake call at least made some sense. This one is about as realistic as Newfoundland and Labrador applying to hook up with Djibouti. It's also kind of disappointing given that one of The Current's writers is Greg Locke, staunch nationalist. Does this means he now advocates trading in Confederation for cuddling up with Malta and Latvia?
When you're finished with The Current, you might just want to visit the European Union website. We'd have some difficulty qualifying as "European" in any meaningful sense of the term so the whole scheme would be moot anyways. But more to the point, since everyone - especially the nationalists - likes to rant about foreign overfishing and blames Canada for what the Spanish are doing (Go figure that one), proponents of the EU option might just want to have a look at the EU fisheries page. Maybe it won't be foreign overfishing if the overfishing is done by our EU partners. We can then say we ended foreign over-fishing by making them not foreign.
That would sound like Gwynne Dyer's claim a few years ago that war as we know it was gone after the collapse of the old Soviet Union, even though there were still civil conflicts going on within states like Yugoslavia. Talk about semantics. Interstate warfare was over, therefore everything was peachy. Unless you were a Tutsi or a Chechin. But be happy knowing you were not slaughtered in a war. Nope, it was a civil disorder.
But back to the point, just to get a genuine taste of the EU fisheries policy, here's the main quote on the introduction page:
"The EU fishing industry is a major source of employment and food. It is therefore important to prevent over-fishing by some to the detriment of all. The European Union has a common fisheries policy (CFP) in order to manage the industry for the benefit of both fishing communities and consumers."
Hold on to your turbot-on-a- stick.
While you are surfing through the EU sites, just take a look at the other member states, not the new ones, but the ones with real clout. Like Spain.
And Portugal.
And France.
Now imagine President Danny Williams in Brussels trying to convince them to stop devastating a fishery that is - oooh easily half a freaking world away from them and a place they used to plunder when it was their colony.
You think we have troubles being heard in "colonial" Ottawa. Bring on the Mannequin Pisse!
Now, let me just check and see if the United Federation of Planets has an opening for new members.
Country evenly divided on same sex marriage
Anyone who has heard federal member of parliament Gerry Byrne try to explain the position he is taking on the same-sex marriage bill can understand the difficulty he is having once they see the poll results below.
Even when a majority of the province is moving in one direction (backing Danny Williams just recently), Byrne still manages to take so many sides on the issue that he makes master waffler John Kerry look like he has steely determination and single-minded vision.
In this instance, Bryne has managed to concoct some absolutely cokamammie rational that links same-sex marriage, minority rights, ending denominational education with voting against a simple change to legislation that would actually make every reasonable person happy on a divisive issue. Oy vey!
A poll conducted last week by SES Research shows that while Byrne's logic may not be kosher, certainly he can take comfort in the divided views among his fellow Canadians.
Respondents were evenly divided when asked to indicate whether marriage as being between a man and a woman or allowing people of the same sex to marry best described their opinion. Forty six percent [46%] said marriage between a man and a woman best reflected their views. Forty five percent [45%] said allowing members of the same sex to marry best described their view. Of the remainder, nine percent were unsure or selected neither of the two choices.
Here are the actual questions and response percentages. This was a random telephone survey of 1,000 Canadians conducted by SES Research between Jan. 28 and Feb. 2, 2005. The results have a margin of error ±3.1%, 19 times out of 20.
Percentages may not add up to 100 due to rounding.
Question - Some people think that same-sex couples should be allowed to belegally married and be recognized like couples made up of a man and a woman. Other people think that only marriages between a man and womanshould be legally recognized. Which of these two opinions, if either, bestreflects your views?
46% Marriage only a man and a woman
45% Allow same-sex couples to marry
5% Neither
4% Unsure
Question - If your local Member of Parliament had views different from your own on the issue of same-sex marriages, would you vote against your federalMP for that reason?
53% Would not vote against MP
42% Would vote against MP
5% Undecided
Question - Thinking of the upcoming vote on same-sex marriage should yourMember of Parliament vote based on……[ROTATE]
54% The views in his/her riding
22% His/her personal views
16% His/her official party position
8% Undecided
Note for those confused by some of the introduction: The sudden lapse to Yiddish is just a symptom of a piece I wrote a while ago and just recently re-read, called The Yiddish of Newfoundland Politics. Maybe I'll post it here soon, although it is a little dated. It could be time to update the concept that takes into account the mishegas about the Accord and the sheer drek being pumped out by some media both here and across Canada on the who issue.
Somewhere along the line I managed to start slipping Yiddish into my speech. The language seems to be tremendously expressive and captures so many aspects of life in a single word or single evocative phrase.
The link I supplied is to a New York deli that has as part of its website a dictionary of Yiddish words and phrases.Sadly, I don't have a Yiddish dictionary that matches my copy of The dictionary of Newfoundland English, so I make do with what I can get. Hmmm. That reminds me to find the online version of that so non-Newfoundlanders will be able to decipher some of the local expressions that may from time to time creep into these postings.
A la prochaine, mes amis.
Even when a majority of the province is moving in one direction (backing Danny Williams just recently), Byrne still manages to take so many sides on the issue that he makes master waffler John Kerry look like he has steely determination and single-minded vision.
In this instance, Bryne has managed to concoct some absolutely cokamammie rational that links same-sex marriage, minority rights, ending denominational education with voting against a simple change to legislation that would actually make every reasonable person happy on a divisive issue. Oy vey!
A poll conducted last week by SES Research shows that while Byrne's logic may not be kosher, certainly he can take comfort in the divided views among his fellow Canadians.
Respondents were evenly divided when asked to indicate whether marriage as being between a man and a woman or allowing people of the same sex to marry best described their opinion. Forty six percent [46%] said marriage between a man and a woman best reflected their views. Forty five percent [45%] said allowing members of the same sex to marry best described their view. Of the remainder, nine percent were unsure or selected neither of the two choices.
Here are the actual questions and response percentages. This was a random telephone survey of 1,000 Canadians conducted by SES Research between Jan. 28 and Feb. 2, 2005. The results have a margin of error ±3.1%, 19 times out of 20.
Percentages may not add up to 100 due to rounding.
Question - Some people think that same-sex couples should be allowed to belegally married and be recognized like couples made up of a man and a woman. Other people think that only marriages between a man and womanshould be legally recognized. Which of these two opinions, if either, bestreflects your views?
46% Marriage only a man and a woman
45% Allow same-sex couples to marry
5% Neither
4% Unsure
Question - If your local Member of Parliament had views different from your own on the issue of same-sex marriages, would you vote against your federalMP for that reason?
53% Would not vote against MP
42% Would vote against MP
5% Undecided
Question - Thinking of the upcoming vote on same-sex marriage should yourMember of Parliament vote based on……[ROTATE]
54% The views in his/her riding
22% His/her personal views
16% His/her official party position
8% Undecided
Note for those confused by some of the introduction: The sudden lapse to Yiddish is just a symptom of a piece I wrote a while ago and just recently re-read, called The Yiddish of Newfoundland Politics. Maybe I'll post it here soon, although it is a little dated. It could be time to update the concept that takes into account the mishegas about the Accord and the sheer drek being pumped out by some media both here and across Canada on the who issue.
