Cluck. Cluck. Moo.

The chickens are coming home to roost.

The cows are coming home,too.

Early on Wednesday morning government and union officials are expressing surprise at the layoff of 50 workers at Hibernia.

They shouldn't be.

They've known it was coming since Kathy Dunderdale - on Danny Williams' orders - cancelled Hibernia South.  She did so on the flimsiest of flimsy excuses, not the least of which was acknowledging that she and her officials had failed in their duty to gather information until it was way too late. The subsequent exchange of correspondence with the offshore regulatory board showed Dunderdale's arguments were weak, if not downright phony.

You see, with Hibernia South, the drilling program at the province's first offshore field was pretty much done.  Whatever was left could be handled by one of the two drill derricks on the platform.  The Hibernia Management and Development Company knew it.  Provincial government officials should have known - but that can't be assumed given past admissions of obvious things missed.  Everyone else knew it because it's in the documents filed at the offshore board over the past two decades ago and long since a public document.

Had the provincial government closed the deal on Hibernia South development, we wouldn't be seeing these layoffs.  We also would be seeing the increased capital expenditure over the next two years that would help offset the downturn in the economy, until Hebron construction cuts in.

And that's what Wade Locke said a year ago and what he's repeated just this week in the Chronicle Herald.

Here's what he said in February 2007, right on the heels of Dunderdale's offshore blunder;

With all four fields being developed to their potential, provincial revenue from the oil and gas sector would peak at $1.4 billion in 2012, generate more than $1.0 billion to the provincial treasury for another 12 years [beyond that] and yield in excess of $500 million per year for at least another eight years. ...

However, at this point the following caveat is important to bear in mind: these tremendous impacts may never be realized. They are contingent on Hibernia South and the Hebron project proceeding. If these developments do not proceed, then the revenue from the oil and gas industry will fall from $23 billion to $9 billion. In other words, while enhanced prosperity is within our grasp, there is a real risk it may not be realized. Furthermore, this risk is directly affected by decisions that are within the control of the Government of Newfoundland and Labrador. [Emphasis added]

And here's what he said just this week in discussing this province becoming a "have' one in 2009;

But all of this is based on the assumption that further oil projects at South Hibernia and Hebron move ahead after being stalled in negotiations between oil companies and the Newfoundland and Labrador government.

"Right now, it’s important to get an agreement on South Hibernia," said Mr. Locke.

"This is important for continuity of revenue flow to government and the industry while waiting for Hebron to get started. South Hibernia is worth in excess of $20 billion alone. I find it hard to believe that two parties can’t come to an agreement on how to share $20 billion, . . . but I’m sure it will happen and I base my calculations on that."

That's not happening, however.

Hebron still isn't signed.  There's no official explanation but Danny Williams has tried to suggest the oil companies are slow in their approvals process.

There might be another contributing factor:  Danny doesn't have the cash to meet the financial commitments, that is without driving the province in debt. 

Anybody wonder why Danny didn't just up and pay for all those needed hospital renovations this week? 

Forget that for three budget cycles during which ministers did nothing about it.  Why didn't the premier do what he usually does in these cases:  whip out the chequebook and make the boo boo go away?

Well, for one thing the provincial government is looking at a period of flat-lined or decreasing revenues. If oil prices drop this year, as expected, there'll be a drop.  If the US economy slows down, there'll be a drop.

At the same time, Williams and his colleagues have busily built up expectations and swollen public spending as if the boom of the past couple of years could go on forever.  They seemed to believe their own publicity that indeed with the second coming of the mortal saviour, everything was different, that somehow, all the problems the province was facing were due to sheer incompetence of everyone who went before.

They've also faced increased expenses due to a growing economy.  Ask anyone who has tried to due house repairs.  Costs have gone up.  Fuel prices are up and the costs of materials is up.  And all those construction workers who'd be in the housing industry waiting for Hebron which was about to start two years ago until Danny canned it?  Well, they've hightailed it to Alberta too. Altogether capital costs have shot up.  It's unavoidable in the economic climate the provincial government has created through its offshore decisions.

Except they thought they were different.

And all those polls did was reinforce that sense of arrogance.

And pride.

But pride doesn't meet the bills.

At the same time as forecast lowered revenues and demands on the public treasury that exceed the revenues, there's an obvious tussle within the administration about finances.  That debt clock Tom Marshall is carrying around is aimed squarely at anyone in his own cabinet who might want to spend hundreds of millions, perhaps by borrowing.  Borrowing increases the debt and increasing the debt is not good for a whole bunch of reasons.

Danny Williams is throwing token cash at the hospitals scandal because he doesn't have any more.  he's facing an unalterable cash commitment at White Rose.  The acquisition cost is significantly higher than forecast.  So is the provincial share of capital costs because the capital costs are higher.

And Hebron?  Well, every day the deal isn't signed and oil prices stay high, the acquisition cost is considerably higher than the $110 originally forecast.  Every day the deal isn't signed the capital cost commitments go up just a that much more and those are capital expenditures that can't be avoided.

It's not like a hospital, which you own and control and which doesn't have sprinklers.  With the hospital you can plan to spend 414 million on all hospitals even though the ones in St. John's alone need $70 million in critical repairs.  And then when the secret reports get leaked accidentally, you boost the $14 to $20 million but it's still tokenism because you can make those decisions.

But Hebron?  There are timelines to be met.  Hard and fast timelines. There's nasty partners who expect you to pay your bills on time, especially considering the unholy grief you put them through for your tiny piece of the action with no management rights.

Danny Williams has cash enough to meet expenses, he just doesn't have enough cash to meet the things that need to be done and to meet the other obligations he's built up over the past three years but that don't really need to be done. 

At the same time, delays in offshore projects are producing results  - real, undeniable results - that were known and predicted at the time projects were cancelled or needlessly delayed.  Go back and look at what's been written here:  you'll find it all.

It doesn't take a rocket scientist to figure out what's going on.

The entire freakin' barnyard is headed back to the barn.

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No case for crowing

When voter turnout drops to a mere 41% from the already abysmal 44.7%, there's no reason for any news story to write about increasing a share of popular vote. 

This link happens to be to a CBC story; undoubtedly other media will take up the same general approach.

Why wouldn't they?  it's standard political reporting, and to make it worse they can quote political scientists who speak in terms of a stunning victory.

Yet, not a single one seems the least bit curious as to why 60% of the electorate stayed home.

That's a pretty significant question especially given this description of Alberta:

Driven by the booming oilsands, the province is grappling with major growth pressures, including a lack of affordable housing and aging infrastructure, as well as balancing environmental concerns with the massive oilsands developments.

Ed Stelmach won.

But 60% of Albertans didn't vote, let alone vote for him.

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ABC Comedy Central

Somehow, the Premier likely never thought his great political theatre called "Anybody but Conservative" would degenerate quite so quickly into absurdity.

One day it looked destined to be the next West Wing.  Next day it's Three's Company without the sophisticated humour.

ABC meets the comedy channel.

What else can you call it?

First there's Not too much to ask starring the former environment minister, backed by a guy who got his professional acting start in tourism commercials.  Clyde Jackman keeps going after the federal government for not ponying up money for Cupids. 

But, as it turns out, the executive director of the Cupers Cove Foundation packed it in last August after he was getting no where with either the feds and the province in the request for $12 million.

But that's not the funny bit.

Peter Mackenzie was really peeved when the provincial government told the foundation they needed to lower their expectations for provincial cash.  Jackman's department tossed $2.0 million on the table against a $12 million "ask", to use the cabinet vernacular these days.

Then Jackman's department went to the feds demanding $7.0 million. Jackman points to Quebec City which got $110 million in federal funding.

But as regular readers already know,  that province tossed in 50% of the cost.  All Jackman and his predecessor, current intergovernmental affairs minister Tom Hedderson, would do was cough up $6 million over three years ($2.0 million per year, not in total) and the federal cash would have flowed like water.

