Equalization: some thoughts and background

Since Equalization is back on the national agenda, it's useful to review what's been said before.

At the outset, let's make one thing clear: the position taken by Premier Danny Williams has been predictably devoid of many facts. In place of facts, we have seen hyperbole and other forms of exaggeration akin to what we saw in the previous offshore transfer discussions.

It's hard to have a sensible public discussion of such an important issue if the guy right at the top spends more time spinning both his wheels and the perspective on the issue.

Let's see if we can correct that with some facts and some contrary opinion:

1. Bond Papers summary of some points in the Expert Panel report. This focuses on a couple of the aspects related to Newfoundland and Labrador. Most importantly, though, the post contains links to the original Expert Panel report. Take the time to check that out. It's in plain English so most people should be able to grasp the issues, the analysis and the recommendations.

2. A comparison of Danny Williams' idea of including all resource revenues in entitlement calculations and the version proposed initially by Stephen Harper, backed by former finance minister Loyola Sullivan [left]. This is one of the most significant aspects of the entire discussion yet it is also one completely ignored by local news media.

3. War of the Pee. One of your humble e-scribbler's favourite titles, which plays on the title of classic treatise on guerrilla war as well as Premier Williams' apparent penchant for urinating on people's shoes. Big plus: links to a raft of other posts on Equalization. There's also a reference to the problem John Crosbie highlighted recently, although Crosbie discusses the problem with Danny's approach in a far more eloquent way than we did here at Bond Papers.

Hunter-gatherers support dismemberment

Since the fish union now backs breaking up Fishery Products International and selling off the bits and pieces to the highest bidders, there's nothing to stop the company from being dismantled.

The hypocrisy in Earle McCurdy's comments should be obvious; his union has had a hand in bringing about the chaos, controversy, disorder and poor results FPI has seen since the board of directors changes in 2001.

Of course, going back to May of 2006, McCurdy has been in favour of dismantling FPI.

NL productivity up; oil a major driver

A new Statistics Canada report on labour productivity shows Newfoundland and Labrador's productivity grew at twice the national rate between 1997 and 2005.

The story is covered by the Globe. As the Globe explains:

Labour productivity, measured as the amount of gross domestic product in constant dollars per hour worked, is considered an underpinning of a prosperous economy, which should bode well for Canada's most eastern province.

The Globe story opens with a quote from Jerry Byrne, president of D.F. Barnes, a company that has prospered in recent years in the offshore oil supply sector.

Since leading a 2002 management buyout of the 74-year-old company, Mr. Byrne has guided it to a 30-fold increase in annual revenue in just four years -- and he expects to hit a threshold of about 50 times 2002 revenue some time in the next year.

At the same time, the story also quotes Trevor Adey, president of high-tech firm Consilient. Adey notes that the gains from the oil sector haven't necessarily filtered down in a province where workers are still leaving in large numbers to find work elsewhere. Adey's right, of course. The oil and gas sector is such a capital intensive business that the apparent good news in the labour productivity numbers masks productivity shortcomings in other sectors of the economy.

That said, Byrne's success at D.F. Barnes is indeed remarkable. It has come about through some smart deal-making and a good measure of competence and ability. Local offshore companies have been known to compete successfully around the globe based on their experience in local offshore and Barnes is certainly one of the prime examples of successful local entrepreneurship.

Unfortunately, local companies have to look overseas for work these days. They had been planning on the Hebron project but that project has now been shelved indefinitely.

At the same time, though, D.F. Barnes has had its share of financial help from the provincial government.

In June, Byrne announced a major contract for launch and recovery systems for remotely-operated vehicle. The work is being done through a Barnes subsidiary, Orphan Industries.

In December, 2006 - six months after the launch and recovery system contract was announced - the provincial government provided Orphan with $970,000 "to expand the manufacturing facilities of Orphan Industries Limited to become the preferred supplier of Launch and Recovery Systems (LARS)."

Notice that the provincial government release doesn't mention D.F. Barnes once and - very unusually - doesn't include a quote from the company.

Nope.

It just has comments from Kevin O'Brien, the logo guy the business minister, and Kathy Dunderdale, the Premier's natural resources minister.

Harper moving on fiscal imbalance

Radio Canada is reporting that the plan will include half of natural resources in Equalization calculation. Newfoundland and Labrador premier Danny Williams wanted all resource revenues included.

Ottawa will also boost transfer for post-secondary education and infrastructure, according to Radio Canada. The federal Conservatives will reduce federal taxes, as well, thereby opening up room for provinces to increase their rates of taxation. The Conservatives will also introduce a bill in parliament to limit federal spending power. Each of these elements has been discussed for months.

This news comes in advance of a meeting of provincial premiers, scheduled for February 7 to discuss Equalization, among other things.

Quebec will receive $2.0 billion according to la presse.

Williams criticized on Hickey; story goes national

Canadian Press is running this story which includes criticism of Premier Danny Williams' decision to keep John Hickey in cabinet despite word today that the Royal Newfoundland Constabulary has launched a criminal investigation into allegations Hickey and another Progressive Conservative member of the House of Assembly double-billed the legislature for expenses.

The CP is running across the country.

Williams' decision flouts centuries of parliamentary tradition designed to preserve the integrity of government while avoiding tainting or appearing to taint the police investigation. The Canadian press story includes several recent examples of the principle followed by Canadian governments, until now in Newfoundland and Labrador.

In a related comment, Williams [right] this weekend called the speaker of the legislature the head of a division or department of government. Williams' faulty constitutional knowledge was displayed on NTV's Issues and Answers, a 30 minute interview show airing Sundays.

Chief electoral officer told by whom?

Provincial chief electoral officer Chuck Furey said today he's been advised other members of the House of Assembly will vacating their seats before the scheduled October general election.

Who told Furey?

Why would the CEO know this information under any circumstances?

According to vocm.com, Furey also said he did not know if the Premier would change electoral boundaries based on the recent boundary commission report. Maybe VOCM misquoted him because surely Furey knows - as a former member of the legislature and former cabinet minister - that such a decision is not made by the Premier, anyway.

Williams cabinet minister, MHA under CID probe

The Royal Newfoundland Constabulary confirmed today that allegations of double-billing against John Hickey and Kathy Goudie have been referred to the Criminal Investigation Division (CID).

Premier Danny Williams relieved Hickey of his cabinet responsibilities, but re-appointed him days later, characterising both Hickey and Goudie as victims of incompetent House of Assembly administration.

The allegations from the province's auditor general involve 58 incidents of double-billing expense claims.

UPDATE: Williams says nothing new in RNC announcement, Hickey will stay.

UPDATE: Telegram editorial criticizes Hickey decision.