Somewhere along the line I managed to start slipping Yiddish into my speech. The language seems to be tremendously expressive and captures so many aspects of life in a single word or single evocative phrase.
The link I supplied is to a New York deli that has as part of its website a dictionary of Yiddish words and phrases.Sadly, I don't have a Yiddish dictionary that matches my copy of The dictionary of Newfoundland English, so I make do with what I can get. Hmmm. That reminds me to find the online version of that so non-Newfoundlanders will be able to decipher some of the local expressions that may from time to time creep into these postings.
A la prochaine, mes amis.
Some links to offshore oil and gas websites
Just a few links to give you more background information on offshore development.
Hibernia: Link to the official site for Hibernia Management and Development Company.
Here's Petro-Canada's site for Terra Nova.
Then there's White Rose. Just watch out for the flash animation at the start if you have dial-up or a slow connection of some kind. Just a lil design hint, Husky guys - make the flash an option or let people somehow skip it. I know it cost you a lot of cash, but after the umpteenth trip to the site it becomes more of a nuisance. For those people out there that have trouble with flash, lack of a "skip it" feature just turns them off.
While we are at it, here's a link to Offshore Technology.com and its summary of North American projects. Easy to read, with lots of good graphics and some easy to decipher charts, each of the project descriptions gives a fine overview. Take the one on White Rose for example, which gives a 3-D illustration of the field. Awesome!
Now if only the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNOPB) could find a way to get just a glimpse of their core and sample storage online. This is the regulatory authority for offshore development and while their mandate does not include public education as a Number One Priority - and nor should it be for them - the storage facility has a wealth of information that would assist the lay public appreciate what is going on offshore Newfoundland and Labrador.
I had the opportunity of getting a tour of the facility a couple of years ago and it is truly amazing. Now when people talk about the heavy oil at the Hebron/Ben Nevis field or its heavily fractured structure, I can appreciate what they are talking about. From the 3-D seismic computer models CNOPB can build, the whole world that far offshore and that far underground is right in front of your eyes.
CNOPB Core Storage and Research Centre is accessible to the public, although priority seems to be given to academics and other researchers. There are fees that apply for use of the facility and those are available on the CNOPB website under General and the Catalogue of Information and Services.
Hibernia: Link to the official site for Hibernia Management and Development Company.
Here's Petro-Canada's site for Terra Nova.
Then there's White Rose. Just watch out for the flash animation at the start if you have dial-up or a slow connection of some kind. Just a lil design hint, Husky guys - make the flash an option or let people somehow skip it. I know it cost you a lot of cash, but after the umpteenth trip to the site it becomes more of a nuisance. For those people out there that have trouble with flash, lack of a "skip it" feature just turns them off.
While we are at it, here's a link to Offshore Technology.com and its summary of North American projects. Easy to read, with lots of good graphics and some easy to decipher charts, each of the project descriptions gives a fine overview. Take the one on White Rose for example, which gives a 3-D illustration of the field. Awesome!
Now if only the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNOPB) could find a way to get just a glimpse of their core and sample storage online. This is the regulatory authority for offshore development and while their mandate does not include public education as a Number One Priority - and nor should it be for them - the storage facility has a wealth of information that would assist the lay public appreciate what is going on offshore Newfoundland and Labrador.
I had the opportunity of getting a tour of the facility a couple of years ago and it is truly amazing. Now when people talk about the heavy oil at the Hebron/Ben Nevis field or its heavily fractured structure, I can appreciate what they are talking about. From the 3-D seismic computer models CNOPB can build, the whole world that far offshore and that far underground is right in front of your eyes.
CNOPB Core Storage and Research Centre is accessible to the public, although priority seems to be given to academics and other researchers. There are fees that apply for use of the facility and those are available on the CNOPB website under General and the Catalogue of Information and Services.
05 February 2005
Offshore royalties - the easy version
For those of you who missed it - like me - here's a story Moira Baird filed in March 2002 on Hibernia royalties. It describes in general terms the types of royalties that come from projects like Hibernia and Terra Nova and White Rose. I'll give all the detail like page, placement and so forth for those who might want to cite this somewhere other than coming from my blog. Like I said in the other post, Moira is "industrial strength", that is, she gives it to your fair, factual and, in this case, reduced down to the point where even someone like me can actually get it.
Many thanks to Moira and The Telegram for providing this copy. Note: I have changed the paragraph structure slightly from the original. Otherwise, the piece appears as it did in the print original.
Background information is available on Hibernia and Terra Nova and the generic offshore royalty regime from the Government of Newfoundland and Labrador. There is a separate generic regime for onshore production, like the site at Port au Port.
Province's Hibernia royalties continue to trickle in: Terra Nova project holds more promise for Newfoundland coffers
St. John's Telegram
Wednesday, March 6, 2002
Page: A3 / FRONT
Section: News
Byline: Moira Baird
Source: The Telegram
Newfoundland and Labrador won't get rich from its Hibernia royalties -- but they continue to trickle in.
By the end of March, the province's annual royalties from its largest offshore oilfield are expected to total $29 million for the fiscal year. Since Nov. 17, 1997, when Hibernia started producing oil, until March 31, 2002, the province's royalty share is expected to total $65 million."
The province receives monthly cheques from Hibernia," said Darryl Mercer, spokesman for the Department of Mines and energy. First oil flowed from Terra Nova Jan. 20, and the royalty cheques from that project are expected soon. By comparison, last year's production at Hibernia was worth substantially more than the province's royalty cheques.
Using Petro-Canada's average price of $36.63 Cdn per barrel, as noted in the company's 2001 annual report, Hibernia oil was worth about $1.9 billion last year. Monitoring and auditing offshore oil royalties is a complicated business. The job falls to the petroleum projects monitoring division, part of the Department of Mines and Energy.
TWO TYPES
There are two types of royalties for Hibernia -- one is the basic royalty rate, the other is the net royalty rate.
The basic royalty rate is determined by the price of a barrel of oil, the level of production, and the cost of transporting that oil to market. (That cost includes shipping the oil from the Hibernia platform to the transshipment facility at Whiffen Head, Placentia Bay in tanker shuttles.) The basic royalty started at one per cent and goes to a maximum of five per cent.
Right now, Hibernia is paying at three per cent. The net royalty of 30 per cent doesn't kick in until "payout" has occurred. That means all the costs, plus interest, incurred by the Hibernia consortium to produce oil must be paid off before the province receives any net royalties.
Those costs submitted by the Hibernia partners are regularly audited by the province's petroleum projects monitoring division. When the Hibernia consortium asked for permission to increase production to 180,000 barrels a day, the province, in turn, asked for a speeded-up timetable for the basic royalty rates. A deal was worked out by July 2000.
Previously, that basic royalty regime increased by a percentage point every 18 months until reaching a maximum of five per cent. These days, the province gets a royalty increase every 18 months, or every time Hibernia reaches specified production levels -- whichever comes first. That rate now stands at three per cent. It will reach four per cent when Hibernia produces 194 million barrels of oil, and will top out at five per cent in February 2004 or when production hits 268 million barrels.
