For the record: Danny Williams' 2001 speech to Nova Scotia Tories

Shortly after taking power in 2003, the provincial Progressive Conservatives stripped their party website of any documents from their time in opposition.

The reasons are inexplicable.

The site could have been re-arranged but older, important document still retrieved via google. Could have been, that is, if the Tory webmaster hadn't also blocked access to the old stuff.

Never fear, gentle reader. Some of us saved files for just such an eventuality.

In light of recent events, it is useful to go back and look at what Danny Williams said to a bunch of Nova Scotia Tories in 2001. Williams had just recently been elected leader. Some of his recollections of what had happened just prior to that might not be entirely in accordance with the historical fact, but in the six years that Danny Williams has been in elected politics, some of us have come to understand the Premier's penchant for making things up as he goes along inaccuracy.

A few things to note:

1. The then-newbie politician apparently spent 25% of his working day listening to radio call-in shows. The practice continues but now draws in public servants.

2. The obviously visceral hatred evident for the federal government, which Williams equates with "Liberals".

3. In light of the campaign to increase federal transfer payments through Equalization and offshore revenue side-deals, the oddity of this statement: "We don't want handouts. We want our pride back. We want to be independent and self-sufficient."

4. The numerous historical fallacies - a polite word for falsehood - like the bit about the federal "manipulation" on the Upper Churchill deal or pre-Confederation Newfoundland "owning" adjacent ocean resources.

Williams sees cooperation
among Atlantic provinces as
the key to battling Ottawa

Notes for a Speech by Danny Williams,
Newfoundland and Labrador PC Party Leader,
at the Nova Scotia Annual Premier's Dinner
Halifax, NS, Saturday, June 2, 2001

This text may vary from the delivered version

Thank you very much for the invitation to speak to your annual fundraiser this evening. Unfortunately, my wife, Maureen, could not join me as she is attending a graduation party for the son of a close family friend.

I want you to know that I feel very much at home here tonight. Both Maureen and I remember fondly the day 30 years ago as newlyweds when we jumped into our beaten-up '61 Valiant Station Wagon and headed for Dal where I obtained my Canadian Law Degree. Our memories of student poverty are treasured. In particular, I vividly remember one lunchtime in Dartmouth when we were trying to scrape together the price of two snack packs of Kentucky Fried Chicken by hauling out the seats of the car to get some loose change to make up the shortfall. The Colonel hasn't tasted as good since.

But my fondness for this province is not just personal. It is also cultural. We have a history and values that go back centuries before Confederation. The bonds that unite us are far stronger than the few differences that could divide us. We have common goals, common interests, common challenges, common vulnerabilities, common opportunities and of course a common boundary. But we have been more than just neighbours sharing adjoining properties. We have been partners sharing enterprises, resources and people. We hold kinship in thousands of families throughout both our provinces. Many Newfoundlanders and Labradorians like myself have received quality education in your province and are alumni of Nova Scotia Universities and Colleges. So when I say that I feel at home, I mean it. Our Atlantic Canadian family is a strong bond that unites us all.

So you may ask yourself why am I here tonight. By way of quick background, just a year ago I was a very happy man. I had a good law practice, a successful business, some free time for my family and a chance to play the odd game of golf. But then the Leader of the P.C. Party in Newfoundland and Labrador, Ed Byrne, resigned and, in the absence of a strong successor, I decided that the province needed a change in leadership and direction - and I threw my hat into the ring. As a result, I sold my business to avoid conflict of interest. My practice is drying up because people think I'm too busy, and I now spend at least 25 per cent of my time listening to our open line shows and less time with family. In the last seven months, I have campaigned in the fall federal election - and also in two winter by-elections on the Great Northern Peninsula, both of which we won. I have had a leadership convention in April, and I now find myself running in a by-election in Corner Brook to obtain a seat in the legislature. I didn't realize how good I had it! Premier, no one will ever convince me that the role of a politician or a party leader is an easy one. As CEO of a private company, you are top dog - but in politics some days you are the dog and some days you are the hydrant.

But it does have its light moments. One supporter told me at the convention that the Liberals in Newfoundland should erect a sign in Port aux Basques that the light at the end of the tunnel has been turned off indefinitely.

And another voter who wanted change in the Northern Peninsula told me that politicians and diapers have something in common: they both have to be changed regularly, for the same reason.

But all jokes aside, I am truly enjoying the experience and challenge of political life. Like Premier Hamm, I did not seek the position for something to do to fill the leisure hours. I have sought this position because I love my province, because I see some things that are desperately wrong that need fixing, because I think I bring a background to the table that can make a difference and because I cannot rest until I have tried.

The more that I see, the more nauseous and angry that I get. The way that our people and our region have been treated by one arrogant federal Liberal government after another is disgusting. The legacy that the late Prime Minister Trudeau and Jean Chrétien will leave in Atlantic Canada is one of dependence on Mother Ottawa, which has been orchestrated for political motives for the sole purpose of maintaining power. No wonder the West is alienated and Québec has threatened separation. Canadians - and Atlantic Canadians, in particular - realize the importance of dignity and self-respect while Ottawa prefers that we negotiate from a position of weakness on our hands and knees. We must heed the words of J.F.K. who said, "Let us never negotiate out of fear, but let us never fear to negotiate."

Our fellow Canadians must wonder why Newfoundlanders and Labradorians are always angry, always complaining about the inequity of the Upper Churchill, when we receive unemployment and TAGS benefits from Ottawa together with generous transfer payments.

We don't want handouts. We want our pride back. We want to be independent and self-sufficient. We have already lost 30 years of profits from the Upper Churchill representing tens of billions of dollars. If we had just ten years of profit from the remainder of that contract at today's prices, our province would be debt-free. Instead, Ottawa saves that money by paying less to Québec.

Last year, over $2 billion worth of oil left our shores - and, after the federal clawback, we netted $12 million. Our mining industry last year produced over $1 billion, and we netted $4 million after federal clawback.

If Voisey's Bay is developed, we will net approximately $6 million after clawback on over a billion dollars worth of nickel production.

So on those three items alone with $4.5 billion dollars of annual production we would net $22 million dollars on royalties after federal clawback of 70% and 80%.

Not to mention the gross mismanagement of our cod fishery by the federal government, resulting in its destruction; the bartering of our fishery rights for favoured access to international markets; and federal manipulation in favour of Québec on our hydroelectric power.

That is why we are angry, we just want a fair share. Comments like "fish have no home" from Trudeau, the philosopher king, might make good soundbites, but they portray arrogance and contempt for a hard-working people who have been deprived of their heritage.

In Atlantic Canada, we are resource-rich but economically poor. We do not benefit as we should from our resource bounty, and part of the reason is that we gave up ownership and control of some of our most important resources when we joined Confederation. Prior to that, we were a sovereign country and we owned the sea's resources. We brought with us the fish in the ocean and the oil and gas in the adjacent ocean shelf, and God knows what else might be discovered in years to come with new technology.

By contrast, the provinces of Alberta and Saskatchewan were carved out of federal lands in 1905. The federal government of that day gave those new provinces ownership and control of the oil and gas in those former federal lands. They could own them and manage them as they saw fit. Alberta, in particular, has turned those resources into colossal wealth for the people of that province. There is no Alberta Accord to allow Albertans a limited share of the benefits from their natural resources. As a result, they hope to pay down $5 billion this year on their debt.

What is the difference between the wealth beneath Alberta's soil and the wealth beneath the sea adjacent to our coasts? Why have we been treated differently merely because our resources are located underwater rather than underground?

I believe that this distinction cannot be justified. I believe it is fundamentally wrong. I believe the situation is discriminatory and goes a long way to keeping our Atlantic provinces in positions of fiscal and economic subservience.

Our offshore resources belong to Canada simply because we are provinces of Canada. They are there because we are there. They go where we go. If we left Canada, the economic zone would go with us. There is no dispute about that. Why then should there be any dispute about the claim to the right of ownership of those economic resources within Canada? Joe Clark's government acknowledged our ownership and control over oil and gas resources offshore in 1979, but Trudeau rejected it in 1980. It was the Mulroney government in 1985 that gave us the Atlantic Accord.

Ours is a strong case of basic fairness and fundamental justice. Jean Chrétien knows this because he was Trudeau's Minister of Energy and intricately involved in the original negotiations. He should be ashamed of himself for the way that he has treated our provinces. Unfortunately, because of relatively low population numbers and the consequent low number of seats in the House of Commons, the Senate and the federal Cabinet, our voice is not heard loudly enough in Ottawa when we try to state our case. All too often, a muted voice is mistaken for a whining voice, if it is heard at all. Atlantic Canadians should never give up the fight to have clear ownership of resources in our economic zone restored to us. Don't ever forget that we collectively constitute four provinces of this country despite our population.