Oil, gas news

1. Refineries planned for East Coast. Bond readers heard this already. They've also heard about the prospects the Irving refinery and gas plant planned for Saint John will make it harder for other refinery proposals, especially for green-field sites. Expansion at Come by Chance is not inherently as risky.

2. Natural gas drilling on downturn. Warmer weather and lower prices blamed.

3. Husky criticizes Alberta infrastructure, earns government rebuke.

4. Venezuela expands petro-influence in Central America. New refinery for Nicaragua; expansion of existing natural gas pipeline under discussion. (from platts.com)

5. Gulf of Mexico grows. Government and majors still wrangling over money but exploration set to expand in American backyard.

Devil in polling details for Williams

The Telegram obtained the most recent Corporate Research Associates (CRA) polling results (December 2006) and the numbers don't look good for government.

According to the Telegram, employment was the number one issue facing the province according to respondents. Concern about employment was highest outside the metro St. John's area.

And residents are becoming less enamoured of the Williams administration’s job-creation record, CRA found.

Only 33 per cent of respondents were completely (two per cent) or mostly (31 per cent) satisfied.

The majority — 62 per cent — were completely (18 per cent) or mostly (44 per cent) dissatisfied.

CRA reported that overall satisfaction levels remained high.

Second economist criticizes government money for Alcan

The article is in French, but you will get the point fairly quickly.

A package of incentives worth $337,000 per job, for a total value of $3.0 billion over 30 years (if my French holds up.

The deal to support Alcan's operations in Saguenay-Lac-Saint-Jean includes a guaranteed price on 225 megawatts of power, to be supplied by projects such as the one begun last week on the Rupert river.

Seven pillars

1. Dick Cheney's 1999 speech to the Institute of Petroleum. Some look on this for portents of Bush II policy in the Middle East. Others will see an overview of the challenges in the petroleum industry globally. This copy of the speech is on a site discussing the concept of peak oil. Poke around and you'll find other articles worthy of your time.

2. The challenge of deepwater drilling. From South Africa comes this Reuters piece on exploration and production in the Gulf of Mexico.

3. Profit drops expected for oil industry. From the International Herald Tribune, a look at the impact falling oil prices may have on the companies that take the risks of drilling in the expensive new frontiers.

This is one of the reasons why some analysts considered the Hebron failure such a massive giveaway; it's been a painful lesson for those who misuse Newfoundland and Labrador history by talking about some economic development projects as "giveaways". Sometimes a loss comes from failing to reach an agreement at an opportune time.

It will be much harder to strike a lucrative deal when oil prices are relatively low or appear to be low.

4. Local fall-out from Hebron failure? Rutter posts a drop in revenue and sheds its interest in DORIS.

5. At least no one dies from local talk radio. [Via Drudge]

6. Chavez takes them out, well, sort of.

7. ConocoPhillips holds S& P rating, but the company is buying back about US$1.0 billion of its own stock in the wake of disappointing earnings in the last quarter of 2006. Conoco's other problems - coupled with the complete uncertainty of dealing with the Williams administration - may lead it away from its earlier interest in Grand Banks gas fields. Husky has also shelved its plans for White Rose gas pending release of the province's energy plan and natural gas royalty regime, already a decade in development.

For a reminder of previous comment on the way oil companies look at the world, check this critique of an old Telegram editorial. Oil companies will take risks, but evidently are looking anywhere but Newfoundland and Labrador where there seems to be no certainty of anything when it comes to government revenue demands.

John Crosbie is right.

There's a reason Danny spends so much time in Florida

Is this what our energy plan will consist of?

Is this the next call if more of Danny's backbenchers are accused of double-billing taxpayers for lunch and dinner?

These are just light-hearted questions to help pass the weekend.

Iceland shows us how it's done!

A humourous take on the local world.

1. Codfish killed by sulpher pollution?

2. U Iceland research budget tripled. Sounds great until you read the story and see that the increase is US$8.9 million each year.

Sounds wonderful until you check closer to home. According to the most recent inventory, Memorial University attracts about $90 million in research every year including $4.0 million from the province (despite our massive debt burden).

But here's something even more interesting: out of that $90 million, about $50 million comes in various forms from the federal government.

Oh yeah. We can learn a lot from Iceland.

3. Every job is important. But this looks a bit like Small Town News of the finest kind.

4. Until no fish swim. Icelandic researchers "finally" find a school of capelin. Now the race is on to issue "temporary" fishing quotas.

5. And we bitch about how hard it is to find a pineapple and starfruit at the local Dominion. Icelanders pay 62% more for groceries than the European Union average.

6. Next we'll hear about the need to develop a local psychic hotline industry.

All of which is proof once again that when they aren't creating yet another blog on which to promise great things to come that either never come or aren't so great, some people spend way too much time surfing the Internet without understanding what it is they find there.

Tory website vanishes

With all the problems in his administration, maybe Danny Williams just can't get in there and find the reason why his party's website has been down.

Lord knows nothing can happen without his express approval, so maybe he just has too much on his plate to debug the html.

The site's been down for days.

As of noon on Saturday, it's still not loading.

Hmmmmmm, as Watton would say.

What Harper got in writing

At the upcoming first ministers meeting, expect to hear the Premier of Newfoundland and Labrador talk a lot about what he got in writing from Steve Harper.

What you won't hear the diminutive, dyspeptic Dannyboy say is what Harper got in writing from him:

The Government of Newfoundland and Labrador is advocating...(3) comprehensive revenue coverage (which would include, in full, all renewable and non-renewable natural resources)... [Emphasis added]

Don't expect Williams to head for the parapets in defence of that one; which of course makes John Crosbie's observations all the more prescient.

Adios Jim-bo

Jim Hodder announced his resignation from the House of Assembly today, for health reasons.

He becomes the third Tory to pull pin in little over a month, thereby forcing Premier Danny Williams to call no fewer than three by-elections by the middle of March.

Other names are due to come just as they will for the Liberals too. The thing is it is so strange for a first-term party fresh off years on the opposition benches to suffer attrition at such a rate. Including the three already declared, Bond Papers has about another seven names who either won't run again or who are in danger of losing their seats for one reason of another.

A year ago that list of Tories dead or on life support was completely blank.

Hodder deserves a proper send-off, for this is second retirement from politics.

Hodder was first elected in 1975 as a Liberal, crossed the floor in the 1980s to sit with the Conservatives and subsequently served in Peckford's cabinet. After resigning from politics in the 1990s he ran again after a brief absence and was re-elected.

For those who read this far, here's a bonus question for 10 points:

What other current member of the provincial legislature with a career profile very similar to Hodder's is also looking at resigning from the legislature?

This other Liberal cum Tory from the Class of 1975 is planning to run against Scott Simms [Right, not exactly as illustrated].