But those royalties can also fluctuate with the price of oil. That's thanks to an "index factor," which reduces the royalty rate as the price of oil decreases from one month to the next. If crude oil prices fall below $30 per barrel in 1997 American dollars, the royalty rate is reduced during the repayment of $1.2 billion in loans that were guaranteed by the federal government.
The index came into effect last year, and will last for eight years. (To get Hibernia off the ground, Ottawa also invested $1 billion in the project.)
ONE EXAMPLE
For example, if the price of oil drops to $15 US per barrel in 1997 U.S. dollars, then a two per cent royalty rate would decrease to one per cent for a month.
Each month, the federal government calculates this index for both the province and the oil companies. Although Terra Nova is a smaller oilfield than Hibernia, it will produce more generous basic royalties for the province. Those royalties start at one per cent and reach a maximum of 10 per cent based on the level of production. Unlike Hibernia, Terra Nova has no index factor that will reduce the monthly basic royalties.
And also unlike Hibernia, there is no "payout" of pre-production costs to the oil companies that will eat into future net royalties of 30 per cent. The more profitable the Terra Nova oilfield is, the more net royalties the province will receive. Any future offshore oil projects, such as White Rose, will use a generic royalty regime and the province is still designing a competitive natural gas royalty.
-30-
Many thanks to Moira and The Telegram for providing this copy. Note: I have changed the paragraph structure slightly from the original. Otherwise, the piece appears as it did in the print original.
Background information is available on Hibernia and Terra Nova and the generic offshore royalty regime from the Government of Newfoundland and Labrador. There is a separate generic regime for onshore production, like the site at Port au Port.
Province's Hibernia royalties continue to trickle in: Terra Nova project holds more promise for Newfoundland coffers
St. John's Telegram
Wednesday, March 6, 2002
Page: A3 / FRONT
Section: News
Byline: Moira Baird
Source: The Telegram
Newfoundland and Labrador won't get rich from its Hibernia royalties -- but they continue to trickle in.
By the end of March, the province's annual royalties from its largest offshore oilfield are expected to total $29 million for the fiscal year. Since Nov. 17, 1997, when Hibernia started producing oil, until March 31, 2002, the province's royalty share is expected to total $65 million."
The province receives monthly cheques from Hibernia," said Darryl Mercer, spokesman for the Department of Mines and energy. First oil flowed from Terra Nova Jan. 20, and the royalty cheques from that project are expected soon. By comparison, last year's production at Hibernia was worth substantially more than the province's royalty cheques.
Using Petro-Canada's average price of $36.63 Cdn per barrel, as noted in the company's 2001 annual report, Hibernia oil was worth about $1.9 billion last year. Monitoring and auditing offshore oil royalties is a complicated business. The job falls to the petroleum projects monitoring division, part of the Department of Mines and Energy.
TWO TYPES
There are two types of royalties for Hibernia -- one is the basic royalty rate, the other is the net royalty rate.
The basic royalty rate is determined by the price of a barrel of oil, the level of production, and the cost of transporting that oil to market. (That cost includes shipping the oil from the Hibernia platform to the transshipment facility at Whiffen Head, Placentia Bay in tanker shuttles.) The basic royalty started at one per cent and goes to a maximum of five per cent.
Right now, Hibernia is paying at three per cent. The net royalty of 30 per cent doesn't kick in until "payout" has occurred. That means all the costs, plus interest, incurred by the Hibernia consortium to produce oil must be paid off before the province receives any net royalties.
Those costs submitted by the Hibernia partners are regularly audited by the province's petroleum projects monitoring division. When the Hibernia consortium asked for permission to increase production to 180,000 barrels a day, the province, in turn, asked for a speeded-up timetable for the basic royalty rates. A deal was worked out by July 2000.
Previously, that basic royalty regime increased by a percentage point every 18 months until reaching a maximum of five per cent. These days, the province gets a royalty increase every 18 months, or every time Hibernia reaches specified production levels -- whichever comes first. That rate now stands at three per cent. It will reach four per cent when Hibernia produces 194 million barrels of oil, and will top out at five per cent in February 2004 or when production hits 268 million barrels.
But those royalties can also fluctuate with the price of oil. That's thanks to an "index factor," which reduces the royalty rate as the price of oil decreases from one month to the next. If crude oil prices fall below $30 per barrel in 1997 American dollars, the royalty rate is reduced during the repayment of $1.2 billion in loans that were guaranteed by the federal government.
The index came into effect last year, and will last for eight years. (To get Hibernia off the ground, Ottawa also invested $1 billion in the project.)
ONE EXAMPLE
For example, if the price of oil drops to $15 US per barrel in 1997 U.S. dollars, then a two per cent royalty rate would decrease to one per cent for a month.
Each month, the federal government calculates this index for both the province and the oil companies. Although Terra Nova is a smaller oilfield than Hibernia, it will produce more generous basic royalties for the province. Those royalties start at one per cent and reach a maximum of 10 per cent based on the level of production. Unlike Hibernia, Terra Nova has no index factor that will reduce the monthly basic royalties.
And also unlike Hibernia, there is no "payout" of pre-production costs to the oil companies that will eat into future net royalties of 30 per cent. The more profitable the Terra Nova oilfield is, the more net royalties the province will receive. Any future offshore oil projects, such as White Rose, will use a generic royalty regime and the province is still designing a competitive natural gas royalty.
-30-
04 February 2005
Outside the Box - The Stunnel
Call it the Stunnel.
If the Channel Tunnel became the Chunnel, then the name for our fixed link makes sense. Stunnel is also a good name for an idea that is pretty stunned when you look at it a little more carefully.
A couple of Scandinavian social scientists wrote a book last year called Megaprojects and Risk. After studying a bunch of European projects like the Chunnel, they came to a set of surprising conclusions: first they found that proponents grossly overestimate the benefits of their Big Idea. Second, proponents grossly underestimate all the costs.
Consider the Stunnel idea. According to the Stunnel web site, the project would cost $1.3 billion or thereabouts. It would need an average of 1400 cars traveling across it per day, with a peak of 3, 000 per day, in order to be viable. Proponents also claim it would produce upwards of 40, 000 direct and indirect job during construction, although this would last for a total of 3 years. Using the ever popular argument, proponents say the Stunnel would be an engineering marvel and attract tourists from around the world.
Let’s just look at the traffic flow. Right now, the main surface carriers are Marine Atlantic and Oceanex who between them carry 882 vehicles per day into the province. Even if we closed those two carriers and forced everyone to use the Stunnel, we’d still only have 63% of our break-even average. Obviously, we need more people to use the Stunnel.
Tourism, you say? Well, consider that the largest number of tourists come to the more populated areas of the country. For Newfoundland and Labrador, that means that surface travelers come through Atlantic Canada and cross the ferry to add Newfoundland to a tour. Would they come through one of the most desolate parts of Quebec to get here? Doubtful. As for those engineer groupies, think of how many tunnels Kierans and company say have been built in warmer places? If I loved holes in the ground, the last place I’d go to see one is the Straits of Belle Isle where it is freezing cold in June.