Those zany ministers are at it again, folks. Every episode you can hear one or the other say:  "is it too much to ask?"  And from off camera comes the small voice:  "Apparently, it was for you."

Then there's 5 Wing.  It was supposed to be an action/adventure hour but turned into endless comedy.

Labrador Affairs minister John Hickey likes to issue news releases that lambaste the Harper Conservatives currently running the country for ignoring a base that is crucial for protecting Canada's northern sovereignty. Only last month he was claiming that the woods around Goose Bay were ideal training areas since they could simulate any terrain in the world.  But of course both those releases were just a reaction to federal stories.

The comedy here, aside from the really obvious?  Hickey campaigned to put Harper in office in the last federal by-election and the Labrador by-election.

In very short order, Danny Williams went from having a political impact to running a comedy/variety show.

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"Petty, mean and intimidating"

And those are words from a guy who likes Danny.

Now admittedly, the guy hadn't seen NTV news on Friday night or seen the Telegram coverage, so he was only commenting on Paul Oram's version of the attack on Lorraine Michael.

So when the opposition does its job the Government, or at least one of its ministers throws out the threat of not supporting providing the money needed to offer opposition. I have to say it was not a classy move on Oram’s part. Petty, mean and intimidating. The Premier should put him on a leash.

R'uh R'oh.

'Cause here's where the whole thing started:

“Lorraine Michael is out calling on us to do this and do that, and saying she’ll be annoyed with government if we don’t get this done,” the premier told The Telegram late Friday.

“By way of interest, you should know this — Lorraine Michael now has a request in to the management committee (at the House of Assembly) for a raise. So here is the champion of the people out there, who’s calling on the government to do this and do that, and now, after all the heat over MHA salaries … has come back and looked for a special raise as leader of the New Democratic Party.”

That's gotta hurt something, especially when the piece goes back to the standard government Blackberry line right at the end, even if the excuse of blaming it all on Harper contradicts everything that preceded it:

That said the stepping stone, the $10 Billion carrot dangled in front of us and than cruelly yanked away by Ottawa would repair a lot of hospitals, roads, bridges, schools, sewers, water supplies and allow us to pay down our debt while we are in a positive cash flow position. Spending all of our surpluses to catch up on generations of under funding is going to leave us more reliant on the federal government when our non-renewable resources are depleted than we ever were.

You see, the provincial government has had growing income of its own for the past four years.  The surpluses are not the growth:  they are a sign of how massive the growth has been. They are also a clue has to how the provincial government's spending has grown over the same time period.  There's been more money spent in the past three years than at any time in the province's history ever. Newfoundland and Labrador spends more per capita on government operations than every provincial government in Canada except for Alberta.

And on top of that growth in budgeted spending, the cash surpluses (the money left over on annual operating budgets at the end of the year), have totalled almost $2.0 billion in 2005, 2006 and 2007 combined.

Yes, the cash coming in the door on top of what was forecast has actually been as much as the entire one-shot transfer from Ottawa's coffers in 2005.

So even with all the growth in public spending and with all the surpluses piling up, the provincial government still opted not to repair critical health care infrastructure, even though it clearly had the cash.

Randy Simms made Paul Oram look foolish because Simms wasn't talking about  "[s]pending all our surpluses."  He was talking about budgeting.  And he wasn't talking about chronic under-funding:  that suggests the prior governments had the cash but opted not to spend it.

Dead wrong, and even wronger  - if that's possible - considering that those words came from a former executive assistant to a cabinet minister.  As he should know, until now the provincial government often had to face a drop in revenues every year.  Often, provincial governments didn't have money to meet existing needs and normal inflation.  Having a windfall of almost a billion dollars was unthinkable and having such a bonus on top of huge growth in revenue anyway was the stuff of wild fantasy.  "Underfunded" only works if you understand the word means "didn't have the cash to do things with in the first place."

But that's not what he meant, clearly.

Nope, trotting out the "promise" myth is just like the attack on Lorraine Michael;  it's just a subtle version of the same kind of distraction.  The provincial government doesn't want a discussion in public of spending priorities based on accurate information.  Open, informed public discussion  - like a sitting legislature - gets in the way of government doing whatever it wishes.

What the "promise" fable returned to in that post is actually what Paul Oram was trying to do:  make excuses for why government did what it did.  Oram went on at length trying to explain why there were more demands on government cash than there was cash.

Yada, yada, yada.

Yeah and if Harper...

The attack on Michael is a scurrilous personal attack, but the goal remains the same.

It's all just a distraction.

Pretty fast update:

Well, your humble e-scribbler and two others pointed out the obvious, namely that the Premier actually started the attack.

The response?

Well the Premier needs a better attack dog because Oram never pulled it off very well.

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The ticking equity cost clock

Finance minister Tom Marshall likes his debt clock.  That's a little electronic thingy that ratchets up to show how much money is being spent servicing the public debt. 

It's good to mention the debt and to commit to a plan to pay down debt, but when debt servicing accounts for only 10% of your annual outlay, it's a bit disingenuous - there's that word again - to talk about debt like it was the biggest problem facing cabinet.

But it's funny in all the talk about money that the fin min doesn't talk about the escalating cost of starting up the provincial oil company.

He doesn't make a passing reference but doesn't note it as an escalating cost:

Marshall said about $350 million of that surplus will be spent on infrastructure. More than $100 million will be used to buy an interest in offshore oil developments.

The only equity outlay in the current fiscal year is for White Rose.  Hebron isn't done yet.  White Rose is actually ramping up.  Hebron 's final agreement  - and therefore the final costs - haven't been sorted out yet.

So "more than $100 million for White Rose" then.

When the project was announced initially, the actual cost of buying the 4.9% interest was pegged at $44 million.

That's it.

$44 million.

Marshall just told us that White Rose will now cost almost three times what we were told.

And before you get all excited, the so-called "handling fee" on every barrel of oil associated with the provincial shares doesn't get factored in there.

First of all, it's a fee that gets applied when the oil is pumped.

Second of all, even if we stupidly agreed to pay it in advance, that still only works to about another $38 million.  That still adds up to less than $100 million.

Third of all, the initial capital costs and operating cost shares also don't drive that number to "more than $100 million".  The first extension is set to cost around $600 million or so. take 5% of that and add it on.

In order to get the White Rose acquisition costs over $100 million we'd either have to pay every fee and charge up front, even before the work was done, or there's something else going on.

The something else might be in the discrepancy between the initial announcement of the deal and the final one.  In the first version, we were told the acquisition price of $44 million subject to "due diligence", reservoir verification and so on. In the second version - when the final agreement was done - the acquisition price mysteriously disappeared.

Gone.

Vanished.

Not discussed.

Maybe someone should ask the finance minister what exactly that equity cost actually is.  It sure doesn't look like what we were told first.

It might well be that every day the Hebron deal goes unsigned, the cost of the project is also escalating beyond what we were originally told.

-srbp-

How do you say "disingenuous"?

Try "Minister of Finance."

The provincial finance minister is on CBC bright and early Monday morning picking up a theme he started a week or so ago while on the road with his budget roadshow.

Seems that the provincial government is running into cost over-runs on its capital works budget.

Not surprising at all. Costs for building supplies, gasoline and so forth have all increased.

But Marshall talks about how the current surplus, of nearly a billion dollars, is being spent.

Marshall said about $350 million of that surplus [of $880 million] will be spent on infrastructure. More than $100 million will be used to buy an interest in offshore oil developments.

That's not really the whole story though.  Minister Marshall should note - as he has in the past - that the $350 million is actually not extra spending.  It's just replacing money the provincial government planned to borrow to do whatever capital works they had in the pipeline.  It's not that there's anything wrong with spending the cash instead of borrowing;  it's just a little misleading not to make it plain that, despite an unheard of surplus, no new infrastructure work is being done.

of course, the rising cost of infrastructure has nothing to do with why Mr. Marshall and his colleagues kept a report secret for three years that documented the sorry state of city hospitals.

