Jeffrey Simpson hates Newfoundland

Well, not really.

But that's what the myth-mongers among us would have us believe.

The leading critic of Simpson's latest remarks has re-opened her blog to public view and has taken to slagging Simpson on whatever radio station has an open line show or a viewer call-back line.

Plus ca change.

What Simpson actually said is available through Offal News and Simpson's interview with CBC Radio's On the Go.

Just to show how much Simpson doesn't know about Newfoundland and Labrador - note the sarcasm - here's a column on the Churchill Falls contract from 1986.

As for Simpson's remarks on the impact of demographics, you can find similar arguments here at Bond Papers last fall and in October 2005. There is nothing new in Simpson's remarks and as Simpson told CBC radio, there are a great many leading figures in the province who have discussed the issue with him at length in private.

Your humble e-scribbler isn't a leading figure even in his own house, so draw your own conclusions on who Simpson speaks with when he comes here.

A pitiful contract
Jeffrey Simpson
The Globe and Mail
Toronto, Ont.: Jul 3, 1986.
pg. A.6

Come-By-Chance periodically provokes a nibble of interest from some Israeli or Arab consortium, but most Newfoundlanders have consigned it and the other industrial failures to the far corner of their collective memory.

Not so with Churchill Falls, the Labrador hydro-electric project whose iniquitous terms can stir indignation in any Newfoundlander.

Another Smallwood legacy, the Churchill Falls project allows Quebec to make a killing on Labrador power. Quebec buys Labrador power for the laughably low rate of 3 mills and sells it for many times that rate in the United States.

Put simply, Newfoundland is getting shafted by the deal. All legal challenges, presentations to the National Energy Board and appeals to Quebec's conscience, good name, patron saints and anything else Newfoundland could think of have failed.

Quebec, after all, has a 65- year contract freely entered into with an agent of the Newfoundland Government in 1969. The power started flowing in 1976, and Quebec has been raking in the profits ever since.

Worse still, the contract calls for steadily falling rates to be paid by Hydro-Quebec for the duration of the contract.

Every failed legal challenge by Newfoundland merely solidified the sanctity of the contract. The federal Government, knowing that Quebec has nearly 11 times more parliamentary seats than Newfoundland, has been reluctant to intervene.

Quebec is legally obligated to do nothing but keep taking Labrador power at a low price and selling it for what the market will bear. It has argued that without Hydro-Quebec's consent and money, Newfoundland could never have developed Labrador power, since Quebec stands between the Churchill River and potential export markets.

Under Rene Levesque and the Parti Quebecois Government, Quebec's position remained as unyielding as it was simple - a contract is a contract is a contract. That position echoed the one taken earlier in the 1970s by Liberal Premier Robert Bourassa.

Now Mr. Bourassa, who was returned to power last December, is making modest noises that perhaps Quebec might be flexible. Newfoundland formally presented new proposals to him in March, and Premier Brian Peckford wants a meeting in the coming months. Experts from Hydro-Quebec and Newfoundland Hydro have been meeting.

It is too early to know whether Quebec is serious or is merely making polite, inconsequential noises. The Churchill contract, enduringly important news in Newfoundland, stirs barely a flicker of interest in the navel-gazing Quebec media.

Any re-opening of the Churchill contract would have to be part of a broader package of developing the hydro potential of Gull Island, further along the Churchill River.

Whether Quebec is even interested in Gull Island depends, in part, on Mr. Bourassa's hydro priorities.

He is outspokenly wedded to James Bay II, and hasn't tipped his hand about Gull Island.

Mr. Bourassa, an avowed federalist, is not required to do anything to help Newfoundland, Canada's poorest province. He has the province over a barrel, and he can keep it there for as long as he wishes. A sense of decency and the spirit of federalism, however, should make him stop lording it over Newfoundland.

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What's in a name? Hilarity, apparently

Back in late December, we brought you the story of two Atlantic Canadian regional law firms that were in the process of sorting out the new name for the firm following a merger.

Word coming from the clerks' room was that the partners of the former Patterson, Palmer and Cox, Hanson had settled on a name which had certain masturbatory overtones.

In December, the name making the rounds was Cox Palmer.

Turns out the clerks were a bit off.

Their learned betters decided the firm needed a spiffier name than the one which had been circulating.

They added an ampersand between the two words to unveil:

Cox & Palmer

The addition of that one tiny symbol - much like sticking a fig leaf on David - was supposedly proof against anyone possibly seeing any implications of onanistic pleasure among the briefs.

Job done.

Why bring this up now?

Well, truth be told, it was an issue long forgotten. Until it popped up on the chyron beneath John Crosbie's name as he testified at the senate committee on national finance.

There was the old anti cake-spewer described as "Partner, Cox & Palmer".

Somehow it seemed to make perfect sense.

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Gary Lunn's speech: the full text

Courtesy NOIA, the full text of Gary Lunn's speech to the NOIA annual conference. Lunn didn't actually deliver the speech since weather prevented Lunn's aircraft from landing.

Interestingly, the text of the speech is different in tone from the sections leaked the day before, presumably by the Prime Minister's Office.

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Danny William's speech: full text

From Offal News, the text of Premier Danny Williams' speech to NOIA's annual conference.

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Eating one's cake and throwing it up too: the Crosbie historical fiction series

From the Tuesday Globe and Mail, a comment by John Crosbie and Roland Martin on the Equalization ruckus.

Following is the text, with Bond Papers notes inserted between square brackets.


Atlantic Accord: A deal is a deal, Mr. Harper

The people of Nova Scotia and Newfoundland are neither greedy mice who gobble up cheese, as some, including this newspaper, would have you believe, nor do we, as some federal politicians have accused us, simply want to have our cake and eat it too. What we want is for Ottawa to honour the 2005 Canada-Nova Scotia and Canada-Newfoundland agreements on offshore revenues.

A recent Globe and Mail editorial stated that the current quarrel over equalization formulae "may be reduced to half a dozen simple words: 'as it exists at the time.' " We submit that the key words in the Feb. 14, 2005, agreements are: "The government of Canada intends to provide additional offset payments to the province in respect of offshore-related equalization reductions, effectively allowing it to retain the benefits of 100 per cent of its offshore resource revenues."

"As it exists at that time" is intended to clarify that the 100 per cent of benefits will be obtained by Nova Scotia and Newfoundland no matter what changes are made to the federal equalization program in the future. That is because these two bilateral agreements are economic development arrangements, no different in principle than Ontario's various federal-provincial auto-pact programs, Ottawa's recent multi-hundred-million-dollar funding of Quebec's aerospace industry or B.C.'s "Pacific Gateway" economic opportunity, all of which contribute to building a stronger and more prosperous Canada.

Don't forget that in the 1950s and 1960s, Alberta received both equalization and its oil and gas revenues until its economy had sufficiently developed. [Bond Papers: Actually Alberta received Equalization from 1957, when the program was created, until 1962. While technically correct - 1957 and 1962 are respective in the 1950s and 1960s - the Crosbie/Martin presentation is misleading. See, for example, Thomas Courchene, "A short history of Equalization".]

It might also be helpful to remind the news media, politicians, bureaucrats and the general public that in October, 2004, while the negotiations on the future of the original 1985 and 1986 accords were in progress, Paul Martin's government introduced significant short-term changes to the equalization program and signalled it would appoint an expert commission to study equalization and to recommend a long-term strategy. The commission's report is what the current Conservative government has adopted and is proudly praising.

It would be hard to imagine that in the middle of these fundamental fiscal policy actions by the federal government, Nova Scotia Premier John Hamm and Newfoundland Premier Danny Williams and all of their ministers and advisers would agree to enter into the February, 2005, Offshore Agreement and not insist that any deal protect their provinces against future changes in the equalization program, changes that might cancel out the benefits of these bilateral economic agreements.

