Connies dump another election commitment

The Harper administration will be locating 6200 federal jobs in Quebec, a move that will involve relocating about 4000 existing employees and adding another 2200, according to CBC Ottawa.

Infrastructure Minister Lawrence Cannon noted that the cost of office space in Gatineau is 20 to 30 per cent lower than in downtown Ottawa.

"So we're doing this for the Canadian taxpayer as well as, of course … respecting the long-standing policy that's been in place [since] back in 1994," he said.

That policy sets as a goal a ratio of 75:25 between federal office space in Ottawa and Gatineau. Right now, the ratio is 77:23, the government says.

Of course that policy on how to distribute workers within the National Capital Region doesn't square very well with the Conservative campaign commitment, as contained in Stephen Harper's letter to Danny Williams during the last federal election campaign:

There is an over-concentration of certain federal government services in some areas of the country and an effort must be made to ensure that there is a fair distribution of the federal government presence across the country.

It will be interesting to see how local Conservatives react to this news. Federal presence was a major issue for the Conservative team, including provincial Progressive Conservatives. An incomplete assessment by the Harris Centre at Memorial University was used by both candidates, the provincial government and Conservative supporters at the time, like members of St. John's city council as a political issue during and after the election.

Now the whole issue of federal presence was a partisan crock wrapped up with all the nonsense of looking at public spending as a matter of pure pork. That's been the Bond position, whether it's been about federal jobs or provincial government jobs. It's just laughable to see all the posturing that went on during the last election from federal Conservative politicians, backed by their provincial friends only to see the issue all but vanish from their collective minds. Sure it gets a mention once in a while but it hardly gets the shrill attention it used to get, that is before the federal administration changed hands.

Face it. There was as much commitment to the federal jobs thing as there was to custodial management or Loyola Hearn's call in 2004 for the federal government to hand over its Hibernia shares to the provincial government. Nothing stopped Hearn from pushing that and then running twice for a party that specifically rejected the idea.

Newfoundland and Labrador's federal cabinet representative Loyola Hearn made quite an issue of saving a single position originally to be relocated from St. John's to Montreal. In a news release issued at the time, Hearn was obviously proud of 14 new positions shifted to Newfoundland and Labrador and about the relocation of public weather forecasting to Gander from Dartmouth. Hearn, of course, did not note that marine and aviation forecasting remained in Montreal. Weather forecasting was moved from Gander to the two other locations in a move widely criticised in Newfoundland and Labrador.

"Despite commentary in the media last week, this position will continue to reside in St.John's. I would encourage everyone to gather the facts first, before jumping to conclusions."

"People who know me know that federal presence in our province has always been a key issue for me. Whenever it makes sense to have federal jobs in different parts of the country, I will push for that."

"Since we've taken power, we've put 14 new Fishery Officers on Newfoundland and Labrador waters, we've reinstated the Gander weather office, and we've protected this position."

"Newfoundlanders and Labradorians should be encouraged by this trend during our first eight months in office."

Hearn subsequently announced the relocation of Coast Guard jobs from Dartmouth to Newfoundland, but thus far promises to locate hundreds of military personnel remain unfulfilled.

Of course, none of that addresses Hearn's comments just before he was appointed to cabinet. CTV quotes Hearn as saying something about the need for increased federal presence in the province to promote growth of the local oil and gas industry:

"Newfoundland and Labrador requires a federal presence capable of promoting the province as a fantastic place to do business and to address the industry's requests to streamline regulations," Hearn says in a written statement on his website.

"We need someone in the province, not a faceless bureaucrat thousands of kilometres away, that industry can approach to deal with the day-to-day issues stemming from all the significant oil patch business being generated."

While there's no indication about the departments receiving the 2200 new employees, if any of them are employed by Natural Resources, it looks like the Newfoundlanders and Labradorians will be dealing with thousands of what Hearn once thought of as "faceless bureaucrats" thousands of kilometres from where the work gets done.

The whole move to abandon the federal presence issue just fulfils the point noted in this Bond Papers post from February 2006. Then treasury board president John Baird vowed at the time to stop any plans to relocate federal jobs outside the National Capital Region. Bond wasn't alone.

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Separated at birth: the reader input version

There's Normand Lester and Robin Philpott.

Ya got yer Leandre Bergeron, your Pierre Bourgeault, and the other sovereignists.

Who would be the Newfoundland and Labrador equivalents?

Any suggestions, serious or otherwise are welcome.

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Anti-federalist witch hunt comes up short

The results of a detailed investigation into alleged irregularities has turned up about $500, 000 in spending that was not reported by the "No" campaign during the 1995 referendum in Quebec.

The official news releases from the Quebec chief electoral officer can be found here and here, and the entire report can be found here.

The secrets of Option Canada "alleged that Option Canada received $5.2 million from Heritage Canada to promote linguistic duality, but the money was used to pad the No committee finances instead." The book was authored by Normand Lester and Robin Philpot. Philpot, a Parti Quebecois candidate in the 2007 is the author of a controversial book on Rwanda.

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Risley blames gov't; Williams worries about flips

To each his own.

John Risley is blaming two successive provincial administrations for actions that led to the breakup of Fishery Products International.

From cbc.ca/nl:

"We're in this situation essentially because of the FPI Act," Risley told CBC News on Monday, after the Newfoundland and Labrador government gave its blessing to FPI's plans to sell most of its plants, vessels and quotas to two competitors: St. John's-based Ocean Choice International and Nova Scotia's High Liner Foods.

Risley said his original plan — to merge FPI with his own, Nova Scotia-based company, Clearwater Fine Foods — would have turned FPI into a powerhouse.

The plan was blocked by the then-Liberal government and the Risley-led board has had strained relations with the governing Progressive Conservatives since they took office in 2003.

"FPI would have become one of the premier seafood companies in the world instead of now effectively ceasing to exist," Risley said.

Meanwhile, Premier Danny Williams apparently spent a chunk of time worrying that the whole arrangement might allow Risley to come in through the back door:

"What we've tried to do is make sure that there wasn't a quick flip on this, and that this wasn't perceived or was a sham for some takeover by John Risley or anybody else, at the end of the day," Williams said.

Maybe this worry about flipping was the reason the provincial government rejected the first buyer, the Barry Group.

It all seems rather convoluted though, given that the provincial government could have just as easily continued the FPI Act and held onto control over all the company assets.

Instead, the provincial government facilitated breaking up the company, changed the FPI Act to make breaking the company up even easier and will now become even more directly involved in operating part of the company through its control over fish quotas. it makes you wonder if the provincial government got itself into the position of smashing up a vertically integrated company by accident or if someone thought that this was a good idea.

The only real mystery around Bond Papers is why there's been all this concern about conniving and secret deals and vague possibilities of something happening in the future that wouldn't be happening had government not interfered in the whole process in the first place?

It's the same sort of concern, incidentally - the appearance of something as opposed to the fact of it - that seems to have hung up the fibre optic deal for an extra-ordinary period of time.

Maybe the Premier is a bit sensitive to the whole issue since he was accused of being party to such a flip, at least once. He says he wasn't; take him at his word.

But other than paranoia, was there ever any evidence that anyone wanted to break up FPI, that is, other than the people who have been currently involved in breaking it up?

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Saving stamp factories aim of government policy

A majority of Fishery Products International headquarters staff will likely be on the streets looking for new jobs employment after the smash-up of the once-proud fisheries company.

The provincial government announced on Monday that it had accepted a deal that would see the company broken up and sold to smaller local companies and with the lucrative marketing arm and FPI's only secondary processing facility sold off to a Nova Scotia fishing company.

Under the deal, the plant operators in Newfoundland and Labrador are required to keep employment levels - much of it heavily dependent of employment insurance benefits to keep people going for much of the year - at current levels for a minimum of five years.