Right from the start, the very reason for building the Stunnel – lower costs owing to large usage - goes out the window. Even if we forced everyone to use the Stunnel, and allowed some reasonable rates of growth in traffic, it would be years, maybe decades, before there was enough traffic to meet the break-even traffic numbers Kierans says his project will need from the beginning.
Consider our own recent experience. The Tobin government started building a road around the southern coast of Labrador to meet up, ultimately, with the highway out of Labrador City. There were plenty of promises of great benefits. Already, we have found that shipping goods to northern Labrador ports is more costly than sending them from Lewisporte. The roads can’t be kept open to traffic in winter, and if that wasn’t bad enough, we already know from the Auditor General and PriceWaterhouseCoopers that the province can’t maintain its existing roads.
There are already signs that Labrador is coming more closely connected to Quebec than the island. The Stunnel would link the whole province to Quebec via an isolated stretch of road. We’d move away from the short routes to our historic partners in the Maritimes and New England and link up with Quebec City. That’s a big strategic implication that can’t be overlooked.
As for cost, we have only seen the beginning of the escalations. The proposal is only a couple of years old and already Kierans and company have tripled the costs. The $1.3 billion project that Danny Williams bought into three years ago is already estimated to cost $4.3 billion. Megaproject proponents grossly underestimate costs. They’ve shown that already. As for traffic flows, the higher the cost, the more cars we need to make it pay. If we don’t have enough traffic to support the first cost estimate, where are the cars coming from to support a project three times as costly?
If the Channel Tunnel became the Chunnel, then the name for our fixed link makes sense. Stunnel is also a good name for an idea that is pretty stunned when you look at it a little more carefully.
A couple of Scandinavian social scientists wrote a book last year called Megaprojects and Risk. After studying a bunch of European projects like the Chunnel, they came to a set of surprising conclusions: first they found that proponents grossly overestimate the benefits of their Big Idea. Second, proponents grossly underestimate all the costs.
Consider the Stunnel idea. According to the Stunnel web site, the project would cost $1.3 billion or thereabouts. It would need an average of 1400 cars traveling across it per day, with a peak of 3, 000 per day, in order to be viable. Proponents also claim it would produce upwards of 40, 000 direct and indirect job during construction, although this would last for a total of 3 years. Using the ever popular argument, proponents say the Stunnel would be an engineering marvel and attract tourists from around the world.
Let’s just look at the traffic flow. Right now, the main surface carriers are Marine Atlantic and Oceanex who between them carry 882 vehicles per day into the province. Even if we closed those two carriers and forced everyone to use the Stunnel, we’d still only have 63% of our break-even average. Obviously, we need more people to use the Stunnel.
Tourism, you say? Well, consider that the largest number of tourists come to the more populated areas of the country. For Newfoundland and Labrador, that means that surface travelers come through Atlantic Canada and cross the ferry to add Newfoundland to a tour. Would they come through one of the most desolate parts of Quebec to get here? Doubtful. As for those engineer groupies, think of how many tunnels Kierans and company say have been built in warmer places? If I loved holes in the ground, the last place I’d go to see one is the Straits of Belle Isle where it is freezing cold in June.
Right from the start, the very reason for building the Stunnel – lower costs owing to large usage - goes out the window. Even if we forced everyone to use the Stunnel, and allowed some reasonable rates of growth in traffic, it would be years, maybe decades, before there was enough traffic to meet the break-even traffic numbers Kierans says his project will need from the beginning.
Consider our own recent experience. The Tobin government started building a road around the southern coast of Labrador to meet up, ultimately, with the highway out of Labrador City. There were plenty of promises of great benefits. Already, we have found that shipping goods to northern Labrador ports is more costly than sending them from Lewisporte. The roads can’t be kept open to traffic in winter, and if that wasn’t bad enough, we already know from the Auditor General and PriceWaterhouseCoopers that the province can’t maintain its existing roads.
There are already signs that Labrador is coming more closely connected to Quebec than the island. The Stunnel would link the whole province to Quebec via an isolated stretch of road. We’d move away from the short routes to our historic partners in the Maritimes and New England and link up with Quebec City. That’s a big strategic implication that can’t be overlooked.
As for cost, we have only seen the beginning of the escalations. The proposal is only a couple of years old and already Kierans and company have tripled the costs. The $1.3 billion project that Danny Williams bought into three years ago is already estimated to cost $4.3 billion. Megaproject proponents grossly underestimate costs. They’ve shown that already. As for traffic flows, the higher the cost, the more cars we need to make it pay. If we don’t have enough traffic to support the first cost estimate, where are the cars coming from to support a project three times as costly?
-srbp-
Origins of The Stunnel
Someone kindly forwarded this little gem to me. I just couldn't help but chuckle and shake my head at how we all seem to be stuck in some sort of bizarre time loop.
February 5, 1966, Toronto Star
Joey plans undersea 16 1/2 mile tunnel
ST. JOHN'S, Nfld. (CP Special) -- Plans for a tunnel under the Strait of Belle Isle between Newfoundland and Labrador to carry cars, trains and power cables and to connect with a trans-Labrador highway were outlined in the Newfoundland legislature by Premier Joey Smallwood yesterday.
He said the 16 1/2 mile tunnel would cost about $43 million to build and take four years.
-30-
If only, if only I was makin' this stuff up.
Sad to say, this is a real news clipping of a real story from 39 years ago. Even sadder, this was actually the first major development initiative announced by Premier Williams last year when he tossed tens of thousands of dollars into a pot to study the feasibility of the fixed link concept.
Premier Williams remains committed to this nutty idea even though the current estimated cost is more than $4.5 billion dollars. Of course, the Premier claims it will generate thousands of car trips per day (where hundreds exist today) and that people will be clamouring to see the big hole in the ground. Who does he plan to get to pay for it? Why, Paul Martin and the Government of Canada of course.
Hmm. I wonder what the Globe and the Star and the Empire Club will say when they get Danny's pitch for The Big Busy Ditch (copyright pending)?
February 5, 1966, Toronto Star
Joey plans undersea 16 1/2 mile tunnel
ST. JOHN'S, Nfld. (CP Special) -- Plans for a tunnel under the Strait of Belle Isle between Newfoundland and Labrador to carry cars, trains and power cables and to connect with a trans-Labrador highway were outlined in the Newfoundland legislature by Premier Joey Smallwood yesterday.
He said the 16 1/2 mile tunnel would cost about $43 million to build and take four years.
-30-
If only, if only I was makin' this stuff up.
Sad to say, this is a real news clipping of a real story from 39 years ago. Even sadder, this was actually the first major development initiative announced by Premier Williams last year when he tossed tens of thousands of dollars into a pot to study the feasibility of the fixed link concept.
Premier Williams remains committed to this nutty idea even though the current estimated cost is more than $4.5 billion dollars. Of course, the Premier claims it will generate thousands of car trips per day (where hundreds exist today) and that people will be clamouring to see the big hole in the ground. Who does he plan to get to pay for it? Why, Paul Martin and the Government of Canada of course.
Hmm. I wonder what the Globe and the Star and the Empire Club will say when they get Danny's pitch for The Big Busy Ditch (copyright pending)?
