Privatizing Hydro: a glance back

Introductory Note:

One of the more controversial proposals over the past 20 years was the privatization of Newfoundland and Labrador Hydro.

Much of the Hydro privatization story has passed into myth, much like the Churchill Falls story. Unfortunately for anyone interested in looking more closely at the idea of Hydro privatization today, some of the documents publicly available 15 years ago are no longer readily accessible.

Following is a text of an address delivered by Premier Clyde Wells to the St. John's Board of Trade in November 1993. It is the prepared text, not a transcript of the actual speech. It doesn't need much comment; the thing speaks for itself.

In order to produce this post, the original hard copy of this speech was scanned electronically. Please note that errors in spelling and so forth may remain, despite careful editing.

Next in this series will be the 1969 Churchill Falls contract. Given the documents length, it will take some time to scan and edit and the subsequent online versions will be broken down into smaller segments.

Government of Newfoundland and Labrador

Restructuring and Privatizing the Electrical Industry
of Newfoundland and Labrador

An Address by
The Honourable Clyde K. Wells
Premier of Newfoundland and Labrador
to the
St. John's Board of Trade
November 17, 1993
Check Against Delivery

I want at the outset to express my appreciation to the Board of Trade for giving me this opportunity to advise you and through you the people of the province of the government's position with respect to privatization of Newfoundland and Labrador Hydro.

Contrary to some suggestions you have been hearing this is not a proposal intended to benefit a particular company or group of people. This proposal is intended to benefit the province and its people both in their capacity as electrical ratepayers and in their capacity as taxpayers. It is also completely consistent with the overall economic vision and goals that the government is pursuing for Newfoundland and Labrador.

In June of 1992, after nearly two years of research and extensive consultation throughout every region of this province, government released its strategic plan entitled, Change and Challenge. At that time we stated that Change and Challenge is a living document for the Newfoundland and Labrador economy in the latter years of the 20th century and beyond the year 2000. To quote:

Our economic vision for Newfoundland and Labrador is that of an enterprising, educated, distinctive and prosperous people working together to create a competitive economy based on innovation, creativity, productivity and quality.

Two of our set of eight guiding principles for economic development are worthy of repeating today:

1. The private sector must be the engine of growth. While it is a role of government to create an economic and social environment that promotes competitiveness, it is the enterprising spirit of the private sector that will stimulate lasting economic growth, and
2. Government policies and actions must have a developmental focus where the client comes first. The structure of government must be streamlined, efficient and responsive to public need and to changes in the economy.
   

As well Action Item 31 of the Strategic Economic Plan specifically commits the government to "avoid providing services where they can be provided by the private sector".

The ultimate goal of privatization and restructuring is to improve the economy as a whole. There is hardly a country in the world today that does not have a major privatization plan in hand. These plans constitute a main pillar for the future economic strategy of most governments.

December 1992 Economic Statement by the Finance Minister

As part of his address to the House of Assembly on December 4, 1992, the Honourable Winston Baker, Minister of Finance, reviewed the state of the provincial economy and outlined a number of important decisions that the government was taking to deal with our financial and economic position.

One of the fundamental policy statements articulated by Mr. Baker at that time was government's decision to review the various operations, crown corporations and agencies of government and to pursue a privatization and restructuring program for those areas presently in the public sector that could be owned and operated by the private sector. That was also consistent with the government's often stated position that scarce and difficult to raise public funds should not be tied up providing commercial type services that the private sector is prepared to provide unless there is an overwhelming public policy reason for so doing.

Since the presentation of that economic statement, we have been pursuing the privatization of several government activities including the provincially owned Computer Services Corporation, certain assets of Newfoundland and Labrador Housing Corporation, Newfoundland Hardwoods and Newfoundland and Labrador Hydro. We are currently considering other possible restructuring and privatization opportunities.

One of these has attracted a significant amount of attention in the past few weeks. That one is Newfoundland and Labrador Hydro.

A little background might be helpful to a full understanding of the issues.

In 1989, Fortis, the parent company of Newfoundland Power, approached government with a view to purchasing certain select rural assets of Newfoundland and Labrador Hydro, mainly all the lower voltage transmission and distribution assets. Government, on the advice of Hydro and others, rejected the offer. Fortis, offering slightly different terms, pursued the matter again in 1992.

Government again asked Hydro for advice. The Board of Directors of Hydro initiated an assessment of the Fortis offer. The Board also decided to review at the same time various other alternative structures for the province's electrical industry.

Hydro retained ScotiaMacLeod and RBC Dominion Securities, two of Canada's largest and most respected investment dealers. These two companies have participated in billions of dollars of successful privatization and restructuring transactions in Canada and throughout the world. It is noteworthy that they were the lead advisors in the recent successful privatization of Nova Scotia Power. They have also been the senior fiscal advisors to Hydro and the province for over ten years.

The financial advisors recommended that Hydro and the government reject the Fortis offer because it did not represent fair price and payment terms for the assets in question and was not the best strategic alternative for the future structure of the electrical industry of Newfoundland and Labrador.

Hydro's Board of Directors and its advisors pursued the assessment further and ultimately advised the government that the status quo was obviously a viable option but if the government wished to privatize it could do so successfully either by privatizing Hydro on a stand-alone basis or by first merging with Fortis and/or Newfoundland Power and then selling its shares in the merged company. They did however advise that the combination with Fortis/Newfoundland Power was preferable to a stand-alone privatization, from the point of view of government, taxpayers and ratepayers, if the combination could be effected on acceptable terms.