[Bond Papers: While it might be hard to imagine, the phrase noted by the Globe editorial and debated by Crosbie and Martin is at the heart of the dispute. The key point not noted by Crosbie and Martin is that the 2005 agreement can be met in full and the Equalization program "as it exists at the time" by simply removing the cap unilaterally applied to the 2005 agreement(s). The federal government can reduce Equalization payments in keeping with the program as it exists, while honouring in full the 2005 agreement.

Federal officials apparently referred to a conundrum in an exchange with Wade Locke on this issue. The conundrum would come from differentiating between qualifying for Equalization and what payment was actually received.

One potential solution would be to consider the phrase in the agreement describing the additional offset mechanism as referring to the amount to which the province would receive without a cap being applied. This would limit the amount of Equalization actually paid to zero in some years but allow the offset to continue to function. This may all now be a moot point since the provincial government will no longer qualify for any Equalization payment at all by 2010-2012.]

It should be remembered that in, in October, 2004, former finance minister Ralph Goodale caused those negotiations to collapse when he proposed in writing that any new offshore revenue agreement include a "fiscal cap" that limited Nova Scotia and Newfoundland to the fiscal capacity of Ontario. Surely all Canadians remember the reaction to Mr. Goodale's proposal, including the emotionally charged lowering of the Canadian flag in St. John's. Then Mr. Martin, with the enthusiastic support of then-opposition leader Stephen Harper, wisely withdrew the concept of a "fiscal cap," and shortly thereafter the three parties agreed to the 2005 Offshore Agreement and related federal legislation.

[Bond Papers: Martin and Crosbie's characterization of the situation in 2004 is essentially bunk. The negotiations did not collapse in October 2004. In fact, they continued until December 22, 2004. The Premier decided on the disastrous flag tactic at that point, but restored Canadian flags once polling confirmed the strength of opinion against the move from across the country. In the subsequent January 2005 agreement, many of the provisions of the October agreement remained, even in slightly amended form. The only point removed was the fiscal capacity cap.]

Those who tell us that Newfoundland and Nova Scotia should stop complaining that the new deal contains a fiscal cap demonstrate a profound lack of understanding for the history of the 1985 Canada-Newfoundland Atlantic Accord and the 1986 Canada-Nova Scotia Offshore Petroleum Resources Accord. Worse, they mislead Canadians by implying the provinces are greedy and want to continue getting equalization once they reach the national average fiscal capacity.

[Bond Papers: This is a remarkable statement given that Crosbie has claimed as recently as last week that the intention in 1985 was to allow Newfoundland and Labrador to receive oil and gas revenues in full and Equalization in full, as if the oil and gas revenues did not exist.

Crosbie now appears to have abandoned that point in light of the historical record, as well as a rebuke from his former cabinet colleague on another aspect of the 1985 Atlantic Accord.

Martin has also previously made claims about the 1985 Accord which do not stand up to scrutiny.]

Quite the contrary. The 2005 offshore agreements do not get renewed in 2011-12 if either province is no longer receiving equalization.

Newfoundland's equalization payments have already declined from a peak of $1.2-billion in 1999-2000 to a forecasted $477-million in 2007-2008. Recent studies estimate it may no longer get equalization by 2009-2010.

The 1985 and 1986 accords were meant to make the two provinces "principal beneficiaries" of their offshore resources. Until the 2005 offshore agreements, the federal government was the principal beneficiary. That recognition of provincial benefit was the battle Dr. Hamm and Mr. Williams fought and won. If these agreements are not fully honoured, Nova Scotia and Newfoundland, and, in fact, all of Canada, will have been done a great injustice.

[Bond Papers: Once again, Crosbie and Martin enter the realm of historical fiction. While it is true the agreements are intended to make the provinces the principal beneficiary of offshore resources, the agreements themselves contain no definition of the term. Contextual and contemporary evidence suggests that principal beneficiary was intended to mean the right to set and collect revenues as if the resources were on land, the right to manage the resources jointly with the federal government and to establish local benefits provisions in any development agreements. See, for example, "Which is to be master?".

Mr. crosbie position on Equalization entitlements and offshore oil and gas revenues has also changed considerably since he was a federal cabinet minister. in 1990, Crosbie dismissed provincial concerns about the so-called clawback of oil revenues through Equalization with these words: "I'm getting a little tired of them trying to have their cake and throwing it up too. They can't do both." Consider the delightful contrast with Crosbie and martin's next sentence.]

We are neither mice, nor greedy cake-eaters. We are proud Canadians.

We just want the opportunity to utilize our natural resources to become self-sufficient. We will resist any attempts to prevent this from occurring.

_______________

John Crosbie, a St. John's lawyer, and Roland Martin, a Nova Scotia business executive, have advised Nova Scotia and Newfoundland on their offshore accords.

Talking about maybe talking about Hebron

The lines of communication are open once again between the Government of Newfoundland and Labrador and the Hebron partners.

The National Post and others reported it earlier today.

CBC News and the Telegram reported Premier Danny Williams comments early Tuesday to the annual NOIA oil and gas conference in St. John's.

Negotiations have not restarted.

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Dan Leger's truth telling

From the Chronicle Herald, Dan Leger's column.

An interesting perspective and generally and accurate summary of the major relevant points.

One point of disagreement:

Truth No. 5: The federal government can and it has unilaterally changed the Atlantic accord. It can also claw back Nova Scotia’s gas royalties and it can thumb its nose at our complaints. All these moves are perfectly legal and constitutional. The Atlantic accord is merely an "arrangement" signed by two fairly junior cabinet ministers.

First, Brian Mulroney and Brian Peckford don't qualify as junior cabinet ministers.

Second, the 1985 Atlantic Accord for Newfoundland and Labrador states specifically that neither party can amend the enabling legislation unilaterally. Maybe the Nova Scotia deal is different.

That's not my dog.

The feds can do what they want on Equalization, within the limits of politics.

When it comes to the terms of the actual agreements, they can't.

That is my dog.

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Bourque drives for Connies

Like this will come as a shock.

Pierre Bourque, who has been driving his Bourque website for the federal Conservatives for some time now, will also be piloting a stock car sponsored by the same political party in this season's Canadian NASCAR circuit.

At least, he's consistent.

Bourque finished 13th in a Father's Day race.

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Some early efforts to develop the Lower Churchill

From Jason Churchill's superlative summary of efforts to develop the Churchill River's hydroelectric potential, this extract on the federal government approach during the Mulroney administration:

Once in office, Mulroney’s pre-election sentiments about simple decency on this topic were not evident. His administration failed to take any measures to ensure Newfoundland and Labrador gained unrestricted access to the North American energy markets through Quebec territory. Mulroney Cabinet Minister John Crosbie has stated that there was no practical action which the Prime Minister could have taken. He said the history of the Conservative Party in Canada demonstrated the critical importance of a federal party protecting its electoral base in Quebec in order to retain majority governments. Newfoundland and Labrador’s requests for action had perpetually asked the federal government to take action which could have aggravated voters in Quebec, especially the nationalists. According to Crosbie, a national government could not retain a majority national government if it alienated a large bloc of critical voters in Quebec to appease a smaller group of voters in Newfoundland and Labrador.94

Churchill's paper should be required reading for those interested in gaining a basic understanding of the paper.

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Lament for a non-partisan editor

We all carry biases of one sort or another.

For some reason, people tend to expect reporters and editors to park as many of their biases - especially partisan ones - at the doorstep.

That's why it was so interesting to see a Telegram editor not only lament the demise of the old federal Progressive Conservative party, but to distort history on an apparently partisan basis.

The Liberals will likely rise again in Canada in the not-too-distant future, once the sponsorship scandal fades far enough into the background. A Liberal administration provides, if nothing else, a sort of comfort-zone governance while the country waits for a broader vision to come along.

But the national unity aspired to by the old Progressive Conservative party — even if it was only fleetingly achieved — is sorely missed.

Ah well, it only seems to fit, though. In the past, the same editor has criticized a Supreme Court judge who dealt with the law and the facts of a case, rather than delivered a decision that conformed to the editor's own misrepresentation of the province's oil and gas history.