Meanwhile, a majority of FPI's headquarters staff will likely get lay-off notices according to Henry Demone. The High Liner official told CBC Radio he expected a majority of the professional staff in St. John's will be looking for new jobs.

It won't be a good time for those professionals to be looking for work, at least in Newfoundland and Labrador. They'll be handing out resumes in a regionalready hit by a major slowdown in the oil and gas industry. The failure of a Hebron agreement last year cost the province about 3000 jobs and more than $10 billion in provincial government revenue. A squabble with oil companies over a 300 million barrel extension is also forecast to slow growth in the provincial economy and the impacts are being felt in the local job market.

In a news conference on Monday, though, Newfoundland and Labrador Premier Danny Williams heralded the new deal.

Williams told reporters that the agreement announced Monday actually worked out to be better for the province than its original demand.

"We in fact feel that we actually strengthened it," Williams said."I'm not just saying that, you know, to try and basically accommodate for the fact that we didn't get the quotas at the end of the day, but the federal government wasn't prepared to pass the quotas over [so] we got into a negotiation with them and [we] feel that we ended up better off, quite frankly."

The provincial government has been engaged in an ongoing war with the former FPI board of directors. It took over 18 months to review a capitalization plan and only approved after the plan - to turn an asset into an income trust - had become functionally useless. The war has been marked by frequent - and apparently unfounded - accusations that the former board members were looking to break up FPI and acquire the assets for their own fishing companies.

In the end, the only people talking about breaking up the company were the provincial government and the head of the fishermen and fish plant workers' union.

Effectively, the deal ensures that FPI, which likely would have swallowed up smaller operators like Ocean Choice in the highly competitive local processing industry, has been smashed up.

Key assets, which reportedly also marketed fish for smaller local companies, have been sold off to interests outside the provinces.

The only thing guaranteed in the deal announced Monday seems to be the survival of fish processing plants in a sector of the economy already well-past glutted with capacity that cannot be met with supplies of local fish. Increasingly fish plants in Newfoundland and Labrador have come to be regarded as stamp plants, in which employees work for only enough weeks to qualify for federal income support programs.

Survival of the so-called stamp factories seems to have been one of the major objectives of fisheries minister Tom Rideout.

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Islanders bin Binns

Discounted a month ago, Joe Ghiz's son leads Prince Edward Island Liberals to a majority government.

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Harper and Prems' meeting off

Prime Minister Stephen Harper won't be meeting with provincial premiers before heading off to a G8 summit.

The official excuse is that they couldn't agree on a date for the session.

The real reason is anyone's guess at this point. Saskatchewan Premier Lorne Calvert says that relations with the prime minister have been reduced to "megaphone diplomacy".

Around these parts, some would suggest it is actually "smoke signal" politics, with the smoke coming out of Premier Danny Williams' ears.

No matter what one calls it, there's no way it qualifies as diplomacy.

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FPI sold

The official announcement came on Monday, even though the deal has been in the works for a couple of weeks.

The Honourable Danny Williams, Premier of Newfoundland and Labrador, and the Honourable Tom Rideout, Minister of Fisheries and Aquaculture, today announced that the Provincial Government has reached two separate Memoranda of Understanding (MOU) with Ocean Choice International (OCI) Incorporated and High Liner Foods Incorporated for the sale of various FPI assets. The MOUs also outline the terms and conditions that will accompany the successful completion of those transactions and provide the necessary protections for the province’s interests. The sale remains conditional upon the signing of final binding legal agreements between both companies and FPI, which is expected in the coming weeks. The Provincial Government will also approve the sale of The Seafood Company, a primarily independent business unit located in the United Kingdom, which will be sold to interests in Europe.

One of the consequences of this deal is that the lucrative marketing arm of Fishery Products International will be sold to a Nova Scotia-based company. Another marketing asset based in the United Kingdom - which would have been a useful way to market local shellfish in the European Union will be sold to European interests.

"Since 2001, it is clear that FPI has pursued a business strategy that has been incompatible with the public policy objectives of the Provincial Government [sic] and communities that depend on the company," said Minister Rideout. "The agreements we are announcing today hold the promise of finally rectifying that situation, and our approval of this sale is reflective of this government’s confidence in the industry to move forward in a productive way that will serve the best interests of all stakeholders."

Time will tell if the second part of that statement is true. Certainly, the first bit - about the business strategy - is bordering on the completely nonsensical. Rideout has never indicated what the provincial government's public policy objectives are.

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Venezuelan strong-man silences opposition television

Like this is a surprise.

There are those around here who think people should be thrown in jail - literally - for daring to question what the government says.

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Norsk Hydro ponders ALCAN bid

Norwegian energy company Norsk Hydro is considering a bid to take over ALCAN, according to the Globe and Mail.

Norsk Hydro is in the process of restructuring, following a merger last year with Statoil. The latter will absorb all of Norsk Hydro's oil and gas projects, with Hydro to focus on its traditional strengths of hydroelectricity generation and aluminum production.

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Rio Tinto sizing up ALCAN

Mining giant Rio Tinto, which operates an iron ore plant in western Labrador has hired Deutsche Bank to advise on a possible bid for ALCAN, as the Sydney Morning Herald reported in its Monday edition.

Alcan last week rejected a $US27 billion ($33 billion) hostile offer from its US rival, Alcoa, which would create the world's largest aluminium company, and indicated it was in talks with unnamed "third parties".

The Herald understands that several potential suitors, including Rio and BHP, have expressed interest in opening discussions with Alcan's board. Some, including Rio, have already hired investment banks to provide advice on a possible bid.

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Alaska gas pipeline inches forward

From the Alaska Journal, an update on plans to develop a new gas pipeline in Alaska. The article compares the proposals from the former governor and his successor on a number of issues including local hiring and taxes and royalties.

On the latter issue, there's this observation:

One major difference between Murkowski and Palin plans is that while both approaches offer tax and royalty incentives for the producers, those proposed by Murkowski were more far-reaching and more controversial with the public and the Legislature.

Murkowski would have had a 45-year freeze on natural gas production taxes and a 30-year freeze on oil production taxes. Palin proposes a 10-year freeze on gas taxes only. The producing companies say this isn't enough, and it is a key obstacle for them in participating with a pipeline licensed under AGIA.

Murkowski would have solved a big problem producers have regarding uncertainties in state royalty administration, and particularly the state's ability under the current leases to switch between in-value and in-kind royalty-taking at six- to nine-month intervals. Murkowski's plan would have had the state take its gas in-kind for the duration of the 45-year contract.

In-kind would mean the state government would actually receive quantities of natural gas which it could then dispose of as it wanted.

One other difference between the Murkowski and Palin plans is that the former governor would have had the state invest in the pipeline and own as much as 20 percent. The idea behind this is that if the state takes its gas in-kind for a long period, it would, as a pipeline owner, be shipping its own gas and earning profits from that rather than paying another pipeline owner to ship state gas. Murkowski proposed investing about $4 billion in the project for a one-fifth share.

Palin would have no such equity ownership, but instead proposes a $500 million state grant to the pipeline license holder to subsidize early planning and engineering work. The state would get no equity or other repayment from the grant.

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This didn't take long...

Steve Kent, member of the federal Liberal party and now a Dan-didate wannabe.

Nothing like ridicule.

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Update: Did the old ears deceive or did Steve Kent dismiss his Liberal party connections a something confined to trying to get a Liberal nomination a decade ago?

Is that what Kent told a VOCM call-in show audience?

Well, if it is, people will have to wonder about Kent.

Offal News dissected the whole question of Kent's political opportunism when Kent finally announced his intention to be a Dan-didate - six months after he'd made the decisions and six months after Bond Papers outed Kent's switch from federal Liberal to provincial Dan-didate.