I am proud to say that one Premier in particular in this region has been fighting back and setting the example - and that Premier is John Hamm. Thank Heavens for Premier Hamm! Our province, with its string of silent compliant Liberal Premiers, owes John Hamm a debt of gratitude for fighting on their behalf. But it's time we joined forces and fought together. It's time to form a united power block in this region. With Ontario controlling the Commons, with Québec frequently setting the national agenda and with the West now uniting to ensure their particular perspective is heard, we cannot afford not to act in concert. Circumstances necessitate it. If we want to get our fair share of benefits and to influence public policy in this country, we must band together.

Provincial Liberal Governments in Atlantic Canada have put party ahead of province at the expense of the people they were elected to govern. By contrast, the Progressive Conservative approach is based on the premise that sacrificing the concerns of part of the country for the good of the whole of the country only leaves the country weaker, not stronger.

A blue tide is sweeping the Atlantic region. It has swept over the Maritimes and it is rolling in Newfoundland and Labrador, because our people are tired of poor representation. After a general election, all four Atlantic provinces will be Tory blue - and we must work together to get action.

His fellow Premier Ralph Klein has come out in favour of Premier Hamm's Campaign for Fairness. He feels that a better deal with Ottawa over the lucrative and ever-expanding royalties from vast reserves in the North Atlantic would benefit all Canadians and help the Atlantic provinces get back on their feet. Just this week, Jeffrey Simpson's column in The Globe and Mail drew attention to Premier Hamm’s campaign and the unfairness of clawback. And the Commentary in The National Post on Thursday past was entitled "The Cruel Hand of Equalization". The author agreed with Premier Klein that all Canadians would benefit by removing the shackles from Atlantic Canada and shifting from dependence on Ottawa to greater self-reliance. The perverse incentives of equalization only prevent sound, long-term development.

With developments in the U.S. energy plan and high energy prices, the time is right for the Atlantic provinces to revisit these issues and demand fairness.

Mr. Roland Martin, a former deputy Minister of Finance in Newfoundland and Labrador who now lives in Nova Scotia, recently published the first significant analysis of federal equalization payments since the program was introduced over 40 years ago. He says Ottawa should do three things to help the economies of the Atlantic provinces and reduce their dependence over the long term.

First, he says, Ottawa should take oil and gas out of the equalization formula so there will be no clawback of revenues from offshore royalties and taxes. Second, Ottawa should return to a ten-province standard for calculating entitlement to equalization instead of the current five-province standard. A ten-province standard would treat provinces equally in terms of their capacity to raise revenues, and would provide more equalization revenues to the Atlantic provinces.

Thirdly, Mr. Martin calls for a needs component in the equalization formula that will compensate, to some degree, for the higher costs of such public services as transportation, health and education in our province.

There is now a huge disconnect between the wealth generated by our resources and the net value we derive from them as provinces of Canada.

Ottawa, not Newfoundland and Labrador, is the big beneficiary.

This inability to gain any significant advantage from our resource wealth goes a long way to explaining the stark contrast between reported GDP growth and the actual economic and revenue benefits that accrue to Newfoundlanders and Labradorians.

Newfoundland and Labrador leads the nation in GDP growth and has been at or near the top for several years.

For every one of those years, Newfoundland and Labrador has also led the nation in unemployment and outmigration and trailed every other province in the nation in its ability to raise revenues to pay for essential public services, despite having some of the highest taxes in the nation.

Our dilemma is compounded by Ottawa's retreat from the federal principles of comparable public services for comparable fiscal effort. Those principles distinguished Canada among the nations of the world for much of the post-war period. But we are much less a sharing, caring nation today.

Mr. Martin, in his own paper on equalization, described the widening gap in taxation levels among provinces as "a rapidly evolving threat to the nation's political, social, and economic survival".

All of us in Atlantic Canada are suffering as a result of Ottawa's greater tolerance for inequalities in Canada.

We can no longer count on transfers from Ottawa to help pay for essential public services up to national standards.

From now on, this region will be more reliant on it own resources than at any time in the last half-century.

It is urgent that we find ways together to adjust to these new realities.

And it is urgent that we work together to impress upon Ottawa the need to give us the time to make those adjustments - to end our dependence on Ottawa in a planned way, without creating an even-wider gap between this region and the rest of the country.

I believe that we need our own Atlantic Accord and we can achieve greater self-sufficiency by working together as a region. Ontario looks after Ontario. Québec has its own agenda. The western provinces are a force in their own right and have succeeded in capturing national attention to their issues.

So far, Atlantic Canada has been irrelevant in the debate about the values of our nation and its future. Thanks to Premier Hamm, people are standing up and taking notice.

There is much work to be done.

There is a fight to be won.

Capitulation is not an option.

We owe it to our children and their children to preserve and find new creative ways to build a stronger, prosperous and self-reliant society.

The fight is well underway in Nova Scotia.

It has begun with the Conservatives in Newfoundland and Labrador.

We will fight as a united team, and I firmly believe that we will win.

No charges for Hickey; defamation suit possible

According to news reports, the Royal Newfoundland Constabulary will not be laying charges against transportation minister John Hickey [Right. Photo: cbc.ca] following an investigation of his double-billing for legislature expenses.

Hickey did double-bill the legislature for everything from donations to community groups to an apparently exorbitant monthly rental fee for a laptop computer.

If the computer had been purchased outright, the cost to the Crown would have been considerably less than a year's worth of payments at the rate indicated in the duplicate claims.

Hickey was initially relieved of cabinet duties but restored to cabinet by Premier Danny Williams shortly afterward in a move virtually unprecedented in parliamentary history.

It is customary to preserve the integrity of government by removing from cabinet any minister under criminal ivnestigation.

Hickey [Left. Double Photo: cbc.ca] told reporters: "I am completely vindicated."

Well, yes, there is vindication, at least to the extent that there was no criminal wrong-doing.

But Hickey most definitely did double-bill, and he has admitted to unspecified "mistakes". presumably that includes a situation in which two, and in one instance three claims, were filed for the same expense.

Like all newbie government members deployed as part of the government's communications strategy on the legislature scandal, Hickey lays the blame for the double-billing on the legislature's financial staff...presumably for not noticing that Hickey had in fact submitted duplicate claims for service not once, not twice, but 20 separate times. The duplicate claims were submitted in Fiscal Years 2003, 2004 and 2005. Hickey was first elected to the legislature in October 2003.

Hickey is also demanding an unqualified apology from former Premier Roger Grimes who stated publicly at the time, and as he repeated for news media today that he would "repeat every word that I've said publicly about how incompetent and dumb and stupid and sloppy that somebody like Mr. Hickey [Right. Hat-trick Photo: cbc.ca] would have to be to double-bill the government some 30-odd times and then pay the money back...".

Details of Hickey's double-billing can found in Auditor general John Noseworthy's report.

Among the billings were claims submitted twice for a chamber of commerce luncheon in November 2003. The first claim, along with the original invoice for $50.00 was submitted with a payment date of December 4, 2003. The claim was submitted a second time with a copy of the original invoice. Payment for the second claim was made in February 2004.

One of the most curious claims was a triplicate submission for an ad in the souvenir booklet for the 2004 Labrador Canoe Regatta. The first claim for $125, supported by an invoice apparently dated 22 July 04, was paid by the legislature on August 25, 2004. The second claim for the same ad was submitted with an invoice apparently dated in September 2004, was paid on October 6. A third claim - for the same ad - was submitted with a copy of a cancelled cheque apparently dated Aug 4. It was paid on February 4, 2005. None of the Auditor General's reports contains the actual date on which each claim was submitted.

Rather than sue Grimes, it would be far cheaper - not to mention genuinely open, transparent and accountable - for Hickey to hold a news conference, bring along his claims and explain what happened.

Otherwise, the public purse could be burdened completely needlessly by Hickey's legal fees.

Of course, if he had just kept track of what he was submitting, the whole thing would never have happened in the first place.

Then again, if Hickey [Left. Not exactly as illustrated] hadn't claimed to have a signed road construction contract on his desk last fall, he never would have been caught in an embarrassing fact malfunction under questioning in the legislature.

Lorne Calvert to Harper: you shoulda let income trusts suck my treasury dry

While the federal government's decision on income trusts may have violated an election promise, failing to act in the way it did would have caused phenomenal revenue loss for both the federal and provincial governments.