Hibernia and Terra Nova Royalties
Today is the day to get The Telegram or visit the online site.
Check out the business story by Moira Baird on Hibernia and Terra Nova royalties. I have known Moira for a while and from my perspective she is an industrial-strength reporter. Solid. Dependably fair. Factual. Fortunately, there are lots of them working in the news business in Newfoundland and Labrador. They are the best in the long run.
Moira's assessment is that combined royalties - not direct revenue in total - will hit more than $200 million this fiscal year. Factor in the offsets in the existing Atlantic Accord and other direct revenue related to oil and I stick by my prediction we are going to be well over $300 million before the end of the fiscal year. Add to that the $133.6 billion in added offsets from the new deal and the revenue stream from the offshore mounts.
Flip back to Wade Locke's slides and have a look at a few where he notes oil revenues. I may have issues with his interpretation, but I am not going to question the core facts on which he builds his case. A couple of things leap out. First of all, it is clear the province's October revenue slide was based on oil prices at less than US$32 per barrel. Second, you start to see the value of the Atlantic Accord. The greatest economic benefit to Newfoundland and Labrador comes from the Mulroney/Peckford Accord and from the royalty regimes negotiated by successor provincial governments. Danny Williams has added some good cash to that mix but the real value is in the original Accord.
That's what I have been saying since the beginning.
Now I have to visit the doctor to fix the shoulder dislocated by patting myself so hard on the back!
Check out the business story by Moira Baird on Hibernia and Terra Nova royalties. I have known Moira for a while and from my perspective she is an industrial-strength reporter. Solid. Dependably fair. Factual. Fortunately, there are lots of them working in the news business in Newfoundland and Labrador. They are the best in the long run.
Moira's assessment is that combined royalties - not direct revenue in total - will hit more than $200 million this fiscal year. Factor in the offsets in the existing Atlantic Accord and other direct revenue related to oil and I stick by my prediction we are going to be well over $300 million before the end of the fiscal year. Add to that the $133.6 billion in added offsets from the new deal and the revenue stream from the offshore mounts.
Flip back to Wade Locke's slides and have a look at a few where he notes oil revenues. I may have issues with his interpretation, but I am not going to question the core facts on which he builds his case. A couple of things leap out. First of all, it is clear the province's October revenue slide was based on oil prices at less than US$32 per barrel. Second, you start to see the value of the Atlantic Accord. The greatest economic benefit to Newfoundland and Labrador comes from the Mulroney/Peckford Accord and from the royalty regimes negotiated by successor provincial governments. Danny Williams has added some good cash to that mix but the real value is in the original Accord.
That's what I have been saying since the beginning.
Now I have to visit the doctor to fix the shoulder dislocated by patting myself so hard on the back!
03 February 2005
Margaret Wente again
Alright.
Did anybody actually read either one of Margaret Wente's columns? I mean actually read and comprehend, inwardly digest and otherwise get what she was saying. It reminds me of an e-mail I got today from a friend who passed on the comments of a Conservative friend of his. This Conservative guy couldn't understand that I found a positive aspect to Margaret Wente's first Danny Williams column.
Well, b'y, I read it. And compared to Charlie Lynch, Margaret Wente should be given a guest spot on Hatching, matching and despatching or be feted by the local "Newfoundland" Club, if there is one anywhere near The Beaches.
All this comes after seeing the Fair Deal posting today and hearing Dave Salter on Out of the Fog. I am not even sure I'll turn on Nite Line for fear of hearing the same thing.
Let me make it easy: to understand Margaret's lastest musings on Newfoundland and the country, read the Globe and Mail editorial (If the provinces shout, Mr. Martin's all ears) on the other page.
And just so that there is no mistake and everybody gets it, here is the message:
Did anybody actually read either one of Margaret Wente's columns? I mean actually read and comprehend, inwardly digest and otherwise get what she was saying. It reminds me of an e-mail I got today from a friend who passed on the comments of a Conservative friend of his. This Conservative guy couldn't understand that I found a positive aspect to Margaret Wente's first Danny Williams column.
Well, b'y, I read it. And compared to Charlie Lynch, Margaret Wente should be given a guest spot on Hatching, matching and despatching or be feted by the local "Newfoundland" Club, if there is one anywhere near The Beaches.
All this comes after seeing the Fair Deal posting today and hearing Dave Salter on Out of the Fog. I am not even sure I'll turn on Nite Line for fear of hearing the same thing.
Let me make it easy: to understand Margaret's lastest musings on Newfoundland and the country, read the Globe and Mail editorial (If the provinces shout, Mr. Martin's all ears) on the other page.
And just so that there is no mistake and everybody gets it, here is the message:
The Globe and Mail does NOT support this offshore deal.
What bothers them is the idea that Danny Williams got what he was looking for: oil revenues plus Equalization, even if we are richer than Ontario and wouldn't qualify for Equalization. So here we are with everyone in the country thinking danny won, when he didn't. Everyone in Newfoundland and Labrador is over the moon and more and more people across the country are definitely not that happy.
The problem with that is, as far as I am concerned, everyone is in a knot for the wrong reason.
So with that said, CSI is on and I have some Tim's coffee to enjoy.
First, we assume a can opener
This post started yesterday before I found out that Wade Locke did much the same thing at the forum at Memorial University by comparing the December and January proposals on Accord offsets. I fell out of bed this morning listening to David Cochrane's report and my eyes opened wider staring at the VOCM account on their website. Now that I have seen the slides from Locke's presentation I need to see a doctor to reattach my jaw.
On the face of it, it sounds like Wade did a fine job of situating the estimate, instead of estimating the situation. Or to put it in the terms of an old joke about an economist, 'First, we assume a can opener". In this case it seems to be more a case of "first, we assume this is a splendiferous deal". I'll explain my observations in a couple of posts, and to make sure everyone understands this - while Locke may be a fine economist, I think he seriously distorts the ups and downs of different proposals. He grossly overestimates the "monumental" nature of the January deal because of his assumptions or omissions.
Following is my comparison between the federal draft agreement in principle from December and what appears to be the agreement that was accepted by the Government of Newfoundland and Labrador in Ottawa on 28 January 2005. The bits in italics illustrate the changes to the basic structure of December deal that turn it into the January one.
1. [Note: This clause would remain unchanged] This agreement reflects an understanding between the Government of Canada and the Government of Newfoundland and Labrador and the Government of Nova Scotia that:
· both provinces already are collecting and will continue to collect 100 percent of offshore resource revenues as if these resources were on land;
· the Government of Canada has agreed to provide additional offset payments to these provinces in respect of offshore-related Equalization reductions.
2. [No change] The Government of Canada intends to execute its commitments under this agreement through legislation that will authorize additional payments to provide100 per cent offset against reductions in Equalization payments resulting from offshore revenues.
3. [No change] For the fiscal year 2004-05, the value of the additional offset payments will be:
a. For Newfoundland and Labrador: $133.6 million;
b. For Nova Scotia: $30.5 million.
4. For the fiscal year 2005-06, the value of the additional offset payments will be:
a. For Newfoundland and Labrador: $188.7 million;
b. For Nova Scotia: $26.6 million.