Oh yes.  And why they did nothing about the report's contents, except hide them.

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When the going gets tough,

The losers get stupid.

Hilary Clinton's campaign is in trouble so her team produces a beautiful 30 second television spot.  It's just a tiny bit more sophisticated than the famous anti-Goldwater spot from the '64 campaign, but not by much.

Problem:  It's a great ad for John McCain. Someone who already knows the world's leaders, who knows the military and who has been tested before?  Yep a navy pilot who's been in combat, spent time in a North Vietnamese prison and who has been around the block more times than Monica's little blue dress.

Sometimes in politics, when the going gets tough, the losers get desperate or in this case stupid, which adds up to the same thing.

 

 

 

 

For good measure, here's the classic "Daisy" spot from the 1964 campaign. LBJ versus Goldwater.

When people talk about attack ads, this is the grandmother of them all.

But notice that it was aimed outward from LBJ, instead inward, as in the Hilary spot.

Nice concept.  Wrong client.

And even if it is suppose to be a pre-emptive strike, it's hardly good strategy to shoot yourself in the foot before someone else shoots you.

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Uppus datum:  Charles Cheeseman made some valid comments on this original posted and he linked to Obama's response spot. Incidentally, do yourself a big favour and go visit Charles own' blog.

The Obama response is another reason why Clinton's spot turned out to be a dud.

For starters, Obama got to take a simple line:  "It's judgment that matters."  But look at the spot and you'll see a bunch of other smart, simple things.  For example, it steals the opening visuals from Hilary.  Then it rams them down her throat by showing Obama with visuals and a voice over that talk of his security background.

Notice especially the reference to Obama working with Luger on arms control.

That would be Republican Senator Richard Luger from Indiana.  Security initiatives, apparently blessed by a stalwart Republican and all of this airing in a state where security and Republicans are big.  Heck, even Texas Democrats make Stephen Harper look like a wimp.

This spot really plays well to Obama's strengths.  Yes, he's a Democrat, but he appeals to moderate Republicans and Independents much like Clinton and other Southern Democrats have tended to do.

And if all that wasn't enough, the thing is done cheaply and quickly.  You gotta like that:  on time, on target and under budget.

Consider as well, that in the current polling Obama and Clinton are in a tight race among Texas Democrats.

The latest poll has Clinton ahead in Ohio, but tied with Obama in Texas. That pretty much runs the same in other recent polling.

Obama's spot might be a shade more effective because his message is simple and right in front of your face.

Clinton's is a bit too subtle. Add to that the data in the second poll link She already owns "experience" as a quality and experience was the second most important quality among those voters polled.

She gets her doors blown off by Obama as the "change" candidate, but on the issues question, they are tied. What Hilary needed in Texas  - if this polling is accurate -  was something demonstrate that she and the voters were speaking the same language on the same issues.

It's a fundamental strategic question:  where do you put your effort, since resources are always limited?  If Clinton needs to pick up votes, she's not going to get them by playing to a point she already dominates. Bear in mind that in that same polling, her identified supporters are pretty much solid in their choice.  Obama's aren't as solid. Once you hit a certain number - like 93% - it gets progressively harder and harder to win every additional point.

Solely from the standpoint of cost-effectiveness, it's more profitable to put energy somewhere else.  It's like running as a candidate for the Liberals or the New Democrats federally in St. John's.  The Tory vote is pretty much a solid block.  Play up your Tory credentials or sound like a Tory in the mistaken belief you need to be a Tory to win the seat and you are pretty much wasting your time.  More people vote against Tories federally than vote for 'em.  Tories usually win because the non-Tory vote is split.  There are way more votes to be had with far less effort and cost on the left than on the right.

Lots of candidates make those strategic errors.

let's see after the Texas primary whether Hilary chose wisely or not.

Bandaids, buck passing, a scurrilous personal attack and the possible breakdown of cabinet government

Despite posting record operating surpluses in each of the three years since it received reports on the needed repairs and life safety improvement province's hospitals, the Williams administration planned to increase spending on hospital repairs by just two million dollars in its upcoming budget. 

The plan was to spend $14 million instead of the $12 million budgeted in those three record surplus years.

That is until news broke this week of the problems.

Now, according to Premier Danny Williams , that $14 million will be increased to somewhere between $20 to $28 million. Williams said $14 million of that will go to the four sites in St. John's, including the provincial health centre at the Health Sciences Centre.

You can read about it on the front page of today's Telegram. Williams comments were also reported on NTV News on Friday evening.

Previously secret consultant's reports were released this week by the provincial health department after health minister Ross Wiseman inadvertently referred to them.  The assessments, completed in 2005 showed that four St. John's area health centres required $134 million in required repairs.  over half that amount - $70 million - was classified as currently or potentially critical.

The provincial allocation for St. John's amounts to just 20% of the amount identified as critical or potentially critical just three years ago.  In the meantime, the situations have deteriorated and the costs have increased.  According to CBC, which broke the hospital scandal earlier this week, the bill for St. John's hospitals could top $170 million if all work was done this year.

"It's growing faster than we can keep ahead of it," said Keith Bowden, director of infrastructure and support for Eastern Health, the regional authority that manages all hospitals and clinics in the city area, as well as the rest of eastern Newfoundland.

"I mean, we're not keeping ahead of the curve at all."

The reports on the St. John's hospitals were kept secret despite a written commitment from Williams in his 2003 campaign manual to release government-commissioned reports within 30 days of receipt and to have an action plan made public within 60 days to address the reports.

Reports on other hospitals in the province - so-called facilities reports - may also exist.

According to provincial finance department figures, the Williams administration posted a $524 million surplus on its operating budgets for 2005 (capital and current) and a $141 million surplus in 2006.  In 2007, the surplus is projected to be more than $880 million yet while the finance minister and the health minister knew of the hospitals problem, the surplus was redirected to other spending, including covering some of the costs of creating a government-owned oil and gas company.

In the Telegram, Williams defended his health minister saying that Wiseman didn't create the problems. 'We inherited this and we inherited a mess," Williams said.  While that's true Williams' administration also hasn't done anything to deal with the problem and obviously hadn't planned to do anything until the secret reports were uncovered by media inquiries.

For his part, Williams denied knowing anything about the reports. Given the Premier's penchant for nano-management, his claim seems odd but if we take him at his word - there's no reason not to - Williams has now pointed to a far more sinister problem within his administration. 

If Williams is correct, three successive ministers of health, including the man he just appointed to head the energy company's board of directors withheld crucial information from him and potentially other members of cabinet.

Williams claim suggests a fundamental breakdown in the operations of cabinet government in the province. Ministers cannot properly make crucial decisions, such as government spending, if details of major issues are hidden from them.  The secrecy cloak that apparently kept these reports from the public also applies within government too, if Williams' comments are accepted at face value.

Opposition parties were highly critical of the Williams' administration handling of the hospital scandal this week.

"This report has sat on the desk of three ministers," [Liberal health critic Roland] Butler said.

"Yes, the debt has to be looked after," said Butler, who said Health Minister Ross Wiseman should be lobbying Finance Minister Tom Marshall, "trying to find out if he can get the money to correct those serious issues, sooner rather than later."

New Democratic Party leader Lorraine Michael called on Williams to relieve Wiseman in light of his performance on a serious of scandals within the department.  In an interview with NTV news, Williams attacked Michael personally, claiming she was being hypocritical to criticize Wiseman when she herself had been looking for a raise from the House of Assembly management committee. 

There's no logical connection between the two issues, but the attack was a trademark Williams' personal smear.

Update:  CBC has other examples of repairs needed in hospitals around the province. Seems there are hospitals without sprinkler systems. 