That's the sort of simple background that makes Lorne Calvert's comments in St. John's on Friday undeniably bizarre.

Calvert told a local business luncheon:

"Whether you agree or disagree with the income trust decision - and it was clearly walking away from a promised commitment - he's at high jeopardy if he does that anymore," Calvert said after delivering a speech to the St. John's Board of Trade.

That sounds like Calvert would have been happy if the feds had left income trusts alone, just for the sake of keeping a promise. If Calvert was merely saying that Harper couldn't afford to break another promise, one must wonder at Calvert's logic.

If keeping the original promise would have produced financial problems for both orders of government, then it was sensible to break the promise. By the same token, then, if the second promise on resources and Equalization would cause as many problems as it fixes, then it's only sensible to trash the second promise as well.

On another point, the Canadian Press story linked above contains a glaring factual error:

Newfoundland's offshore oil revenues are protected by the Atlantic Accord, but Williams has expressed fears that Harper is leaning towards including them in a new formula.

Newfoundland and Labrador's offshore revenues are included entirely in the current Equalization formula. They are included for the purposes of determining the province's fiscal capacity and therefore, its entitlement to the Equalization top-up.

The O'Brien expert panel recommended excluding 50% of all resource revenues from the calculation. Premier Danny Williams originally proposed including all revenues in the calculation of Equalization entitlements. He now seeks their total inclusion, apparently.

Under no circumstances are the revenues in some form of jeopardy that requires them to be protected. This is a totally false presentation, the lie of which is confirmed by the admission in the Atlantic Accord (2005) that the Government of Newfoundland and Labrador sets, collects and retains 100% of provincial government revenues from offshore oil production.

A day late...again

On January 17, Consolidated Thompson chief executive Brian Tobin - yes, that Brian Tobin - said that his company would no longer be pursuing plans to purchase Wabush Mines.

No surprise there, since Bond Papers covered the issue when it happened. Never content to accept things at face value, your humble e-scribbler went so far as to speculate that maybe Premier Danny Williams' attitude to power costs for the two mines in Labrador West may have been a factor in the decision by CT to abandon the Wabush deal. Incidentally, CT cited unspecified liabilities as the reason for dropping the project.

On top of that, about 10 days after the original story, reference to the Bond Papers column turned up in The Aurora, Transcons' weekly in Labrador West.

How very strange then, that this news release flew out of Confederation Building at mid-day on Friday stating that the provincial government was encouraging CT to take another look at Wabush.

Two weeks after the company abandons the project and makes an announcement to investors to that effect, Danny Williams apparently decided to give his old pal Brian a call and "encourage" him to take another look.

The cynic would point out that the Premier is just trying to do some damage control in Labrador West in advance of what will be the fifth by-election in 2007.

Then again, regular readers of Bond Papers would recognize the pattern here. Long after an issue has been decided, Danny Williams issues a news release all for naught.

Think about the long series of releases and delays over the Voisey's Bay smelter location. INCO decided against the Argentia site since it carried way too many liabilities. Williams asked the federal government to accept unlimited liability for the site. He kept it up for months, until the feds politely declined the opportunity. Heck, Danny Williams was still talking about Argentia as INCO filed applications to approve the Long Harbour site.

Completely pointless, mind you, but Danny is persistent.

Then there was the release last summer taking issue with someone's remarks about the province's offshore policy. The only problem was the Premier's comments were about something that had happened three weeks previously. By the time he got around to clenching his jaw again for the cameras, most reporters - let alone most people on the planet - had long since forgotten what had been said at the NOIA conference on the local oil and gas industry. Nonetheless, Williams fired out the release, called reporters together and had at the windmill.

In this latest instance, there are one of three possible outcomes:

1. Since the company has skedaddled away from the purchase based on certain liabilities and maybe because of Danny Williams' position on power rates, Danny will find himself talking to himself...yet again. Consolidated Thompson will move on to other things. In the meantime, western Labrador will see some benefits from the Bloom Lake development, once it is up and operating.

2. Consolidated Thompson will gladly come back to the table expecting that Danny Williams will now be willing to talk some sense on power rates. They might even expect - since he is chasing after them - that he will pony up cash and take care of those pesky environmental liabilities.

Yes, the Great Negotiator will meet the Great Communicator.

But since the Great Negotiator is entering the talks from a position of some weakness, I'd put my money on the guy who parted ways from Frank Stronach after a handful of months and pocketed more cash than you could shake an unread financial report at.

3. While Danny is busily talking to shadows, or figuring out how to get his watch on the right date, Brian Tobin will make a pitch to Iron Ore Company of Canada, buy up their facility and extend the life of that operation.

That's only possible, of course, if Williams changes his tune on what rates IOC can buy power from its own company.

Either way you look at it though, this latest news release shows just exactly how heavily micromanaged and how badly out of touch this government is.

The Equalization Phoney War

Before he was hired away from Atlantic Institute for Market Studies to work for the Harper Conservatives, Brian Lee Crowley wrote a brief commentary that might serve as a clue to the federal government's Equalization plans.

Crowley argues - among other things - that removing non-renewable natural resources is possible provided that provincial governments commit to use the revenue for debt reduction. The other features of Crowley's proposal are similar to the O'Brien expert panel recommendations and produce approximately the same cuts to outlays the federal government is seeking.

The federal budget will likely feature a revamped Equalization program that excludes 50% of resource revenues for all provinces. For provinces that wish to take up the option, the federal government will offer removal of the other 50% of non-renewable resource revenues provided the province agrees to commit the cash to debt reduction or infrastructure development.

Crowley's analysis shows that over a 10 year period, Newfoundland and Labrador could reduce its debt by $2.4 billion or 26.7% of Crowley's total debt of $9.1 billion. That's based on including only 50% of revenues from non-renewable resources in the Equalization formula.

That figure is suspiciously close to Premier Danny Williams' recent comment that the provincial budget will include a $2.0 billion for a new capital works program.

The Crowley option may already have been discussed at the finance ministers' meeting before Christmas. Any possible arrangement along those lines would have been communicated to Premiers - including Danny Williams - before Williams ramped up his anti-Ottawa tirade. In other words, he may already know the likely outcome. Williams can run a political crusade largely designed to divert public attention from substantial problems in the province knowing that the "war" is - in effect - a sham.

According to Crowley's analysis, the Equalization entitlement for Newfoundland and Labrador under the O'Brien scenario, and under his version that completely excludes non-renewables, would come out to the same figure: slightly more than $900 per capita.

If asked about it by news media on Friday, Williams' response is predictable:

1. Williams will insist on the original Harper promise that is "in writing six times."

2. Williams will criticize AIMS as a right-wing thinktank and dismiss Crowley out of hand. He can do this reliably since most people won't take the time to read Crowley's report and there is little likelihood news media will report it.

Once the federal government announces the Crowley option, the Williams reaction is also predictable:

1. Williams will claim complete victory since the federal government has lived up to its commitment to remove 100% of non-renewable resources from the Equalization formula and trashed the O'Brien mess that would have resulted if the "Goodale-inspired" plan was put in place. [No media in Newfoundland and Labrador will report that Crowley's plan is a modified version of the O'Brien one.]

2. The Premier will not discuss the commitment on revenues, and the feds will likely keep that under wraps as well. Danny Williams will emphasise the removal of 100% of resource revenues and declare yet another victory over the federal government with a "We got it!" as dramatic as the declaration of victory in January 2005.

All the public will see is cash flowing everywhere less than six months before a provincial election and in the same year as a federal election.

3. Danny Williams will openly campaign for Stephen Harper in the next federal election in an effort to repair the relationship with Ottawa.

Pay heed to the silent majority

Political science professors often get quoted in media stories.

They are considered experts on politics.

Fair enough assumption.

Too often though, what comes out is nothing more than garden-variety opinion without much analysis.

Like this comment featured in a Canadian Press story on Thursday's by-election sweep by the ruling Progressive Conservatives under Danny Williams:

"Byelections are typically opportunities to send a message to government," [MUN political science prof Michael Temelini] he said in an interview. "There's no message here, other than, 'Keep on going, Danny!' "

By-elections are about a lot of things. It all depends on context, so a comment like the one above doesn't offer any insight.

What Temelini didn't apparently notice was that the turn-out in these by-elections was strikingly low. Canadian Press did and included references to fall-out from the legislature spending scandal.

None of the turn-outs are anything to crow about. The high was Port au Port where 51% of eligible voters showed up at the polls. In Kilbride, a traditional Conservative stronghold, only 33% of voters turned out to cast ballots. That continues a low turn-out trend set in Signal Hill-Quidi Vidi where, as in Port au Port, Danny Williams personally campaigned extensively on behalf of his candidate.