Hint: unlike Hodder, this re-tread made it to cabinet again.

And this just in...

Generalissimo Francisco Franco is still dead.

Really old people who watched Saturday Night Live from episode one will get the joke.

To be sure, vocm.com does report tons of useful information daily and a couple of weekends ago they outed a major story.

This one just struck the funny bone.

Lono nominated

At least two Liberals in the federal riding of St. John's North read that and fainted.

They should read this instead.

Good on ya, buddy.

The two Liberals will have to wait to faint at the other nomination.

Danny Williams: Public Enemy Number One

Ok.

So the headline on John Crosbie's latest column might be a bit overdone, calling Newfoundland and Labrador's dyspeptic first minister the greatest current threat to national unity.

Crosbie's observation are still spot on, as the audio of his interview with CBC's Jeff Gilhooley.

Lono, at Offal News, has a good take on it, as well.

The age of persuasion

Around this neck of the woods, Thursdays at noon are the time when things go mostly quiet and we flip on CBC Radio One.

That's the time for "O'Reilly and The Age of Persuasion", ad man Terry O'Reilly's look at his business.

There's no way to describe the show and goodness knows the CBC website for the thing would definitely not lead you to suspect you will be getting a half hour that provokes and entertains while it educates.

That's okay.

There's a blog, but it really isn't very exciting.

That's okay, too.

Over at the website for O'Reilly's agency - Pirate Radio and TV - you will get every conceivable indication of just exactly how creative and possibly insane O'Reilly and company are. Pirate does its own work but it also subcontracts production for other agencies.

This is the Internet presence of a truly inventive bunch of people. Click on "Reels" in the top menu and you get samples of their work.

Like the Irving Mainway radio spots for Target that - if memory serves - won an award the first time they aired. O'Reilly directed them. They are actually a variation on a concept originally used for Labatt in another market to push its bedrock line, Blue. The Labatt concept involved having an actor making calls at random to unsuspecting businesses - out of the blue, get it? - with a simple but potentially funny scenario. The whole thing dependend very much on getting the right person on the other end of the phone but odds are good that with a few calls, you could wind up with 30 seconds or so of radio that truly stands out from the clutter.

In the Irving spots, the calls were to people who had won an item in a Mainway contest. They worked really well the first time they aired, since it was hysterical listening to some guy answer questions about winning a bottle of juice as if it were a million bucks. He's humouring this over-the-top chick making the call. However, by the second or third season, the whole thing got tired.

There are some devastatingly funny radio spots for everything from the Toronto Symphony Orchestra to a Toronto car dealership. None of it - absolutely none of it - is conventional.

Is there talent enough to do this kind of creative work around here?

You betcha.

The challenge is finding the clients willing to go with it.

Meanwhile in Nova Scotia

The Premier is having troubles of his own.

Check the latest at the Daily News here, here and here.

The Canadian Press version is here.

The root of his problem comes from someone asking a simple couple of questions:

What did you know?

When did you know it?

More people should ask those questions.

Why Loyola left

They had a deal Sully could live with on Equalization.

Danny was of a different mind.

Instead of being a meeting to formally agree, this one will likely be the scene for another Danny tirade. Don't be surprised if he stages some storm-out to avoid having his fellow Premiers rip him a new one for his petulant, self-interested posturing.

Just like the last time.

Notice the date, though.

February 7.

Hmmmmm.

Would be convenient to use a problem with Equalization where Danny supposedly stands alone against the rest of the Premiers and the Prime Minister as an excellent excuse to call an election.

And, as Danny knows full well, he doesn't have to recall the House to drop the writ.

Fishery Products back on the block

CBC News is reporting that talks are underway - again - that might see Fishery Products International Limited's (FPIL) groundfish assets in Newfoundland and Labrador sold off.

As in the last go 'round, two of the potential buyers are Barry Group and Ocean Choice, owned by the Penney Group.

A third proposal is expected from FPI management.

As noted on Bond Papers last May, the goal of the provincial government's changes to the FPI legislation was actually to make it easier to break up the company and sell off the assets. The FPI bill gave cabinet the authority to approve any sale of FPI assets. Under the original Act, a sale of assets would have required a change to the legislation, meaning it would had to come before the legislature for public debate.

Here's why our weather is warmer

Forget global warming, El Nino and cow flatulence.

Newfoundland and Labrador is experiencing milder than usual weather because the weather office is back in Gander.

Iintergovernmental affairs minister John Ottenheimer is quoted as saying "[w]e are committed to examining opportunities where the federal government and the province can benefit from an increase in federal jobs in Newfoundland and Labrador...", after he reminded us that the weather office thing was a Conservative party commitment during the last election.

Unfortunately, Minister Ottenheimer forgot that almost exactly one year ago, the chief Conservative party representative in Newfoundland and Labrador reminded us all that the weather office was the sum total of the commitment.

After all, as Hearn noted, federal jobs that come merely from our tax dollars aren't sustainable.

And it isn't even sweeps week

CRA polling doesn't start up again until October, but already the publicity machine on The Hill is cranking out happy news.

Like this one from the innovation minister's department on a regional trade mission to Florida. It's a general one that says - in so many words - about the same thing as this one from December 14, 2006 and this ministerial statement from December 5, 2006.

It's all great to hear that local companies are making inroads in overseas markets, but how many times can we say essentially the same thing?

Is someone trying to qualify for a Tobin Award - most news releases from a single event or incident?

From the headline - "Florida More Than a Vacation Destination" - some people would likely mistake this for an account of the Premier's favourite place during the winter months.

Another jihad in the offing

Will Gander get the same level of attention in the meantime as Deer Lake?

Update: Of course, Gander is not in the district of a provincial politician accused of double billing her constituents - and the rest of the province's taxpayers - for expenses.

Outmigration details

Statistics Canada figures for the third quarter of 2006 show that outmigration from Newfoundland and Labrador that quarter was the third highest quarterly decline since 1993.

Latest NL Executive Council fashion accessory

Do they have to pay for it or are these covered on an expense claim?

Did Danny say this?

Yes.

Last week.

Announcing that John Hickey would be relieved of his cabinet duties over accusations he has filed duplicate expense and travel claims to the House of Assembly totalling over $3700.

"I have done what I have done because, as the premier of the province, if I have a person in my cabinet [with] any kind of cloud over at all, [I must] either ask them to resign or move them aside until that cloud passes or is dealt with."

This week, the Auditor General issued a public report, recommending the matter be referred to the police.

The local constabulary has opened a file.

Williams response - contrary to a longstanding tradition designed to protect the integrity of government and the administration of justice - was to restore Hickey to cabinet and begin an orchestrated spin campaign involving Williams himself, Hickey and Kathy Goudie, another member of the legislature accused of submitted duplicate claims.