You'd be amazed at how many Liberals were amazed at the Bond piece and how many dismissed it entirely. Many of those same people likely believed Brian Tobin was staying for the full second term - right up until he bailed and ran back to the mainland - even though it was an open secret the guy's campaign team was raising cash months before he made the announcement.

But anyway...

At some point, Kent needs to explain his presence at the federal Liberal convention last November.

Was he a delegate?

If so, didn't he have to sign membership papers last summer?

Oh and for those who love the silly pretensions of certain locally-owned newspapers, check this week's Scrunchions over at The Independent. Therein readers will find a lovely precis of the Offal News stuff - printed a week or so later.

Likely Indy editor Ryan Cleary took time from tireless and fearless pursuit of his agenda to read through some old notes for a story he filed for The Telegram almost a decade ago on Kent and his flirtations with the Reform Party.

Beware of junk merchants

A story originally in The Telegram has turned up on the CanWest news service across the country.

It is a short piece that only discusses some of the more outdated and, consequently humorous, sections of the City of St. John's Act that are still on the books.

There's even a quote from St. John's Mayor Andy Wells, who is shown at right in the illustration, along with the Telegram's headline on the story:

The act is the bane of Mayor Andy Wells. "A lot of the content of the act is junk," Mr. Wells said.

[Telegram Photo: Joe Gibbons]

One of the sections Wells thinks to be junk?

The section of the act empowering the province's auditor general to review the City's books and operations.

You have to go to the Telegram version for that:

The auditor general (currently John Noseworthy) - whose reports annually shed an embarrassing light on the provincial government - could turn his attention to city hall if he wanted.

But Wells said there is no need, because the city already has an external audit process which produces reports annually.

No need because an outside auditor - hired by city council - can do the job.

Like we haven't heard that one offered up by politicians before.

That was exactly the same excuse used by politicians who blocked the auditor general from reviewing the House of Assembly accounts during years when millions were allegedly misspent.

Maybe the residents of St. John's should be suspicious of a politician who considers independent review of public spending by an appointed, impartial official to be a problem.

In the meantime, they can give Wells a shovel and have him repair the city's crumbling infrastructure of roads, sidewalks and water and sewer works.

Like this little gem that erupted in the middle of the last municipal election:

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Andy Wells: Not in the public interest

Anyone familiar with St. John's Mayor and likely Dan-didate wannabe Andy Wells, left, [Photo cbc.ca]understands that one result of his presence anywhere is that a functional entity like a board or a municipal council quickly becomes dysfunctional.

It quickly becomes distracted by the Wellsian bluster, sheer bullsh** and his trademark: vicious personal attacks against those who resist his boorish ways.

Premier Danny Williams is more than passing familiar both with Andy Wells and his ways.

The Telegram rightly notes the current situation at the offshore regulatory board, although the editorial seems to suggest dysfunction is merely a coincidence rather than a direct consequence of Wells' presence.

Ok.

Maybe it is.

But it isn't like there isn't a bit more than a coincidence.

Andy Wells shows up.

Positive stuff tends not to happen, except in spite of Wells' efforts.

Tons of histrionics.

Not much else.

Public Utilities Board.

St. John's City Council.

Canada-Newfoundland and Labrador Offshore Regulatory Board.

So the questions that we should consider are these:

1. Given the obvious pattern, why would anyone - especially Premier Danny Williams - appoint Andy Wells to a board whose proper functioning has such a profound influence on the province's future well being?

The answer to that one might actually be easier if you consider first:

2. Whose interest is served by turning the offshore board from a functioning one (without Andy Wells) into the dysfunctional one described by the Telegram?

Frankly, your humble e-scribbler wouldn't suggest the offshore board is dysfunctional yet.

The board itself is perfectly capable of carrying out its crucial role. It has highly competent, board members with knowledge of the oil industry, with the obvious exception of Andy Wells.

Just how little Andy Wells knows must be painfully obvious at every board meeting with the likes of Hal Stanley at the table. It must be personally mortifying for Wells - a crushing blow to the considerable and distended ego - to be so painfully, so obviously out of his depth.

Maybe that's why he has resorted to the public grandstanding seen in recent days. He doesn't have anything of substance to offer.

Of course, the board's professional staff is second to none when it comes to the job of regulating offshore oil and gas development.

But given all that anyone knows about Wells' behaviour, whose interest is served by having him be the monkey-wrench in the offshore board works?

It certainly isn't in the interest of the people of Newfoundland and Labrador.

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True Life

Father to nine year old daughter: "So how was school today?"

Daughter: "Pretty good."

Father: "So what did you learn?"

Daughter: "Nothing."

Father: "So remind me again why I send you to school."

Daughter: "No clue."

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How times change, Part 4

From 2003, a CBC Radio report from the provincial general election on the need for better relations with the federal government.

Among the choice quotes, Danny Williams saying this: "There's a tremendous split in the Liberal Party, federally and provincially and there seems to be a lot of internal bickering going on, you there's disputes going on between provincial members of the House of Assembly ..."

The whole thing is surreal - a word normally overused but all too accurate in this case.

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It's going around

From Telegram editor Russell Wangersky's Tuesday column:

Overall, though, there’s one clear point that has to be made: there’s a major difference between disagreeing with someone’s questions, and disagreeing with their right to make them.

There are obviously people who disagree with my point of view — they’re welcome to their positions. The fact is, this newspaper will be printing their letters to the editor long after I’m no longer writing columns.

Disagree with my arguments — perhaps I’ll disagree right back.

But once we get to the point that all dissent is suddenly proof of disdain — or worse, proof of disloyalty to some cause — then we’re in real trouble.

And believe me, there is more written and said now about the fact that some people in our province shouldn’t be allowed to make their positions known than there has been in years.

Unanimous and constant backing of our provincial government? Let’s be careful what we wish for.

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A wealth of knowledge

The offshore board retains a huge archive on the offshore area within its jurisdiction.

Core samples.

Oil samples.

Gas samples.

A host of paper and electronic records.

And soon the paper and electronic stuff will be available through a computer database.

This is one of the best kept secrets in the province. Your humble e-scribbler has had an idea on how this wealth of knowledge could be made available to people interested in the offshore, but who aren't researchers or oil and gas companies.

Maybe it's time to make the pitch.

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Fish on the Pill?

Ok.

So Sue and Gus are gonna have to rethink this "it's all Ottawa's fault" theory they've been running on all along.

Turns out all that estrogen pumped down the toilet from women on The Pill has been shagging up icthyan reproduction.

What will they do now that it isn't a giant conspiracy?

Likely blame Ottawa - which regulates prescription medicine - for failing to do complete environmental studies and predict that 45 years after the introduction of the artificial contraceptive pill that it would adversely affect fish spawning.

Yeah, it's all Ottawa's fault Gus' fishing boats broke the law.

And if they didn't? Well, it wasn't the fishing boat skippers who were wrong.

Nor were the company executives wrong for allowing high-grading.

Nope.

It was the feds' fault for not catching the crooks in the first place.

Try that argument on St. Peter, Gus and see how far it gets you on violations of The Big Ten.

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Just askin'...

When will Steve in Kabul not be news?

Maybe Harper's planning to run in the Afghan general election.

He spends more time in Kabul than in Kitchener or Kamloops.

Maybe Canada and Afghanistan could trade. We could pick up Karzai and a local warlord to be named later.

We could send them Harper and one or two provincial premiers with despotic tendencies.

Might be good for both countries.

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Let the lawyers stick to the law

Eastern Health authority listened to its lawyers last year when it disclosed only certain information about problems with its cancer screening tests.

Now the authority is caught up in a series of mea culpa briefings for news media, politicians and just about anyone else connected to this story.

But one of the results of this little fiasco was predictable: bags of publicity for the lawyers leading the class-action suit and, then inevitably, even more people suing the authority over the entire mess.

So one lesson to learn from all this?