Look closer at the winning side and you see something as well. In Port au Port, Progressive Conservative candidate Tony Cornect took 31% of the eligible vote. That's in a district where the Premier and his entire caucus campaigned hard to convince voters they had to deliver a message to Ottawa and Big Oil with their votes.

In Ferryland and Kilbride, where voters didn't see the same Danny campaign machine in action and didn't get the same messages, the winners got respectively 34% and 26% of the eligible vote.

That hardly sounds like "Go Danny Go!"

The simple fact is that most voters sat on their hands.

In Port au Port where the Danny message was clearly a call to send an unmistakable sign to the foreign demons, more opted to sit quietly on the sidelines than voted for the Danny-boy candidate.

The question to answer is why they did that. Temelini clearly didn't know. Odds are good most of the commentary in the next few days will miss it too.

Perhaps the non-voters just supported Danny so much they didn't feel the need to vote. Highly unlikely. If there had been an election in January 2005, Danny Williams would have found more members on his side than there are seats in the legislature.

Perhaps some felt there was no point in voting since the outcomes was pre-ordained in a race where the Premier is apparently overwhelmingly popular. That's a possibility.

Perhaps some sat on their hands because they are simply disaffected from the political process as a direct result of the ongoing scandal. That's much more likely.

Other factors were also at work as well and taken together with that last likelihood, one can come up with a plausible explanation of the by-election result.

In the two Avalon peninsula ridings, the Liberal campaigns were vigorous on a local level but little was done to launch major attacks on the government as a way of hamstringing cabinet ministers and capitalizing on public discontent.

Neither party took the chance to attack cabinet ministers - like Kathy Dunderdale, for example - whose performance overall has been abysmal and who, shortly before Christmas, was caught in an embarrassing case of misleading the province on a public tendering scandal.

Ditto for transportation minister John Hickey, who sits in cabinet despite being the subject of a criminal investigation over alleged double-billing on his legislature allowances.

In each riding, the candidates fought very local battles. True, sitting members of the House campaigned door-to-door, but the province-wide political messages simply didn't exist.

For voters, especially voters intent on sending Danny Williams a rocket, there wasn't a clear alternative to Williams that they could stand behind. Neither the Liberals nor New Democrats look like a renewed and credible alternative devil to the one they already know. That reaction is all too common in Newfoundland and Labrador, the 1.5 party state.

In past cases where the Opposition has picked up seats, voters wanted to send a message to government. But that's usually been when the incumbents are in trouble and the major opposition party - Liberal or Conservative - looks like a pretty solid alternative. Otherwise, voters stay home and wash their hair or make sure all the spaghetti is lined up straight in the cupboard rather than vote. It's the equivalent of telling a public opinion pollster that they are "undecided"; there's no way to miss the meaning if you pay attention.

What's left on Thursday, then, is a situation where the highly organized, well-funded and aggressive political party - bolstered by incumbency - could identify its hard core supporters and get them to the polls. It isn't rocket science.

The only bright spot for the Liberals now remains Humber Valley where the capable and popular candidate will face mounting pressure over the weekend. As he goes door-to-door, Dwight Ball can simply tell people that Danny doesn't need one more seat to send a message. That job was done. They can instead make their choice based on something else.

Danny Williams did a curious thing in putting a label on the by-election results before they were known. He is already claiming a massive endorsement, of course, but in truth, both Stephen Harper and Big Oil are looking at Williams' victories with a more sophisticated eye than any of the commentary from news media and at least one poli sci prof would bring to bear.

For Harper, Williams' victories are largely irrelevant. Harper likely knows that there is a simple solution to the Equalization battle at hand. That makes Williams' Equalization battle a distraction intended primarily for domestic audiences. The reaction in the Langevin Block will likely be the common one to news from Dannystan: big freakin' deal.

Of course, Williams doesn't matter politically to Stephen Harper anyway since Williams' political influence west of Corner Brook is all but non-existant.

For the oil companies, knowing that Williams couldn't generate a massive groundswell of support is telling. If the by-elections mattered to them at all - and there is no reason to believe any of them pay any serious attention to that sort of thing - the public affairs analysts would tell them that Williams faces difficult times ahead and there is a mood of discontent that affects all current politicians.

Their conclusion would be the same one they already reached: Hebron is dead for at least five years. Hibernia South is on life-support. An emboldened Danny Williams is highly unlikely to come to any deal at all, no matter how sweet the pot gets. They will continue to wait on the energy plan - if it ever comes - or the gas royalty regime. Their interest in these documents has been largely academic since last April. Medium- to long-term spending commitments are already made. By the time they might have an interest in Hebron or Hibernia again, or if there is a significant discovery somewhere else offshore, Danny will be gone and the economic and political environment will be changed.

Danny Williams can claim there are discussions and negotiations with Big Oil.

People who know what's really going on understand that the fibreoptic phone lines from the Confederation Building to the oil companies are blacker than crude.

Danny sweeps three

The Tories took all three by-elections.

No surprise in Kilbride which is a staunchly Tory seat, for for that matter in Ferryland which was last represented by a Liberal in the 1950s.

In Port au Port, the race was reportedly close, however a heavy press put on by the Tories seems to have pulled more Tories to the polls.

Overall though, the voter turnout is down dramatically. It follows a trend that has been running since the race to replace Fabian Manning where the turnout exceeded the general turnout by a small margin.

Stelmach and Williams at odds on fed hand-outs?

During his trip to Alberta with the three Maritime premiers, Premier Danny Williams claimed he had support from Alberta Premier Ed Stelmach in Williams' battle with Ottawa on Equalization.

Seems that might not be exactly the case.

Stelmach told reporters in Alberta that he and his provincial colleagues have adopted a "wait-and-see" approach. That is, they'll wait and see what Ottawa does before discussing Equalization any further.

CHED Edmonton is reporting that Stelmach "says if more revenue is put into the pool, it puts additional pressures on so-called 'have provinces' to maintain those levels in the future."

Williams wants to make changes to Equalization that would see more money flow to his province and keep Newfoundland and Labrador in a "have-not" position for the foreseeable future.

Stelmach apparently prefers lower Equalization demands while seeing additional federal cash flowing to all provinces through transfers on health and education.

Premiers disagree on Equalization

Demonstrating once again that the Council of the Federation is a vital tool of inter-provincial co-operation, premiers agreed yesterday to abandon any efforts to achieve a consensus on Equalization and instead move on to other topics, like energy and internal trade.

Danny Williams told reporters: "There wasn't any arguing, there was enough of that in other meetings. There was a real appetite to work together."

So much for any posturing by Danny Williams that more Premiers than Lorne Calvert were staunchly behind Williams' got-it-alone approach to inter-provincial relations. After all, one of the things Bond Papers has maintained consistently is that Williams' unilateral blustering goes over like the proverbial flatulent emission in a house of worship.

That would be the plenty of arguing thing.

So now Premiers will go on to other issues, having successfully achieved a consensus on Equalization: "No matter what happens we must be able to beat up on Ottawa."

Yep, like you haven't heard that before.

Natural gas terminal on track: Turner

Mark Turner, president and chief executive of Newfoundland LNG Ltd, is optimistic construction will start this spring on the company's proposed liquid natural gas terminal near Arnold's Cove.

Newfoundland LNG's environmental application to the provincial government received conditional approval around the same time the provincial government denied conditional approval to Hibernia South.

Hibernia production slowed down

Operators of the Hibernia production platform are doing a scheduled maintenance now, instead of seven months from now when it was originally the planned.

Industry insiders have known for some time that the operators moved up the planned maintenance in the wake of a generator malfunction in January. The decision pre-dates the province's rejection of an application to develop Hibernia South.

Production is expected to be 110,000 barrels per day, down from the 220,000 barrels per day at peak.

A family of talent

Mike Herriott's back in town to play a gig.

He truly is a talented trumpet player who has made a name for himself internationally. Your humble e-scribbler played in a band with Mike more than a few years ago. Mike was one of several talented trumpet guys - talented to the point of being intimidating; talented to the point of generating a bunch of ongoing "mine is bigger" kinda healthy competition - so it's no surprise that each them has gone on to acclaim in the musical realm.

Mike comes from a talented family, too. His brother Richard is an accomplished pianist.

Another brother - Chuck - is an exceptionally creative local actor.

Lower Churchill timelines slide back

Newfoundland and Labrador Premier Danny Williams announced on Tuesday that the province's hydro corporation had filed applications to transmit electricity through New Brunswick to unspecified markets.