Doing the right

In Labrador, the Royal Canadian Mounted Police have demonstrated they the can do right in addition to desiring it.

The bills so nice they claimed them twice

Roger Grimes and Ralph Wiseman - both former members of the legislature - are right on this one: ultimately the submission of claims is the responsibility of the person making the claim.

If members of the House of Assembly didn't submit duplicate claims for the same service, there wouldn't be any double billing.

Looking at the Hickey and Goudie reports, and allowing for the peculiarities of the Auditor General's reporting, though, it's difficult to say that Goudie and Hickey didn't appreciate that by submitting two separate claims using two different means of documentation for the same service that they were doing something that was definitely not kosher.

Premier Danny Williams has tried to apply another frame to these most recent accusations as part of his effort to tamp down the scandal that has now embraced his own ministry directly.

Curious to see experienced reporters accepting the Premier's explanations before they saw the details of what is alleged to have occurred. It'll be more curious if they stick to the same interpretation now that they have seen more information.

Among the curiosities in the latest portion of the House of Assembly spending scandal:

- A member of the legislature reimbursed for a meal dated three months before she was first elected.

- Two members of the legislature submitting different claim forms for the same service and being paid for both. Sometimes the payment was on the same day; sometimes the payments came weeks apart.

- Credit card receipts or debit receipts submitted for meal claims showing one amount; the restaurant invoice submitted for the same meal on a separate invoice showing a different amount.

- One member receiving double payment of per diems for meals and accommodations normally paid when the House is in session, for dates when the House was not sitting.

- Double claiming $775 in donations to various groups, one donation being for $500.

- A member claiming three days of per diems and receiving double payment ten days apart.

- A member submitting two separate claims for a $500 donation using two different receipts and a cancelled cheque as supporting documentation. The dates on each of the three supporting documents shows a different date for the donation.

Afrighting the ear

Lumber World has been running a radio spot on VOCM for way too many months now extolling the virtues of Bruce brand hardwood flooring.

There's some reference to Shakespeare and "trodding the boards", presumably to attach the hardwood flooring to some sort of elegance, grace and education.

Unfortunately this is a good example of a truly hideous radio spot where both the writing and the voicing wind up affrighting the ear of any listener with half a clue.

Not only is there a meaningless hodge-podge of some Shakespearean dialogue, one portion of which sounds like the prologue of Henry V, but the guy pretending to be an actor obviously has no idea what he is reading.

The word is Agincourt - pronounced "aazhincour". This guy pronounces it as if it were Jethro Bodean's way of saying "again".

Just so you get the point, here's Derk Jacobi's performance, from the 1989 Branagh version. No one's expecting the VOCM guy to deliver a performance worthy of one of the finer actors around, but at least we could expect that he could get the pronunciation right.

No one said you'd asked for it, Jerome

We just said Danny would offer you the job.

All Jerome Kennedy [right] did on Monday was confirm that Danny Williams hasn't approached him - yet - about taking an appointment to cabinet.

Ok.

At a Monday news conference, the Premier did admit he'd considered making Kennedy an offer, presumably that Kennedy couldn't refuse. But Danny Williams said he hadn't spoken to Kennedy.

Yet.

And then there's Dr. Fitz

Odd to hear a story on CBC Radio this morning discussing the activities of His Excellency the High Commissioner in Ottawa.

Sources tell CBC News that FitzGerald — who taught courses at Memorial University before being appointed last year as what he at the time described as the province's eyes and ears in Ottawa — has not had a significant impact during his eight months on the job.

Sources say FitzGerald does not have much traction with Ottawa mandarins, and lacks the power to negotiate on behalf of the province.

The audio version had a bit more detail, noting, for example, that after Stephen Harper's trip to Dannyland in October, His Excellency was despatched to the Langevin Block to set things right with the Prime Minister.

Fitz was left outside the office cooling his jets, reduced to offering to walk with the PMO staffer to his next appointment if need be.

Such is the impact Danny's man has on The Hill.

If they haven't already started, CBC Radio should expect angry e-mails flying from the Blackberrys at the Premier's publicity departments and threats of legal action from Fitz's legal counsel.

Fitz is nothing if not touchy.

He didn't say that before

Danny's threatening to stay around as long as it takes to sort out the House of Assembly mess.

It's not like he said that before.

No. This is a new promise to stay as long as it takes.

Don't think of it as used.

Shop-worn even.

Think of it more like a previously-loved comment.

Only driven by a little old premier once a week during a scrum during the latest jihad against foreign infidels:

"I can tell Exxon Mobil that I will be in this office when this project gets done … If that takes 10 terms, and the people of Newfoundland and Labrador want to re-elect us time and time again, we'll stay here till this is done," he said.

"They won't wait us out."

That's what he said in April, after the Hebron talks collapsed and Danny promised that in retaliation he was gonna "take ExxonMobil out."

Yeah. Right. Like that happened.

Of course, Danny Williams is fond of bitching about the burden he carries and mused out loud - after getting back from the latest trip to Florida for the weekend - about retiring so he doesn't have to slog away 24/7 on behalf of his ungrateful subjects for the betterment of the province.

Heck, Danny's frustration got so bad before Christmas, he even announced his retirement to VOCM, albeit about four years in advance.

So we can all rest assured Danny Williams will be here for another term or four until Hebron is sorted out and the House of Assembly is fixed.

or he will be gone after the next election.

or not.

AG Noseworthy changes rules as he goes

In the most recent accusations under the House of Assembly spending scandal, Auditor General John Noseworthy has once again changed the rules under which he is conducting his review.

In the original four cases, the AG levelled accusations without having completed even the most basic investigations. Each of the four accused met for a handful of minutes - less than 10 for Ed Byrne - and were asked to explain claims without being shown the claims in question. Noseworthy claimed at the time his legislation prevented him from showing the documents to anyone outside his office.

In the second round of accusations, Noseworthy met with the accused member of the House after making the accusations public. Noseworthy only got around to calling the MHA involved after he filed a report.

Now with the double-billers, Noseworthy met with at least one of them, show him the questionable claims and - solely on the basis of that meeting - is now deleting one of the fellows from the report.

In one instance, the member was paid for the same incident based on the receipt and the VISA bill. Why were they filed separately? It could indeed be an innocent clerical error by inexperienced staff.

Then again, it could be something else.

There is no reason to delete anyone from a report.

Rather, by fully disclosing the details, the AG could help us understand what happened.

Unfortunately, we have an AG who is acting as a law unto himself. The rules get made up as Noseworthy likes and, when it gets right down to it, his work seems to fall far short of any reasonable standard of performance by anyone in a comparable position.

Unfair? Unreasonable? Slipshod, even?

Yes. Without a doubt.