CBC's Deanne Fleet reported on this in the Friday news cast.  Neither the fire commissioner nor municipal affairs minister Dave Denine were available Friday to take questions on the growing controversy.  Denine and health minister Ross Wiseman dropped the regulatory hammer on 22 personal care homes in the province just three weeks ago for not having sprinklers installed.

Operators, who had been warned of the sprinkler issue in 2003, were given just 30 days to install systems or get signed contracts for installation or face immediate closure.

You can likely figure out Fleet's questions to the fire commissioner and to Denine.

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Mon Dieu! Other places are experiencing demographic change?

From Macleans, a story on resettlement along the Lower North Shore.

Aylmer Sound is an isolated, anglophone community. The town's down to four residents and those four will soon be gone as the province cuts off services. The provincial government has offered financial incentives to get people to move to nearby communities.

There is no road into the town. As you will hear in this little slide show Martin Patriquin had to take a $1200 Air Labrador flight - yeah, that's right 12 hundred bucks - into a nearby town and then head overland.

Maybe you'd have better luck than your humble e-scribbler figuring out the fare on Air Labrador's website for an imaginary flight from St. John's to La Tabatiere, the nearest airport to Aylmer Sound.

Accept the start dates offered by the system which, presumably are dates the airline flies into the community and you get back a message saying there are no flights on those dates.

Air Labrador is owned by the Pike Group of companies, whose head offices are in St. John's.

-srbp-

Maybe better planning would have helped...

Celebrations to mark the founding of Cupids, the first English colony in what is now Canada, are expected to generate $15 million of economic activity in the celebration year, 2010.

That's it.

$15 million.

And the nationalist-sounding, go-it-alone provincial government is willing to contribute the amazing sum of $2.0 million to the celebrations.

Whoopeee.

Yeah, Whoppee-ding.

Now, it seems that an event as significant as the 400th anniversary of the first English colony would be a fairly big deal not just locally but nationally.  The fact it happens to fall in an Olympic year doesn't bode particularly well for Cupids being the top tourist attraction in Canada that year, but it might make out all right.

It might make out if the provincial government actually paid any attention to the project.  For starters there's the tiny sum they've thrown into the planning for it.  When you are pulling in $2.0 billion in oil and mineral revenues and running billion dollar surpluses, $2.0 million bucks just doesn't say "serious".

And bear in mind that's not $2.0 million over each of the next two years.

Nope.

That's $2.0 million, in total.

Doesn't sound very serious at all.

That's why it is getting tedious to listen to tourism minister Clyde Jackman rabbit on about how tremendously important these celebrations in Cupids are and why it is so important for the federal Conservative members of parliament to stand up for their province and wrestle federal funding for the whole thing.

It's tedious just writing a sentence that encapsulates the windy minister's windy complaint.

The whole thing would be a lot less tedious, though, if Jackman's boss would actually allow him to give some serious cash to match the serious level of whining coming from the provincial tourism minister.

And that's what it is:  whining.  That's all it is.

You see if the provincial government were that serious about Cupids, it would have tossed in more cash of its own up front. There'd have been great talk three years ago about the fantabulous festival in Cupids or some such.  We'd be Cupidsed to death just as we were cabotted in 1997 or impaled on Viking helmets another year.

And there'd have been cash.  Not two million in total, but two million a year to a maximum of eight or 10 or whatever the thing would cost. 

You see, Jackman made mention several times of the Quebec City celebrations marking the 400th anniversary of that city.  Jackman mentioned it in his talk radio calls today and in a news release that popped out late in the afternoon.  Jackman noted that the federal government had contributed $110 million to Quebec City but  - up to the time he spoke - the feds just hadn't come across with the seven million Danny had decided was the "ask" for Cupids.  Yeah, Jackman actually called it an "ask".

What Jackman didn't say is that the Quebec provincial government had ponied up $110 million of its own for the celebrations. They showed they were serious with hard currency.  They didn't look on the thing as a slip-and-fall injury settlement negotiation, complete with an "ask". The feds rose to the bait and put up their own cash to match, dollar for dollar.

Clyde Jackman can make as man calls to Bill Rowe as he wants.  He can send out as many "news" releases as he wants. The bottom is that if his boss was serious at all, he would have nodded to Clyde and let him spend provincial money on the Cupids celebrations. The feds would have followed suit.  Heck, a little bit of sweet talk and salesmanship might have stroked some more money from them in an election year.  Think about it.  If such a pathetic provincial outlay could generate $15 million, imagine what $14 million in total would do for the people of Cupids.

For some entirely unexplained reason, though, the provincial cabinet doesn't seem to want to spend any money on things like the Cupids celebrations or even on fixing up hospitals, for that matter.

Wonder where all the cash is going?

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Mr. Premier, what are you trying to hide?

IP Freely made have had a point last August.

Turns out the provincial cabinet had a whole bunch of things they were hiding, even more things than the stacks of files shown in this video.

Like studies on the physical condition of hospitals in the St. John's area.

Done in 2005 and kept secret for three years from a government that campaigned last fall on being accountable, transparent and open.

Here, for your Friday viewing pleasure is the old IP Freely video that asks an ever-appropriate question, asked, as the Gods of Irony decreed, by the Premier himself.

-srbp-

The wheels on the bus...

are square, not round.

That would be the bus of a government that just won a stunning election victory and yet now seems mired in mess after mess after mess.

The latest one - hospitals in desperate need of fixing up, a government report kept secret for two and a half years - is taken apart by the Telegram's editorial.

But after you've done with the editorial, take a look below to some of the comments.  One comes from a fellow who says he's a manger with Eastern Health.  He makes some interesting observations.

But the point is:  he's making them, publicly.

Not so very long ago, public servants were deathly afraid of saying anything that did not conform to the tone from the top.

Heck.  Public servants?  Try just about anyone alive in the province.  Who needed the phone calls at all hours of the day or night in which the person on the other end of the phone was able to recount in detail a private and supposedly privileged conversation among some tiny group or a board or what have you.  There were times you'd have sworn the confessionals at the Basilica were bugged or the local priest was doing his patriotic duty by ratting out a dissident to the secular saviour's disciples.

Not so any more.

The news media are being a bit less wary in their remarks.  The reporting is still solid and professional but there's less tolerance of bullshit.

Take for example, David Cochrane's comments on Here & Now's political panel.  He pretty much stated it, as it was, right down to the comment about Wiseman burping up the existence of the report.  Where Cochrane or Craig Westcott might have been the few to  make observations openly that reflected less than positively on the current administration, the sharp stories are coming much more often and from others.

Things seem to be changing.  It might just be temporary, but then again, there might be reasons why the administration seems remarkably unable to pull off the amateur poll goosing and pitcher planting of the old days.

That sounds like a topic for a weekend post.

-srbp-

The Junk Merchant speaks, again

Andy Wells finished up his day job as mayor today.  He's heading off to new digs and much bigger salary as the guy running the provincial utility regulator.

Meanwhile, Ivan Morgan, the reporter who loves jam jams thought he'd give Andy a call and ask his view on having John Noseworthy audit the offshore regulatory board.  That's the one an independent panel determined someone other than Wells was better qualified to run, based on merit criteria approved by both the federal and provincial governments.

So anyway, Morgan, who now prefers to take potshots at politicos in his news pieces than in his opinion column, got Andy's viewpoint now that Andy is leaving the board for the utilities crew.

Andy sees no problem with having Noseworthy go in and audit the board in every dimension.

Andy would hardly be expected to do anything to support the board, would he?

Or for that matter hold a consistent opinion in his head.

After all this is the guy who thought it a waste of tax dollars to shift provincial public servants from St. John's to the nether regions of the province.

But when the chance came to shift some federal public servants to this province, Wells was all over it as a phenomenal idea.  You see, wells hopped on that bandwagon since it gave him a chance to toe the provincial Tory line and, if it worked, maybe hook up a few more bucks for his city's coffers.