In a media scrum, Williams said there were currently no talks under way on power purchase agreements since negotiations couldn't occur until costs were known. Tuesday's announcement was part of the process of gathering information on costs.

Williams also told reporters the provincial government would consider deferring revenue on the so-called Maritime route (Labrador via Newfoundland to Prince Edward Island). Deferring revenue is code for selling power at a loss.

The feisty Premier claimed the New Brunswick application is part of a plan to deal with a situation in which Quebec would supposedly try to keep Lower Churchill power from markets by loading its grid with energy generated by Hydro Quebec.

Williams knows this argument is a complete fiction since the joint Quebec/Ontario proposal on the Lower Churchill - flatly rejected by Williams - included upgrades to the Quebec grid and to the Quebec-Ontario interconnection. The limitations of Quebec's existing grid are well known and Hydro Quebec is already working on upgrades to the system's capacity.

The go-it-alone option now being pursued by Williams means that Newfoundland and Labrador Hydro may now have to eat the costs of grid upgrades in Quebec and will certainly bear the cost of the underwater cabling to use the Maritime route. The cheapest estimate for the Maritime route would add an additional $1.5 to $2.0 billion to the project cost.

Taken altogether, Williams announcement on Tuesday would likely slide the project time lines back by upwards of two years. Project sanction - which some assumed meant construction startup - might be achieved in 2009 but that would simply mean approval to start negotiating power purchase agreements. Construction would start - if it started at all - only after those deals were closed and financing arranged.

Plans to sell Upper Churchill power to New York fell apart in the 1960s since the costs of transmission from Labrador could never be brought in line with market prices.

The Lower Churchill project is currently estimated to cost upwards of $9.0 billion, or 75% of the total provincial debt load. An additional $9.0 billion of public debt - especially if power is sold at a loss - would bring the provincial debt to almost $20 billion.

That figure may be tough for financial markets to bear given the current gross domestic product is running at less than $25 billion. Newfoundland and Labrador's debt to GDP ratio at that point would be one of the worst in the developed world. Cancellation of major oil projects, like Hebron and Hibernia South, will prevent anticipated growth in the provincial economy that might have otherwise offset the financial problems or given cash that would have covered some of the Lower Churchill's costs.

Energy plan delayed...again

Premier Danny Williams told a VOCM audience this evening the energy plan - 10 years in the making - will be delayed until spring, at the earliest.

He said the gas royalty regime will likely be split off from the plan and announced separately.

In the wake of the Hebron failure, Premier Danny Williams said the gas royalty regime - which at that time had to be included in the energy plan would be released, along with the energy plan, in late 2006.

Times change.

The energy plan - dating from the late 1990s when Brian Tobin was Premier - has languished inside the energy department ever since.

Plunkin' it at City Hall

Danny Williams says he doesn't take a salary.

He does, of course.

Williams donates the whole thing to his family charity.

Since the mid-1990s, members of the House of Assembly [right: Not exactly as illustrated] have quietly adopted the same practice. They take a portion of the allowances established to cover the costs of operating a constituency office and of representing their districts and hand them out to a variety of groups and individuals.

There is something fundamentally - ethically - wrong with elected officials using public money, directly or indirectly, in this way.

It doesn't take a rule book or a judge to let you know it is...wrong.

Should we be surprised in the current political climate that at least one councilor at St. John's Tammany City Hall [left] does the same thing with his annual salary of about $35,000?

As cbc.ca notes in a story on a recent racket about budget cuts,

[Ron]Ellsworth, a successful businessman, said most of his salary winds up in community groups.

"My salary goes back into my ward," Ellsworth said.

Ah yes.

The ward.

Money goes back to the ward.

Looks like Bond Papers had it right in 2005.

DW missile hits target!

Danny Williams said Friday he wanted to send a missile to the oil industry.

It hit.

bloomberg.com - one of the most widely read business news services included this paragraph in its coverage of Husky Energy's financial reports:

Husky's plan to boost output at White Rose may be slowed after a provincial government ruling rejected the proposed expansion of Hibernia, a nearby field, the Canada-Newfoundland and Labrador Offshore Petroleum Board said Feb. 1.

The missile message got through: Newfoundland and Labrador might not be a good place to invest.

Lower Churchill costs increase; must be polling season

This announcement on filing an application to build transmission lines in New Brunswick for Lower Churchill electrical power means three things:

1. The costs of the project will escalate;

2. Corporate Research Associates is in the field again; and,

3. There are by-elections on the go.

Service interruption

A minor technical glitch kept the updates down for a couple of days.

Bond is back!

We now return you to regularly scheduled programming.

McLellan joins LabMag

Former deputy prime minister Anne McLellan has joined New Millenium Corp as a strategic advisor.

New Millennium holds an 80% interest in the LabMag Iron Ore Project, the world's largest known undeveloped magnetite reserve that is currently at an advanced stage of exploration. The project is located in the province of Newfoundland and Labrador ("NL") about 220 km north of Labrador City and 30 km northwest of Schefferville, Quebec. The development envisions the construction and operation of a mine, crusher, concentrator, slurry pipeline, pellet plant, shiploading facilities and related infrastructure. Subject to positive feasibility studies and project financing, it is expected that pellet production from LabMag would constitute a significant new source of global pellet supply and would be shipped by ocean vessels to markets in Canada, the United States, Western Europe and Asia.

Williams acts...long after the fact (Updated)(Updated 2)

[Originally posted 02 February 2007]

Danny Williams wants members of the legislature repay a $2800 bonus granted in May 2004 for the previous fiscal year.

Yesterday - after the story broke - Williams was defending the legislators as supposed victims of incompetent administration or an Internal Economy Commission that ran its own private, unquestioned fiefdom.

With such heavy public criticism, the Premier has apparently changed his mind.

Well, sort of.

First there's this little admission : "I became aware of the decision some time after the fact, and I don’t think there is any disagreement that it was a poor decision that did not reflect the values and guiding principles of our government at that time."

How long is "some time"? A day? A few hours? A few years?

If it was so obviously wrong - as the Premier now acknowledges - why did it take the public furor to have the Premier act?

________________________

Update: 02 February 2007 Premier Danny Williams scrummed with reporters today on his news release. Under questioning from David Cochrane (if the voice on the CBC Radio broadcast was right), the Premier equivocated on when he first learned of the added allowance for members of the House of Assembly.

Cochrane persisted to his credit.

Williams persisted in his evasion, to his detriment.

Then he switched to excuses: he was a new Premier with huge responsibilities and lots of stuff going on; when he heard about it he never put it in the wage freeze context; he didn't pay attention because it was about compensation and allowances and since he doesn't take a salary, then he didn't feel it right to have input on these things.

A bad story for the Premier just got immensely worse.

The Premier's evasion is done for the same reason as the vague wording in the original minutes of the Internal Economy Commission approving the allowance increase.

The Premier seeks to evade responsibility for his own actions, or in this case his inaction.

His excuses are more revealing of his mindset in seeking to escape responsibility.

The Premier's job is a tough one. It carries weighty responsibilities, not the least of which is to watch over the spending of public money. He has helpers in his task, if he lets them help. But those helpers must receive clear and unmistakable direction. Having worked in the office, your humble e-scribbler can attest to the demands of the office. Having spoken over the years with several premiers, your scribbler is also witness to the weight that sits on the shoulders of each Premier.

None would have offered excuses. The exercise of offering excuses is bad enough; it is the antithesis of leadership and fundamentally, the Premier must be a leader in good times and bad.

Not putting the allowance hike in the context of the freeze is a excuse which - by the Premier's own implication - suggests his judgment is exceedingly poor. How could he not see what everyone else apparently saw at the time and the public knows now? The allowance increase was unnecessary. It was wrong. He should have stopped it when he learned of it. He is the Premier after all.

The third is excuse is perhaps even more serious by implication than the others since it contains a serious misstatement of fact.

Danny Williams, member of the House of Assembly and Premier, collects a salary and draws down on his constituency entitlements and other allowances just like every other member of the House of Assembly and member of cabinet.

It's a matter of fact.

Nothing wrong with it.

He lives entirely within his means and there is no sign of any impropriety on his part.

Danny Williams donates his salary to his own family charity.

That too is a matter of fact.

Nothing wrong with it.

Who better - as Premier, and given his example - than to put a stop to an inappropriate public hand-out done in a sneaky way?

For the Premier to say he turned a blind eye to this allowance since he doesn't collect a salary is to mislead the public on a key aspect of an important issue. One can only believe the Premier does so deliberately since he repeats the same false comment each time he mentions his salary.