Then earlier this year, the same editor presented the same - i.e. essentially partisan - interpretation of the current row with the Harper administration that graced the Telegram's pages on Sunday.

Too bad that in formulating his pro-Progressive Conservative editorials, Jackson paid attention to unbiased sources like Jason Churchill's history of efforts to develop the Churchill River's hydro-electric potential.

Then again, the myth of victimization - especially at the hands of "Liberal" bogeymen "is apparently just too comfortable a blankie for some people to dispose of.

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Fakes crash Calgary oil show

From the National Post:

The crowd at Calgary’s Gas and Oil Expo received candles apparently made from a deceased janitor who worked at ExxonMobil on Thursday. But before S.K. Wolff, who claimed to be an analyst from the National Petroleum Council, and Florian Osenberg, from ExxonMobil could make their keynote address at the luncheon, security officers forced them off the stage.

The anti-globalization jokers known as the Yes Men took the stage at Stampede Park to promote their book, as well as voice their disapproval of the industry.

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Euphonium Saturday!

Some youtube.com offerings of the glorious euphonium.

First is a tube/euphonium quartet from the American Second Infantry Division band playing an arrangement of Birdland. It cuts out aftef 2:44 but there's enough here to show what you can do.

Can ya dig it? I knew ya could.



On the other end of the spectrum in more ways than one, is a song by The Born Again Floozies: "I used to play euphonium".

Dig it, too or just dig the cymbal-playing tap dancer.

Then, from somewhere else entirely in the vast expanse of the twisted human psyche comes this piece:



To finish, there is this short clip of two guys playing the Mario Brothers theme, flowed another similar duet.

There's some kind of international thing going on with this.

From the police blotter

Some Friday night humour, courtesy of a google news search for the word "oil", comes via the police blotter published in the South Delta Leader.

There's a rash of outboard motor thefts, including this one:

June 8, 2 p.m., 100 block 66 Street: Complainant reported the theft of an outboard motor from the back of his boat that was parked on his driveway. The motor was secured by an anti-theft device that was also stolen. The outboard motor is a 2006, grey, Yamaha 8 hp valued at $3,500.

The only place where "oil"turned up was in this report:

June 12, 6:07 p.m., 4900 block Coleman Place: Complainant reported that an unknown suspect dumped oil on his front lawn. Nothing suspicious seen or heard in the area. The complainant also reported that this is the second such incident.

If the incident occurred in Ottawa at 24 Sussex, and the Lone Oil Skulker had his hair parted down the middle, we could probably come up with a suspect. For now we can just file this as bizarre. Right next to the string of outboard motor thefts.

And the stolen anti-theft device.

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NS Liberals should consider a condom campaign

As Nova Scotia descends further into a pile of political silliness, the provincial Liberals have started a button campaign.

The buttons, described as pins by CBC Nova Scotia, say "The Deal is The Deal".

Somehow, it seems that condoms might be more appropriate under the circumstances.

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Rodney grasps at straws

Grassroots stuff like petitions are best left to grassroots people, not Premiers.

This is just pathetic.

Nova Scotia is turning to the Internet to put some public pressure on Ottawa to settle a festering dispute over the federal budget.

Premier Rodney MacDonald said Friday he wants Nova Scotians and other Canadians to sign an electronic petition on the provincial government‘s website.

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Putting two and two together

One of the last pieces of legislation approved by the legislature was something called the Crown Liability Act.

Specifically, it holds the provincial government immune from any legal action resulting from the break-up of Fishery Products International.

The thing was introduced in the House on June 4 and passed through second reading, committee and third reading on June 11 and 12. There were two trivial amendments. The whole thing passed through the legislature with breath-taking speed.

The thing is, there really isn't much of substance available in the public record on the purpose of this bill. A portion of the Hansard - the bit from the night sitting - isn't available on line.

So, is it possible that the real purpose behind this bill, which opposition House leader Kelvin Parsons noted appeared to have been drafted in haste, was intended to head off any problems with Cooke Aquaculture?

The New Brunswick company announced last October that it was developing a major fish farming enterprise in southern Newfoundland. Part of the FPI sale approved this month included the sale of FPI's Fortune plant to Cooke.

Suddenly - less than 10 days later - Cooke is raising doubts about the sale.

Are the two things related?

We may never know.

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Government likes rubber stamp legislature

Deputy premier, fisheries minister and government house leader Tom Rideout is "extremely pleased with the quality and quantity of business that was achieved during this past session of the House of Assembly."

Let's take a look at the tale of the tape of accountability and transparency.

Of the 34 bills introduced in the current session, 27 were passed through second and third stages in a single day. That's 70% of the total.

Another six bills went through the detailed study stages in three days of debate or less.

Another bill was left on the order paper.

In some instances, such as the related bills on a new energy corporation, a hydro corporation and amendments to the Electrical Power Control Act, government distributed the bills publicly only a day before they were debated in the legislature. The EPCA changes weren't even disclosed publicly until the day before the legislature closed.

Neither the opposition nor the general public can be said to have had sufficient time to study any of these measures, let alone develop any idea of their implications. In the case of the energy bills, opposition members relied entirely on a canned government briefing for their remarks in the legislature during the hasty debate.

In the 2006/07 session, the House of Assembly dealt with 72 bills, 57 of which went through the supposed detailed study stage and received third reading approval within a single day. That's 79% of the total number of bills. Of the remainder, the majority were disposed of in less than a week.

One of the bills rammed through in 2006 were changes to the hydro corporation act that linked electricity prices to unregulated business activity. The revised bill introduced in the session just finished was touted as fixing the problem. In fact, the problem remains.

As a senior minister in any government, Tom Rideout should be proud. He was able to ram an amazing amount of legislation through the legislature without even the most cursory of discussion or public debate. As the senior minister in a government that supposedly supports accountability and transparency, he might be just a little chagrined.

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Living in a fog: one Connie offers his thoughts

Mainland Connies think the people of Atlantic Canada are, to quote the Wonderful Grand Band, living in a fog, living in a dreamworld.

Nonsense like this stuff from the ironically titled My Conservative Dreamworld should give a good idea of how much traction the provincial government's arguments have out past the Port au Port peninsula.

If the Premier can't get at the Conservative vote base, there's not much hope for his so-called ABC option. He doesn't need to convince Liberals and New Democrats that Stephen Harper is a bad idea; they didn't vote for him in the first place.

In passing, it is worth noting how little this form of institutionalized bribery actually benefited its instigators. The concession on ownership rights (by Mulroney) and on natural resource revenue clawbacks (by Paul Martin) did not produce quite the electoral harvest those two gentlemen were anticipating. This also has its own rationale: when voters have grown accustomed to welfare they view it as a right, and then why should they sell their votes for something that is rightfully theirs? The Atlantic Accords is therefore that rare political event that is worse than a corrupt vote-buying exercise - namely a failed, corrupt vote-buying exercise.

Some of these guys actually want to demolish the 1985 Atlantic Accord.

Think about it.

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Wait five minutes

Only a couple of days after dismissing legal action against the federal government as a waste of time, Premier Danny Williams is considering joining Saskatchewan in its case against the Harper administration on Equalization.

The Premier said he hadn't considered the idea of legal action, preferring to try the matter in the court of public opinion.

Meanwhile, McGill constitutional law professor Stephen Scott says there is a way to put the matter in front of the courts.

The fastest, most economical route through the legal system would be to start an action for a declaratory order to see if the agreement is legally binding.

Then Nova Scotia could use the power of reference that every province has in its statute books to send a set of detailed questions to the court of appeal.

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300 or all politics is local

How many times have provincial cabinet ministers or the Premier's parliamentary assistant claimed that the 2005 Equalization offsets deal put $300 million in the provincial treasury this year?

Lots of times? Too many times.

Paul Oram did it this morning speaking with Randy Simms on VOCM's Open Line.

But here's the thing: it isn't true.