Government reviewed the results of this process, but before proceeding decided to further consult with experienced electrical industry experts both within and outside the province. All affirmed that in the event of privatization, merger was the preferred course and nearly all recommended privatization as the best course for government to follow. Accordingly the government decided:

1. To reject the offer from Fortis; and
2. That it was in the best interest of the people of the province to pursue the restructuring and privatization of the industry by either merging Hydro and Fortis/Newfoundland Power, or by privatizing Hydro on a stand-alone basis.
   

Shortly after making this decision, the President of Hydro, the Minister of Mines & Energy, and I met with the Chairman of Fortis and the President of Newfoundland Power. At this meeting on August 30th, we asked them if they were interested in participating in an investigative process to determine whether the merger of the two Newfoundland electrical companies into a single integrated investor owned utility might be achievable and in the interest of all concerned.

I also advised the Fortis/Newfoundland Power representatives that if satisfactory progress towards a merger that would achieve government's stated objectives could not be accomplished in a reasonable period of time, then we would proceed to privatize Hydro on a stand-alone basis.

Overview of the Negotiation Principles and Current Status

It might be helpful to review some of the major principles and objectives that we established for these discussions, and to provide an overview of the major components that will be part of any merger with Fortis/Newfoundland Power, or the privatization of Hydro on its own.

Objectives Established

Before any discussions began with Fortis/Newfoundland Power, government established its set of overall objectives for any merger between Hydro and Fortis. In summary, these objectives are:

1. To get the highest reasonable price possible for its hydro assets;
2. The elimination of the guaranteed debt of Hydro from the Province's financial statements is to take place as soon as possible, and the government is to have no future financial responsibilities.
3. To achieve the most efficient and effective provincial electrical industry.
4. Either by restructuring the industry or privatizing on its own, government would intend to divest itself fully of its shareholdings in the electrical industry (except for its investments in Churchill Falls (Labrador) Corporation, the Lower Churchill Development Corporation and the Gull Island Power Corporation) as soon as practical, by way of a broad public offering of common shares in Newfoundland, the rest of Canada and possibly elsewhere.
5. Discussions are to proceed in an appropriate and orderly manner and both parties are to observe confidentiality until an understanding in principle can be disclosed, or negotiations are discontinued. This is normal and necessary in a negotiation of this nature.
6. The initial executive management team and the initial board of directors of the merged company would require input and approval of government.
   
7. Ownership, voting and possibly other restrictions would apply to the shares of the new merged entity to ensure the electrical industry is widely held and not controlled by a small number of individuals or corporations, nor controlled by foreign investors.
8. To ensure the restructured and privatized industry is well capitalized and credit worthy so that it will be able to finance the Province's future electrical requirements, and
9. To achieve stable or improved revenues for the provincial treasury from the electrical industry.
10. Within the context of these objectives to minimize the rate increases charged industrial, commercial and domestic customers in the immediate and longer terms.
    

A few days after the initial meeting with Fortis representatives, the Chairman of Fortis informed me that they were interested in participating in such discussions. Accordingly it was agreed to establish negotiating teams to start the discussions. It was also agreed that the public and Fortis shareholders should be made aware of what was occurring. This was done by a joint news release on October 1st. These discussions are now proceeding but they are still at a very preliminary stage.

Fortis has not yet agreed to fully meet the requirements of government, that I have just outlined, to ensure that what occurs is not a take over by Fortis but is genuinely a merger of the two corporations with the final structure reflecting the level of assets and strengths each of the two parties will bring to the merged company. Unless such requirements are met there will be no merger.

Major issues to be addressed

Recent public commentary has raised a variety of questions. Valid or not these questions should be addressed. I will do so by posing the questions that have been raised and providing government's answer.

Why is the proposed transaction a merger?

1. The only way to effectively eliminate the duplication that presently exists and would continue to exist if Hydro were simply privatized on a stand-alone basis would be a merger. All of the expert advice available to government recommends such a merger.

2. The newly merged company would be neither Fortis, nor Hydro, but a true combination of the people, assets and shareholdings of Hydro and Fortis.

3. The percentage of the new entity that is coming from the government's ownership of Hydro is the majority interest in the new company, and will then be sold to investors in Newfoundland and Labrador, throughout Canada and the world by a public share offering.

Why is Hydro and Government negotiating only with Fortis?

1. Newfoundland Power, a company wholly owned by Fortis, is the only other electrical utility in the province and it distributes electricity to 85 % of all electrical customers in the province. Any effort to restructure the industry in the province must include Fortis, and only Fortis.

2. The advisors and government are of the opinion that the most efficient operating structure for the electrical industry is to have a fully integrated operation for the generation, transmission and distribution of the product to the customer, and that can only be achieved by negotiating with Fortis.

3. We do not want control to be with another corporation outside the province and we do not want private interests, either within or outside the province, to buy Hydro. Therefore, it is not appropriate to seek bids for Hydro. The interests of the province will be best served if its electrical industry is a widely held public company that cannot be controlled by any group either within or outside the province and can raise the capital required for future growth of the industry.

Will the Government get fair value for its investment?

1. Most definitely, Hydro and government's financial advisors are among the best in the world. Their projections indicate a very attractive value can be achieved and that there will be a profit to the people of the province from the privatization of their investment in Hydro.

2. The government will not privatize Hydro, either in a merged entity or on a stand-alone basis, unless the value received is fair and is consistent with values other governments have received in similar privatizations.