And today's revelations just add another straw to the already snapped spine of the camel bearing the calls for a public inquiry into the whole mess.

Provincial political round-up

1. Early election? Responding to a question from reporters, Premier Danny Williams is quoted in the Saturday edition of the Telegram that he has not ruled out the possibility of an election before the planned date in October.

Williams said he had no intention of catching the opposition parties by surprise and would call the House of Assembly back to amend the elections rules if an early election was needed.

That's an odd statement since the changes Williams introduced in 2004 do two things:

First, they allow an election can be called at any time.

Second, in the event of an election before the planned date, the subsequent election would be fours years later. Given that, if the Premier did seek an election writ before October (likely time: called by the end of February with voting before Easter), the next election after that would be in October 2011, exactly as it would occur anyway.

Liberal leader Gerry Reid and New Democrat leader Lorraine Michael both criticised the idea of an early election. Both said there was no need of going short and that an early election would forestall the Auditor General's review of the House of Assembly. Michael said an early election would go against the spirit of Williams' own amendments in 2004.

2. More AG news on Monday. Auditor General John Noseworthy will hold a news conference on Monday to discuss double billing by members of the House of Assembly.

3. Kennedy will run. St. John's lawyer Jerome Kennedy [left. Photo: cbc.ca] announced this weekend he will be seeking the Tory nomination in Carbonear.

Local political scuttlebutt has it that Kennedy intended all along to run in his old hometown seat but was talked into the Signal Hill-Quidi Vidi by-election by Danny Williams.

As Bond Papers already suggested, don't be surprised to see Kennedy appointed to cabinet well before the next election. A cabinet shuffle could come any time before the end of February as the Premier gears up for the next election.

In related news, the provincial Tories placed newspaper ads over the weekend calling on interested people to contact party election chairman Ross Reid about their potential candidacy in any of the seats currently not held by the Progressive Conservatives. Several other seats are expected to vacated by current members of the legislature who won't be seeking re-election.

How to raise money

Bring in a guest who people will pay big bucks to come hear speak.

Brokeback Mountain of Crap

Bill Rowe's column in this week's weekend Telegram is noteworthy for two reasons:

First of all, he repeats a story not realising that it is actually used by the less enlightened as a backhanded insult to both Loyola Sullivan and others from the Southern Shore. Rhyming off the times tables is not a mark of genius in any part of the world - except Bill Rowe's corner, apparently. The astute people from Da Shore apparently understand that far better than the townie columnist.

Second, Rowe plants so many passionate kisses on Sullivan's penny-pinching arse that one wonders if readers should avert their eyes for having stumbled, innocently but no less embarrassingly on the literary rendering of some school-child's first crush.

Loyola Sullivan was more commonly known as the Rain Man among denizens of the East Block for his ability to recite digits but assign them no deeper meaning than their mathematical value. He was indeed a well-respected politician, as are many and in Sullivan's case the high regard in which he was held was well deserved.

But beyond that and offering us no less than two reminders in two back-to-back sentences that Rowe was once in the same general vicinity as power (As Danny's ambassador to Hy's), Rowe's column gives us absolutely no insight into one of the political events of a year already chock-full of political events that will be long- remembered and oft-pondered.

Why did Sullivan give Danny a political kick in the goolies that evidently sent Danny's teeth a chattering just as it sent tongues wagging across the country? Do not look to Rowe for a possible answer, any more than one might look to him for an explanation of why he voted for the Churchill Falls deal. This is the print version of Rowe's host-talk-caller-listen show.

Such is the sheer inanity of the second half of Rowe's column, that he had the first PIFO Award sewn up until a few mouse clicks revealed the a better work by that other inveterate anony-quoter, Warren Kinsella.

But here's one for William to ponder: if Loyola Sullivan is such a penny-pincher with public funds, how could he sanction overspending $3.2 million of public money through the House of Assembly members accounts from 1998 to 2005, with the bulk of the overspending occurring while he sat both on the house management committee and as finance minister?

Kinsella wins PIFO award for January

We have barely entered the New Year, just languishing in the splendour of Old Christmas Day in fact, and already we have seen the winner of a new award handed out at Bond Papers.

We call it the PIFO. It will be awarded regularly to the person or persons in the media or politics who succeed in telling nothing more than a penetrating insight into the f**king obvious all the while masquerading as deep thoughts.

The recipient of the first PIFO of 2007, the PIFO for January and, indeed the first-ever PIFO:

Warren Kinsella: blogger, racenteur, National Post columnist (the Sun had its token Lib, eh Sheila) for his recent offering: "Why cabinets get shuffled".

Congrats Warren.

Spiderman knew what Danny apparently doesn't

Danny Williams is apparently frustrated by the ongoing scandal in the House of Assembly and information coming supposedly in dribs and drabs.

Danny can only blame himself. He didn't create the problem but - by his own claim from the outset in June 2006 - he has taken full responsibility for how his administration is dealing with the scandal.

From the outset, the Premier endorsed - without reservation - the Auditor General and his work.

If Danny Williams now finds a problem with the system, he has no one to blame but himself.

The Premier and his ministers rejected flatly the appointment of a public inquiry supported by forensic auditors who would have the complete skill-set and the complete legal authority to conduct thorough and proper reviews in a timely manner.

It's not like people haven't pointed out problems with the Auditor General's reports and the entire process.

It's like Uncle Ben told Peter Parker: with great power comes great responsibility.

Danny Williams has great power. He also has the great responsibility.

Rather than whine about it, Danny Williams should exercise it.

If he can't or won't then, by all means he can stop merely envying Loyola Sullivan and join him in private life.

Most of the people in the province - your humble e-scribbler included - believe that the Premier can do the job.

The only question is: "Will he?"

Rona-vision

Ok, so like while everyone else has been getting on her case, here at Bond Papers, your humble e-scribbler actually kinda liked the diminutive Rona Ambrose in her gig as environment minister.

In this first clip, courtesy of youtube.com, we find Rona playing along good-naturedly with Rick Mercer as they produce a little maple syrup. There are some slightly risque double-entendres, Ambrose plays along nicely and she even makes some self-effacing jokes.




In the second clip, we find Rona participating in a little environment song during the recent international conference in Nairobi. Somehow, it's hard to imagine her replacement being quite as approachable.




Do not lose heart, Rona fans. The real policy nerds among our small but enthusiastic group will get to see more of her dealing with controversial issues in her new position as federal intergovernmental affairs minister.

She'll be knee deep in Equalization, among other things, presumably where she'll go toe to toe at some point with the Mad Mullah of eastern Canada, Danny Williams.

Something suggests that for all her good humour, Rona won't be pushed around by the vertically challenged and ever-dyspeptic Williams.

Nosirree.