Let the lawyer's stick to the law.

'Cause when lawyers start practicing public relations, things have a tendency to get royally shagged up.

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Pollyanna Dunderdale, part I: offshore exploration license trends

Newfoundland and Labrador's energy minister Kathy Dunderdale claims that the offering of a mere five parcels of offshore real estate in the 2007 call for exploration bids a sign of renewed interest in the province's offshore oil and gas prospects.

Specifically, she focuses on the interest in Labrador:

"This year’s Call for Bids focuses on offshore Labrador, which, up to this point has been relatively unexplored compared to other areas of our offshore. Industry obviously has confidence in the prospectivity of these parcels and this puts us on a path of having additional discoveries in this region."

In an election year and in polling season (Corporate Research Associates is in the field right now) any government would have an interest in puffing up good news or trying to create good news where a more sober analysis might lead one to something other than a pollyanna-ish conclusion.

If we take a very simple look at the overall picture, this year's call for bids is nothing to crow about. There are only five parcels in the current bid. Last year, there were twice as many.

Even with the number of parcels offered last year, the experience in 2006 is an object lesson on why we should draw conclusions on the number of licenses issued and facts related to that rather than on the number of parcels offered.

Since 1988 when the first parcels were offered, the Canada-Newfoundland and Labrador Offshore Petroleum Board posts parcels for sale based on expressions of interest from likely explorers. There are rules and conditions attached to the holding of an exploration license. There are also costs associated with all of it. As we can see from the chart, the number of parcels offered is no indication of how many parcels will actually turn into licenses.
Last year, for example, NL 06-2 contained three parcels. Even though a company or companies had expressed interest in them, there were no bids received. NL 06-1 and NL 06-2 contained a total of eight parcels, with bids ultimately being received on six. In other words, only half the parcels offered actually attracted bids.

Check the years before that. There have been a whole bunch of years in which the number of parcels bid were a lot lower. If you look just at the past couple of years, you might even believe that things are getting better. The lines go up and up is good.

Well, maybe yes; maybe no. If we look at licenses (bids) as a percentage of parcels offered, we see some interesting numbers. These really clarify the relationships noted in the first chart. Out of the 16 years in which lands have been offered for sale since 1988, bids matched offers in only five cases or 31%. Another five cases fall above the 60% line. The remainder are below 60%.

If we extrapolate that data, we might reasonably project that at least three parcels will be bid at the end of this whole thing sometime in the fall. That would put this year's land sale at the bottom end of the chart. It's hardly encouraging at all. Even if the entire number of parcels in this sale were turned into licenses, we'd still be in the bottom portion of our license experience.Another way to look at offshore would be a look at the money bid. The next chart shows that over the past three years, that even though there is a minor upswing in the number of licenses issued, the dollar value has dropped.

Dollar values are a gauge of costs involved in exploration but they also reflect the level of interest and competition. In a period of high interest and high competition, bids will increase. When interest is waning or there is relatively little overall interest due to costs, bids decrease.

In the early 1990s for example, when oil prices were low and the western economies were in recession, the bids were low. There were even two years in which no lands were offered. No one was interested.

By contrast, if you look at the period after the basic royalty regime was announced, the dollar bids, the number of parcels offered and the number of licenses issued was high across the board. Even with high exploration costs - those things are pretty much fixed - and a relatively low price for oil with equally low forecasts, companies were interested in the local offshore.

That's not a coincidence. These three points are linked. A globally competitive royalty regime produced interest from the investment community. it's also important to note that in the same time frame, the operators on the last major oil field discovered to date also returned to the Newfoundland offshore and began examining how to get a very costly field into production.

When poorly informed commentators talk about fallow field legislation and mention Hebron, they fail to notice crucial facts. Hebron is heavy, sour crude in heavily fragmented structures. It will be expensive to develop - compared to the three other fields - and it will also get a lower price on the market. Oil prices are publicly quoted based on light sweet. Heavy sour sells at prices lower than than that. Heavy sour is also more costly to refine and produces relatively fewer end products for a given amount of crude at the start.

Add that together and you can see why Hebron was considered non-commercial for most of the 25 years since it was discovered. A combination of factors, not the least of which was a stable, competitive royalty regime and the investment returned.

Is the current land sale a sign of great things to come, as suggested by the provincial natural resources minister.

Not really.

It isn't a sign of good or bad times, necessarily.

In part II we'll take a look at the specific parcels offered in this sale.

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That's Riche

riche (n): an overwrought use of an inappropriate analogy, based on the writer's obvious and complete ignorance of world and local history; to repeatedly display ignorance by persisting in the use of said inappropriate analogy; to confuse fiction with fact.

Alternately, to believe a work of fiction is actually a documentary.

As in: "That's riche" or "He pulled a riche" or "Of course, Confederation was a plot. Didn't you see Secret Nation?"

As in this letter to the editor of the Telegram from Ed Riche.

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Andy Wells to run?

Steve Kent decided around Christmas to run for the House of Assembly.

He didn't formally declare until yesterday.

A week after he spoke at the Rally for Danny.

In the meantime, he had a few things, including a boundary dispute, to keep his profile up there as a fighting Mount Pearler.

Follow so far?

Good.

Mayor Andy Wells.

Being his usual annoying, abrasive - and uninformed - self.

Behaving at the offshore regulatory board the same way he used to carry on at the public utilities border 20 years ago. Insulting people with terms that could be better used to describe himself.

Same boring stuff.

Someone leaked a letter to CBC Radio from the chair of the offshore board complaining about Wells. Wasn't the federal minister. Likely wasn't the provincial minister. Definitely wasn't the offshore board.

Who's left?

The same guy who leaked the story of his failed nomination for the top job at the board in the first place?

Good guess.

You see the same letter wound up in the hands of the Independent along with a marvelous, long-winded interview full of quotes.

But here's the thing.

The whole issue didn't need to pop up in the public domain right now. After all the letter was written almost a month ago and the incident involved goes back months before that.

So it gets the thoughts flowing.

If one mayor in the region is running for Danny, maybe the other big mayor will be running for him as well. Maybe this is just another one of those cheesy little stunts to keep Andy Wells' name in the news. Lord knows fixing the streets wouldn't be quite as newsworthy as Wells calling someone a hack, a word incidentally which describes the mayor to a tee.

So where would he run?

In Kent's case, both his intentions and his seat choice were wrapped up in a neat little bow, right next to the "it's all about leadership" crap that he would use to explain away what appears to many to be a track record of political opportunism.

In Well's case - if he were to run - there are actually a couple of options.

St. John's East is a safe Tory seat. It's currently held by intergovernmental affairs minister John Ottenheimer. Now Ottenheimer - surely one of the finest cabinet ministers in a while in this province - is not expected to run again.

But Andy doesn't quite fit the St. John's east profile.

That's a seat better suited to say, Dean MacDonald.

(Now there's an announcement that wouldn't surprise anyone. All that would be left to complete the set after that is a seat for Ken and job for Mel. Call it Cable Newfoundland and Labrador. An unregulated political monopoly. But I digress.)

Anyway, the seat most likely to suit any ambitions Andy might have would be the one currently held by the New Democrat leader, Lorraine Michael.

So there you have it. Speculation of the week. Andy Wells will be running for Danny in Signal Hill-Quidi Vidi.

And some smart bunny out there will undoubtedly connect up the rest of the political dots federally and provincially on his or her own.

The follies continue: yet another two week delay in the spending scandal report

The report by Chief Justice Derek Green into pay and benefits for members of the House of Assembly has been delayed three times so far.

It has always been promised within two weeks.

It's delayed again.

And yes, you guessed it.

It should be delivered within two weeks.

At the same time, the Premier's Office is not committing to implementing the report before the next election.

You see this is what happens when people get involved who pay no attention to the existing law and past practice.