3. The government will only agree to proceeding with a transaction with Fortis if the proceeds are at least equal to or greater than would be received by privatizing Hydro on a stand-alone basis.

4. Government will obtain an opinion from recognized investment bankers that the proposed transaction is fair to the taxpayers of the province. Without such an opinion there will be no merger.

How will the province's financial position be improved?

1. The guaranteed debt of Hydro represents approximately 18% of the total direct and indirect debt of the province. This will be significantly reduced immediately, and completely eliminated over the longer term. Hydro's current debt and equity today is approximately $1,250,000,000.

2. The province will receive a substantial amount of cash from the profitable sale of the securities that it will receive in the privatized company. This cash will be used to reduce the province's debt by lowering our future borrowing requirements, thus saving current account interest expense, which means avoiding tax increases and/or government program cuts that would otherwise occur.

Will this mean that there will be an increased outflow of capital from the province through payment of dividends?

I believe the answer is NO. More than 90% of Hydro's current interest payments are to institutions outside the province. While part of the debt will be converted to equity, dividend payments won't make us worse off. Thousands of Newfoundlanders and Labradorians will be encouraged to invest in the shares of the new entity, thus keeping more dividends in the province. In addition the retained profits in the new utility will be reinvested in new fixed assets within the province, no different than what occurs now. In total, more money will remain within the province.

Will this assist the province's credit rating?

1. The major U.S. credit rating agencies, Standard & Poors and Moody's visited with me and senior ministers and officials earlier this year. They were strongly supportive of government's plans to restructure and privatize various crown agencies including Newfoundland and Labrador Hydro, as well as our other financial management initiatives.

2. The province's total direct and indirect debt as a percent of gross provincial product is 61.5%, the highest in Canada. Financial institutions frequently emphasize this when commenting on the province's financial state or its credit rating. The elimination of the Hydro debt and the reduction of future debt and borrowing requirements from privatization can only be positive, and will result in improved creditworthiness.

What will be the government's on-going role in the electrical industry?

1. The new company will be totally subject to regulation by the Public Utilities Board in respect of all of its electrical utility activities.

2. Government will still be responsible for the regulatory policy regime of the electrical industry. We will be introducing a new Electrical Power Control Act that will ensure the people of Newfoundland and Labrador, and specifically the consumers, will continue to have an efficient, fair and reliable electrical industry.

3. The restructuring and privatizing of the industry will be governed by a Privatization Act which will outline the policies under which the new company will operate. This Act will cover major policy issues such as ownership rules, to ensure regulation and management of the industry remains within the province and not with other organizations in Canada or foreign countries.

4. The government will continue to control and be responsible for the development of future electrical development because it will retain ownership of Churchill Falls Labrador Corporation, The Lower Churchill Development Corporation, all other Labrador water rights, all undeveloped island water rights, and the policy direction for non-utility independent generators and alternate power sources.

Will electrical rates increase?

1. Rates in the future, as now, will only be set after hearings by the Public Utilities Board. Under any of the alternatives of the industry, including leaving things as they are today, rates will increase as costs increase.

2. Privatization, whether by merger or on a stand alone basis, will cause some additional rate increase beyond that which would otherwise occur in the first five years. That additional increase due solely to privatization should average about 1 % per year or less. Merger and privatization should result in lower rate increases beyond that five years.

3. Any rate increases must be considered in light of the benefits to the provincial treasury of privatization. Generally speaking the more the people as taxpayers get from the sale the more the same people as ratepayers will have to pay in the future. Government's objective will be to achieve the greatest fair return we can get while at the same striving to keep any increase at a minimum.

What will be the impact on the employees and the unions?

1. One of the objectives of the industry restructuring is to improve operating efficiencies. Merging two large utilities such as Hydro and Fortis/Newfoundland Power will result in the elimination of certain areas of duplication in management, administration, and maintenance. These will be identified and a fair and equitable program will be developed to accommodate early retirement, voluntary severance and position redundancies.

2. The Unions will be involved in the merger process if a transaction is agreed upon. So will the non union employees.

3. It is premature to speculate on numbers or specific areas of operating efficiencies that will result.

Concluding comments

On October 1st when we announced that we were beginning discussions with Fortis/Newfoundland Power, we stated that any transaction would have to meet three objectives:

1. To create a more efficient electrical industry.

2. To be fair to the current public shareholders of Fortis and Newfoundland Power and to the electrical utility ratepayers of the province, and

3. To maximize the proceeds of privatization of Newfoundland Hydro for the people of this province.

I hope my comments today have helped explain how we arrived at the strategic decision to begin a restructuring process for the electrical industry; that we are going about it in a careful and responsible way; and that the achievement of our objectives will be in the best interests of all the people of Newfoundland and Labrador.

The restructuring and privatizing of the electrical utility industry is not being done behind closed doors. I advised the people of the province as soon as the basis for negotiations was decided upon by both parties. We have considered many different alternatives; sought advice from the industry experts; and engaged highly respected and experienced financial advisors, before deciding to restructure and privatize the industry. We will keep the public and House of Assembly fully informed as discussion progress. In any event no such privatization can be completed without full debate and passage of the necessary legislation by the House of Assembly.

The government's stated policy is that we will privatize and restructure government operations, crown corporations and agencies where there is no overriding public policy purpose for government to remain as an owner. The electrical industry meets this policy criteria.