The 2005 offshore deal has not added a single penny of new cash to the provincial coffers since 2005.

Here's why.

The 2005 Equalization offsets deal provided for two specific things that are relevant. First, there was an advance payment of $2.0 billion. Second, the clause covering that advance payment also provided:

Amounts calculated starting in 2004-05 under clauses 3 and 4 will not result in actual payments to the province until such time as their cumulative value exceeds $2.0 billion. [Emphasis added]

The cheque was received and applied against a portion of the unfunded pension liability in 2005.

Spent.

All that has occurred over the past four budgets (FY 2004 to FY 2007) is that the finance minister is accounting for the payment that the province is entitled to receive under the deal.

There's no new cash involved. That's because there won't be new cash until the full $2.0 billion has been accounted for annually. right now, the four year total (including the paper money cabinet minister talk about for this year) is $847 million. Simple calculation: another $1.153 billion will have to be drawn down before that deal actually generates new cash in the bank.

Take a look at any of the calculations done by Wade Locke and you will see pretty quickly that the 2005 deal will not generate any new cash before the deal expires. The provincial government will not qualify for Equalization under either system - fixed pot or 50% exclusion - long before the add-on benefits reach that figure of $1.153 billion.

In some respects, the ongoing racket over the so-called side deals is a bit overblown. The Atlantic Accord (1985) provided for temporary, declining Equalization offsets intended to cushion the provincial treasury against a sudden drop in transfers. The transitional cash was intended to support debt reduction and infrastructure development.

Improving the financial lot of Newfoundland and Labrador makes sense for the province and it makes eminent sense for the country. Temporary transfers from the federal government to Newfoundland and Labrador for a well-understood purpose, even if linked to the Equalization program, is backed by precedent and the focused nature of the transfers doesn't come close to destroying the fundamental fairness of the Equalization system.

Ontarian taxpayers, among others, can rest easy that they will not be funnelling cash into a gaping maw. The whole thing is set up as a limited program. Take a look at even the most recent assessment of the Equalization program and the offsets, and one thing becomes clear: Newfoundland and Labrador's economy will do so well in the next four years that the provincial government will become a so-called "have" province in short order. Ontarians, and others upset about the offsets arrangements should follow a simple rule: don't look at the theatrics continuously surrounding the 2005 agreements; look at the facts.

Even the 2005 deal is a temporary arrangement with triggers designed to shut the whole cash tap off when the provincial government becomes a "have" province. The final agreement - as opposed to the October draft - has a dual trigger to shut down the cash flow. The province must be meet two conditions to keep receiving offsets; the draft version had an "either/or" option that made it easier to extend the deal under any Equalization formula.

Politically, it would impossible for any federal government of any stripe to produce an Equalization program that ignored completely non-renewable resource revenues. It wasn't possible in 1962 when the object of attention was Alberta and it sure as heck isn't possible today when the focus is on Nova Scotia and Newfoundland and Labrador. Only the most fool-hardy of political parties or a party with no hope of actually forming a government would make a political promise that is politically untenable.

And in Newfoundland and Labrador? Well, aside from the people who voted Conservative on the basis of the Equalization promise - were there any? - few people are likely to organize a lynch mob for Conservatives now or in the future. Sure, there are plenty of provincial Progressive Conservatives who took the cue from the Premier and worked on Conservative campaigns. Realistically, though, Equalization wasn't likely a vote driver except for a very limited number of people.

Conservative candidates may face some heat next time and a year from now they may face a vengeful provincial premier, but realistically, they can rest easy knowing that a year is a long time in local politics. Things change. In 2004, Danny Williams rejected Harper's 100% exclusion option. A year later, Harper supposedly delivered the pyjama's for Danny's cat. A year after that, Harper is "untrustworthy" and his Conservative members of parliament are "traitors".

If nothing else, Conservatives have likely taken heart from the most recent regional poll. That's why they voted for the budget on third reading, despite the intense political pressure. Look at the whole picture: the only place when Connies are currently facing a real problem is Newfoundland and Labrador. The federal Conservatives likely are counting on Danny Williams' limited traction outside his own province and, given the available evidence, he doesn't seem to have much traction.

That's because his messages are aimed mainly at his own province. His communications plan ignores the attitudes toward his goals and his approach; it makes no effort to put the local issue in a context that genuinely counteracts perceptions. It does nothing to connect with his audience except, as in the case of teachers and students, with their instinctive, ideological opposition to the federal Conservatives.

Behind it all, though Danny Williams knows full well that his province is not hurting financially. In the worst case scenario, that is where he plays it smarts and opts to maximize the cash, federal transfers to Newfoundland and Labrador through Equalization and offsets will be $2.787 billion over the next four years.

The gap between that and the old Equalization system, according to APEC figures, is less than $300 million a year over that period and that amount will likely be generated in the economy anyway. The Premier knows there will be new investment in western Labrador through Consolidated Thompson. He can count on a couple of other major developments in the next five years or so and maybe, just maybe, there will be renewed interest in the offshore oil and gas industry.

Danny Williams is a smart guy and he is playing the whole Equalization racket very smartly. If he has learned one thing over the past three years it is that Danny Williams can make whatever claim he wants and people will react to it without thinking. That's the $300 million thing, for example. He knows he can create a firestorm of domestic political controversy that makes him look good and makes others look like, well, traitors. It reinforces his status as the only force in provincial politics and that's really the point of the whole exercise.

All politics is indeed very local.

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Why cabinet avoided a public inquiry

When judges have real powers they can upset carefully concocted sets of excuses.

Like say Chief Justice Derek Green's conclusions on the secret bonus money handed out to members of the House of Assembly, after the Accountability and transparency police came to office.

Bear in mind Green's terms of reference did not give his commission the powers of a public inquiry.

Yet he was still able to make this observation, as quoted in the Telegram:

MHAs contended the two events were unrelated.

The chief justice disagreed.

"If I were sitting in a court of law assessing, as sworn evidence, the information I have been presented with, I would not have too much difficulty in drawing the inference that the issue must have been present in the minds of at least some of the participants in the decision," he wrote.

That's judge-speak for "pull the other one, it's got bells on it."

Imagine what Green would have done if he'd put everyone he spoke to under oath.

Some politicians and their scripted supporters said the inquiry would take too long.

Like maybe a year?

Green took almost a year.

Pull the other one, indeed.

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SK court case to undermine NL and NS

Saskatchewan's court case over Equalization will tackle the issue of fundamental fairness in the system, according to Premier Lorne Calvert.

CBC News is reporting it this way:

Calvert said the legal action would not be over a broken campaign promise.

If a lawsuit was filed for every broken Conservative promise, there wouldn't be enough lawyers, he said.

Instead, he said, the suit would be based on the sections of the constitution that require the equalization program to be fair and equitable.

One possible route to that argument will undermine the offshore side deals from 2005 between the federal government and Nova Scotia and Newfoundland and Labrador.

Why?

Because those side deals are effectively a political work-around for the Equalization program. After all, if Saskatchewan's argument is based on fair and equitable treatment, the province that's been looking for an Accord-type exemption might just put that point on the table.

If Saskatchewan doesn't raise the issue directly, we might well see other provinces weigh in on the case. Bet your bottom dollar that those other provinces - already fried about the deals - will bring it up as an example of a fundamental inequity in the federal government's approach to Equalization.

Ask Ed Stelmach if his province might seek standing on this one. His province has had its non-renewable revenues clawed back, to use that idiotic phrase, for 45 years. Why would it be equitable, from Alberta's perspective to treat that province differently from the others?

-srbp-

Offal News round up

Some choice posts from another local blog:

1. A post on the First Law of Petropolitics, a reprint of a column from the Globe on the implications in Canada.

2. "Jobs out east", a look at the local supply and service sector for the oil industry.

3. Energy transportation issues.

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Andrew Coyne on the Equalization racket

From the National Post:

It is not true, then, to say that the Accord has been violated. It is true that Mr. Harper played Atlantic Canadians for suckers. At least he is paying the price.