5. [No change] Commencing in 2006-07, the annual offset payment for each province shall be equal to 100 per cent of any reductions in Equalization payments resulting from offshore revenues. The amount of additional offset payment shall be calculated as the difference between the Equalization payment to be received by the province under the Equalization formula as it exists at that time if the province received no offshore petroleum resource revenues in that year, and the Equalization payment for that province in that year under the Equalization formula as it exists at the time, net of any payments made with respect to existing accords or Equalization offset provisions.
6. [No change] For 2006-07 to 2011-12, in any fiscal year, if either province no longer qualifies for receipt of an Equalization payment, no additional offset payments will be made to that province, beyond payments specified in existing accords.
7. This arrangement will be in effect until March 31, 2012. No later than March 31, 2011, Canada and each province will, on a bilateral basis, begin discussions to determine whether a successor arrangement with each province should be put into place for an additional 8-year period beyond 2012. There will be no further arrangements for a province beyond March 31, 2012, if the province's net per capita debt servicing costs becomes lower than that of four other provinces not party to this agreement and ["and" replaces "or" in the original] the province has not qualified for Equalization payments in 2010-11 or ["or" replaces "and" in the original] 2011-12. [Note: This is changed from the requirement to have a balanced budget or be receiving Equalization. There is now a double requirement to qualify for the second eight-year phase. See the provincial backgrounder on this point from Monday.]
8. Any successor arrangement with a province would be in effect for the period 2012-13 to 2019-20. [Note: the previous conditions for continuing in the second phases appear to have been replaced by the sole requirement that the province must continue to qualify for Equalization. The new clause would contain a provision that once the province ceases to qualify for Equalization in the second phase, there is an immediate transfer to two years of declining offsets with no prospect for reinstating the offset payments should the province qualify for Equalization again before 2020.]
9. [Deleted] The Government of Canada commits to providing new offset payments for an additional 8-year period, starting with the first fiscal year of offshore commercial production, if any, from the Deep Panuke project in Nova Scotia or the Hebron project in Newfoundland and Labrador. Any such additional offset payments shall be limited to the revenues from these projects.
10. [No change] The Government of Canada agrees that if, in the future, it enters into an arrangement with another province or territory concerning offshore petroleum resource revenues, then either province may elect to enter into discussions with the Government of Canada to amend this agreement.
11. [New clause, words to the effect that] The Government of Canada will transfer to the Government of Newfoundland and Labrador the sum of $2.0 billion representing an advance on payments under this agreement. No further payments will be remitted to Newfoundland and Labrador under this agreement unless the provincial government qualifies for such payments under this agreement and the cumulative offset entitlement exceeds $2.0 billion.]
12. [New clause, words to the effect that] If the Government of Newfoundland and Labrador disagrees with the Government of Canada on how the offset payments have been calculated starting in 2006-07, the province can request that the federal calculations be audited to ensure they are consistent with the 100 per cent principle.
13. [New clause, with wording to the effect that] The Government of Canada and the Government of Newfoundland and Labrador agree that no later than the beginning of the sixteenth year of the agreement, the two orders of government will jointly enter into a review of the agreement.
On the face of it, it sounds like Wade did a fine job of situating the estimate, instead of estimating the situation. Or to put it in the terms of an old joke about an economist, 'First, we assume a can opener". In this case it seems to be more a case of "first, we assume this is a splendiferous deal". I'll explain my observations in a couple of posts, and to make sure everyone understands this - while Locke may be a fine economist, I think he seriously distorts the ups and downs of different proposals. He grossly overestimates the "monumental" nature of the January deal because of his assumptions or omissions.
Following is my comparison between the federal draft agreement in principle from December and what appears to be the agreement that was accepted by the Government of Newfoundland and Labrador in Ottawa on 28 January 2005. The bits in italics illustrate the changes to the basic structure of December deal that turn it into the January one.
Draft Agreement in Principle between the Government of Canada and the Government of Newfoundland and Labrador and the Government of Nova Scotia
(December 2004) with January adjustments (italics)
1. [Note: This clause would remain unchanged] This agreement reflects an understanding between the Government of Canada and the Government of Newfoundland and Labrador and the Government of Nova Scotia that:
· both provinces already are collecting and will continue to collect 100 percent of offshore resource revenues as if these resources were on land;
· the Government of Canada has agreed to provide additional offset payments to these provinces in respect of offshore-related Equalization reductions.
2. [No change] The Government of Canada intends to execute its commitments under this agreement through legislation that will authorize additional payments to provide100 per cent offset against reductions in Equalization payments resulting from offshore revenues.
3. [No change] For the fiscal year 2004-05, the value of the additional offset payments will be:
a. For Newfoundland and Labrador: $133.6 million;
b. For Nova Scotia: $30.5 million.
4. For the fiscal year 2005-06, the value of the additional offset payments will be:
a. For Newfoundland and Labrador: $188.7 million;
b. For Nova Scotia: $26.6 million.
5. [No change] Commencing in 2006-07, the annual offset payment for each province shall be equal to 100 per cent of any reductions in Equalization payments resulting from offshore revenues. The amount of additional offset payment shall be calculated as the difference between the Equalization payment to be received by the province under the Equalization formula as it exists at that time if the province received no offshore petroleum resource revenues in that year, and the Equalization payment for that province in that year under the Equalization formula as it exists at the time, net of any payments made with respect to existing accords or Equalization offset provisions.
6. [No change] For 2006-07 to 2011-12, in any fiscal year, if either province no longer qualifies for receipt of an Equalization payment, no additional offset payments will be made to that province, beyond payments specified in existing accords.
7. This arrangement will be in effect until March 31, 2012. No later than March 31, 2011, Canada and each province will, on a bilateral basis, begin discussions to determine whether a successor arrangement with each province should be put into place for an additional 8-year period beyond 2012. There will be no further arrangements for a province beyond March 31, 2012, if the province's net per capita debt servicing costs becomes lower than that of four other provinces not party to this agreement and ["and" replaces "or" in the original] the province has not qualified for Equalization payments in 2010-11 or ["or" replaces "and" in the original] 2011-12. [Note: This is changed from the requirement to have a balanced budget or be receiving Equalization. There is now a double requirement to qualify for the second eight-year phase. See the provincial backgrounder on this point from Monday.]
8. Any successor arrangement with a province would be in effect for the period 2012-13 to 2019-20. [Note: the previous conditions for continuing in the second phases appear to have been replaced by the sole requirement that the province must continue to qualify for Equalization. The new clause would contain a provision that once the province ceases to qualify for Equalization in the second phase, there is an immediate transfer to two years of declining offsets with no prospect for reinstating the offset payments should the province qualify for Equalization again before 2020.]
9. [Deleted] The Government of Canada commits to providing new offset payments for an additional 8-year period, starting with the first fiscal year of offshore commercial production, if any, from the Deep Panuke project in Nova Scotia or the Hebron project in Newfoundland and Labrador. Any such additional offset payments shall be limited to the revenues from these projects.
10. [No change] The Government of Canada agrees that if, in the future, it enters into an arrangement with another province or territory concerning offshore petroleum resource revenues, then either province may elect to enter into discussions with the Government of Canada to amend this agreement.