The province is being affected by the profound economic and financial forces which are impacting the economies of all countries of the world. These forces make it imperative that we make wise use of investment capital and that the electrical industry, and for that matter, all sectors of our economy, be operated in the most productive fashion possible. That is what we are seeking to achieve.

Thank you very much.

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Russert moments

There have been plenty of tributes to Tim Russert, the long-time host of NBC's flagship public affairs program Meet the Press, who died suddenly on Friday.

John Gushue flips a link to a compilation of Russert's top 10 "gotcha" moments.

Gushue's daily blog Dot Dot Dot is a marvelously eclectic compilation of posts presented in John's characteristic lean style. No long winded essays from Gushue. Just the facts. Just John.

If you haven't dropped by lately, take this peak inside John's mind.

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Cameron wins White Rose contract

Houston-based Cameron International has been awarded a US$235 million contract to engineer, construct and install subsea systems for the North Amethyst extension of the White Rose project.

Scope of the contract calls for Cameron (NYSE: CAM) to provide 13 subsea wellheads and Christmas trees, control systems, manifold components, flowline connection systems and engineering and project management support.

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It's all about control

You can read a profile of the Premier, this week in the Toronto Star.

You've heard it before but you can read it if you want.

Or you can skip to something really interesting: a series on how the Prime Minister's Office is clamping down on public communications from the federal government in a way that some veterans inside the Queensway are saying is unprecedented.

Public appearances by cabinet ministers – whether it's a speech or an interview – are carefully staged, starting with a "message event proposal" vetted by the Privy Council Office, the bureaucratic wing of the Prime Minister's Office (PMO).

And in a marked change from previous governments, now even basic demands for information from reporters, once easily fielded by department spokespersons, are sent to this office for review – and often heavy editing – before they are okayed for public release, government insiders say.

It's a series so you can see different things. Like the member of parliament who paid dearly for speaking out of turn. Like the policy of having everything vetted by officials in the communications and consultation branch.

Donald Savoie couldn't have written a more timely book. Too bad that of the three copies at Chapters locally, only one was bought up to yesterday evening when your humble e-scribbler bumped and jostled with the crowds picking up Father's Day stuff. That would be the one said scribbler bought last week.

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What a difference a week makes: the latest Hebron project stories

First - June 9 - a deal was "close".

There were just a few minor details left to sort out.

Mark Nelson, Calgary-based president of Chevron's Canadian subsidiary, said Hebron discussions are focused on such issues as how much of the project has to be built locally, how the province will pay for its share, how ownership interests will change to make room for the province.

Then the deal was perhaps as close as "next week."

The latest is that there's just a 25% chance the deal can be closed by the time the Premier speaks to the NOIA conference next week.

The biggest hold up - by logical extension there are other hold ups - is the "confidentiality agreement".

The curious thing about that version of the story is that Bill 35 - the latest amendments to the energy corporation legislation - essentially make just about everything connected to the deal and the project entirely confidential and exempt from just about every form of public disclosure except what is required by the offshore regulatory board.

Maybe everyone should just kick back with a cold one and let the whole thing work itself out. When there's a real deal, there'll be an announcement and not before.

Face it. If the stories are true the parties would be a long way from a deal at this point, like maybe 75% of the way from a deal. (Get it? If there's only a 25% chance of it happening next week, there's a 75% chance it won't and that could be a way of saying the final version of the deal is a long hot summer away from happening. That would still be well within the time frames people have been talking about for project start-up; it's just not as quickly as some of the local speculators have been hoping.)

They still have to sort out:

• a confidentiality agreement, in addition to the confidentiality agreement in the memorandum of understanding (Didn't that portion of the MOU alone take something like four months to hammer out?);
  
• how much of the project will actually be built locally given local labour market shortages;
• how the original corporate partners are going to re-divide their shares to give some to the provincial government; and,
• how the provincial government will actually pay for its share of the capital costs. That's the only thing that might be in question since the energy minister clearly told the legislature this past spring that "[t]he funds will be transferred from the government to the energy corp to purchase the equity in Hebron as well as in the White Rose extension."

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Never forget to remember

Maxime Bernier is the latest politco afflicted with what appears to be a virulent disease: amnesia politica.

“He doesn't remember forgetting them [the classified briefing notes], that's the question,” one source said.

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CDS wins national PR award

Outgoing Chief of Defence Staff General Rick Hillier is the first recipient of the Canadian Public Relations Society's (CPRS) president's award for outstanding public relations and communications management.

Hillier received the award at the CPRS national conference in Halifax, June 10.

In making the award, CPRS president Derrick Pieters said "General Hillier was selected for this honour for his outstanding leadership in communications and excellence in communications management. He has also demonstrated a commitment to two-way communication practices and relationship management."

CPRS represents more that 1800 public relations practitioners across Canada. Members commit to following a code of professional standards. They are dedicated to promoting professionalism in the practice of public relations. CPRS was founded in 1948 and this year celebrates its 60th anniversary. Today, CPRS is a federation of 16 member societies based in major cities or organized province-wide.

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From the G&M: "The broken chain of answerability"

By one definition, a gearhead is a person who is extremely interested in computer hardware and software and they work.

Well, if that's the case, then Donald Savoie could be called a govhead. He's got an extraordinary interest in and knowledge of the hardware and software of government.

Savoie holds the Canada Research Chair in Public Administration and Governance at the Universite de Moncton. He's an accomplished public servant and academic with a resume that would make even the highest achievers feel inadequate.