See you can't keep pouring ever more money into Mile One without getting it from somewhere and a few high paying federal jobs would help keep the Wells-Coombs Memorial Money Pit going for a while longer.

Anyway, says Andy, bring John Noseworthy on in and let him have a go at the offshore board.

But last year, Wells had a different tune, at least when it came to the idea of having Noseworthy rotting around in Andy's fiefdom at city hall.

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 there is already and external auditor.

Just like at the offshore board.

Makes you wonder if Wells had actually gotten the job at the offshore board, if Noseworthy would not have been told to piss off, in far less genteel a way than  "piss off". 

The guy who got the job Danny coveted for Andy never said Noseworthy couldn't come in and look the place over.

He just addressed the question, competently  - egad - consistently.

-srbp-

Is this the same announcement or more money?

MedicLink.

Money from the provincial government.

Same department that gave $675,000 to SAC Mfg.

Announcement on Monday.

Is it the same money - again - or new money?

-srbp-

The lowest common denominator

If you have spare change in your pocket, it is sometimes amusing to pick up that upstart weekly newspaper, The Independent.

Paul Daly's photography is worth way more than a twonie so even if the rest of the paper doesn't enlighten or edify or stir up anything else besides a yawn, you can always be sure you have helped keep employed one of the finest news shooters on the planet.

This week, Ivan Morgan eschews his package of jam jams to take issue with Richard Raleigh, the new columnist at the Business Post. Raleigh, you may recall is the local writer who publishes Serious Business, a blog on local politics. The Business Post you may recall is the local paper owned and published and everything-elsed by Craig Westcott.

Seems that Ivan Morgan has some issues. Well, issues in this case with Raleigh who criticizes the Premier or his administration from behind the cloak of a pseudonym. This is apparently not on in Morgan's world and Morgan uses all the high moralizing dudgeon he can recall from his days as a New Democrat to curse Raleigh for his sins.

None of this should come as a surprise.  The Indy is full of not just holier-than-thou but holiest-of-all public onanism when it comes to journalism and ethics.  Its radio ads on VOCM always draw attention to the fact the paper is locally owned, as if that actually has any positive impact on the quality of the stuff on the pages. [Hint:  it doesn't.]  Indy editor Ryan Cleary likes to slag off the province's major daily, The Telegram, mostly about its being owned by a mainland company which therefore means  - to those who think that way - that the Telly's content is negatively affected.  [Hint:  it isn't.]

To add to the moral outrage at the Indy, Raleigh had the temerity to put his stuff in the Business Post.  Westcott, you may recall, left the Indy suddenly after a very short stint.  While the story may not be widely known, the parting wasn't necessarily the friendliest of all.  it didn't sink to the way Hydro Queen departed, but there weren't a lot of kisses and hugs going around.

Morgan claims his columns are superior because as a journalist he doesn't slag people off in an opinion piece and then go and try to interview them on another subject for a news piece.  That isn't what Raleigh does incidentally.  That's what editor Westcott has been accused of by those who felt that his being blackballed by the Premier's Office was okay because Westcott slagged the Premier in his opinion pieces and then wanted to interview the Premier on other subjects.

As you may have gathered, the ethical pedestal onto which Morgan climbs exists entirely in his own imagination. Raleigh isn't Westcott, as near as anyone can determine. Raleigh only writes his opinion pieces online and now in print.

Now he does use a pseudonym and around these parts, the view has been that if you are going to make a stand, then you should have the courage to stand behind your convictions.

That said, Raleigh is an equal opportunity slagger, taking the piss out of a wide variety of public figures and even himself on occasion. He writes well and his observations are forcefully presented.

It's a bit hard to take Morgan's attack seriously, though. As he well knows, people who do write critical opinion pieces and use their own name are also slagged off by the Indy.  For several weeks running last year, Morgan's paper tried to smear four individuals with nothing more than a bit of venom and some old fashioned personal innuendo. They did so in the opinion spaces where the defamation laws apply a little more loosely than otherwise. In other cases, the paper has slagged people off in its news stories not in the opinion spaces but on the basis of a minimal amount of research and damned little context.

More often than not, and for all the claims to the contrary one is more likely to see an homage to backside of the Premier and his cause du jour in the Indy's editorial and opinion spaces than not.  There's really no surprise in that. After all, his world view aligns with the world view of the Indy's editor.

So go figure.

Criticize Danny from behind a cloak and you get told off.  Criticize Danny without the cloak and you get personal smear and innuendo or the little jabs of the type we see in Morgan's latest column.

It's not hard to find the lowest common denominator in all that.

Update:  In which Mr. Raleigh himself turns his guns on Comic Book Guy, in detail.

-srbp-

Public Policy Health Warning: virulent outbreak of Pinocchiosis Politica in NL

At least two provincial cabinet ministers have been stricken with advanced cases of pinocchiosis politica, a debilitating public policy disorder characterized by incredible or misleading statements, usually by politicians. 

Cabinet ministers are particularly susceptible to infection.

Ironically, health minister Ross Wiseman appears to have the most advanced case.

Wiseman, who has been parliamentary secretary to the health minister since 2003 and took on the ministerial job in 2007 called reporters on Wednesday to correct what he felt were media misstatements.

However, when Wiseman met with reporters in a scrum, he experienced a flare-up:

Asked by a reporter about problems at the Waterford, the minister referenced its “facility report.” He later backtracked, saying “there might be” such a report. But he declined comment on the Waterford situation, noting that he had not read it.

Wiseman later acknowledged Eastern Health had completed an evaluation of its facilities, including the Waterford.

The reports  - more than one - on all acute care facilities in St. John's, including the province's major health centre, were released later in the day. They chronicle $135 million in capital costs to address critical and potentially critical problems with the physical plant as well as a range of other problems and issues.

They were prepared in 2005 but kept secret until Wednesday.

Government thus far has not addressed the problems in the two year old report, beyond offering $500,000 to study the health infrastructure needs in the capital region.

In its 2007-08 budget submission to government, Eastern Health asked for $93 million to deal with critical or near-critical repairs.

The board received $3.6 million, according to [Keith] Bowden, [Eastern Health’s director of infrastructure support].

In December 2007, finance minister Tom Marshall announced the provincial budget would finish that fiscal year with a capital and current account surplus of more than $880 million,  In 2005 - the year the reports were received - the surplus on capital and current account was more than $500 million.

Marshall also appears to afflicted with pinocchiosis politica. On a radio call-in show Thursday, Marshall credited the Auditor General's annual report last year with bringing to his attention the provincial government's debt load and the need for a debt reduction program.

Marshall campaigned in 2003 on the public debt.  As a cabinet minister in 2003, he received a full briefing on the provincial government's financial state from government officials.  Along with the rest of cabinet, he received a detailed financial analysis by PriceWaterhouseCoopers.  Both included references to the high level of public debt.

In 2004, Marshall was part of a cabinet that implemented austerity measures based on the financial analysis it received from these two.

There is no known cure for pinocchiosis politica although the symptoms can be reduced through prolonged exposure of politicians to public scrutiny.  Sustained questioning in the legislature and elsewhere is the usual course of treatment. In extreme cases, treatment will require a public inquiry.

Effective treatment is often hampered by open resistance by the infected individuals to questions or to public inquiry .

Left untreated, pinocchiosis politica spreads and may result in public policy crises,  the destruction of individual political careers and ultimately in political defeat for the party with the greatest number of infected members.

Communities where legislatures are closed for extended periods are ripe for major outbreaks which infect not only cabinet ministers but government backbenchers, other politicians and senior public servants.

Long gaps between general elections and the opening of a legislature also present heightened risk for pinocchiosis politica infections. 

The presence of weak, ineffective or fawning news media promotes the development of the disorder and encourages its spread through the repetition of the incredible and/or misleading statements.

Update:  Several e-mails today shed new light on pinocchiosis politica.

As the correspondents noted, pinocchiosis politica is the general term for a family of disorders afflicting the political class.