The House of Assembly story today took on a much more ominous cast for Danny Williams and it did so as a consequence of the Premier's own comments.

Danny Williams enjoys almost unprecedented public confidence in his forthrightness and integrity. People believe that above all else, Danny Williams will be accountable. That is his reputation.

The essence of accountability is responsibility.

In evading responsibility for not putting a halt to the allowance when it occurred or as soon as he learned of it, in equivocating so miserably on even when he knew, Danny Williams attacked the heart of his credibility and hence his reputation.

Danny Williams forgot the most important lesson of scandal: it is not the action or the inaction - not matter how minor - that causes a downfall.

It is the evasion that kills you in the long run.
__________________________________

Update 2: When did Danny know about the extra cash? Likely May 2004, when it was approved, according to the Telegram front page story in its 03 February edition.

That little morsel wasn't reported by other media.

So the guy who had enough power to order the Internal Economy Commission to let the Auditor General back into the House of Assembly in April 2004 couldn't or wouldn't deal with a bonus stipend right after he froze public sector wages for two years.

Hmmm.

The secretive bonus was effectively hidden from view by a vaguely worded set of minutes from the meeting that approved the retroactive payment.

As for the total overspending by members of the House of Assembly allowances and assistance budget during the two years of the freeze - 2004 and 2005 - well that was hidden by misreporting - deliberately (?) - the spending in the annual budget estimates.

For FY 2004, the government estimates showed spending as dead-on budget even though the entire cabinet knew at the time the account was overspent by $479,000. The next year they misreported the spending, knowing full-well the account was overspent by $557,000

The Auditor General's reports to date have only identified 20% of the overspending for those two years. AG John Noseworthy says his work on overspending is done.

NL subsidiary posts higher profits in Alberta

FortisAlberta, subsidiary of Newfoundland and Labrador-based Fortis Inc announced Friday its profit for 2006 was Cdn$41.1 million, up from $31 million the year before.

The serial government slows further

Since Danny Williams took office in 2003 he's tried to manage the provincial government with everything - literally every little thing - flowing across his desk.

He's a micro-manager for micro-managers.

It shows in everything government does.

Or, to be more accurate what it doesn't do.

Micro-managing something as large as government means it doesn't take too long before your list of unaccomplishments - as Alice might say - is considerably long than your list of accomplishments.

There's plenty of meetings and busy-work and people generating "strategies", like the 20 or so Williams claims to have sitting on his desk right at the moment.

Some of the meetings go for hours, like one on the fishery last week that supposed went on for two or three hours. Smart leaders tell you any meeting longer than 30 minutes is useless.

But hey, it's hard to know for sure because Williams is also a definite bullshitter hyperbole addict. He tells fibs through the colourful use of exaggeration.

And he's a micro-manager.

That's why Bond Papers said that Danny Williams runs a serial government.

He takes everything - and we mean everything - one at a time.

He only has so much time available.

And so things pile up.

No surprise then, that Williams admits the latest bit of the House of Assembly money scandal is clogging the wheels of progress in Danny-land.

it's bound to do that.

God knows what else in his life is taking his mind off the business of micro-managing the living daylights out of a giant organization like government.

That's a government that in the next eight weeks has to:

- wage four by-elections;

- deliver a Throne Speech setting out the policy agenda for the next year;

- figure out what the policy agenda will be for the next year;

- write the Throne Speech, or at least edit it into yet another ear-numbing, soul-eating POS like the others so far;

- finish a budget that will call for more than $5.0 billion in spending and include a capital works program the size of the recent federal infrastructure project;

- wage an ongoing war with Big Oil;

- get ready for a war with Ottawa over hand-outs that are only necessary because of the failure of the war with Big Oil; and,

- cope with money scandals, bimbo eruptions or any other typical political crisis that might emerge - unforeseen - from the darkness.

It's enough to tighten even the tightest sphincter.

And as we know, that just makes the crap back up even more.

Williams to oilpatch: closed until further notice

Danny Williams is confused.

Or maybe Telegram political reporter Craig Jackson is confused.

In the Saturday paper, Danny Williams rants about Hebron, a multi-billion dollar deal that died last year and won't be revived anytime soon.

"I'm into a battle with them to make sure that they are not jamming us on the Hebron field," Williams said.

If Danny Williams is still in a battle on that one, then he is fighting alone. The oil companies left last year. They won't be coming back, at least as long as the pugnacious, dyspeptic, East Coast satrap is hanging around.

Danny should know he's not fighting on Hebron because...well...he killed it. Danny just got back from a very expensive hug-fest with the Alberta oil patch. Williams - you may recall - was trying to drum up work for local supply service companies who Williams shafted big time with his shut-down of the local oil industry last year. They had planned on doing work in this province on not one but oil developments.

Now people like Jerry Byrne are stuck with tagging along while Daddy Danny introduces them to Alberta, which is, as Danny put it, the place we want to be when we grow up.

To cap off the rant, Williams apparently then scolded Petro-Canada chief executive Ron Brenneman for pointing out that oil companies have other places to invest their money.

"Well, I ask Ron to tell me where he can get a return which gives him, basically, $60 on a $3 cost. That’s a pretty good return," said Williams,...

Well for one thing, those figures are not accurate for Hibernia, Hebron or anywhere else in the local offshore.

They are about as accurate as the Premier's comments on the secret bonus cash he called the scrum to discuss in the first place. Or for that matter they are about as accurate as a great many things he's been saying these last three years.

But I digress.

If Danny Williams wasn't so busy trying to cover up, paper over and otherwise dodge the mess in the House of Assembly - a mess he is responsible for just like the other forty-odd members of the legislature - Williams would have noticed Petro-Canada investing in places like Norway.

Why?

Let's compare the two places and their offshore:

A. Political Climate

1. Norway: Politically stable, mature democracy.

2. Newfoundland and Labrador: Politically unstable, immature democracy currently embroiled in a spending scandal.  While the leader is not implicated directly, he admitted on Friday to condoning secretive bonus payments to legislators. Same leader may have taken cash - which came as a tax-free entitlement - and donated to his family charity.

leader prone to rants. Since shortly after taking office, frequently talks of leaving office due to pressures of work and ingratitude of public.

Admires Hugo Chavez.

B. Regulatory environment

1. Norway: Regulatory authority arms length from government with no conflicts of interest with government policy and taxation arm or state-owned energy companies. A model system often used as an example for the world.

2. Newfoundland and Labrador: Regulatory authority arms length from government with no conflicts of interest with government policy and taxation arm or state-owned oil companies.

Warning: Since taking office, current Premier has been engaged in a series of efforts to bring all regulatory, policy and state-owned energy businesses under his direct control. Actively creates serious conflicts of interest. Attempted to subvert the independence of the regulatory authority by appointing political and ideological ally to senior position. Recently overturned regulatory decision on major project citing "lack of information."

C. Financial

1. Norway: A mature, stable financial environment in which government royalty and taxation is designed to balance government revenue with the need to stimulate exploration and development

2. Newfoundland and Labrador. Total unknown. In Hebron negotiations, Leader suddenly jacked up demands at last minute, after a working agreement was achieved. Gas royalty regime in development for 10 years, currently on hold while leader copes with widening political scandal. State-owned energy company officials recently spoke admiringly of oil and gas regime in developing world dictatorships.

Not surprising that the companies are quickly leaving the local oil patch for somewhere else.

Given the political mess that has been seizing more and more government attention and which on Friday started lapping at the door of the Premier's Office, it will be surprising if the local oilpatch rights itself or is righted any time soon.

Danny Williams is out of touch, overwhelmed and largely incapable of progress on many issues. From his scrum, all he can offer is bluster which sends a clear message to everyone, including Big Oil:

Newfoundland and Labrador's oilpatch is closed until further notice.

Williams money recall: Lipstick on a pig

Give the Telegram editorialist credit for stating it plainly and correctly.

In Saturday's editorial, the province's largest circulation daily tells its largest daily audience that it just isn't good enough for Danny Williams to ask his fellow politicians to return money now that they were caught getting it.

The payment itself is called "sleazy, dishonest and downright underhanded."

Absolutely.

The current crop of MHAs, rightly or wrongly, are now marked by their behaviour, maybe for the rest of their political careers. And because of that, they should be fully and publicly policed — they may not realize it, but if they had done the same as a civil servant, they would now be fired.

Let's see what happens.

Energy minister displays incompetence...again

Newfoundlanders and Labradorians are growing sadly too familiar with incompetent legislators who sign documents without reading them.