Them pointy-toed shoes (left) might not be just for show.

And if nothing else, intergovernmental affairs will suddenly take on all the geek-appeal of Lucy Liu's efficiency expert in the first Charlie's Angels movie.

You know the scene.

Williams punts transport minister to sidelines in audit scandal

Transportation minister John Hickey (PC-Lake Melville) is a serving cabinet minister - collecting full cabinet salary this evening, but stripped of actual ministerial duties in the latest problem in expense claims by members of the House of Assembly.

Premier Danny Williams met with Hickey at sometime this morning, according to CBC television news, but for some incomprehensible reason waited until 3:00 PM to advise news media - and the general public of the latest financial irregularity. The pattern mirrors the day Williams broke the scandal when he waited eight hours to reveal the first problem.

Williams said the province's auditor general had uncovered 20 instances of Hickey filing duplicate claims for miscellaneous expenses under his constituency allowance dating back to his election in October 2003. Some of the claims were for donations to unspecified community groups. The total double-billing amounted to $3700.

While the Premier was quick to encourage people to reserve judgment, his own actions suggest there is more to this latest incident than meets the eye. If the matter was a simple accounting error, as Williams suggested to reporters, then it would be easy to determine and correct without side-lining the minister involved.

Under the provincial Auditor General Act, the AG is required to notify officials of problems if he perceives a breach of legislation, including the Criminal Code of Canada. This presumes that the AG is capable or or has conducted sufficient investigation to make a determination, based on reasonable grounds, that a violation has occurred. To date Noseworthy's investigations have been accepted by news reporters as having included investigations comparable to those carried out by the police.

They haven't.

In each instance, Noseworthy has reported to authorities at the first appearance of an irregularity without determining at all the nature of the alleged irregularity. Some aspects of his investigations - the absence of sworn statements, failure to disclose information while making accusations of criminal wrongdoing - suggest the AG is incompetent.

In the Hickey case however, the amounts are small - $3700 - and the number of claims so small over a limited period that it would ordinarily be extremely easy to make a reasonable conclusion as to whether the double-billing was inadvertent or deliberate. With inadvertent billings - for example by a new assistant who was unsure of the process corrective action far short of firing or suspension would be warranted.

Under those circumstances, Williams' scrum today would have consisted of a simple statement: "We found the problem. Here's what it was. John cut me a cheque. Everything's kosher."

Diligent response and prompt, thorough disclosure would forestall misunderstanding and misrepresentation.

In the case of deliberate acts, those would be apparently criminal. Suspension and an immediate police investigation would be the logical consequence.

Williams' scrum today suggested a response somewhere between the two. That vague, almost contradictory response will lead to further speculation that information is being deliberately withheld or that there is more to the Hickey matter than disclosed or known.

Revelations about Hickey are a reminder than more than half of the inappropriate spending alleged to have occurred in the House of Assembly took place after April 2004. Of the more than $3.2 million overspent by the legislature between 1998 and 2005, less than half has been turned up by the AG before he shut down his investigation. Of the $1.6 million in unexplained spending, about $800,000 was disbursed in 2004 and 2005. In addition, the bulk of questionable payments made to three suppliers occurred after 2003.

Latest worst kept secret; more elec spec

Danny Williams suggests there may be a pre-election cabinet shuffle.

In related news, the number of Tories running to replace Loyola Sullivan is at five and headed to as many as eight according to CBC radio. The words that come to mind are "safe seat".

Spec on Loyola's sudden departure continues to mount. There's the version that he had his office cleaned out either before he told Danny or a handful of hours afterward. That's quick.

Then there's the version that Sullivan brought back a deal on Equalization that would include a phase in period, with transitional grants for provinces like Newfoundland and Labrador that would see a drop in their Equalization payments under the new scheme.

This one sounds plausible since transitional grants were part of the Connie 2004 election platform. Then they were looking at 12 years of transition; the figure bandied around now would be more like four.

The falling out under that scenario came when Premier Danny Williams rejected any loss of revenue.

Then there's the last explanation of Loyola's abrupt departure which holds that the Rain Man from Ferryland was growing increasingly frustrated with how things run - or sometimes don't run - in the Confederation Building these days. That's plausible too.

Speculation is already growing about who won't be running in the next election. Names tossed around so far include deputy ayatollah Tom Rideout, intergovernmental affairs minister John Ottenheimer and municipal affairs minister Jack Byrne for the Tories. On the Liberal side, the names include Kel Parsons, Judy Foote, Percy Barrett and just about half the caucus.

Names vary depending on who you talk to for both Liberals and Tories looking to quit politics. Only time will tell.

There's no speculation on Ross Reid, formerly the deputy minister to the premier, who resigned today to head up the provincial Tory re-election campaign.

Reid is widely respected and capable. If your humble e-scribbler hasn't said so before, let's make it plain now: Reid would be the finest replacement for Danny when he finally packs it in on the planned departure date in 2010. If Reid ever decides to get back into politics either federally or provincially, he can expect wide support. There simply aren't that many people in the province with Ross' talents.

Of course, that appointment is sure to raise the spectre of an early election call in Newfoundland and Labrador. There are no signs of a quickie writ at all, but Reid's appointment might just start tongues wagging. The Premier could use either a new war with Ottawa over Equalization as the premise or he could seek an endorsement of his energy plan and playing hardball with the oil companies. Either way it would be a jihad against foreign infidels which tends to play well in local politics, especially when led - as in 1982 - by our own version of the Mad Mullah.

If Claudia Cattaneo's Financial Post piece turns out to be accurate in its speculation an energy plan mandating an automatic Crown interest in any offshore field would need a public endorsement to withstand the onslaught of criticism. It would also be an unassailable political issue akin to the January 2005 offshore deal where emotion - and a heckuvalot of sheer political bullshit - trumped reason yet again. Liberal candidates would be falling over themselves to endorse the position, just as they did in 1982.

As for political fall-out, Danny Williams might take a few seconds of heat for not waiting until October but even in the worst case scenario, any criticism of an early election would evaporate well before polling day and would have absolutely nil negative impact on Danny Williams' re-election. The full impact - as in 1982 - wouldn't be felt until after Danny is gone.

Oh.

And for those who think there's no way to go early, recall that the so-called fixed elections date bill didn't really set a fixed date for elections. The 2004 amendments to the House of Assembly Act state clearly:

3. (1) Notwithstanding subsection (2), the Lieutenant-Governor may, by proclamation in Her Majesty’s name, prorogue or dissolve the House of Assembly when the Lieutenant-Governor sees fit.

(2) A polling day at a general election shall be held on the second Tuesday in October, 2007 and afterward on the second Tuesday in October in the fourth calendar year following the polling day at the most recently held general election.