Well, suckers is a strong word. Appropriate but strong.

And it's not fair to lump all Atlantic Canadians into one lot.

Only some people were suckered, and the ones who are angriest now are the ones who were fooled.

-srbp-

APEC assessment of Budget 2007 and Equalization

From the Atlantic Provinces Economic Council:

June 13, 2007

APEC releases study on the Equalization Options of Budget 2007 for the Atlantic Provinces

APEC is today releasing a new report on the implications of the proposed changes to the Equalization program for the four Atlantic provinces. The report entitled Assessing the Equalization Options of Budget 2007 for the Atlantic Provinces has been prepared by Professor Paul Hobson of Acadia University and Professor Wade Locke of Memorial University, both Senior Policy Advisors of APEC.

Following on the recommendations of the Expert Panel on Equalization, the new Equalization program includes the re-establishment of a ten province standard, simplified measures of fiscal capacity and a more predictable and stable payment system that is formula driven. The new program also reverses a pre-election commitment to exclude natural resource revenues, and includes 50% of these revenues.

The study provides estimates of the revenue flows to the four provinces under the current program (Fixed Framework) and the new Equalization program for each fiscal year from 2007-2008 to 2019-2020, the year in which the Nova Scotia and Newfoundland and Labrador Offshore Accords expire. These simulations utilize publicly available data projected forward, based on certain key assumptions. In particular, it is assumed that the aggregate of the fiscal equalization payments under the Fixed Framework will grow at an annual rate of 3.5% (as currently specified by legislation) and that non-oil and gas fiscal capacities for all provinces grow at an annual rate of 1.4% (the aggregate rate of growth of per-capita fiscal capacity in Canada over the last ten years). In addition, the simulations take into account changes to the Fiscal Arrangements Act, and to Offshore Accord legislation as detailed in the Budget Implementation Act (Bill C-52).

The Atlantic Accord, signed in 1985, and the Canada-Nova Scotia Offshore Petroleum Resources Accord, signed in 1986, gave Newfoundland and Labrador and Nova Scotia, respectively, the right to collect royalties and to levy taxes on offshore operations as if the resources were on provincial land. In addition, the Accords provide Equalization offset provisions to compensate for potential reductions in Equalization payments as these additional revenues come on stream. The 2005 Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act provided for additional Equalization offset payments to Nova Scotia and Newfoundland and Labrador to ensure that each province would receive 100 percent of the benefit of its offshore revenues. That is, offset payments would ensure no claw back of offshore revenues through Equalization.

The summary revenue implications for each of the four Atlantic provinces are provided in the table below. Nova Scotia, New Brunswick and Prince Edward Island are better off financially under the new Equalization program for two years and thereafter are disadvantaged by the revised Equalization program. Newfoundland and Labrador is immediately worse off under the new program.

Specifically, the impacts on the provincial treasuries are:

o Nova Scotia - $159 million increase in revenues for the first two years under the new Equalization program, and reduced revenues in each year thereafter compared with the Fixed Framework: in aggregate, the province receives $1.4 billion less under the new Equalization program than under the Fixed Framework;
o New Brunswick - $68 million increase in revenues for the first two years under the new Equalization program, and reduced revenues in each year thereafter compared with the Fixed Framework: in aggregate, the province receives $1.1 billion less under the new Equalization program than under the Fixed Framework;
o Prince Edward Island - $7 million increase in revenues for the first two years under the new Equalization program, and reduced revenues in each year thereafter compared with the Fixed Framework: in aggregate, the province receives $196 million less under the new Equalization program than under the Fixed Framework;
o Newfoundland and Labrador - $654 million reduction in revenues for the first two years under the new Equalization program, an increase of $22 million in the third year, and reduced revenues in each year thereafter compared with the Fixed Framework: in aggregate, the province receives $1.4 billion less under the new Equalization program than under the Fixed Framework. It should be noted that Newfoundland and Labrador will no longer be a recipient of Equalization after 2008-2009, under both the Fixed Framework and the new Equalization program. [Emphasis added]

Beyond 2007-2008, both Nova Scotia and Newfoundland and Labrador can choose to permanently opt into the new Equalization program or remain under the Fixed Framework. The results clearly indicate that both provinces should remain under the Fixed Framework. Since other provinces were not offered this choice, this would result in an unprecedented situation in which two distinct Equalization programs are operating simultaneously, a situation which is not likely to be sustainable.

Furthermore, Equalization payments under the new program are constrained by a fiscal capacity cap. For purposes of the cap, fiscal capacity is measured, on a per-capita basis, as the sum of non-resource fiscal capacity, one hundred percent resource fiscal capacity, (pre-cap) Equalization entitlements and payments under the Accord legislation (applicable only to Nova Scotia and Newfoundland and Labrador). Total fiscal capacity of a receiving province cannot rise above that of the lowest non-receiving province. Should it do so, Equalization payments are to be reduced accordingly.

The Budget Implementation Bill contains significant changes to the 1985 Atlantic Accord, and to the 2005 Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act, necessitated by the introduction of the new Equalization program. The protection provided by the Accords is undermined by any Equalization reductions caused by the fiscal capacity cap, since any reductions amount to claw backs of Accord payments. In the authors’ view, this violates both the letter and the spirit of the Accords. [Emphasis added]

****************************
The Atlantic Provinces Economic Council is an independent, non-profit research and public policy organization that seeks to advance the economic development of the Atlantic region.

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Williams big on Harper promise...in 2006

From the archives, a couple of stories containing Danny Williams' fulsome praise for the newly elected Harper administration.

Did the Premier actually claim he never trusted the guy?

Williams sees new allies in Ottawa
CBC News

Premier Danny Williams says a new Conservative government in Ottawa is nothing to fear – and could deliver on long-standing issues involving the federal government.

"I think Atlantic Canadians are going to be very pleasantly surprised and pleased with the performance of Mr. Harper," said Williams.

While Williams embraced Harper's response to a letter he sent to the major party leaders on issues pertinent to Newfoundland and Labrador, he refrained from actively campaigning for the Conservatives in the election.

Instead, Williams planted a sign supporting Conservative candidate Norm Doyle outside his residence, and used cautious language during the campaign.

During the campaign, Williams also applauded a response from NDP leader Jack Layton to the same list of questions, while being cool to the response from Liberal leader Paul Martin.

Williams also denied a rift between himself and the new MP for Avalon, Fabian Manning.

Manning was booted from the provincial Progressive Conservative caucus last May, after Manning spoke out against the provincial government's controversial raw materials sharing plan for the crab industry.

Williams said the dispute was "a caucus issue" and applauded Manning's victory.

"In all fairness to Fabian, I wouldn't take anything from Fabian's victory tonight. It was expected," said Williams, who noted a number of the members of the provincial Tory caucus campaigned for Manning.

In fact, Williams suggested that the Atlantic Accord dispute – in which he launched salvo after salvo against the Martin Liberals in a campaign to wrest more financial benefits from the offshore oil industry – helped Manning take the seat.

"That was John Efford's former district. The Atlantic Accord played a big role in that particular district, as it has played a role in the entire province," Williams said.

Efford, who won the Avalon race in 2004 with almost 60 per cent of the vote, became a lightning rod for anger when he rebuked Williams in the early days of the Atlantic Accord fuss.

"We basically had to drag Ottawa kicking and screaming to come with the Accord deal … I think it played a significant factor."

Efford announced his retirement in November, citing his lengthy battle with diabetes.

Williams, meanwhile, said he looks forward to a productive relationship with Harper.

"It's a delicate job [and] it's a difficult job to manage the relationship between the premiers and the prime minister of the country. However, I think it will be a refreshing change," Williams said.

He said he expects Harper to follow through on pledges involving the fishery, energy issues and the "fiscal imbalance" in Atlantic Canada.