In the case of natural resources minister Kathy Dunderdale, they also know she has some difficulty with information. Google is a concept she never mastered in another portfolio as she insisted her officials would "do the due diligence piece".

Now in what may turn out to be another pissing match between this administration and someone else, Dunderdale has issued a news release and taken exception to the publication on Thursday of documents by the offshore regulatory board related to Hibernia South.

Dunderdale has a right to be embarrassed. Documents released show the inherent falsehood in many of Dunderdale's claims when she vetoed the Hibernia South project conditional approval. It's never nice to have your incompetence displayed in such an open and unequivocal fashion.

For example, Dunderdale claimed the Board's decision removed the province's ability to look after its financial interests. Not true, as the official Decision demonstrates in remarkably plain English. The project could proceed - if and only if - the provincial government was satisfied on matters related to royalties. Similar safeguards existed on benefits and two other issues affecting the long-term exploitation of the Hibernia field.

Dunderdale's veto letter, by contrast was poorly written and highly repetitive. Dunderdale's letter-writer(s) appeared to be grasping for any available excuse to justify a decision taken many months before by her boss.

It is highly unusual for a regulatory board to release information in this way.

However, both Dunderdale and her boss have consistently attacked the competence of the 60 Newfoundlanders and Labradorians protecting the interests of the province at the offshore Board. Their morale has suffered solely as a result of the ignorant comments directed at them either directly or indirectly by the Premier.

In her rejection letter, Dunderdale impugned the Board itself. The Board had little choice but to demonstrate that Dunderdale's attacks on its competence and actions were utterly without merit. The Board released information that might otherwise have been withheld to avoid a repetition of the sorry display of political games played by a former Premier and his energy minister over the Terra Nova project. At that time, Brian Tobin and Chuck Furey blamed the offshore board for decisions they sanctioned.

Bond Papers will have a lengthier post on this issue over the weekend. The only thing Dunderdale made clear in her letter released today, is that she needs to read her own documents rather than affixing her signature to letters dictated for her by others.

Did Williams fatten charity with allowance?

Since first confronted with the Auditor General's revelation that members of the legislature took a retro-active bonus in 2004, Premier Danny Williams has contended that it didn't apply to him as he does not take a salary.

His language has grown carefully precise but potentially misleading. Williams states that he did not take or receive the money personally.

Many people, including most reporters, have interpreted this to mean that Williams did not take the money full stop. Williams' publicist told the Telegram the Premier did not use the money - not because he takes no salary - but because, as the Telly attributes the remark, Williams "had sufficient constituency funds available.

The latter comment was made before the rest of us realized or were made aware that the House of Assembly actually had already overspent its budget by $350,000. Rather than provide reimbursement on a case by case basis, the House of Assembly's executive committee - controlled by three of Williams' senior ministers - opted to give everyone a retroactive bonus. The additional $2800 applied to the previous fiscal year and was not issued on the basis of receipted expenses.

On Friday, Danny Williams admitted he learned of the payment sometime after it was approved, but did nothing to stop it until public outrage reached its current peak. Williams' parliamentary assistant and one of his ministers tried to justify the retro-cash with no success on Thursday.

The key point to recall is that Williams in fact does collect a salary and routinely avails of allowances and other stipends from the House of Assembly.

The question to be answered is this: Did Danny Williams not receive the bonus at all or did he take and turn it over to the Williams Family Foundation?

The former is what people have assumed. But we have all made grave errors in doing along with what we assume Danny and others have meant when what they said was actually very different.

The latter would be entirely consistent with the Premier's language and with established practice of donating his salary and stipends to his family charity. It would also explain - more than anything else - why he simply kept his mouth shut about the thing. And too, since he had actually taken the money, it would explain the Premier's reluctance to admit when he knew about the bonus and why it took him three years and the ire of voters across the province to realize the allowance was a bad thing.

The Auditor General knows who got the money and who didn't.

Maybe he'd tell us, if someone asked.

Friday Follies

This wasn't there last night when Bond posted last night on advertising.

But overnight, this turned up on youtube.com.

It's funny.

Hibernia South veto has consequences

Bond Papers linked to the offshore board documents on Thursday, but the Telegram's Moira Baird does a much better job of covering the Hibernia South story here.

The offshore board noted the implication inherent in government's decision - namely that the approvals process would take longer on future projects.

Industry representative Paul Barnes concurs:

"From the industry’s perspective, this will mean it will take longer to get projects approved," said Paul Barnes, Atlantic Canada manager for CAPP in St. John’s.

"This flies in the face of what we’ve been working towards with governments over the last few years in trying to shorten timelines for regulatory approval."

Barnes says the Hibernia South decision erodes efforts to create a "single regulatory window" and increases uncertainty about the rules for Newfoundland offshore developments.

"It’s causing a lot of confusion,” he said. “You’ve got to have certainty around the regulatory regime because it has an impact on who invests here, why they invest and when they invest."

Advertising highs and well...ummm...

For SuperBowl Sunday (now that I know when it is!), here's a spot that remains one of the best SuperBowl spots ever run. This one comes from Pirate Radio and Television, which regular readers of Bond Papers will know is home to Terry O'Reilly's creatively warped cranium. Here's the link to O'Reilly's blog supporting his CBC radio show, Age of Persuasion.



On another level entirely are these spots coming from some pseudonyposter on youtube.com and aimed squarely at the local political market.

These showed up at the Bond e-mail just as they seem to have shown up in a bunch of other inboxes. Despite the fact the first one has had almost 8,000 hits and managed to make both vocm.com and NTV evening news, your humble e-scribbler isn't sure if they are hitting anything other than a novelty.

Nonetheless, here is the latest one: a karaoke version of an old Frank Sinatra song, rewritten to reflect local content.

This kind of guerrilla advertising is likely to spread as the technology to produce video of a reasonable quality grows more accessible.

Boston "guerrilla marketing" stunt: a dumb idea

The publicity stunt that set Boston police bomb squads hopping on Thursday was not a guerrilla stunt so much as a case of some monkey tossing his own...well, you know.

If convicted, the two twits misunderstood creative geniuses will fit right in; jails are full of stupid people victims of society.

Successful crooks never get caught.

And smart marketers don't screw up in the first place or compound their error with a totally lame news gaggle in which they talk about "hair" questions.

Alberta oilpatch keen on Norwegian offshore

From CanWest:

Canadian-based companies went to town Tuesday in Norway's offshore oil and gas licensing round, snapping up 13 of 49 parcels offered in the world's third-largest petroleum exporter.Petro-Canada led the way by gaining interests in seven blocks; Nexen Inc. had four and Talisman Energy Inc. came away with two.Half a world away, local analysts said the Norwegian North Sea offers potentially big discoveries for homegrown players operating in a mature oil and gas region....

So why aren't they looking at Newfoundland and Labrador?

Maybe this has something to do with it:

Though the state oil company Statoil controls about 60 per cent of the country's production, Norway has been liberalizing its fiscal regime to offset declines and attract new exploration.

Knowles compared it to competition between the governments of Alberta and Saskatchewan to attract drilling dollars in their respective jurisdictions. "The same kind of thing happens between the U.K. and Norway."'

Fuelled by a royalty holiday on new discoveries, the European North Sea has become a hot spot for Canadian companies operating abroad.... [Emphasis added]

Around here, Danny Williams keeps pointing to the Norwegian example.

Well, apparently he doesn't understand how Norway really works.

Army reserve stretched by Afghan mission

Reserve army commanders told the Senate committee on national security that continuing the Afghan mission beyond 2009 will put increased pressure on reserve army units for training and recruiting.

Military family support centres opens in Corner Brook

With the deployment of nine reservists from second battalion of the Royal Newfoundland Regiment, the Gander Military Family Resource Centre is opening an office in the west coast city.

Dunderdale wrong on offshore board and Hibernia South

The Canada-Newfoundland and Labrador Offshore Board today released (click "what's new", once at the CNLOPB site) correspondence between the board and the provincial government on Hibernia South.

In total, the correspondence, including the formal reply to natural resources minister Kathy Dunderdale's letter of January 17, 2007, demolishes every contention by the provincial government on the proposal and on the board's actions.

Among the choice comments: "The Board's Decision [sic] actually goes a step further by requiring that the agreement [commercial agreement among the proponents] be approved by the royalty owner, i.e. the Province, before it will be acceptable to the Board."

That's right: there would have been no production unless and until the provincial government was satisfied on its financial issues.

So much for Dunderdale's spin that she rejected the decision merely to seek "more information".

March Madness starts early

Danny meets with European journalists to talk up the seal hunt.