Chief Justice Green's little investigation is a completely bizarre - and unconstitutional? - effort to circumvent the established process and place control of pay for the legislature in the hands of the executive branch of government.

It is a dodgy constitutional proposition even if it isn't outright unconstitutional.

There was already a mechanism established and used for decades to handle pay and benefits. The same process was used in 1989 to set up the Morgan commission, It worked. There were tight rules and definitions that were followed.

Immediately after a general election, the House of Assembly would appoint a commission with the powers of a public inquiry to establish pay and other forms of remuneration for legislators. The commissioner would report within 90 days.

As set out by law, in black and white for all to read and understand.

That system worked until 1996, when the current Premier's stylistic predecessor and his colleagues tossed it out the window.

They decided to make the rules up as they go along.

And basically, that's what the current Premier is doing.

Making the rules up as he goes along.

And that is wrong.

There was never any legitimate reason to appoint Chief Justice Green to this little project.

That is, unless there was some reason to be concerned what would turn up if someone had the powers of a public inquiry.

Chief Justice Green was deliberately denied those powers by the Premier and the rest of cabinet.

And so we wait yet again with no commitments to act on the highly improper report even when it is received.

because there are no rules.

And that's been problem in the House of Assembly since 1996.

Everyone thinks the rules apply to everyone else.

But him.

-srbp-

Background: The Internal Economy Commission Act.

Inquiry re salaries, etc.

13. (1) The House of Assembly may by resolution appoint, upon those terms and conditions that are set out in the resolution, an independent commission of not more than 3 persons to conduct an inquiry and prepare a report respecting the indemnities, allowances and salaries to be paid to members of the House of Assembly.

(2) The persons appointed under subsection (1) shall have all and may exercise all the powers, privileges and immunities of persons appointed as commissioners under the Public Inquiries Act.

(3) The persons appointed under subsection (1) shall complete their inquiry and deliver their report containing recommendations to the speaker within 90 days of the commission's appointment.

(4) The speaker, upon receipt of the report containing the recommendations of the persons appointed under subsection (1), shall refer the recommendations to the commission as soon as possible following the receipt of them and the commission shall implement the recommendations with or without the changes the commission considers appropriate.

(5) [Rep. by 1999 c14 s2]

Ouch!

Offal News on Steve Kent.

Wells to offshore board chair: "He can get stuffed on that."

In a situation that is likely no surprise to anyone, St. John's mayor Andy Wells is in hot water with the chairman of the offshore regulatory board.

CBC News is reporting that Max Ruelokke, chairman and chief executive officer of the Canada-Newfoundland and Labrador Offshore Board complaining about comments made by Wells in a recent oil magazine article. Wells, who is a provincial appointee to the board, reportedly called the board "incompetent" in its recent handling of a development application.

The provincial government vetoed the board's approval claiming a lack of information, even though the provincial government did nothing while the application was in process to obtain the information it claimed it needed.

In January, the board took the unprecedented step of releasing its decision and associated correspondence, although the documents have been removed from the board's website.

"He can get stuffed on that," Wells said.

"He's not going to be telling me how I'm going to respond to any issues that come before this board. I'm not going to stand by and allow some bureaucratic hack to tell me what I can and cannot say on matters of public interest," he said.

Wells was Premier Danny Williams surprise choice in 2005 to head the board, coming as it did despite the fact that the selection process agreed to by both the federal and provincial governments was well under way.

Wells didn't get the job, even after a second process as established under the Atlantic Accord (1985).

Wells has commented publicly on the decision previously.

-srbp-

Punt O'Connor now

If anyone needs to see a perfect excuse as to why the country needs a new defence minister, consider his testimony to the House of Commons committee reviewing defence estimates.

Most of Gordon O'Connor's answers to questions are meaningless talking points. In fact for significant chunks of the questioning, O'Connor repeats the same lines over and over and over again.

No substance.

No content.

It is astonishing the number of responses that are merely four or five short sentences in length.

The most typical answer in Gordo's exchange with Labrador member of parliament Todd Russell?

"Mr. Chair, when the government makes the decision on precise commitments, the announcements will be made."

This is a minister who can in no way be accused of being in control of his portfolio. He clearly cannot command a brief, and one would venture that his course report in minister training school likely would have said: "people will follow this minister if only out of idle curiosity."

O'Connor has likely bogged his office and it will take more than a couple of strong hands and an armoured recovery vehicle to get the former tank driver out of his current mess.

O'Connor's performance is evidence of a minister incapable of coping with the management of one of the largest and most important departments in the Government of Canada.

Memo to PMO: Punt O'Connor now.

That action alone will do more to rebuild the Canadian Forces than any cash ever spent.

-sbrp-

Sanford looking at disappointing first quarter results

From the New Zealand Herald:

Fish exporter Sanford warned of a disappointing first half result, after a high New Zealand dollar ate into profit and weaker United States markets dampened sales.

Revenue was down 2 per cent for the six months ended March 31, as disappointing sales in the second quarter reversed a 15 per cent rise in the first three months.

...
Profit would be boosted by a one-off gain of over $6m on the sale of Sanford's Argentine investment.

Proposals to sell the major assets in its 15-per cent owned Fishery Products in Canada were under consideration. If concluded, the sales could result in a one-off gain of about $20m, [Sanford managing director Eric] Barratt said.

-srbp-

Exxon returns to Timor Sea

Oil giant ExxonMobil is farming in on a prospect in the Timor Sea, marking a return to the region for the company after a decade's absence.

The well will be drilled beginning in September by the new Wilcraft jackup rig.

An Exxon spokesman yesterday described Marina as an exciting prospect. The farm-in with a junior was a clear sign of the company's enthusiasm. In recent years Exxon has spent hundreds of millions of dollars in exploration and development in Australia, mostly associated with the Bass Strait oilfields but also in re-establishing an exploration position in northern and western Australian waters in partnership with Chevron and Shell.

-srbp-

Rio Tinto mans barricades

The Australian reports that, faced with increasing speculation that the company will be the subject of a takeover bid or takeover bids, Rio Tinto has instructed its financial advisor, Morgan Stanley, to prepare a defense strategy.

Rio has "refreshed" Morgan Stanley's existing mandate in order to be prepared for any possible bid, an industry source told The Australian. The company refused to comment. Morgan Stanley's global mining industry adviser in London is Peter Bacchus, who spearheaded WMC's takeover defence against Xstrata in 2005 when he was based in Australia with Citigroup.

-srbp-

Chevron to spend US$4.0 billion in Asia in '07

From the International Herald Tribune:

BANGKOK, Thailand: Chevron Corp. will invest about US$4 billion in Asia this year for petroleum exploration and production, a company executive said Friday.

"The company sees Asia as a very attractive place for investment for future growth," Steve Green, managing director of Chevron Asia South Ltd., told Dow Jones Newswires in an interview.

-srbp-

Post columnist slags Pipeline Canada

From Terence Corcoran's column in the Friday Post:

Having just sold off Petro-Canada, ending that particularly disastrous episode in national energy history, the Harper Conservatives are floating the idea of taking control of a new national project, Pipeline-Canada. As a Crown corporation, Pipeline- Canada would contract out construction of the $16.2-billion project to Trans-Canada Pipeline.

If this were to happen, rest assured that it would not really be an energy policy. It would be, above all, a native buy-off policy, a job-creation policy, a make-work program and a political strategy to secure votes and seats in Parliament.

But as an energy policy, the benefits are far from obvious. A government-funded pipeline megaproject would do nothing to help establish Canada as an "Energy Superpower." But it could set Canada up as an Energy Superloser. With a $16-billion construction cost, the latest estimate, it poses a monumental risk to the government.

Prediction: The National Post won't like the Newfoundland and Labrador energy plan whenever it is released, for many of the same reasons given in Corcoran's column.