His most recent book - Court Government and the Collapse of Accountability in Canada and the United Kingdom - won't make the national best seller list, but among academics and others interested in how government runs, Savoie's writings will become required reading.

Savoie condensed part of his recent book into a two page article last month in the Globe and Mail. His observations should startle Canadians into re-examining the federal and provincial government sin the country. Likely, Savoie will go unnoticed, not just unheeded.

Let's hope not:

The relationship among Parliament, the prime minister, ministers and public servants is in need of repair, and we are ill served by pretending that all is well. We should no longer tolerate court government, by which a political leader with the help of a handful of courtiers shapes and reshapes instruments of power at will. Those with the power to introduce change for the better are reluctant to do so because they enjoy being able to wield tremendous power.

We need to define, preferably in law, the role of the prime minister, cabinet and the public service and give public servants an administrative space of their own to manage government operations, while recognizing that the prime minister and ministers must always have the authority to override public servants in all matters not covered by statutes.

...

What is to be done? The time has come to engage Canadians in a debate on the role of Parliament, officers of Parliament, the prime minister, cabinet and the public service, and for Canadians and public servants to tell Parliament, "Heal thyself." Political parties need to take the lead and launch a meaningful debate on the state of our national political-administrative institutions. The issue is vitally important, and parties should engage their members in the debate. It provides an opportunity for political parties to be more than election-day organizations, to offer meaningful opportunities for involvement and to become effective vehicles for promoting thoughtful debates and change.

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Create wealth fund: OECD

The Organization for Economic Co-operation and Development believes that a Norway-style overseas investment fund would be beneficial for Canada:

“It's not [only] an exchange rate play. It's a more fundamental issue” of investing the proceeds for the future, and helping manufacturing in Canada at the same time, said Angel Gurria, secretary general of the OECD, in Ottawa on Wednesday to release its report on the Canadian economy.

The OECD wants Alberta “not to be so procyclical ... not to spend all those revenues now,” said Peter Jarrett of the OECD economics department.

The federal government should set up a fund too, and set aside any windfalls in a transparent manner, he said.

The Norway idea is a popular one among some academics and government officials but has never gained traction among politicians in Canada.

Ottawa has said in the past that it can't calculate how much money it gets from the energy industry, given the substantial spin-offs of investment and production in that industry, Mr. Jarrett said. But there's nt reason it couldn't create a model.

“There is scope for doing so,” he said.

Bond Papers has discussed the idea at least once before. So far local pols have ignored the idea.

You find a summary of the OECD report at oecd.org.

Don't cut yourself on the edge...

Earlier today, from the CPRS national conference in Halifax, Joseph Thornley liveblogged a panel presentation on the impact blogs, youtube and a raft of other new Internet phenomena are having on employee communications.

CBC employees will enjoy the bit from Amanda Brewer and the impact the Internet had on the 2005 strike. Brewer was a CBC employee who left the company after the strike, took a job with Hill and Knowlton which has now been hired by Ceeb management to help the Corp cope.

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CPRS-NL submission to the Cameron Inquiry

[Editor's note: Following is the text of the submission made by the Newfoundland and Labrador Chapter of the Canadian Public Relations Society (CPRS) to the Cameron Inquiry, under the call for submissions in Part II of the Inquiry.

The only editorial change in the submission made here is to move the acknowledgements from its position at the front of the original document to the end.]

Submission to the Commission of Inquiry on Hormone Receptor Testing

by

Canadian Public Relation Society –Newfoundland and Labrador (CPRS-NL)
May 15, 2008

Legal roflmao of the week

roflmao.

Rolling on floor laughing my ass off.

Internet shorthand.

Anyway.

Post a few court decisions and someone sends along a link to a blog that is built entirely on the humourous goings-on in courts south of the border.

That's the United States, since this is being written in Canada.

Lowering the bar is the blog.

It's most recent post describes some of the arguments presented in FCC v. Fox Television. That's a case at the heart of which is whether or not fleeting uses of four letter expletives are sufficiently shocking to audiences that they should be banned entirely from broadcasting between the hours of six and 10 in the evening.

Seems the lawyer for Fox began his argument by using two of the seven words you can't say on television repeatedly and in full.

There's a link to another post about a Pennsylvania case where fines where handed out to a person being deposed and his counsel for the use of the infamous "f*ck" 73 times in the course of a deposition, while the word contract only came up 14 times. The fine worked out to $367 per "f*ck".

Some people have no sense of humour.

In any event, turns out that the Wall Street Journal has a law blog, which is is well worth checking out on occasion. There's also SCOTUSblog which is, as the name suggests, a blog about the Supreme Court of the United States. These both tend toward a more serious raportage of legal matters than the stuff you'll find at Lowering the bar.

In Canada, you can find The Court, which is a rather serious blog from Osgoode Hall law school about the Supreme Court of Canada and its decisions. A reference librarian from SCC has his own blog, titled Library boy. google around enough and you'll find a few more worth stopping by if you have a sudden taste for things about lawyers written by lawyers.

Too bad we don't get this kinda stuff from the local law courts. Something says there'd be plenty of really funny stories to relate.

Barristers may feel free to send their submissions for consideration.

Update: In order to ensure there is no confusion, the phrase "for consideration" used above should in no way be construed as an offer to pay for any posts a barrister may submit. Words are funny things and lawyers are good at using them. Let's make sure there is no confusion.