Several specific local variants have been identified:

• Pinocchiosis rideoutis has been thus far been identified in only one case.  It is an unusual variant in which patients present with obvious confusion about time (today is today, but tomorrow is actually four months from now) and confusion about buildings (a house is referred to as an office), although they appear completely unaware that what they are saying is pure nonsense. P. rideoutis patients sometimes display a preference for unusual headwear, right.

 

• Pinocchiosis politica hickii seems to occur among politicians from northern climes. P. hickii presents as a belief by the patient that he or she has a signed agreement when in fact the agreements don't exist. P. hickii has also been known to manifest as a compulsion to submit expense claims over and over.
• Pinocchiosis stephenvillia manifests with the patient making promises he or she cannot fulfill.  It is named for the Town of Stephenville.  Residents of the town were promised by a campaigning party leader that the major local employer, a paper mill,  "would not close on my watch".  The mill closed. [See Williams Syndrome]
• Humber West Denial Virus, also known as Williams Syndrome, is characterized by the repeated used of certain words and phrases which have no real meaning or which have lost meaning through repeated use.  For example,  "Quite frankly", "nothing could be further from the truth", "you know" or "Steve".  Patients frequently display repetitive shrugs of the shoulders.  Often this physical action is accompanied by a persistent non-productive cough, particularly when in stressful situations such as when being questioned by reporters. While these are the common names for this manifestation, Williams Syndrome is in fact a variant of pinocchiosis known as P. willielmus.

-srbp-

The Williams Zone

You unlock this door with the Key of Confusion. Beyond it is another dimension - a dimension of sound, a dimension of fury, signifying nothing.  You're moving into a land of shadow, a world of obfuscation, where nothing is ever as it seems.  You've just crossed over into the Williams Zone.

Alright. 

The reports on the physical repairs and upgrades needed in four St. John's hospitals date back to 2005.

It took Ross Wiseman and his cabinet colleagues two years to get around to giving Eastern Health $500,000 to come up with a plan to figure out the future needs in the St. John's area for buildings.

In the meantime, the $135 million in capital repairs and upgrades didn't get done.

And there's no commitment from government that they will accept the recommendations - which aren't in yet apparently - when they finally come in.

Two years could easily become five or more by the time everything gets done that needs to be done.

By contrast, just three weeks ago Wiseman and his newbie cabinet colleague Dave Denine dropped the regulatory hammer on 22 personal care homes in the province for not installing sprinklers in their buildings despite having five years to do so.

Seems just a bit hypocritical given the government's own problems that they knew about at the time but the rest of us didn't.

Why didn't we know?

Because the open, accountable and transparent government never indicated they already had studies showing $135 million in deficiencies. 

They never said Word One about it at any time right up to last fall during the election when they promised to look at the hospital needs around St. John's as if it was a brand spanking new idea.

Little did we know they'd been diddling around for two years.

But this is not the first time the Premier and his cabinet have known something and didn't tell us.

Secret bonus payments in the House of Assembly, for example. 

That's just one example.

And ya know what's really galling?

It's not like saying 15 years ago when a government faced with a bill for $135 million could say, honestly and legitimately 'We don't have the money."

Nope.

In Fiscal Year 2005, Danny Williams' administration finished the fiscal year up with a surplus of over $500 million on their capital and current account.  They only reported a little over $130 million on an accrual basis, which means they tossed the cash surplus up against the total liabilities to make it shrink.

But they still finished up with $524 million in cash left over.

Yep.

That's almost four times the money needed to fix all the problems in those two linear feet of reports.

The ones they kept completely, totally secret.

While claiming to be open, transparent and accountable.

There was a chunky surplus in 2006, too.

And in 2007, the year they gave $500,000 for a study?

Well, that's the year where finance minister Tom Marshall forecast he will wind up with an extra $880 million at the end of the year he didn't expect.

Yep.

That's six and one half times the money need to fix up all the existing hospitals in St. John's.

So that maybe the Health Sciences Centre wouldn't need to close its day surgery because of leaks in the roof.

So what's Tom Marshall been doing all the while he knew he had all this cash and knew - or should have know - he had all these problems in St. John's hospitals?

He's been running around the province clicking his debt clock asking us what we wanted to spend "our" money on.

And all the while he knew something really, really really important that we didn't.

Hardly fair is it?

Hardly, accountable, open and transparent, is it?

Nope.

But it is what you get in the Williams Zone.

-srbp-

His reach exceeds his grasp

"...Why would they not want me to come in?”

Auditor General John Noseworthy, quoted in The Telegram and The Western Star

Auditor General John Noseworthy could find an answer by looking at his sorry record over the past two years.  it is littered with far too many examples of serious factual errors, misleading statements, unsubstantiated claims and a general disregard for the fundamental principles of natural justice.

Search Noseworthy on this site and one can find evidence of them all.

In the case of his recent bizarre effort to dig into the operations of the board regulating the province's offshore industry, Noseworthy offers an eloquent case against his ever being allowed to enter the building housing the board's offices let alone have him run amok in the filing system. Let us forget for a moment that Noseworthy himself does not consider the board to be an entity subject to his audits.

The province's auditor general, you see, is not interested in the board's financial state or its overall operations, areas he might be entitled to review. That is,  he is not interested in any of the usual functions of an auditor general.

Noseworthy wishes to appoint himself to govern the offshore:

“CNLOPB has some significant responsibilities, including safety, environmental, industrial benefits, resource management,” Noseworthy said in an interview.

“So I wanted to look at those areas — for example, are the companies providing a safe environment for workers offshore? Have they identified all hazards and implemented appropriate measures to reduce risk? Those sorts of things.”

If the Government of Canada and the Government of Newfoundland and Labrador had thought that an accountant was the right person to ensure public safety, enforce environmental regulations and industrial benefits and to manage the exploitation of oil and gas reservoirs, then they would have assigned those responsibilities to the auditor general.

They did not.

They did not do so in the original memorandum of understanding on joint management of the offshore.

They did not do so in either the federal statute giving legal force to the agreement nor in the provincial one doing likewise.

The democratically elected representatives of the people of Canada decided to establish a regulatory agency comprising experts in each of these fields and others to determine whether or not "the companies are providing a safe environment for workers offshore", for example.

The men and women of the offshore board have done a thorough and professional job of safeguarding the public interest since 1985.  They have done so recently despite the unwarranted and unsubstantiated attacks upon their professionalism and competence by the Premier and most recently by the slimy innuendo of the Auditor General. 

In his most recent, and perhaps most bizarre public comments, John Noseworthy wants to overrule Parliament and the House of Assembly.  The will of parliament be damned, it seems. Noseworthy wishes to appoint himself the sole arbiter of issues not only that proper authorities have already assigned legally and properly to people properly qualified to do them but also issues that Noseworthy demonstrably knows absolutely nothing about.

Such a flagrant disregard for the laws passed legitimately by the elected representatives of the people is sufficient cause to stop Noseworthy in his tracks in this instance.

Coupled with a number of other incidents over the past two years, the House of Assembly would also be justified in ordering a thorough investigation into the operations of Noseworthy's office.

Noseworthy's reach has long exceeded his grasp of the law, the constitution or due process.  As an ordinary citizen,His wild claims would be entertaining and entitle him to a seat on city council.    

In an Auditor General, this failing strikes at the core of Noseworthy's ability to perform the duties of the office he holds.  His antics threaten the legitimacy of an extremely important public office. 

in the public interest and for the public good, it is time to send the auditors into the Auditor General's office.

-srbp-

That would be so cool, if it wasn't going to hurt us

Ross Wiseman.

A cabinet minister whose career clock today started winding down.

Rapidly.

You can't screw up repeatedly, and in this case in such a laughable way, and expect to keep your job for very long.

Standing back a bit, one can almost hear the political staffers in government looking at Wiseman's cock-up and thinking of Ron Stoppable.