The plan will likely call for the same high level of government intervention in energy projects Corcoran criticises in the Mackenzie pipeline story.

Even though there is no reason to believe it, some people will argue that the Post is part of a national plot to denounce and degrade the Newfoundland nation.

Other people will roll their eyes up in their heads at the foolishness of the conspiracy conclusion.

-srbp-

Leo 2s to cost $1.3 billion

New Leopard 2 tanks will cost the Government of Canada $1.3 billion for acquisition and lifecycle costs over 20 years according to defence minister Gordon O'Connor.

O'Connor revealed the new cost - double the amount previously announced - in testimony before a House of Commons committee on Thursday evening.

No reason has been given by the minister or his department for breaking with past practice and not announcing the total cost for the new acquisition. In previous purchases, purchase costs as well as lifecycle costs were provided at the same time.

-srbp-

Feds to buy into Mackenzie pipeline

The Government of Canada may buy an interest in the stalled Mackenzie Valley pipeline project in an effort to restart the venture, the National Post is reporting.

Oil companies backing the project said in March that the 1,222-kilometre pipeline linking gas fields in the Mackenzie Delta to Alberta's natural gas pipeline grid would cost $16.2-billion, up from $7.5-billion only two years ago, thanks to inflationary pressures that have beset energy projects around the world.

The consortium then asked Ottawa for huge tax concessions, but at a May 2 meeting in Calgary [Indian affairs and northern development minister Jim] Prentice slammed the door on the idea of subsidizing the oil companies. Imperial then said it would shut down the project, sources said.

Since then, Ottawa has not only resurrected a proposal to be a partner in the project, but is exploring taking control away from Imperial. The massive venture would provide a new source of natural gas for North America and be a springboard for development of the North. It would also open the prospective frontier to gas exploration.

Under the plan under consideration, Ottawa would buy out Imperial and its partners, Houston-based ConocoPhillips and international conglomerate Royal Dutch Shell PLC, by reimbursing them for costs already incurred on the project plus interest.

Imperial, Conoco and Shell are now formulating a plan to let the government into the project. A deal is expected to take several months to be finalized, sources said.

As Bond Papers noted last October in an article on a possible Lower Churchill loan guarantee, the federal government favours taking equity in projects rather than providing loan guarantees. Specifically, the October article linked to a Globe and Mail story on the possibility of the feds taking equity in the pipeline project.

-srbp-

Another view of Alberta

Greg Locke has an interesting post on the experience of moving to Alberta especially when it comes to Medicare coverage and worker's comp.

This looks like just the snippet of a bigger piece, or at least the start of something that should be bigger.

Here is something Newfoundland's migrant workers are not told about in the glowing upbeat presentations in hotel ballrooms used to sell them on going to work in Alberta. Particularly on industrial job sites where risk of injury is higher than other jobs and just which health care system covers you in case of illness or injury.

First you had better figure out if Newfoundland’s MCP covers you while working in Alberta or if Alberta resident’s provincial health care plan is in play for your particular situation. If you are not an Alberta resident, you may not be covered. Also, when and does your employers additional health care benefits kick in after you start work. A lot of the answers to these questions will depend on whether you are an Alberta resident or a “commuter” flying in to work in Alberta but still a resident of Newfoundland.

-srbp-

Government promises accounting in cancer scandal

Premier Danny Williams said Thursday his administration had a "moral responsibility" to investigate whether patient health was compromised in the way a regional health authority in the province responded to news that certain breast cancer screening tests had produced incorrect results.

Upwards of 300 women were steered away from access to the drug Temoxafen, based on the results of faulty hormone receptor tests.

Former health minister Tom Osborne, now the province's justice minister, admitted he was briefed on the scope of the problem in December 2006.

At the time, health authorities only publicly disclosed changes in treatment to over a hundred women. Information that tests were incorrect for almost three times that number of women was not made public until this week, as a result of inquires for lawyers representing some of the women.

CBC reported Thursday that:

...Health Minister Ross Wiseman told the legislature Thursday that Eastern Health — which is largely funded by government, but operates at arm's length — was aware of the inaccurate test results more than a year ago.

However, he said, government officials were not notified until last August, and that the then health minister was not personally briefed until three months after that, in late November.

Health Minister Ross Wiseman said Eastern Health has known for more than a year about the error rate of hormone receptor testing.Health Minister Ross Wiseman said Eastern Health has known for more than a year about the error rate of hormone receptor testing.
(CBC)

Court documents reported earlier this week by CBC News showed an error rate of 42 per cent in a large set of samples, several times higher than a public estimates.

Wiseman said Eastern Health still may not know what went wrong with hormone receptor tests done between 1997 and 2005.

In the House of Assembly, Wiseman said that the health authority became away of a problem with testing in May 2005 and began a review of tests and procedures.

There was no explanation for the delays in briefing the health minister in 2006 or why the provincial health department concurred with legal advice that appears to have recommended partial disclosure of information.

The premier told the legislature today that his administration would conduct a thorough review of the matter bearing in mind the issues of liability and confidentiality.

-srbp-

Ahhh, but what if...

Funny how everyone is in a high dudgeon over Equalization.

Well, not e-v-e-r-y-o-n-e, as was painfully obvious at the Rally for Danny.

Despite the claims of the rally organizers, it looks like about 1500 people showed up on a fine and glorious Friday. None too impressive.

[Photo removed by request] For those who don't know, that was the non-partisan rally organized by DW's political supporters and attended by...well, ...his political supporters, like this gaggle of political staffers (left). That's the Premier's parliamentary assistant standing there in shades, likely keeping an eye on his promotion to cabinet.

Paul Oram's boss worked the crowd like it was a Tory rally and at an appropriate moment took a spot behind the podium to deliver what was likely seen by most to be the keynote. They even chanted "Danny! Danny! Danny"!

The whole thing featured a bunch of speakers, culminating in a few politicos, but the high point was surely DW himself, as would be fitting at a Rally for Danny.

There was Steve Kent, on behalf of municipalities in the province, but oddly enough an aspiring DW candidate, as Bond revealed last January. He'll formally announce tomorrow but Bond isn't expecting a thank you for saving everyone the six months of suspense.

There was Kevin Noble, a fine local actor who has lately taken to calling every VOCM talk show on the go to attack anyone saying anything about DW that might look like criticism. No small irony Noble spent a chunk of his professional time playing Joe Smallwood.

Noble could parlay the whole thing into a kind of eerie one man show in which he plays both premiers simultaneously. Challenge people to guess which one said what.

But I digress.

Then there was a police officer speaking on behalf of police officers.

Yes, at a political rally.

Odd that no one bothered to read RNC Act and regulations.

And there was The-Only-Locally-Owned-Newspaper editor who tried to out-speechify the best political speechifiers. He was evidently taking a break from fearlessly tracking down all the stuff that conforms to his political biases, at least when it comes to the crowd Up-a-long, to give speech which confirmed once again that he is a master at saying one thing and doing another:

"I'm here to say it's time for Newfoundland and Labrador to grow up."

Speak for yourself, there buddy. The rest of us are wondering why the nationalists seem to project personal shortcomings, like immaturity or a lack of self-esteem, onto an entire population.

They all shared the view of the guy singing a song in praise of the Fearless Leader and encouraging him to keep up the fight against the evil enemy of the moment.

Anyway...

All of that is just a way of reminding regular Bond Papers readers that the problems with Harper Equalization problems were well known.

And they were known some time ago.

Well known to everyone, it would seem except Fearless Leader who, during the last federal election, was supporting the guy he has now turned on. The year before that he was trashing Harper - carrying an even better version of the later promise - and sucking on to Paul Martin.

But by 2006, there was this piece for example, that noted the vagueness of the 2005/06 version of Harper's commitment.

Then there was this one that predicted a nasty Equalization fight was on the way.