Provincial Politicians Weigh In on Election - Jan 24, 2006
VOCM

Premier Danny Williams says he was a little surprised at last night federal election results. Williams says he thought Stephen Harper's Conservatives would get a larger minority than they did. He's also surprised that Atlantic Canada did not go a little stronger towards the Conservatives. Overall though he is generally pleased with the
result. He says the biggest issue facing the province is the fishery.

Williams says he did give some consideration to calling a by-election in Placentia-St. Mary's today, but he says this wouldn't be fair to party workers having just come off a federal election which saw Fabian Manning win John Efford's old seat. The by-election will be held soon.

Opposition Leader Gerry Reid says Paul Martin has made the right decision to step down as Liberal leader. Following his defeat last night, Martin announced he will leave the post after an orderly transition of power. Reid says Martin realizes that he can't lead the party to another victory. Reid says he believes Brian Tobin would be a good choice and Canadians would accept him.

Provincial NDP leader Jack Harris says given the calibre of local NDP candidates he's very disappointed the Province hasn't sent an NDP member to Ottawa. As for the Conservative minority victory, Harris told VOCM Open Line the federal NDP will have a strong voice in the House of Commons.

How times change.

-srbp-

A spotter's guide to plants and other political flora

That would be labradore, which ha staken lately to tracking the appearances of the various planted and scripted supporters of the current provincial governing administration.

labradore's wjm has also been known to tackle the factually dubious comments of individuals, including reporters on subjects of interest to the province. Odds are he's right and the quibbles he raises are only sometimes trivial.

If David Cochrane actually claimed - as wjm says - that Danny Williams was neutral in the last federal election, then Cochrane would have to be officially classed as out-to-lunch. Progressive Conservative members of legislature would not have dared campaign openly for Connie candidates if Danny Williams himself disapproved.

Danny Williams himself would not have actually invented commitments from Stephen Harper if he was not actively involved in the federal election campaign.

If a claim is made, odds are that wjm will challenge it. Incidentally, CTV's Bob Fife is a fact checker's nightmare, but oddly wjm hasn't set his sites on that guy yet.

But to return to the main story, wjm is especially adept at spotting the numerous planted callers organized by the premier's office to spread the official partisan position of the moment on the issue of the moment. He's named most of them who call regularly. He's noted their odd habit lately of stating that "it's not like they get told what to say from the premier's office", or words to that effect.

Kinda like saying "It's not about Danny" two or three times on a subject that pretty much is all about Danny.

Roger Grime's is quoted in news media? A raft of callers will turn up saying "I don't know how he can gave the gall to stick him head up...".

Like dandelions after a good rain, they will pop up all saying exactly the same thing. People who don't normally call will suddenly be spouting obscure references to something that happened in the House of Assembly during a late-night sitting (not broadcast) in 1993.

Really odd stuff that even politcal junkies like your humble e-scribbler long ago forgot. But someone claiming to be a house-frau from Humber will be able to cite chapter and verse from a cabinet meeting minutes.

or they'll just repeat Standard Anti-Grimes Position Number 6. it's like they are little japanese soldiers deserted on some island, destined to carry out their last order unti, they pass out or are killed by a falling cocoanut.

And that's what some of it is like. A Marx Brothers movie.

Bizarre stuff, really, but it gets on the air. Most often at VOCM, but increasingly the planted callers - Progrsssive Conservative and Liberal - are turning up at CBC. Easy know there's an election coming up in October: the bulls**t is already so deep you need something by bodyglove to get through it without getting an infection

So if you want a convenient spotter's guide to the politcal flaura and fauna of Newfoundland and Labrador, check out WJM's labradore.

Here's a question to start your search through the local political jungle: what newspaper columnist, author and former Tory candidate actually claimed that in 1949 the Newfoundland government gave away all its resources and received a miserable allowance in return?

Hint: a collection of her greatest calls to Open Line will likely be titled: The other Gin and Tonic Gardener.

-srbp-

Don't blame me!

I didn't vote for 'em.

In fact, Bond Papers raised some fairly consistent questions about the Harperites and some of the claims on their own political effectiveness made by one of the cabinet ministers soon to be efforded.

Now Dr. Bondolo may have been wrong about how short some people's memories were, but the Equalization forecast and how other provinces viewed the offshore deals? Bang on!

Oddly enough and despite all the public evidence that problems were looming on the federal political horizon, others did encourage Newfoundlanders and Labradorians to vote for Stephen Harper's merry band of reverse leprechauns.

Like this one, or for that matter the Big One.

Frankly, the people in Newfoundland and Labrador most-pissed by the Harper administration right now are those who voted for them, encouraged others to vote for them or invented bizarre political theories to promote the Harper cause only to find out that the theories were nonsense.

They should be ticked off.

They were caught flat by the Connie performance and these former Harper supporters ignored solid evidence in order to make their pitches.

For example, Premier Danny Williams says he is astonished at Norm Doyle's behaviour. Had he read Bond Papers, then he'd have seen an account of Doyle's voting history in the Commons. There's nothing in it that suggests he will buck the party line. Had the Premier read Bond, he would have seen all along the numerous questions with the Conservatives' positions.

Heck, he might not have claimed there was a loan guarantee on the Lower Churchill from Harper when there obviously wasn't one.

Wishful thinking. Maybe Derek Green will put it in a report and then it will be accepted.

Because, ya know, it's not like these Harper Connies haven't said one thing and then done another right in front of our eyes.

Like say on custodial management, something they abandoned during the campaign.

Or "federal presence" which Loyola Hearn abandoned a couple of days after polling day.

So while you are wondering what will happen next in the Equalization racket, just ask yourself a simple question:

For all the concern about public safety offshore and in the air raised by Connies and their provincial cousins in the last federal election, is there any marine or aviation forecasting being done at Gander?

Ya might just want to think about that next time someone suggests who you should vote for.

-srbp-

Public policy on the fly

Does anyone else wonder if Kathy Dunderdale and her colleagues are making this stuff up as they go along?

One of things likely contained in the changes to the Electrical Power Control Act will be the correction to this problem, hopefully.

All of this just fixes the mess created last year with a hastily drafted piece of legislation setting up the the Hydra Corporation in the first place.

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A meaningless gesture

And an entirely pointless debate.

Under amendments to the FPI Act passed last year - in just a single day - the power to break up the once-proud Newfoundland based company and sell the assets to a grab bag of local and international companies was passed to the cabinet.

Cabinet has exercised its powers; that's why the deal has been announced already.

The old FPI legislation can be scrapped without any worries.

It's just too late to do anything about the sale of the company.

The Opposition gave up their right to deal with this issue last year. They can't moan about it now or accuse the cabinet of doing something improper.

-srbp-

Where's John?

The Atlantic Accord negotiating team photo.

That's the real Atlantic Accord signed in 1985.

Where's John Crosbie?

Draw the obvious conclusion.

-srbp-

Harper team fragmenting

Loyola Hearn is clearly out of touch.

Now on top of that ctv.ca is reporting that Jim Flaherty's infamous weekend letter was originally supposed to be signed by Peter MacKay, DDS.

MacKay refused.

Insiders say that Sandra Buckler, the prime minister's communications director, instructed MacKay to sign the letter, which rejected any side deals with Nova Scotia.

-srbp-

Housing trends, St. John's 1992-2007

Courtesy of the Dominion statistician, a chart showing average house prices and new house starts in St. John's, from 1992 to 2007.

Housing starts began an upward climb in early 2001 and peaked in early to mid 2004.

-srbp-

Take it to the bank!

Danny Williams, from 2003:

Our voice in Ottawa must be strong and passionate, however it must also be rational and levelheaded. Only then will we be effective in achieving for this Province the rights and benefits we have earned and deserve. My government will work cooperatively and collaboratively with our federal counterparts. In so doing, we will develop a mutual respect with the federal government, which in my experience is the key to successful and productive relationships.

Stephen Harper, from 2006:

It is my hope as Prime Minister to initiate a new style of open federalism which would involve working more closely and collaboratively with the provinces and the Council of the Federation to develop Canada’s economic and social union, to clarify appropriate federal and provincial responsibilities, and to resolve the fiscal imbalance between the federal and provincial-territorial governments...