Further to that point, posts may be made under a pseudonym provided that your humble e-editor knows who is making the submission. The local bar is a small one and a pseudonymous post might be in order under the right circumstances. Barristers should be somewhat creative in using a pseudonym. Rumpole is right out, but any of the other characters are fair game.

Speaking of Rumpole, undoubtedly he'd have had something to say about the initiative in the United Kingdom to change the style of dress in court. There's a discussion paper on the subject, complete with illustrations of the old and the proposed new.

The reaction to the proposal - which could see an end to wigs in British courts - has been somewhat mixed. Here's a link to the Inner Temple library blog with posts on the reaction as covered in the media.

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From the Supreme Court of Canada

Where someone is from would obviously affect how one applies the Charter.

Was that sarcasm clear enough for the proponents of the ghetto school of judicial appointments?

Still, here's a case for the legally mind that's worth noting:

The accused made an incriminating statement, after four hours of resistance, immediately after being confronted by the interrogating officer with a prior statement obtained from him in violation of his constitutional right to counsel. The trial judge admitted the latter statement and convicted the accused on three counts of sexual interference. The Court of Appeal upheld the convictions.

Held: The appeal should be allowed and a new trial ordered. The impugned statement should have been excluded pursuant to s. 24(2) of the Canadian Charter of Rights and Freedoms.

A statement is tainted by an earlier breach of an accused’s constitutional
rights if the breach and the impugned statement can be said to be part of the same
transaction or course of conduct. Here, the required connection between the two
statements was direct and obvious. It was temporal, causal and, to some extent,
contextual. The interrogating officer concluded that he would not obtain the
incriminating admissions sought unless he confronted the accused with the latter’s
earlier inadmissible statement. He therefore proceeded to do so. In this way the
interrogating officer made use, knowingly and deliberately, of an earlier statement that the police themselves had obtained from the accused in a manner that infringed his Charter rights. This alone was sufficient to taint the subsequent statement and to cry out for its exclusion pursuant to s. 24(2) of the Charter. To hold otherwise would be to invite the perception that the police are legally entitled to reap the benefit of their own infringements of a suspect’s constitutional rights. And this would bring the administration of justice into disrepute.

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The elements of a good communications plan

Courtesy of Dave Fleet, a step by step guide to communications planning.

He starts - where else? - with a good overview.

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And it isn't in code

Israel's security service is blogging in hopes of attracting a few good nerds into the service.

Sounds like a farkocktah idea.

Who knows?

They might be on to something.

If you read Hebrew, you can check out the site here: Shin-Tech.

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D'oh!

Two "patriots".

One shags up a discussion of the courts.

The other shags up the current discussion on the Lower Churchill.

Both could have used a little fact-checking before launching into their tirades.

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To the crowd running Tammany Hall

St. John's municipal elections use mail-in ballots read by optical scanners.

The people running the thing should think about how their system works.

There's one way of screwing with the system technologically.

Then there's always the impact how the ballot is laid out can have on voters. Is it a coincidence that Doc and Ron were at the top of the columns separated by an abnormally long gap from the next name on the ballot and both won by handy margins?

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Things that go up...

Usually go down.

It's just a matter of when and how far.

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Related: "What goes up must come down"

Rest in peace, Jack. You earned it.

For every sleveen in politics, there's someone like Jack Byrne to keep your optimism alive.

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Truer words

"These numbers are ridiculous".

He should know.

We couldn't have said it any better.

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Back to reality

1. Two out of three residents voted for none-of-the-above. Before anyone gets too excited about the results of the St. John's municipal by-election, just take a look at the numbers.

Voter turn-out was about 33%.

The overwhelming majority of residents didn't vote. Period.

Even in a general election, voter turn-out is appallingly low. This by-election was nothing to crow about.

2. Municipal politics is no place for ideas.

While Doc and Ron both had help from professional advertisers, they ran campaigns devoid of any political oomph or presence. There were plenty of slogans but nothing that could even be mistaken for substance.

Voters weren't engaged in this campaign because no one engaged them.

Municipal politics is no place for ideas. This by-election proved it in spades.

No one should wonder why the city is in a financial mess. Check the size of the subsidy for Mile One today versus when these guys got elected in 2005.

Then look more closely at the Sink Hole's financial statements than accepting what are likely to be the councillors assurances that the thing is breaking even without an anchor tenant.

3. Then there are the surprises.

Debbie Hanlon.

Opposed by the Ron Ellsworth municipal machine and a bit of spite from another corner.

Wins with more votes in Ward Four than Ellsworth had the last time out in the general election. She put sweat equity into the job where Ellsworth just flicked cash at it.

The municipal system is made for a politician who works the phones tirelessly early on and has really huge name recognition.

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ECNL - Part 2 - Delayed

The second part of the mini-series on the energy corporation legislation is delayed.

There are amendments either already introduced or pending, some of which could change the meaning of specific sections of the bill dramatically.

Better to wait until the whole thing is finished and then put together a general description of the legislation and what the energy corporation will look like.

One interesting tid-bit that's turned up already: last fall, natural resources minister Kathy Dunderdale made a comment in an interview with Ted Blades, a comment that seemed strange at the time.

She said something to the effect that Hydro would buy power from the Lower Churchill. It seemed strange at the time since any Lower Churchill development corporation seemed like a natural subsidiary of Hydro itself and therefore, Dunderdale would have the company buying power from itself.

Turns out she was right, but the rest of us couldn't have known it in September 2007. The plan, as contained in the EnerCorp strategic plan - released in March 2008 - is to have Hydro as a subsidiary of EnerCorp alongside all the companies that used to be subordinate to Hydro.