In March, 2006 - a mere two months after Canada's New Crowd took office - the rest of the world knew what Danny Williams apparently still didn't realize in October. [or did he?]

Then there was the little piece on bullshit, which is the main fuel for most of the Canadian political system apparently.

And even in this seemingly unrelated piece, there is evidence of what Stephen Harper was proposing and how it would benefit the provincial government, at least in comparison to the system the Premier himself proposed originally.

As yes, if only more people read Bond Papers.

or just grew up.

-srbp-

But seriously, folks

This is a very good announcement.

The dairy industry is one of the real bright spots in our provincial agricultral industry and it goes largely unnoticed by most of us.

Somehow, though, I just couldn't help thinking of this old Monty Python sketch every time I heard the news story today.

Real grassroots versus astroturf

Doesn't matter where you stand on the Equalization issue, this petition is in the spirit of the Fair Deal campaign mounted in 2004/05.

It looks like a genuine grassroots campaign and there's no sign it isn't genuine. The thing already has the better part of 250 signatures.

That's what sets it apart from astroturf.

-srbp-

CVRD eyes IOC parent

From Australia, comes a report that Brazillian miner CVRD is sizing up Rio Tinto as a possible acquisition.

CVRD operates Voisey's Bay through it's Inco subsidiary.

Rio Tinto operates an iron ore mine in western Labrador through it's subsidiary, Iron Ore Company of Canada.

A Reuters account can be found here .

-srbp-

Cat Fight, the new series

Conservative member of parliament Fabian Manning, left, and Paul Oram, parliamentary assistant to Premier Danny Williams, spent a few minutes on Tuesday night bashing each other in public, courtesy of VOCM's Night Line talk show.

Oram, right, started the row by calling the show to slag Manning for supporting the federal government's budget. Oram claimed that, by way of a gigantic contrast, Oram had voted for a controversial fisheries measure because he was told it was in the best interests of the province. [Now the wording he used was curious enough in itself, but that's another story.]

While claiming purest motives for himself, Oram could not grant the same courtesy to Manning; after all, the guy who holds the keys to Oram's future as a cabinet minister had already declared Manning an un-person. A senior member of Williams' staff reputedly attended the caucus meeting that punted Manning to the opposition benches.

Manning would not be outdone by the likes of Oram. So he called the show from Ottawa to give a spirited defense of himself and his reasons for supporting the budget measure. Not surprisingly it had something to do with best interests of the province.

At some point, Manning also noted that he and Oram had discussed said controversial fisheries initiative back in the days before Manning's image was airbrushed out of every photo of provincial Tories.

Da byes were apparently gnoshing at a local eatery ironically called "My brother's place" when Oram allegedly declared he would cross the floor before he would support the fisheries package.
[Photo removed by request] Of course, Oram didn't cross the floor. He backed the deal to the hilt. By-the-by, in the photo at left that's Oram in the shades and sans 'stache along with a bunch of what appears to be Tory political staffers.

The event was the the supposedly non-partisan Rally for Danny last week in which the rhetoric flowed thick and heavy even if the crowd was thin and the results were light to non-existent.

While Manning was on the air, Oram called to refute Manning's version of events. Smart producer and host put the two together and let them hammer away much to the delight of their audience.

It was a truly spectacular bout of "You did. I din't."

Now the real point isn't what Oram or Manning did back then, although frankly, Manning has nothing to gain by telling a whopper of a fib.

Neither side can likely prove his version of events.

But that isn't the point.

People should notice that the current crusade against the federal Conservatives has opened up deep divisions in the local Connie/PC camp. There are plenty of close friends caught up in the divide, just as two years ago there were some deep divisions among Liberals.

The Tory and Connie cleavages might be bigger though since at no point in the Liberal case did one crowd call for the public lynching of the other. Premier Danny Williams wants to see every Conservative in the province defeated at the next election. Heck, in the process, DW's even turned on a guy he once supported to be provincial Tory leader and Premier.

Oram and Manning's pissing match could be just the tip of the proverbial iceberg. More blood may well flow yet before the whole thing is settled.

Meanwhile, the federal Grits are quietly going about their business.

And the Dippers?

Likely they are doing a very fine impression of Jon Lovitz from The Wedding Singer.

-srbp-

Protecting domestic T & A

From Canadian Press:

The Conservative government is set to unveil new legislation aimed at keeping foreign strippers out of Canada.

Talk about a government that has already exhausted its agenda.

-srbp-

Just say no

It's not on line but this story appeared in today's Telegram.

It appears here thanks to someone with better typing skills than your humble e-scribbler.

Analyses remain secret; Province won't release examination of system

by Rob Antle

It's been an argument fought largely without the help of any hard numbers or firm facts. And the provincial government is doing its part to ensure the situation stays that way.

The Williams administration confirmed this week it won't make public any of its analyses of changes to the federal equalization system.

Requested data

The Telegram requested the data a month ago under provincial access-to-information laws.

The province says doing so would violate both cabinet confidences, and a portion of the law dealing with the financial and economic interests of a public body.

A spokeswoman for Premier Danny Williams steered questions to the provincial Department of Finance, which denied the request.

Williams has been at war with Ottawa since the federal budget was tabled March 19.

The Harper government sidestepped a key election promise on equalization, instituting a cap on benefits.

Williams was apoplectic, commissioning a nationwide advertising campaign condemning the prime minister.

The feds, meanwhile, insist the province can stay in the old equalization system and retain the uncapped Atlantic Accord.

No hard numbers

Neither side has tabled any hard numbers to back up their respective opinions about the benefits of the new system versus the old.

Earlier this month, Ottawa told The Telegram it would require 1,056.67 hours just to prepare to release 31,700 pages of documents analysing the potential impact of the new system on Newfoundland and Labrador.

The federal Finance Department said it would take another 69 hours just to find the information. Total bill: $17,500.

Province just said no

The province, meanwhile, shut the door entirely.

Last month, Williams skated around three separate questions from reporters about whether he would release provincial analyses.

"It depends on how far we can go," he said April 18.

Equalization is fiendishly complicated, with factors as diverse as the price of oil, the value of the Canadian dollar and the economic performance of every province potentially shifting benefit levels.

Projections released

To date, the only person who has publicly released any projections of the new system's impact is Memorial University economist Wade Locke.

Locke first calculated that the new system could provide a boon of $5.6 billion to the province.

But a new set of parameters - based on changes in federal budget implementation laws - turned that boon into a bust. Locke's revised analysis showed the new system would provide $1 billion less than the status quo over 12 years.

The MUN economist has urged the feds and the province to make public their own projections.

Neither side has expressed much interest in doing so.

-srbp-

Fun and games with the Premiers

The Prime Minister is finally getting around to meeting with the Premiers.

With the recent federal budget, it should be an interesting affair.

Maybe that's why the Premier of Newfoundland and Labrador has been absent from the House of Assembly so much.

He's getting ready for the big showdown, expected on June 2.

-srbp-

Back to the future: an overview of Equalization

Lost in most of the current kerfuffle on Equalization is any understanding of what the federal transfer program does or how it evolved.

Thomas Courchene contributed a simple historical summary of the program to Policy Options in March. The following extract suggests that the current Equalization approach is very similar to the one introduced in 1962:

At this juncture, it is important to recognize that equalization has played another key role in the evolution of our federation. Over the years the federal government transferred progressively larger shares of the PIT [federal personal income tax] and CIT [federal corporate income tax] to the provinces, which made Canada one of the most tax-decentralized federations in the world. Arguably this tax decentralization would not have been politically acceptable to the "have-not" provinces were it not for the existence of equalization. In this sense, equalization also benefits the rich
provinces, since it allows them to reap the benefits of their superior tax bases.