We believe that a new equalization formula should exclude non-renewable resource revenues for all provinces, but also that no province should be adversely affected during the transition to any new equalization formula. We look forward to hearing the suggestions of the expert-panel review currently underway on the equalization formula, and to working collaboratively with the provinces and territories to develop a renewed equalization formula that is fair and acceptable to all provinces and territories.

Jim Flaherty, from March 2007:

"Now we can get over the bickering and now the federal government can concentrate on our constitutional responsibilities."

Stephen Harper, May 2007:

"If we cannot continue with this agreement ... we will have to address it ourselves in the courts."

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Pat Carney joins the fray

From the Chronicle Herald, a letter from Senator Pat Carney.

It seems that Bond Papers isn't the only one questioning John Crosbie's grip on the facts of the 1985 Atlantic Accord:

In Stephen Maher's June 6 story, "Crosbie pushed PM to honour offshore deals," it says John Crosbie was "instrumental in negotiating the l980s deals under which the Conservatives under Brian Mulroney ceded control of offshore petroleum to Nova Scotia and Newfoundland."

In fact, and despite claims to the contrary, John Crosbie was never involved in the offshore negotiations with either province in the l980s. That task was assigned by prime minister Brian Mulroney to me, on the grounds that a Western MP and minister with an energy background would bring more balance to an issue which involved intense regional as well as national implications.

Mr. Mulroney was still leader of the Opposition when he signed the original principles of the Atlantic accord with then premier Brian Peckford on June 14, 1984, three months before the Conservatives won the federal election. The completion of negotiations, led by me, was a priority of his government.

There would be no Atlantic accords without the Conservative government of Mr. Mulroney. The primary objective was to treat the provinces with offshore resources on the same basis as provinces like Alberta with land-based resources, in the interest of national unity. That object has been accomplished.

The actions of Mr. Crosbie in attacking the Atlantic accord provisions in the Harper budget show Mr. Mulroney's concerns were valid.

Pat Carney, PC,
Senator for British Columbia

-srbp-

A dispute that divides familes

Gerald Keddy, Harper Conservative member of parliament, married to...

Judy Streatch, one of Rodney MacDonald's cabinet ministers.

Now that situation has to be uncomfortable, but word on Monday is that Keddy is wavering in his support for Harper over Equalization changes.

Makes sense.

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Harper to Rodney and Danny: Bite me!

Now this could get really interesting if the Stephen Harper administration actually refers the current Equalization spat to the courts for an opinion on whether or not his administration is violating the Atlantic offshore revenue deals.

Harper might have an argument on the 2005 deals.

On the 1985 one?

Pretty much black letter.

Under s. 60 of the 1985 memorandum of understanding neither party can change the enabling legislation without mutual consent.

The Harperites might try a legal argument based on some provisions of the constitution, but that's just a possibility.

The Prime Minister would have to send the thing to court first. Of course, there's nothing to stop the provincial government from sending the thing to the courts either.

Somewhere along the line someone must have surely uttered the words "constitutional crisis the likes of which we haven't seen in this country for decades".

That's basically what the Prime Minister is threatening, and all because he made a terribly poor political judgment.

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Harper's impact on Connie support

To get a sense of how deep the federal Conservative slide has been in the past three months take a look at the chart.

It tracks Progressive Conservative or Conservative party support in Newfoundland and Labrador at each federal general election since Confederation (1949). The last number is the latest CRA poll.

Local Conservatives can thank Stephen Harper for bringing them to the lowest point in their party's history and for doing so with what appears to be the sharpest decline in support for any federal party in Newfoundland and Labrador history.

That takes real political skill.

-srbp-

A lamentable trend

God bless his heart, but on Friday Bill Rowe - unabashed cheerleader for a series of provincial governments of a certain approach - questioned the idea that the legislation to implement Chief Justice Derek Green's excellent report on legislators' indemnities should proceed through the House of Assembly without delay.

He wondered why this legislation should not be debated and discussed for some considerable period. Rowe recalled the good old days when legislation was tabled early in the session, thereby giving the public and members of the opposition time to review the implications of proposed legislation.

Rowe is generally right of course, but not about this particular bill. Green's report came with its own enabling legislation attached as an appendix. The report itself is as thorough and detailed as any report presented to government has been. The issue has been widely discussed and the various pernicious practices in the legislature over the past decade have been well exposed. The remedy is pretty clear too: Green's legislation would stop legislators from doing the things that most of us would generally consider inappropriate.

The whole thing is cut and dried.

On the other hand, Rowe does not appear to have any trouble with other pieces of legislation sailing through the House with only cursory debate even though they carry serious implications for the province.

• Take for example, changes to the Hydro Corporation Act that, as a consequence of of its provisions hooked electricity rates to activities by the Crown-owned utility not related to electricity generation or distribution. Given first reading (but not distributed) on March 22, 2006. Distributed on May 18, pushed through second reading the same day and given third reading and approved on May 23.
  

• Or a series of changes to the provincial court judges pension act and related legislation. Run through all three stages in a single day last spring.
  

• Or a bill to establish regional health authorities that flew through the House the day before the judges bill, and like the judges bill having been read a first time only a week beforehand.
  

• Or changes to the Fishery Products International Act that actually made it easier to break up the company and sell it off than the legislation originally provided. First reading 18 may, second reading 23 May, committee stage and third reading on May 26.
  

• Or the energy corporation act and the revised hydro corporation bill, introduced in the session. First reading (but not distributed) on May 29 and then pushed through the House on June 4 and 5, along with the Sustainable Development Act.

• Or the bill to repeal the FPI Act that was introduced at the start of the session but only distributed after the deal was announced publicly. That bill will also be pushed through in a few hours of debate in all likelihood.

The trend here is not a new one, nor does it reflect one political party or another or even one individual legislator or another.

It dates back the better part of a decade and reflects, as much as anything else, an attitude that the legislature is an inconvenience or that public disclosure and public debate are undesirable on most pieces of legislation.

There are a great many routine pieces of legislation that come to the legislature and many that can indeed be passes with a minimum of debate. The list above does not contain any of those, since even the changes to the judges pension plan change eligibility for pensions. Those carry financial implications for the public treasury if nothing else.

The FPI and Hydro bills each contain very significant provisions which were missed - in their entirety - by the opposition and were never commented on by the government. In the case of the Hydro bills, the government didn't comment on them until this year when another new piece of legislation was rammed through the House unopposed. Perhaps the basic flaws in the first bill would have been caught if Government wasn't intent on ramming ill-considered changes through and the Opposition was not anxious to go along for the ride. Perhaps the same flaw would not have been continued in the second bill if anyone was focused on the job of being a legislator.

This trend to limit debate - and limit public access to bills before debate even begins - coincides with the steady reduction in the number of sitting days in the legislature. Before 1996, members of the House of Assembly sat in the legislature for three months of the year. They put in long hours in various committees and in debating bills. Most worked very hard for their pay.

These two trends - fewer days and little or no debate - means that the public are being ill-served by what Brian Tobin used to refer to - somewhat ironically it seems - as "the people's House". Fundamentally, the same attitude appears to be taken taken to the fundamental business of the legislature that was taken to administrative business, as Chief Justice Green noted. Lip service is being paid to accountability and transparency, but the reality is that far too often over the past decade, significant measures have slipped through the House of Assembly as if they were covered in API 70 oil from Garden Hill.

It is far too easy to forget that the legislature exists to keep the government accountable to the residents of the province. It is fundamental in our system of democracy that any power sought by any government must be subjected to scrutiny by the elected representatives of the common citizens. That is the essence of responsible government.

There are greater implications to the House of Assembly scandal than how the members handled public cash for the House administration, as grave as that issue is.

The trends over the past decade go to the very heart of how our elected representatives view their role and responsibilities in our must fundamental of democratic institutions.