"That would be so cool if it wasn't going to hurt us."

Sitch Update:  Late this afternoon, Eastern Health started handing out reports on the physical condition of four acute care facilities in St. John's.

It wasn't just on the Waterford Hospital, as Wiseman's slip in the scrum might have suggested.

The reports take up about two feet of shelf space and come in four massive binders.

According to CBC News, the repairs would total upwards of $100 million.

So how long has government had the reports, one might wonder?

Sitch Update II:  Someone needs to let the comms people in the provincial government that when you have a scrum at 11:00 AM and the minister screws up really badly, it's not that good an idea to have him call Bill  Rowe in the afternoon pretending there's nothing wrong.

Hint:  The message track got changed in there when someone was photocopying the binders of reports the Minister wasn't sure existed or that he'd read so that you guys could release them.

And it's just incomprehensible to issue a news release at 5:00 PM which the minister rendered useless at 11:00 and 30 seconds.

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No access restriction: offshore board

The board regulating the province's offshore oil and gas industry hasn't restricted access to its financial records or other operational records.

The Canada-Newfoundland and Labrador Offshore Petroleum Board issued a statement late Tuesday which contradicted claims made earlier in the day by provincial auditor general John Noseworthy:

As a public agency, the Canada-Newfoundland and Labrador Offshore Petroleum Board has no objection to an audit and does not wish to restrict access. Our point is simply that, since the Board is a federal/provincial agency, any audit should be conducted jointly by the Auditors General of the Province and the Government of Canada.” It was also noted in the same letter that the Board is audited every year by an external auditor, and the results of that audit are in the public domain as part of our Annual Report. These Annual Reports are tabled in the House of Assembly of Newfoundland and Labrador, and the Parliament of Canada and are available on the Board’s website at www.cnlopb.nl.ca.

Noseworthy told news media today he wasn't interested as much in the board's financial operations but in the board's responsibilities to the Government of Canada and the Government of Newfoundland and Labrador for safety, industrial benefits and other areas.  His office has no in-house competence to review these areas. Noseworthy did not indicate how he proposed to evaluate areas beyond his professional competence as an accountant.

In his statements today, Noseworthy neglected to point out that his office has actually never considered the offshore board as an entity subject to audit by his office.

Noseworthy gave no explanation for his sudden change of opinion nor for his inexplicable interest in assessing issues beyond his professional competence.

Noseworthy apparently made no effort to contact federal auditor general Sheila Fraser, dismissing it as unnecessary. 

Instead, he filed a report making claims that are not substantiated by even a cursory examination of the facts of the matter.

-srbp-

NL AG hoist by petard of own misleading statements

Auditor General John Noseworthy is crying foul at supposedly being shut down in his efforts to audit the offshore regulatory board, not for financial issues but for safety, environmental and resource management issues.

Noseworthy issued a surprise report today.

Here are some quick observations:

1.   No statutory authority to audit offshore board. The AG website does not list the offshore board as being an entity subject to audit, even though Noseworthy now claims to have a legal opinion stating otherwise.

As such, Noseworthy's office has no legal right to demand access to the offshore board's operations. Neither the federal nor provincial enabling statutes for the Atlantic Accord (1985) give the provincial auditor general the right to audit the offshore board.

As further proof that Noseworthy himself does not consider the offshore board to fall under his jurisdiction, his 2007 report - issued three weeks ago - makes no mention of the offshore board and its financial statements for any year.

2.  AG fails to meet requirements of own legislation. 

Noseworthy cites supposed obligations under the Auditor General Act to report a failure by an entity subject to provincial audit to provide access to documents.  However, if Noseworthy's office doesn't believe the organization is subject to audit, he has no legal authority to conduct any review.

Beyond that, even if Noseworthy is right on his legal ability to audit the offshore board, he's failed completely in this case to demonstrate the requirements - set out in provincial law - necessary to conduct an audit of an entity whose financial statements are audited  - by law - by an external agency.

Under s. 14(3) of the Auditor General Act,

Where the auditor general is of the opinion that the information, explanation or document that is provided, made available or delivered to the auditor general by the auditor referred to in subsection (2) is insufficient to permit the auditor general to exercise his or her powers or duties under this Act, the auditor general may conduct or cause to be conducted an additional examination and investigation of the records and operations of the agency of the Crown or the Crown controlled corporation that the auditor general considers necessary.

By both federal and provincial legislation, the offshore board uses external auditors to produce its annual financial statements.

3.  AG ignores other entities under his jurisdiction In his 2007 report, Noseworthy noted that he had not received audited financial statements on four Crown corporations - Hydro's subsidiaries - for the year ended December 31, 2006. Aside from that mention, Noseworthy has not indicated publicly he has taken any action using his legal powers to deal with that problem.

To make it worse, this is not the first year Hydro's subsidiaries have failed to meet their legal requirements to provide audited statements to the AG. Noseworthy's website indicates that he has not received financial statements from the four corporations since February 2006:

Company                                                                 Year ending             Date rec'd

Churchill Falls (Labrador) Corporation Limited      31 December 2005    14 February 2006
Gull Island Power Company Limited                      31 December 2005      7 February 2006
Lower Churchill Development Corporation Ltd     31 December 2005       7 February 2006
Newfoundland and Labrador Hydro Electric Corp  31 December 2005 14 February 2006
Twin Falls Power Corporation Limited                   31 December 2005 7 February 2006

4.  Offshore board willing to have joint federal/provincial audit.  For all the posturing inherent in Noseworthy's public report, the offshore board still has refused to give the auditors access to the organizations financial and operational records.

In fact, Noseworthy's claim of being refused access is false:

This Report is submitted to the House of Assembly under the authority of Section 12(1) of
the Auditor General Act (the Act ) relating to the refusal of the Canada - Newfoundland and
Labrador Offshore Petroleum Board (CNLOPB) to provide my Office with unrestricted
access to information necessary to conduct a review of CNLOPB operations.

Noseworthy's own report gives the information that proves his office has not been refused access to the offshore boards records.  According to Noseworthy, the board repeated its view that “…any audit should be conducted jointly by the Auditors General of the Province and the Government of Canada.”

That's hardly a refusal by any definition of the word.

So if the Auditor General can't get his facts straight or abide by the law, what's the point of having him?

-srbp-

The Law of Diminishing Visitor Returns

Since taking office, the Williams administration has boosted the tourism advertising budget from $6 million to $11 million annually.

Now for most of us, a tourist is someone who doesn't live in a place but who goes there to see the sights. Tourists are good because they bring new money into the local economy and spend it on accommodations, attractions, travel, food and souvenirs.

The current provincial administration is proud of the results their efforts have produced. As Mount Pearl North MHA Steve Kent put it:

In the past four years, non-resident visitors to this province have increased by about 15 per cent, contributing approximately $365 million annually to the provincial coffers. The total resident and non-resident tourism industry contributes about $840 million to the provincial economy each year.

Yes, that's right, non-resident visitors, the people most of us would regard as tourists, actually contributed only 43% of the total economic activity generated by the province's tourism industry.

Hmmmm.

Doubled tourism advertising budget.

Tourists - let's call them non-resident visitors or NRVs - only produced 43% of the "tourism" dollars in the economy.

And that's after we've doubled the provincial tourism advertising budget, which, as Kent crowed, has won all sorts of awards.

Let's take a look at the returns we are getting on our investment. We'll use statistics gleaned from a couple of provincial sources. You may find the results startling.

For the first table, let's look at the number of non-resident visitors (NRV), the advertising budget, the increase in the budget from the previous year and the total amount spent by the visitors, in millions of dollars.