Practically, we wouldn't need an election before October but - just as in 1999 - the Premier's agenda may trump all others'. Way back then, Brian Tobin's eagerness to head back to Ottawa with two election victories led him to plan an election for early September 1998. First signs emerged in April of that year but Tobin's plans were bumped back, at the last minute, by a caucus that was uncomfortable with an election only two years after the previous one. Tobin dropped the writ in January 1999 instead.

Shame: Ignorant oppo parties playing political games with military

In 1993, it was the EH-101. The right helicopter for the mission purchased at a good price.

Used as a scapegoat by Liberal leader Jean Chretien during the federal election campaign, axed unceremoniously once Chretien took office.

The price to Canadians? Lives and hundreds of millions of dollars - if not billions - above what it would have cost to carry on with the EH-101 purchase.

In the end, the air force got the EH-101 for search and rescue but was forced to purchase a second-rate aircraft for its naval requirement in a process that also drove up long-term costs to Canadians through the purchase of a second aircraft (savings from a single aircraft with a single spares requirement went out the window.)

Heck, the American president will be flying in the EH-101; our navy is using an aircraft even the American military hasn't bought, thereby reducing its inter-operability with a key ally and...yet again...driving up our long term costs solely because of political folly.

Watch apologists rush forward to point out the military made the decision on the SH-92.

Then watch the same politicos rush forward to slag the military for having "too much" control over defence procurement, thereby prompting the latest exercise in the cynical, pointless political theatre called defence procurement.

Here's the short answer:

In the tactical lift helicopter procurement, there simply isn't another helicopter worth buying except the CH-47 Chinook.

In the Herc replacement, there simply isn't another capable airframe. The A-400 hasn't even flown yet; we need the aircraft now based on a requirement that sat unaddressed under the Liberals.

In the SAR role, we are buying a decent aircraft that combines the capabilities of two aircraft currently filling the role and doing so with one dedicated to the search and rescue mission. In the current situation, we are flying transport aircraft (Hercules) on SAR missions, thereby taking them away from their primary task. The slight change in airspeed requirements (from a max of 130 knots to 140 knots) should not wipe out competitors - the Globe story on this is sheer bunk.

But overall, this sort of nonsense - both from the Globe and from the Liberal, Blochead and New Democrat tag team - is sadly what Canadians get when it comes to defence.

For far too long, defence procurement in this country has been about political pork. Successive Liberal and Conservative regimes have wasted billions - literally billions - solely to satisfy civilian, partisan needs to pay off political supporters or create jobs in underdeveloped regions of the country.

More often than not the equipment purchased - like the LSVW currently squealing its brakes all over Afghanistan - is a second-rate, clapped-out POS that would never have been selected by a process dominated by operational military requirements as the major criteria for selection.

The Liberals reviewed procurement in 1994 and the Liberal dominated committee recommended more off-the-shelf purchases in order to save money and get needed equipment to our soldiers, sailors and air crew.

The result? A weapons-effects simulator (WES) purchase that took 13 years from inception to delivery. WES has been on the market since the early 1980s.

Off-the-shelf doesn't equal a decade and a half.

That's just one. Your humble e-scribbler has been studying this issue for a couple of decades.

There is a need to shake-up up defence-related procurement in Canada but it damn-well isn't a shake-up like the opposition parties are suggesting.

The shake-up needs to be among the grossly irresponsible and grossly ignorant politicians who use defence procurement solely as a means of scoring political points.

Like now.

Sadly, the men and women of the Canadian Forces are the perfect patsy for our pissant politicians.

Their needs offer the chance for billions in public money the politicians can spread at whim among their buddies. The costs - in cash and lives - are borne by someone other than the politician who thinks its a great idea to buy a shovel and a rifle-shield in one combination based on a design by a political secretary all in the name of "civilian oversight".

It's enough to make your humble e-scribbler consider running for public office just to sort out the crap.

Danny's latest pissing match

From the December 19 Financial Post, comes a commentary by Claudia Cattaneo, the Post's Calgary Bureau Chief. There's a link to it, but for posterity, we are reproducing the whole thing below.

After that, you'll find Danny Williams' rejoinder published in the January 3 edition of the venerable Canadian business journal. It's pretty interesting to read Williams' letter since it actually doesn't address the points Cattaneo makes. There are a few Bond Papers' comments in square brackets but don't let those distract you from the main articles.

Or his sentences.

Fragments actually.

Lots of them.

Danny Williams [left, not exactly as illustrated] must have kidneys of superhumanly freakish size for all the pissing he does.

Cattaneo's comments are accurate, reflecting an understanding of Williams' position, recent comments by one of Hydro's senior officials and - to be sure - the view of the oil and gas industry with whom Williams would have to work if offshore oil and gas resources are to be developed. Unfortunately, Cattaneo's understanding doesn't conform to the Premier's year-end puffery. So he claims she is uninformed and in the back pocket of Big Oil.

We've heard it all before.

Anyway, for the record, here's the original article followed by the Premier's comments, all part of the Premier's latest pissing match.

One last thing: Danny Williams' is right about one thing: inaccurate, selective and uniformed commentary is completely unproductive and does a disservice to everyone. Too bad the Premier is most often the one providing such comment.

You could've been a contender
Comment
Claudia Cattaneo, Financial Post
Published: Tuesday, December 19, 2006

Right about now, if Danny Williams, the Premier of Newfoundland and Labrador, hadn't played Russian roulette with Big Oil -- and lost -- the Hebron Ben Nevis heavy-oil project would be hiring hundreds of people and writing cheques with nine zeroes.

The Hibernia offshore oil project, Newfoundland's first and mightiest, would be looking forward to many more years of steady production volumes, thanks to the discovery of an extension in the southern edge of the field. [BP note: see, for example, "Waiting for the other shoe".]

Yet partners are facing a rapid decline next year, apparently handcuffed because the Tory Premier wants a better deal on the new reserves.

It's a similar situation with Husky Energy Inc., which were it not for Tory obstinance, would now be beavering away to develop the 2.3 trillion cubic feet of gas reserves associated with the White Rose oil project. [BP note: This comment is a bit overblown. A natural gas royalty regime has been under development since the late 1990s. In April 2006, Husky indicated it would be shelving plans to develop White Rose gas until the gas royalty regime is issued.]

Instead, thousands of Newfoundlanders are leaving to work in oil projects in Alberta. The exodus is so huge the shock to the provincial economy has been compared to the collapse of the cod fishery.

But Mr. Williams continues to stick to his guns. The province is expected to unveil an energy plan early in the new year that will bring back government ownership and control of oil and gas resources in Canada for the first time since the 1980 National Energy Program.