So yeah. In order to get power to replace Holyrood generation, Hydro would have to buy power from its sister company.

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Energy Corporation of Newfoundland and Labrador (Part 2)

[This post was originally scheduled to post in June 2008.  For some reason, it never appeared. Your humble e-scribbler found it recently and decided to post it retroactively with the original date.  Note that it is an unedited draft. Some of the links may have changed since 2008.  The comments come entirely from the original version of the bill and were made prior to any actual experience with the corporation.]

In Part 1, we offered some links to information on or related to the Energy Corporation of Newfoundland and Labrador (EnerCorp).

In this part, we will take a look at some specific issues that have come up as a result of proposed amendments to the energy corporation act.

Space does not permit a detailed dissection of the entire energy corporation and all the issues surrounding it nor will the following offer any views on the merits or demerits of the energy corporation and the legislation under discussion.

Instead, we will look at four specific aspects dealt with in the provincial government news release on the amendment bill and attempt to describe what the provisions of the bill mean.

1. Establish public accountability process.

The Energy Corporation Act establishes that the corporation is accountable to the legislature through the minister and cabinet.

EnerCorp is an agent of the Crown. As such:

A Crown corporation that has agent status enjoys the constitutional immunities, privileges and prerogatives that are enjoyed by the Crown and can bind the Crown by its acts.

The Crown is ultimately fully liable and financially exposed for all actions and decisions by its agent corporation while the corporation is operating within its mandate. In other words, the corporation's assets and liabilities are the assets and liabilities of the government. [Emphasis in original]

Bill 35 further develops the accountability process in several specific ways.

First, it establishes that unless otherwise indicated in the approval given by cabinet to establish
a subsidiary, the subsidiary will be incorporated under the provincial Corporations Act or the appropriate legislation of any other jurisdiction.

A subsidiary established in this way is not an agent of the Crown. That means that:

the government is not legally liable for the specific actions of the corporation, unless the corporation acts under explicit direction of the Crown, and has, in the eyes of a court, created a common-law principal-agent relationship.

A non-agent corporation would normally be subject to federal, provincial and municipal taxation like private sector corporations.

As well, the subsidiary may be a partnership involving both EnerCorp and non-EnerCorp companies. The agreement establishing the partnership or joint venture may specify financial arrangements, the distribution of shares, as well as the distribution of seats on the subsidiary's board of directors.

Bill 35 does not alter the existing subsidiaries, namely Newfoundland and Labrador Hydro, Churchill Falls Labrador Corporation, Twin Falls Power Corporation, Lower Churchill Development Corporation (non-operating) and Gull Island Power Corporation (non-operating).

Overall, this approach is consistent with past practice in Newfoundland and Labrador and with the Government of Canada.

Second, EnerCorp is required to hold an annual general meeting to which the public are admitted and to issue an annual report. (s. 5.1 and s. 5.2) A private sector corporation's annual general meeting would normally be held to allow shareholders to vote on certain measures such as electing new directors and to receive reports from the corporation.

In this case, however, directors of EnerCorp are appointed by cabinet. The subsidiaries are governed by their own articles of incorporation. Members of the public may attend such a meeting, but there is no indication what status they might have beyond that of silent observer.

In the case of the annual report, EnerCorp is required to present its consolidated financial statements and such other reports on its activities as it may wish to report on or as directed by the minister. Whether or not this provision applies to any subsidiaries would appear to depend on the articles of incorporation.

Third, Bill 35 provides that EnerCorp and its subsidiaries are subject to audit by the auditor general, to the access to information act and similar statutes, the extent of disclosure beyond cabinet is restricted more than in the existing legislation.

For example, the access to information act (ATIPPA), already provides for withholding commercial information. Bill 35 changes that significantly by defining "sensitive commercial information", giving EnerCorp's chief executive officer the power to determine what constitutes sensitive commercial information under the Act and requiring that his decision be followed by the auditor general and other officials

Under Bill 35, "sensitive commercial information" is defined as:

information relating to the business affairs or activities of the corporation or a subsidiary, or of a third party provided to the corporation or the subsidiary by the third party,...

In other words, all information is potentially "sensitive."

The test or procedure for determining sensitivity is given at s. 5.4:

where the chief executive officer of the corporation or the subsidiary to which the requested information relates reasonably believes

(c) that the disclosure of the information may

(i) harm the competitive position of,

(ii) interfere with the negotiating position of, or

(iii) result in financial loss or harm to

the corporation, the subsidiary or the third party; or

(d) that information similar to the information requested to be disclosed

(i) is treated consistently in a confidential manner by the corporation, the subsidiary or the third party, or

(ii) is customarily not provided to competitors by the corporation, the subsidiary or the third party.

If the corporation consistently considers the number of its employees to be sensitive information, then it must be withheld from disclosure.

In the case of the auditor general, the same general approach applies. As well, in the event of a dispute, the chief executive officer's decision must be followed with the withheld information provided to cabinet in a separate report:

In the case of a disagreement between the auditor general and a chief executive officer respecting whether information in a draft report is commercially sensitive information, the auditor general shall remove the information from the report and include that information in a separate report which shall be provided to the Lieutenant-Governor in Council in confidence as if it were a report to which section 5.5 applied.