Q. What do the following have in common?

Anna Nicole Smith
Loretta Swit
Pam Ferdin
Elizabeth Berkley
Danny Williams

A. All use the seal hunt to boost their careers.

A New Approach to roads maintenance

From the AG's report on government spending and operations:

In 1996, we concluded that the Department was not adequately managing the Province's road system. A decade later in 2006, we have come to the same conclusion.

A make-work slush fund in an unaccountable government?

From the AG's report on a make work program in the municipal affairs department:

Because the Job Creation Program was funded through special warrants and intra-departmental transfers from other programs, there was no opportunity for the House of Assembly to debate and consider funding requirements for the Program. Furthermore, although officials indicated that funding allocation was made by electoral district, there was no documentation available to show how much was allocated to each district or the basis for the allocation.

and then this:

There was no documentation in the files outlining the rationale for funding approvals.

Openness, accountability and transparency in an administration that brings a genuinely New Approach to government.

Pull the other one.

AG reports deficit and surplus at same time for same agency

Auditor General John Noseworthy released his comprehensive review of of provincial government spending and management today.

There is some new information about the House of Assembly scandal, including admission for the first time that Noseworthy's review started in January 2006. That's six months before the first public acknowledgement a review was underway. Bond Papers will have more on this in the days ahead, including some comment on Noseworthy's misunderstanding of the provincial constitution.

One curiosity in Noseworthy's summary booklet: in a section on educational spending, Noseworthy suddenly reports on deficits for health care boards:

(c) Operating results

All 5 boards reported operating surpluses for the year ended 30 June 2006 totalling $5.1 million. Operating surpluses ranged from $349,000 for the Labrador-Grenfell Regional Integrated Health Authority to $2.3 million for the Eastern Regional Integrated Health Authority. Because of inconsistent reporting periods resulting from the restructuring of school boards in 2004, comparisons with prior years' financial results would not currently be meaningful. It will be next year before effective and meaningful comparisons can be performed.

This produces an odd set of conclusions, since in the section on health authorities, the Labrador-Grenfell board goes from an operating surplus in the section quoted above to an unspecified deficit:

During the year, all 4 boards reported operating deficits totalling $11.0 million. Operating deficits ranged from $400,000 for the Western Regional Integrated Health Authority to $5.6 million for the Eastern Regional Integrated Health Authority. One board, the Labrador-Grenfell Regional Integrated Health Authority, reported an annual operating deficit higher than that reported for the fiscal year 2005.

Hmmmm.

This is no small discrepancy nor is it an easy cock-up to make. The names of the respective health care and educational authorities are different for one thing. Of course, the report is exceedingly lengthy at some 475 pages but there is a huge staff at the Auditor General's office including a new "information" manager.

Prems cancel meet fearing Equalization "bunfight"

The Council of the Federation meeting on February 7 will now take place via conference call instead of the face-to-face session originally planned.

The official reason is that there were scheduling problems. That doesn't hold water since Premiers were well aware of the meeting well in advance. Scheduling problems wouldn't be eased by a conference call, especially if the agenda was as extensive as previously claimed.

Initial media reports suggest the meeting was cancelled out of concern it would turn into a "bunfight" over Equalization.

In October 2004, Premier Danny Williams - the current chair of the Council of the Federation - stormed out of a meeting on Equalization, ostensibly to express his rejection of a federal proposal on offshore revenues. Other reports suggested the dramatic exit was to avoid - at least in part - criticism from other premiers of his approach.

Hibernia spat led to better royalty regime

In 2000, the Government of Newfoundland and Labrador vetoed an increase in production rates at Hibernia but subsequently approved the hike based on a better royalty agreement with the operators.

Then-energy minister Paul Dicks delivered a statement on the decision to the House of Assembly on April 10, 2000. In the statement, Dicks said that "[i]f the production increase had been approved, more oil would have been taken from the field at a lower royalty rate. Over the life of the project, this would have negatively impacted royalties to the province."

The production rate increase had been approved by the Canada-Newfoundland and Labrador Offshore Petroleum Board based on an application by the Hibernia operators

One difference between the 2000 decision and recent rejection of the Hibernia South development application is the speed with which government acted. Dicks initiated discussions on the application as soon as the offshore board decision was forwarded to government in early March. No agreement was reached within the 30-day window for approval set under the Atlantic Accord (1985) implementation acts.

In the Hibernia South case, apparently, the provincial government did not initiate contact with the operators nor, apparently, did it raise concerns over incomplete information in the Hibernia application until after the project application was rejected.

The provincial government has still not indicated its goal for Hibernia South. Industry sources suggest the provincial government is seeking to treat the 300 million barrel development as a new project which would involve a new royalty and benefits agreement and a new production platform.

The operators reportedly wanted to bring Hibernia South onstream in 2008 and, as Petro-Canada chief executive Ron Brenneman put it, "step out into the more prolific and better return prospects" while boosting production rates back to 200,000 barrels a day, the rate established in 2004.

In the 2000 disagreement, talks continued beyond the 30 day mark and an agreement was reached that June. Under the new deal - a supplement to the original Hibernia agreement -

"The royalty rate will increase above the current two per cent to three per cent earlier. It will then move to four per cent and five per cent after certain cumulative production levels have been reached. This will result in higher royalties than under the time based system,...This method of dealing with royalty rate increases is consistent with Terra Nova and the generic royalty regime in place for White Rose and future offshore projects."

Dicks said the original Hibernia royalty agreement remained in place and would "act as a floor to ensure that if production declines, rate increases will occur in any event."

Another major difference between the 2000 and 2006 disputes involves project pay out or the point at which the provincial royalty rises to 30% per barrel. In 2000, the provincial government secured a revised royalty regime that allowed the project to pay out around 2011, according to some estimates. Dicks noted in his statements that under the original regime, pay out was unlikely.

In 2000, total reserves at Hibernia were estimated at 1.2 billion barrels, including oil already produced. By 2006, total reserves estimates had reached 1.9 billion, the bulk of which would remain to be produced after pay out.

Treating Hibernia South as a new project would likely restrict provincial royalties to a lesser amount for an indefinite period and might delay pay out on the entire project. A new production platform would not be needed to extract Hibernia South, except in response to a political demand.

____________________

NOTE 1: Bond Papers previously reported that the Hibernia South rejection was the first time a provincial government had overturned a fundamental decision by the offshore board. In fact, it appears to be the second, except for the differences noted above.

NOTE 2: In the ministerial statement, Paul Dicks said: "To date, government is not satisfied that the province is being kept whole." Aficionados will recognize "keep whole" or "kept whole" as a favourite phrase of the current Premier.

Cable companies expanding phone services nationally

In Newfoundland and Labrador, that means your tax dollars at work.

Fish processing worker background

Some quick references on the issue:

1. An analysis by the Atlantic Institute for Market Studies, 2002. An extract:

Newfoundland has almost 140 fish plants, and up to 20,000 fish plant workers. Although some of the plants are highly automated, highly efficient operations that produce year-round. (National Sea's Arnold's Cove plant and Beothuck Fisheries’ Valleyfield plant are examples of a modern year round fish processing industry.) Many of the rest were put there for political reasons, often paid for by tax dollars, an often barely able to give their workers the 420 hours needed to qualify for 34 weeks of employment insurance....

The pulp and paper industry in Newfoundland has only 60% of its 1972workforce, while the fishplants employ twice as many as they did in 1972. Even the number of loggers is down by almost50%, while the number of fishermen continues to climb. In 1972 the Newfoundland unemployment rate was eight per cent. Since the advent of the "stamp fishery" and easier EI it has averaged between 15 and 20 per cent. A good quarter of that unemployment is directly attributable to the "stamp fishery."

2. From 2004, a short news release from then-fish minister Trevor Taylor. An extract:

Work at fish plants tends to be short-term in rural areas where employment opportunities are low and unemployment rates are high. The Fish Processing Policy Review Commission, under the direction of Commissioner Eric Dunne (Dunne Report), found that in real terms plant workers' average employment income in the province had declined to $9,660 in 2001. The outlook for plant workers is unclear given that technological innovations continue to reduce the labour demands of the fishing industry.

3. A typical Williams administration response, to date. The federal government has followed the same approach.

The Government of Newfoundland and Labrador will provide an additional $2.4 million to assist fish plant workers who will likely not secure sufficient hours to qualify for Employment Insurance. The Honourable John Ottenheimer, Acting Municipal Affairs Minister, today announced the funding to meet employment support needs in the province’s fishery.

4. Fishery reports. The problems have been studied - a lot; here are just two.