In this election year, perhaps Newfoundlanders and Labradorians should insist on a discussion of how our democracy runs. We should look to alter fundamentally the relationship between voters and those we entrust with the responsibility of looking after the affairs of our province.

Rather than listen to pledges that one side will be "Putting People First" or that another will be "Getting Our Fair Share", we should start from the most basic point: these men and women want to be tenants in our House of Assembly.

The crew that have been there over the past decade, generally speaking, haven't been living up to the terms of their historic lease. The place is run down and needs some serious attention.

As their landlords, let us see how they - individually and collectively - propose to run the place for the next four years. Let's see how they propose to restore the proper functioning of our democratic institutions.

If they merely offer the same approach as we have seen for the past 10 years, then perhaps we need to issue some eviction notices or, in other cases, not lease out the seat in the first place.

Either way, it is time for the landlords to assert their rights.

-srbp-

Crown Liability Act?

So why exactly has the Government of Newfoundland and Labrador introduced a specific piece of legislation that will prevent any legal action against the Crown in relation to the break-up of Fishery Products International?

The Crown Liability Act, 2007 provides that

"2. (1) An action or proceeding does not lie or shall not be instituted or continued against the Crown or a minister, employee or agent of the Crown based on a cause of action arising from, resulting from or incidental to the disposition of the assets, business and other undertakings of FPI Limited or Fishery Products International Limited.

(2) A cause of action against the Crown or a minister, employee or agent of the Crown arising from, resulting from or incidental to the disposition of the assets, business and other undertakings of FPI Limited or Fishery Products International Limited is extinguished.

and...

3. A person is not entitled to compensation or damages from the Crown or a minister, employee or agent of the Crown arising from, resulting from or incidental to the disposition of the assets, business and other undertakings of FPI Limited or Fishery Products International Limited.

-srbp-

The Pitcher Plants are in full bloom

labradore makes some observations on comments found at vocm.com.

Yes, it's spring (almost summer), in an election year, and suddenly the orchestrated political comments - known as astroturf, or Pitcher Plants in their local variety - come popping up everywhere.

Chief Justice Derek Green's report may change some of the things Danny Williams inherited from Brian Tobin, but it seems the Premier is still addicted to Tobin's greatest political legacy: the organized support calls to VOCM and the manipulation of its public forum "Question of the Day."

-srbp-

Shooting one's own foot off

Telegram columnist Brian Jones does a fine job of shooting his own argument out of the water in a column today.

Offal News tears it apart nicely.

-srbp-

Jim Flaherty: myth monger

Federal finance leprechaun Jim Flaherty is just as much a myth monger on the Altantic Accord (1985) and even the 2005 side deal as his predecessor, John Crosbie.

Flaherty writes in the Chronicle Herald:

Let me be clear, Canada’s New Government is honouring the Atlantic accords fully in its budget.

If this were true, Flaherty would not need to amend the 1985 Accord, in his budget bill, thereby violating section 60 of the 1985 agreement.

Since he is applying a capto the 1985 and 2005 agreements, he is also not honouring either the letter or spirit of either agreement.

For him to claim otherwise is to state something which is incorrect, and in truth, Flaherty ought to know that what he is stating is patently false.

Perhaps he has been listening too much to Crosbie.

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The disingenuous Mr. Crosbie

John Crosbie has waded into the current budget and Equalization row with the federal government.

He builds his claim on the contention that it was the intention of the Government of Canada in 1985 - when he was the Newfoundland and Labrador regional minister - to ensure that under the real Atlantic Accord the Government of Newfoundland and Labrador would receive 100% of oil and gas revenues as well as Equalization in full as if the oil revenues did not exist. He appears to be saying that it was the intention to have this situation continue in perpetuity.

Mr. Crosbie is either:

1. Extremely forgetful;

2. Deliberately misleading the people of Canada and in particular, the people of Newfoundland and Labrador; or,

3. Attempting to blame others for his own failures in 1985.

Either way, the 1985 Atlantic Accord makes no such provision as Mr. Crosbie claims.

Indeed in 1990, Mr. Crosbie himself specifically dismissed the issue - with characteristic sneering condescension - as being a case of the provincial government attempting to bite the hand that fed the province.

Mr. Crosbie's efforts at historic revisionism make Stalinist photo retouchers look like kindergarten finger painters.

Following is an extract from an unpublished follow-on paper to Which is to be master?

Additionally, specific sections of the Mulroney offer, and of the Atlantic Accord, deal with Equalization. It is important to note that these are not included in the section on revenue sharing in either document. Therefore, Equalization was not seen by either parties to the Atlantic Accord as representing a form of revenue to be shared among the parties. The Mulroney letter contains the sentence: “The Current [sic] Equalization provisions will apply.” This clearly established that the Atlantic Accord and any revenues related to offshore oil would be subject to the Equalization program; as such, the provincial government’s Equalization entitlement would normally be reduced by growth in offshore oil revenue.

The Mulroney offer contained a caveat that there should not be a dollar-for-dollar loss of Equalization payments as provincial own-source revenues increased from oil production. As such the Atlantic Accord contains a section to provide a payment to the Government of Newfoundland and Labrador in the form of an Equalization offset. It is clear from the structure of this section of the Accord and of the enabling legislation that the Government of Canada and the Government of Newfoundland and Labrador accepted this offset as a temporary, transitional and declining offset.

The offset mechanism established in the original Atlantic Accord did not provide the level of Equalization protection implied in Mulroney’s letter, although it matched in general outline the declining format he proposed in June 1984. The offset provisions of the Atlantic Accord, as signed in 1985, had the effect of shielding only three cents of every dollar in oil revenue from Equalization.

This was apparent by 1989-90 and was raised publicly by the Wells administration following the signing of the Hibernia agreement. In a speech in Clarenville, Premier Clyde Wells countered arguments that Hibernia was a massive make-work scheme by pointing to the direct and indirect benefits accruing to the Government of Canada. One of those benefits was reduced federal transfer payments to Newfoundland and Labrador. John Crosbie dismissed complaints about reduced transfer payments in this way:

"That’s the whole point to the [Equalization] formula… This is nothing to complain about; this is something to be joyous about. So why would they try to pretend that Newfoundland gains nothing from the royalties? I mean this is absolutely bloody nonsense…".*

The Wells administration had been briefed on this aspect of the Accord prior to the Hibernia signing and a further brief was sent to cabinet in December 1990 ; it is likely the shortcomings of the federal proposal were known in 1985.

In a 1991 assessment conducted for the Institute of Social and Economic Research at Memorial University, economist Wade Locke confirmed that the Accord offset actually shielded as little as 3% of provincial revenues from Equalization. Locke had earlier cautioned against public expectation that Hibernia development would cure the province’s unemployment or debt problems. In an article published in the Newfoundland Quarterly, Locke concluded that "[w]hile it may be true that the sun will shine one day, it does not appear that have not will be no more because of Hibernia." Similar cautionary flags had been raised by Doug House and others, as early as the environmental review of Hibernia in 1983.

Whatever the reasons for Mr. Crosbie's claims about federal (i.e. his intentions) in the 1985 Atlantic Accord, there is no question that what he claims today is simply not true.

His own words condemn him.

-srbp-

* Philip Lee, “Newfoundland, Ottawa clash over Atlantic Accord royalty provisions”, The Sunday Express (St. John’s), 23 September 2004, p. 14 [continued from page 1 under head: “Almost ‘dollar-for-dollar’ loss will leave province no better off, Gibbons claims”.

Latest shocker: Connies poll numbers drop

Another poll from Corporate Research Associates shows the the federal Tories have dropped nine percent in voter support across the Atlantic region, standing at 30% regionally compared to 39% in CRA's last post.

The Connie satisfaction rating in Newfoundland and Labrador stands at 17%, compared with 47% in February.

Is this really a surprise to anyone?

Regional results have a margin of error of plus or minus 2.5%, 19 times out of 20. The provincial results have an MoE of plus or minus 4.9%.

-srbp-