Table 1	A. Non-resident visitors (NRV)	B. Tourism Advertising Budget ($ millions)	C. Budget increase from previous year ($ millions)	D. NRV Revenue ($ millions)
2003	424,401	$6.0	-	$300
2004	449,300	$7	1	$330
2005	469,600	$8	1	$336
2006	494,400	$10	2	$365
2007	469,200 (est)	$11	1	not avail

For the second table, let's do some simple math. Let's look at how much each NRV generated in the economy. Let's also look at how much the provincial government spent in order to attract each NRV to the province. The third column looks at the incremental changes, that is how much each new visitor costs to attract.

Table 2	A. Adv Budget/NRV	B. NRV$/Adv Budget	C. Budget increase/NRV increase	D. $ per non-resident visitor
2003	14.14	49.98	-	$706
2004	15.58	47.14	40.16	$734
2005	17.04	42.05	48.26	$715
2006	20.23	36.46	80.65	$738
2007	23.44	-	-

Observations: As you can see from Table 2, Column A, the provincial tourism advertising spending per visitor has climbed steadily from $14.14 per non-resident visitor to $23.44 in 2007. That's the last year for which we have a fair bit of information.

However, as you can see from Column B in that same table, the return on advertising investment per visitor has actually dropped by over $13.00 per non-resident visitor.

Yes, that's right. We are spending more per visitor to attract them, but the return per visitor is diminishing. [Corrected statement.]

In Column C, you can compare the cost of each new non-resident visitor compared to non-resident visitors overall. Where it took $20 per visitor to attract them in 2006, for example, each "new" visitor that year cost four times as much.

Now, just to be clear, that doesn't mean the same people keep coming back. What we are looking at is the change between the number of visitors the year before and the number attracted in the current year. If there are more in the current year, then the difference is "new".

In Column D you can see the average dollars spent per visitor. You can see a fluctuation year to year. Each visitor spends more on average now than he or she did four years ago, but the spending in 2006 is just 4% above what it was in 2003.

Now there are a few caveats, or warnings here.

First, we don't have the 2007 visitor stats yet. The year is only just over and the provincial officials haven't finished tabulating them all. Note, though, that preliminary estimates have the non-resident visitor numbers down from 2006. If the general trend holds, the dollars they spent will be down accordingly.

Second, the decline in visitors between 2006 and 2007 is not the result of a decreased advertising and marketing effort, at least if we measure by the amount of money spent. There are other factors - like rising costs of travel and the higher Canadian dollar - that likely made Newfoundland and Labrador somewhat less attractive to non-resident visitors than in previous years.

Just be cautious though: the diminishing returns started in the very first year, before the dollar changes cut in.

Third, we don't know exactly how the province defines "non-resident visitors". It's possible that some of what has been captured here actually reflects ex-patriate Newfoundlanders or Labradorians coming back for a short visit.

Overall, though and taking a look at these figures, it's not surprising that the provincial tourism effort appears to be shifting away from non-resident visitors and toward having residents stay home. When the tourism industry talks about increasing activity in the off-seasons of spring and fall, they are clearly seeing the results among locals. That explains why 57% of the total economic activity attributed to "tourists" in the last hear for which we have complete figures actually comes from people whose permanent residence is within the province.

And to think all of this started with a VOCM report back in late December, which in turn inspired a Bond Papers post. Tourism minister Clyde Jackman was encouraging people of the province to spend their tourism dollars at home this year. According to VOCM, Jackman said that in 2007 "local tourists comprised nearly 90 percent of the tourism business.".

With a bit of information, a little analysis and a tip of the hat to the Dominion's finest statistician, we may actually have uncovered a largely ignored story with tremendous implications.

And Steve Kent?

He's still wrong.

-srbp-

Where will the money go? The Hebron - Hydro connection

Yes, you've read it at Bond Papers before:  Hebron money will head to Labrador to underwrite the Lower Churchill development.

And yes, Danny Williams has been trying to lower expectations for the Lower Churchill.

And finance minister Tom Marshall has suddenly discovered the provincial debt as a problem that must be addressed.

But if you want to know where the finance minister - and possibly his cabinet colleagues - are thinking of spending money from oil and gas, look no further than a report from the Gander Beacon on budget consultations held in the central Newfoundland town.

The story is titled "Where will the money go?"

"So, we have to use the resources we have now to change our economy," Minster Marshall said. "The oil and gas money we should use towards hydro, to provide an economy when the oil and gas is gone, because it will all be gone one day. Hopefully, it will be a long time, but it will be gone." [Emphasis added]

See?  The debt clock is not about putting the budget focus on the massive public debt, well, at least no so the provincial government can pay it down.

Nope.

The debt clock is to discourage demands from the public to spend oil and gas money on things they might want to see it spent on.

That way, the provincial government can non-renewable resource revenues, all $2.0 billion of it this year alone, on things cabinet has already decided on.

Like using the cash from Hebron to pay for the Lower Churchill, even though there are no customers for the power, yet.

Bond Papers has been saying it for a while.

Just like Bond Papers pointed at the provincial debt and the lack of action from the current administration.

And once again, Tom Marshall has confirmed it.

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Steve Kent: pure crap

His letter to the editor defending tourism spending in the province isn't online, but let's have a look at Steve Kent's explanation (Amended:  by request, we've removed the Kent letter that appeared in the Sunday Telegram.  It isn't available online.) of why the current administration's tourism spending is right on.

First, says Kent, we must look at all the awards the marketing campaign has won. "The number of awards that the campaign has received to date is a strong indication that it is drawing positive attention to the province."

Well, the campaign has won awards for its creative merit but that doesn't mean that it has had an impact on tourism traffic.

In that context, Kent mentions the province's logo, which, it should be noted be refers to as a "brand signature."  That's industry speak for what they used to call a logo but Danny Williams thought was a brand.

Also, in November the province's brand signature won a prestigious silver award from the London International Advertising Awards. The short animated television spot featuring the province's new logo won a silver statue in the television category. It was also named a finalist in the animation category.

Well, Bond Papers has already explained that Kent's claim is false.  Completely, totally utterly false.  The logo didn't win the award. The video won the award. But even if it was true, as with the awards won by the campaign it's also irrelevant.

The provincial government spends tourism advertising money to bring new people to the province, not help ad agencies fill up the "I Love Me" cabinets.

Second, Kent mentions a bunch of references to the province by prominent travel publications.  All good stuff, of course, but its the bums in airplane seats and feet on the ground that counts.

Third - measured by number of paragraphs - and after all that, that's when we get to the actual tourism stats which, oddly enough, don't figure prominently in a letter from cabinet-minister-wannabe trying to score points with his team.

In the past four years, non-resident visitors to this province have increased by about 15 per cent, contributing approximately $365 million annually to the provincial coffers. The total resident and non-resident tourism industry contributes about $840 million to the provincial economy each year.

Bond Papers has also torn that little piece of misleading information to shreds as well back in December:

The relative proportion of overall spending by locals has actually grown in the four years of the New Approach to tourism much faster than visitor spending.  In a May 2004 statement to the legislature,  former tourism minister and current Humber Valley resort general manager noted that visitors generated approximately $300 million in spending in 2003 out of total tourism spending in the province of $620 million.

In other words, over the four years from 2003 to 2006, overall "tourism" spending increased by $200 million but only $64 million  - 32% - of that new spending was related to visitors.  In the meantime, the tourism advertising budget  - supposedly aimed at bring new dollars into the economy through increased visitation- has increased from $6.0 million to $11.0 million.

Get it?  For all the money Kent is proud of spending, it really hasn't been all that successful at attracting people from outside the province to come here.  That's what most of us would expect a tourism campaign to do.  By far and away, the growth in tourism revenue in the province has come from people staying home, not from some massive increase - or even a reasonable increase - in new faces. 

Nope.

The provincial government has doubled the advertising budget and succeeded in getting more people to stay home.

There's a successful tourism strategy for you.

No wonder Kent didn't say much about it.

Reading Kent's letter is like reading a redraft of the Parrot Shop sketch:  "beautiful plumage, squire."

Nice.

But entirely irrelevant.

-srbp-