One the greatest fears is that the plan will mandate equity ownership in oil projects by the province without contributing capital. The plan may also include a generic natural-gas royalty regime. Depending on the terms -- and there are few hints on what they may be -- it will either encourage production of vast natural-gas finds, or keep them idle. [BP note: The Premier has stated several times over the past year that the energy plan will include a natural gas royalty regime.]

Mr. Williams' approach has wide appeal in Newfoundland, where bashing arrogant Big Oil garners votes and the common view is that the province got a raw deal on Hibernia, as oil companies underplayed its potential to squeeze the best possible terms.

Mr. Williams believes the plan will turn his province into an even greater energy producer by putting the government in the driver's seat and ensure it gets a fairer share. Most likely, it will keep Newfoundland an energy wannabe.

A presentation last month by Jim Keating, vice-president of business development at Newfoundland and Labrador Hydro Corp., the provincial Crown corporation through which Mr. Williams is expected to drive his oil-and-gas agenda, is seen by Canada's oil industry as signalling where the Premier is going.

The presentation notes:

- That many other governments get a bigger share from their oil riches than Newfoundland.

- Government-controlled entities are common in the sector globally, with 88% of reserves under government control.

- The global trend is for a greater government take from oil and gas projects and highlights energy- producing countries such as Russia, which has increased royalty and export duty rates; Algeria, which has introduced a windfall profits tax and is increasing state equity; Venezuela, which has increased royalty, tax and state equity rates; Ecuador, which has introduced a windfall profits tax; and Bolivia, which increased the royalty rate and nationalized assets.

The speech, given at Memorial University in St. John's, praises the benefits of government ownership and control, such as ensuring greater knowledge and influence over the industry while ensuring development of long-ignored resources. [BP note: Several people who attended the session and some who heard a similar speech delivered by Hydro chief executive officer Ed Martin at the St. John's Board of Trade offered an observation similar to Cattaneo's.]

It's hardly the type of thinking that makes oil types want to drop what they are doing and flock to the area. Already, their experience with Hebron, and now expectations that a new standoff is brewing with the province over development of Hibernia's south extension, has dampened any enthusiasm they had left.

Global trends such as increased government take and ownership have largely scared off foreign investment, increased government corruption, and frustrated oil-and-gas sector development.

In Canada, past government ownership of oil and gas resources, through entities such as Petro-Canada, is widely seen as failed government policy that cost taxpayers dearly.

With estimated reserves of 2.7 billion barrels of oil and 10.2 trillion cubic feet of natural gas buried off its coasts, Newfoundland has significant holdings. Yet they're modest by world standard and hard to get to.

Mr. Williams' confrontational style doesn't make him the type of partner oil companies would welcome.

If Mr. Williams moves forward, the predictable outcome is that exploration activity will remain significantly below potential despite high energy prices, there will be no new projects and current daily production of about 300,000 barrels of oil a day will start to decline next year.

The sad part is that Mr. Williams is so popular that Newfoundlanders -- at least those who haven't left for Alberta -- seem to be buying into his views. He should let them know that his high-risk strategy could cause their oil industry to unravel, and that they would be the big losers, not Exxon Mobil Corp.

Financial Post ccattaneo@nationalpost.com

-30-

We will not be bullied
Financial Post, January 3, 2007


Re: You Could Have Been A Contender, Claudia Cattaneo, Dec. 19.

The uninformed, superior attitude of certain commentators never ceases to amaze me. Claudia Cattaneo's article entitled "You could have been a contender" is condescending to the people of my province, to me personally, and frankly your readers should be equally insulted. Her complete lack of understanding of the facts is somewhat astonishing, especially considering she is generally quite knowledgeable on the facts of the oil-and-gas industry. But perhaps her proximity to the oil companies in Alberta has skewed her objectivity. I certainly hope this is not the case. In any event, let me correct some of the impressions left by her unfortunate commentary.

First of all, I would like for Ms. Cattaneo to explain to me how "Tory obstinance" is blocking the development of Husky Energy's natural gas development. This government is in the process of consulting with industry to implement a fair and reasonable natural gas royalty regime. I make no apologies to her for ensuring we do this in a proper, timely fashion. I do not have the luxury of having no one to answer to -- rather, I have many future generations of Newfoundlanders and Labradorians relying upon our government to ensure we get a fair return on our resources. [BP note: The natural gas royalty regime has been under development since the late 1990s. It was supposed to be released, along with the energy plan last year. That would hardly qualify as "proper, timely fashion."]

Furthermore, Ms. Cattaneo's assertion that our government is looking for equity without contributing capital is wrong. During our negotiations on the Hebron development, we were quote willing to pay for our equity position. And a minor equity position at only 4.9%. A very fair and reasonable position, considering some other jurisdictions regulations. [BP Note: Premier Williams deliberately confuses his claims about what was involved in the Hebron discussion with Cattaneo's references to what some people believe may be in the energy plan.] It is ironic that on the very day this "commentary" appeared the news reported the merger of Stat Oil and Norsk Hydro -- the Norwegian government will hold 62.5% of the merged company, and its Prime Minister said he would seek parliament's approval to increase the state's share to 67%. I don't think there will be an exodus of companies leaving the Norwegian shelf as a result of greater government ownership. Fine for Norway, but I guess Ms. Cattaneo doesn't see such benefits as befitting Canada or my province. Which leads to another point.

Ms. Cattaneo selectively uses excerpts from a presentation made by an official from Newfoundland and Labrador Hydro. In so doing, she tries to paint our government as comparable to Algeria, Bolivia and Russia. What she fails to point out is that in fact we are looking for a greater return on our projects, as other jurisdictions have. Her selective examples are the extremes. She conveniently fails to mention the other examples of increasing fiscal terms that are closer to home-- the United States, the U.K., Norway and, yes, Alberta. We are seeking arrangements on the development of projects on a just and reasonable basis. [BP note: Bond Papers has previously noted the misrepresentations repeated here by the Premier. For example, the American offshore taxation regime on some properties, even after increase, would still not be as lucrative as the Newfoundland and Labrador regime. In Alberta, the province is seeking a modest increase in its royalty on tar sands. For a discussion of some factors affecting Newfoundland and Labrador's economic future see here.]

Inaccurate, selective and uninformed commentary, such as provided by Ms. Cattaneo, is completely unproductive. It does a disservice to the people of my province, and indeed to the people of Canada who as well will all serve to benefit greatly from our offshore development. But I can assure Ms. Cattaneo and the oil companies she so valiantly supports that our government will not be bullied into making decisions that are not in the best interest of our people. We are not unreasonable; we are not selfish or irrational. We are, in fact, looking to work together for everyone's mutual benefit and develop our industry in a manner that returns to the people some of the benefit they so richly deserve.

Danny Williams, QC, Premier of Newfoundland and Labrador.