11. [New clause, words to the effect that] The Government of Canada will transfer to the Government of Newfoundland and Labrador the sum of $2.0 billion representing an advance on payments under this agreement. No further payments will be remitted to Newfoundland and Labrador under this agreement unless the provincial government qualifies for such payments under this agreement and the cumulative offset entitlement exceeds $2.0 billion.]
12. [New clause, words to the effect that] If the Government of Newfoundland and Labrador disagrees with the Government of Canada on how the offset payments have been calculated starting in 2006-07, the province can request that the federal calculations be audited to ensure they are consistent with the 100 per cent principle.
13. [New clause, with wording to the effect that] The Government of Canada and the Government of Newfoundland and Labrador agree that no later than the beginning of the sixteenth year of the agreement, the two orders of government will jointly enter into a review of the agreement.
The future of Goose Bay
A caller to Open Line this morning chastised the Prime Minister for the failure over the past 15 months to declare Goose Bay operationally essential to the Canadian Forces.
This notion is merely a clever way of forcing the federal government to pour millions into Goose Bay without the base actually being operationally relevant to the Canadian Forces. It isn't now; there simply isn't the same strategic threat that existed during the Cold War, nor is there the operational need for ferrying aircraft that existed when the base was built in 1941.
The Canadian Forces has a surplus of bases to meet its needs and Goose Bay is a long way from being vital to the defence of Canada in the same way that other bases are. It certainly doesn't provide the broad training opportunities found at bases like Gagetown, either, at least not for a military force as small as the Canadian Forces.
Two news stories in the past months point to a potential role for Goose Bay that might work. Both stories focused on the use of Canadian bases for winter training and testing. One was about British Forces coming to Goose Bay to train in a winter environment they just can't get at home. The second was about testing of new British field radios in a harsh winter environment.
Goose Bay could easily become the Mountain and Winter Training Centre for the Canadian Forces. It would establish a small centre of expertise at Goose, affiliated with the Infantry and Engineering Schools at Gagetown. Goose Bay would become the focus of all trials and training for Canadian personnel and equipment in a northern environment. One of the biggest advantages of the centre would be the ability to attract allied military forces, including the US Army's 10 Mountain Division, the French Legion Etrangere, and the British Royal Marines and others to learn from the Canadian Forces including Canadian Rangers.
This idea isn't as big as declaring Goose Bay operational essential to the Canadian Forces. Nor would it provide the level of ongoing activity as low altitude flight training. It is, however, a workable idea and one that would generate revenue for the base and for the local community.
This notion is merely a clever way of forcing the federal government to pour millions into Goose Bay without the base actually being operationally relevant to the Canadian Forces. It isn't now; there simply isn't the same strategic threat that existed during the Cold War, nor is there the operational need for ferrying aircraft that existed when the base was built in 1941.
The Canadian Forces has a surplus of bases to meet its needs and Goose Bay is a long way from being vital to the defence of Canada in the same way that other bases are. It certainly doesn't provide the broad training opportunities found at bases like Gagetown, either, at least not for a military force as small as the Canadian Forces.
Two news stories in the past months point to a potential role for Goose Bay that might work. Both stories focused on the use of Canadian bases for winter training and testing. One was about British Forces coming to Goose Bay to train in a winter environment they just can't get at home. The second was about testing of new British field radios in a harsh winter environment.
Goose Bay could easily become the Mountain and Winter Training Centre for the Canadian Forces. It would establish a small centre of expertise at Goose, affiliated with the Infantry and Engineering Schools at Gagetown. Goose Bay would become the focus of all trials and training for Canadian personnel and equipment in a northern environment. One of the biggest advantages of the centre would be the ability to attract allied military forces, including the US Army's 10 Mountain Division, the French Legion Etrangere, and the British Royal Marines and others to learn from the Canadian Forces including Canadian Rangers.
This idea isn't as big as declaring Goose Bay operational essential to the Canadian Forces. Nor would it provide the level of ongoing activity as low altitude flight training. It is, however, a workable idea and one that would generate revenue for the base and for the local community.
02 February 2005
Provincial Direct Offshore Revenues - October
Remember that chart from yesterday?
Well the red line on top labelled "commitment" was supposed to indicate what the Prime Minister's commitment supposedly had been in June. See some earlier posts to clarify that point.
Actually, that number is the provincial government's own estimates of direct offshore revenues (royalties plus corporate taxes), based on what they called the "high price assumption" for oil. Some people have suggested to me this "high price" could be as low as US$35 per barrel, but since I can't confirm that let's just take it as the figures they worked with. It's good enough for the purposes here. The numbers below are approximations based on the chart; goodness knows the provincial government would never release the actual numbers.
Now bear in mind, that under the Atlantic Accord, the Government of Newfoundland and Labrador collects every single nickel of these amounts and doesn't lose even the teensiest bit. Remember too that this figure does not include any offsets at all. To get the figure including the current deal, add $250 million to each figure.
2004: $320 million
2005: $400 million
2006: $600 million
2007: $820 million
2008: $680 million
2009: $650 million
2010: $600 million
2011: $480 million
2012: $390 million
Total: $4.94 billion
Now for some perspective. Based on these figures, and assuming the current Equalization standards and nil economic growth, the provincial government wouldn't qualify for Equalization in 2007. However, it would qualify for Equalization in every other year. As such, it would almost certainly qualify for the second eight-year phase of offsets.
There are some problems with that set of assumptions, though.
First, the national economy will grow, as will the provincial one. The relative rates of growth will affect what it would take to put the provincial government over the threshold so that it no longer qualifies for Equalization.
Second, if this estimate from October is based on oil prices at $35 per barrel, then these figures need to be higher by some amount. Oil in October was running at US$51 per bbl and currently is in the range of US$45 per bbl. It is more likely that the provincial government will be off Equalization faster and stay off for more than one year than the numbers above would suggest. For example, if we assume a 15% increase in those revnues based on higher oil prices, the province would cross the Equalization threshold within two years (as estimated by the Premier late last year) and would stay off Equalization beyond 2012 if one includes the other economic growth noted below.
Third, this scenario does not include any other growth in the local economy. We know that Voisey's Bay will be onstream before 2008 and therefore will be generating significant revenue. As well, we can anticipate development of Hebron-Ben Nevis well within the first eight years of the new offset agreement. While the proponents have not discussed royalties with the province yet, we would have to add on to the revenue figures given above. Again, if the province didn't go off Equalization as in the second point above, Hebron-Ben Nevis would almost surely push it over.
Fourth, we don't know if the provincial officials included changes to the White Rose and Terra Nova royalty regimes in these estimates. Terra Nova is moving to Tier 2 royalties, which brings more money for the provincial government, since the project is now considered to have recovered its start-up costs. Under the same conditions, White Rose will likely cross the same threshold before 2010, thereby increasing provincial government revenue.
For those who are counting, the value of the offsets under the new deal is about half the actual direct revenues using the estimates of oil at prices about 25% to 30% below current prices.
Taken all together, this is the "most likely scenario" referred to in previous posts.