In the 1962 quinquennial revision of the tax arrangements, the share of PIT entering the equalization formula was increased to 16 percent (with an interim increase to 13 percent in 1958). For present purposes, however, the importance of the 1962 revisions is that natural resources entered the formula for the first time, thereby beginning a complex and volatile relationship that has influenced the evolution of Canadian federalism well beyond the fiscal arena. The concern at issue in this time frame was that resource-rich Alberta was receiving equalization.

To prevent this, the formula was expanded to include resource revenues — 50 percent of the three-year average of provincial resource revenues would now be eligible for equalization. While this would exclude Alberta from receiving equalization, it would have substantially increased the total level of equalization. To temper this expansion the equalization standard was reduced from the TTPS [top-two-province standard] to a national-average standard (NAS).

This modification was short-lived. Following up on its 1963 election platform, the new Pearson government restored the TTPS standard and removed resource revenues from the formula, replacing them with the "resource-revenue override"; henceforth, 50 percent of the resource revenues accruing to a province would be deducted from that province’s equalization entitlement. The return to the top-two-province standard meant that Ontario was again the only "have" province, but the resource revenue override precluded Alberta and BC from receiving equalization.

-srbp-

Polling in public policy

From David Herle, a provocative discussion of the role played by public opinion research in modern politics and government.

As the blurb from this month's Policy Options puts it:

"The role public opinion research plays in guiding governmental communications is often dismissed as partisan and not necessarily in the public interest," writes David Herle, who begs to differ. As the former pollster to the federal finance ministry in the 1990s, Herle’s polls and focus groups shaped support for balancing the budget and creating the fiscal dividend. Other policies, he writes, "can be sacrificed because (Ottawa) couldn’t talk about them to Canadians in a way that made sense to them." He also identifies five rules of current Canadian public opinion: Canadian social values, transparent governance, activism rather than retrenchment in government, and the enduring regionalism and evolving views of the Canadian federation.

Herle has a striking observation on how Canadians view the separation of powers between federal and provincial governments. In light of recent musings by local nationalists, Herle's assessment might give a clue as to why the tone of the provincial government's most recent battle with the federal government is going over like a lead balloon:

Rule 5 — Views of the federation are evolving. The fight between "a strong central government," on one side, and "a community of communities," on the other side, is over, and both sides won.

Most Canadians have settled on a division of labour between levels of government that is based on what they see as the appropriate roles and competencies.

Program delivery is seen as being best done by provincial or even local governments. They are seen as being better able to manage programs and are thought to have a better sense of what the actual needs are, province by province, community by community.

The cities agenda is coming up into the national agenda for a reason. However, that does not mean that people want or will accept a balkanized Canada. They see it as completely appropriate for the federal government to fund programs in areas of provincial jurisdiction — in fact, most of the things people really care about, such as health care, education, early childhood education and the environment, are outside federal jurisdiction. They would not stand for a federal government that refused to help in those areas. In addition, they want the federal government to demand national principles and consistent approaches and applications.

-srbp-

SK should pick friends carefully: Hirsch

Todd Hirsch, a former chief economist with the Canada West Foundation warns Saskatchewan is sending the wrong message by siding with Nova Scotia and Newfoundland and Labrador over Equalization. His column appears in the current issue of Policy Options.

But the danger of Saskatchewan joining as brothers-in-arms with Newfoundland and Nova Scotia is that it conveys the message that Saskatchewan’s economy is in trouble. Nothing could be farther from the truth.

The unemployment rate in Newfoundland is above 14 percent. In Saskatchewan, it is under 4 percent — behind only Alberta’s as the lowest unemployment rate in the country. Saskatchewan’s economy has grown consistently at or above the national rate of real growth, and is likely to be the second- or third-fastest-growing province in 2007. Strong energy prices, rising real estate values, a burgeoning mining sector and a world-class hightech research sector are restoring business confidence. Even agriculture is doing reasonably well this spring.

-srbp-

Budget accuracy: NL consistently strong results

One of the great unfacts that has crept into political dialogue in Newfoundland and Labrador is that fiscal accountability and sound management suddenly arrived in October 2003.

This report by the CD How Institute shows that over the past 10 years, the Government of Newfoundland and Labrador has been consistently accurate in its budget forecasting. The province showed a mean variation in spending changes off just 0.99%, ranking second in accuracy to Quebec.

Some of the biggest variation in forecasting revenues has been in the past two years - FY2005 and FY 2006 - with variations of 5.8% and 15% respectively.

Prior to that the largest variation was 1997-98 when the provincial budget underestimated revenues by slightly more than 10%, and 1998-99 when the provincial governments revenue actually declined. The difference between forecast and actual was -6.32%.

According to the Howe study, the Government of Newfoundland and Labrador is forecasting a 10% growth in spending in FY 2007. That's double the growth in the federal budget and five times the growth in the Ontario government.

Spending growth of 10% is also more than two and a half times the projected real growth in gross domestic product, according to a recent report by Scotia Economics.

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There is a conspiracy

Expect the local nationalists to be up-in-arms about these two announcements, both of which are surely evidence of the great conspiracy to favour Nova Scotia over Newfoundland and Labrador.

The first is ecclesiastical, but they are all mainlanders under their vestments, obviously.

The second is yet more federal pork for Halifax.

Never mind that the Port of Halifax has a major problem with smuggling.

That anti-smuggling job should be in Buchans.

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Scotia Economics projects top to bottom of pack for NL

Scotia Economics joins all the other forecasters in projecting that Newfoundland and Labrador will lead the country in economic growth in 2007.

Like everyone else, Scotia also projects the province's economy will trail the country in2008.

The update report - released on May 3 - turned up on vocm.com today.

The original report, released in March, was covered by Bond Papers at the time.

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Separatists Across Canada: Unite!

You have nothing to lose but the idea you are alone.

Old news: Harvey quits, Kent to seek Tory nod

You read it first here and here.

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Oil companies oppose Alberta royalty hikes

From Oilweek:

In a written submission to a provincial royalty review panel, the Canadian Association of Petroleum Producers says oilsands projects have a lot of major obstacles to overcome before producing even a barrel of crude. This includes multi-billion dollar up-front cash layouts, long lead times and swirling cost pressures for both material and labour.

"Looking at royalties per barrel in the early years of a project is like looking at a child from age three to six and then saying, 'they will never amount to anything important over their lifetime,' " CAPP said in its submission.

The oilpatch lobby group said oilsands developments are among the most expensive energy projects in the world to build.

Years of unprecedented high commodity prices and a string of record profits from Canada‘s big energy companies has triggered an undercurrent in Alberta that the oilpatch is not paying the province enough.

Under the current structure, companies pay just one per cent of gross revenues until all construction costs are recouped.

The rate then climbs to 25 per cent of net royalties.

The complete CAPP presentation can be found at capp.ca. It describes the oilsands resource, the existing royalty regime and some details of how the oilsands have been performing financially:

There is also a general public perception that royalties have not kept pace with increased commodity prices. But, as noted above, oil sands royalties and lease payments have increased 16 fold in the past five years — from $250 million to $4 billion — to become a major contributor to the provincial surplus.

As of December 2006, 34 of 66 projects covered by the Generic Regime are now in post-payout phases and more are reaching payout quickly. But just looking at the number of projects does not show that just 10 projects make up 88 per cent of the oil sands production. Th is means that about 75 per cent of oil sands projects by volume are paying the 25 per cent post-payout royalty.

In many cases, these projects have achieved full royalty payments ahead of schedule, precisely because the regime is instantly responsive to commodity prices. As prices have risen, so too have gross revenues, thus increasing both the amount of the gross royalty and increasing the fl ow of funds to pay down capital costs and move the project to post-payout royalty payments. In a high-commodity-price environment, projects pay out faster — and then pay higher royalties sooner. If prices decline, royalties automatically adjust to support project economics.

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