Well the red line on top labelled "commitment" was supposed to indicate what the Prime Minister's commitment supposedly had been in June. See some earlier posts to clarify that point.
Actually, that number is the provincial government's own estimates of direct offshore revenues (royalties plus corporate taxes), based on what they called the "high price assumption" for oil. Some people have suggested to me this "high price" could be as low as US$35 per barrel, but since I can't confirm that let's just take it as the figures they worked with. It's good enough for the purposes here. The numbers below are approximations based on the chart; goodness knows the provincial government would never release the actual numbers.
Now bear in mind, that under the Atlantic Accord, the Government of Newfoundland and Labrador collects every single nickel of these amounts and doesn't lose even the teensiest bit. Remember too that this figure does not include any offsets at all. To get the figure including the current deal, add $250 million to each figure.
2004: $320 million
2005: $400 million
2006: $600 million
2007: $820 million
2008: $680 million
2009: $650 million
2010: $600 million
2011: $480 million
2012: $390 million
Total: $4.94 billion
Now for some perspective. Based on these figures, and assuming the current Equalization standards and nil economic growth, the provincial government wouldn't qualify for Equalization in 2007. However, it would qualify for Equalization in every other year. As such, it would almost certainly qualify for the second eight-year phase of offsets.
There are some problems with that set of assumptions, though.
First, the national economy will grow, as will the provincial one. The relative rates of growth will affect what it would take to put the provincial government over the threshold so that it no longer qualifies for Equalization.
Second, if this estimate from October is based on oil prices at $35 per barrel, then these figures need to be higher by some amount. Oil in October was running at US$51 per bbl and currently is in the range of US$45 per bbl. It is more likely that the provincial government will be off Equalization faster and stay off for more than one year than the numbers above would suggest. For example, if we assume a 15% increase in those revnues based on higher oil prices, the province would cross the Equalization threshold within two years (as estimated by the Premier late last year) and would stay off Equalization beyond 2012 if one includes the other economic growth noted below.
Third, this scenario does not include any other growth in the local economy. We know that Voisey's Bay will be onstream before 2008 and therefore will be generating significant revenue. As well, we can anticipate development of Hebron-Ben Nevis well within the first eight years of the new offset agreement. While the proponents have not discussed royalties with the province yet, we would have to add on to the revenue figures given above. Again, if the province didn't go off Equalization as in the second point above, Hebron-Ben Nevis would almost surely push it over.
Fourth, we don't know if the provincial officials included changes to the White Rose and Terra Nova royalty regimes in these estimates. Terra Nova is moving to Tier 2 royalties, which brings more money for the provincial government, since the project is now considered to have recovered its start-up costs. Under the same conditions, White Rose will likely cross the same threshold before 2010, thereby increasing provincial government revenue.
For those who are counting, the value of the offsets under the new deal is about half the actual direct revenues using the estimates of oil at prices about 25% to 30% below current prices.
Taken all together, this is the "most likely scenario" referred to in previous posts.
01 February 2005
Offshore Revenue Math for....well...people who can add
Ok, I know I promised a sort of score sheet, but I am working to put it into a concise, easily understood format that shows a balanced view of the deal.
In the process of reviewing a bunch of files and comments, though, I noticed something really interesting.
Remember the October offer from Ottawa? That's the one that had Danny Williams throwing up his hands and quickly walking out of a meeting in Ottawa [corrects my error of Winnipeg]. Mind you it wasn't such fast walking that reporters could not still get comments as he walked. That's the same one where Newsworld had a great shot of him from behind, in one cutaway, where you see his jaw muscle clenching and unclenching from the tension.
Here's a link to a little chart in pdf format that the Premier and his finance minister used in St. John's to condemn the October offer. Notice the green line at the bottom. That is the provincial view of the October 22 offer which, the Premier claimed, capped offsets at around $250 million annually until 2012. He said at the time, this was far short of the "100% " he sought.
Leap forward a few months and many jaw-clenching moments later. There is now a "monumental" deal with a lump sum payment, up front of $2.0 billion over the first eight years of the deal. With trusty calculator in hand, divide $2.0 billion by 8. Look in amazement at the little LCD screen as it shows:
In the process of reviewing a bunch of files and comments, though, I noticed something really interesting.
Remember the October offer from Ottawa? That's the one that had Danny Williams throwing up his hands and quickly walking out of a meeting in Ottawa [corrects my error of Winnipeg]. Mind you it wasn't such fast walking that reporters could not still get comments as he walked. That's the same one where Newsworld had a great shot of him from behind, in one cutaway, where you see his jaw muscle clenching and unclenching from the tension.
Here's a link to a little chart in pdf format that the Premier and his finance minister used in St. John's to condemn the October offer. Notice the green line at the bottom. That is the provincial view of the October 22 offer which, the Premier claimed, capped offsets at around $250 million annually until 2012. He said at the time, this was far short of the "100% " he sought.
Leap forward a few months and many jaw-clenching moments later. There is now a "monumental" deal with a lump sum payment, up front of $2.0 billion over the first eight years of the deal. With trusty calculator in hand, divide $2.0 billion by 8. Look in amazement at the little LCD screen as it shows:
$250, 000, 000 !!!
Now, of course, theoretically, this new deal, the "monumental" one, could possibly yield more cash. That is, it could if the province doesn't make so much money it goes off the Equalization rolls before 2012. That is it could if the province also stays on Equalization into the second eight-year phase. That second year phase is one of the things that changed in the federal offer in December, but if Newfoundland and Labrador likely won't qualify for it, the second eight years is a theoretical benefit only.
But think about it for a second. The key element of every federal offer has been that the 100% offsets last only so long as the provincial government receives Equalization. That's the basic principle of the deal. (Ignore the amount of cash for a second since it varies with the price per barrel of oil.)
Now put the cash back in and take another look at it. Poof! Same deal, give or take a couple of minor adjustments. I can say same deal because the October letter from federal finance minister Ralph Goodale basically laid out the principle on which the added money would come.
The formula put a cap on the offsets, which the province valued at $250 million per year, and the feds offered $1.4 billion as a lump sum settlement in place of the year-by-year approach. Now simple math would have yeilded $250 million times eight which equals $2.0 billion.
Since the $1.4 billion was based on an earlier calculation of revenues, I am just curious why no one just suggested (either in October or December) that, maybe, just for the sake of exploring the creative options here, the province might consider a lump sum settlement of say...... $2.0 billion. After all, the October formula and the current deal functionally work out to the same cash endpoint.
Just to give you further food for thought, here's a quote from the Premier in The Sunday Telegram, 30 January 2005, page A2 under the headline 'Creative' proposal bridged the gap:
"There was a genuine attempt by everyone to find a solution. And, eventually, because of the complexities of some of the issues it came down to quantifying a dollar amount, which is basically what we settled on at the end of the day." [Emphasis added]
Don't get me wrong. I still think that when everything is added up this is a good deal for the province. Big congratulations to the Prime Minister and the Premier for reaching an agreement that works for both the Government and people of Canada and the Government and people of Newfoundland and Labrador.
It's just when to take a close look at "what we settled on at the end of the day", you start to wonder why it took so long to get to back to where everyone was in October?
-srbp-
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