Some additional specific types of sensitive information are given in Bill 35 which must be withheld. These include:

financial or commercial information, including financial statements, details respecting revenues, costs and commercial agreements and arrangements respecting individual business activities, investments, operations or projects and from which such information may reasonably be derived,

and

information respecting legal arrangements or agreements, including copies of the agreement or arrangements, which relate to the nature or structure of partnerships, joint ventures, or other joint business investments or activities,....

It is not clear whether cabinet may make or would make such information public general terms or if it would be kept confidential. It is also not clear to what extent any changes to the organization of a subsidiary - for example, in its ownership other than a complete withdrawal of any EnerCorp interest - would be disclosed under this Act.

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To infinity, and beyond - redux

Planetspace, Inc., an American company that lost in its bid to develop NASA's Commercial Orbital Transportation Systems phase one demonstrations, is lobbying the Government of Newfoundland and Labrador for financial assistance for an unspecified venture.

Planetspace was one of 13 companies in the race to develop the commercial orbital system but lost out earlier this year to Orbital.

Mark Doucet, of Cabot Capital Network Projects is the registered lobbyist. Doucet has registered to lobby the Premier's Office, the Business Investment Corporation as well as the business, finance, tourism, innovation and transportation departments for a "financial incentive request".

The Globe and Mail reported last year that Fred Doucet, former chief of staff to Brian Mulroney, was lobbying the Government of Canada for $45 million to support development of a space tourism venture as part of the Nova Scotia project.

Fred Doucet, president and chief executive officer of Fred Doucet Consulting International Inc (FDCI), is listed in the federal government registry as a lobbyist for Planetspace. Mark Doucet is listed in the registry as a vice president of FDCI.

Fred Doucet's name popped up early in 2008 as the go-between who arranged meetings been Mulroney and German businessman Karlheinz Schreiber. He denied knowing anything about financial transactions alleged to have taken place at the meetings.

Fred Doucet is reported by the National Post to have been a business partner of former Premier Frank Moores in Government Consultants International.

Planetspace signed a deal in August 2006 with the Government of Nova Scotia for 300 acres of land as part of a plan to develop an orbital launch facility. Bond Papers reported the Nova Scotia deal in July 2007.

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Energy Corporation of Newfoundland and Labrador (Part 1)

[Update: 02 June; added chart of EnerCorp organization]

Several e-mail requests arrived asking for some comment on the energy corporation bill currently before the House of Assembly.

In the interests of helping people to pick apart the aspects of the discussion, here are some general observations on the bill, the Energy Corporation of Newfoundland and Labrador(EnerCorp) and some of the issues that have turned up in the House of Assembly and news media.

The one characteristic of the current discussion is that many of the people commenting publicly have not read any of the documents or pieces of legislation shown below.

Anyone wanting more detail can contact your humble e-scribbler directly at horridlm at gmail dot com or the usual bondpapers at hotmail dot com.

In Part 1, we'll set the table - so to speak - by giving links to some general information. In Part 2, we'll look at some of the specific issues raised in the past two weeks.

1. Legislation

To start out, you can find several pieces of legislations that apply to this discussion. These will all come up later in this post to one extent or another.

• Access to Information and Protection of Public Privacy Act
• Corporations Act
  
• Electrical Power Control Act, 1994
• Energy Corporation Act
• Energy Corporation Act (amendment) also known as Bill 35
  
• Hydro Corporation Act
  
• Hydro Corporation Act, 2007 (not proclaimed)
• Public Tender Act
• Public Utilities Act
  
• Securities Act

2. Energy Plan

Released in 2007 after a decade in development, the energy plan describes in very general terms the government's intentions for the energy sector.

3. Energy Corporation of Newfoundland and Labrador

From the 2007 energy plan:

This Energy Corporation will be wholly owned by the province and will be the parent company of Newfoundland and Labrador Hydro (NLH), Churchill Falls Labrador (CF(L)Co) Corporation, other subsidiaries currently owned by NLH and new entities created to manage the province’s investments in the energy sector. This will provide a structure that permits both regulated and non-regulated activities to exist and grow within separate legal entities.

EnerCorp is not Newfoundland and Labrador Hydro with an expanded mandate.

That approach, implemented with changes to the Hydro Corporation Act in 2006 was abandoned in 2007 with the introduction of two new bills, one of which created the energy corporation and the other covering the Hydro corporation.

Under the new approach, EnerCorp is the parent or holding company, with a revised Hydro Corporation as a subsidiary. Among other things, Bill 35 will change or will allow changes to how these and any new subsidiaries are incorporated

While Hydro had several subsidiaries, these are now all subsidiaries of EnerCorp separate from Hydro.

This includes Churchill Falls Labrador Corporation (CFLC0), for example the joint venture with Hydro Quebec to manage Churchill Falls. Twin Falls Power Corporation, a joint venure with two private mining companies to supply power to Labrador West is a subsidiary of CFLCo. Gull Island Power Corporation and the Lower Churchill Development Corporation are also now subsidiaries of EnerCorp, not of Hydro.

The old structure can be seen in this chart:


The new structure can be seen more clearly in the EnerCorp strategic plan.

This is Bond Papers' version of the same chart:






















4. Some other jurisdictions

• Hydro Quebec Act
• Manitoba Hydro Act
• Organization of Economic Cooperation and Development guidelines for governance of state-owned enterprises
• Saskatchewan, Crown Corporations Act, 1993
  
• Crown Investments Corporation
  
• Saskatchewan Crown corporation governance: one view.
• Saskatchewan: views on performance reporting

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Say goodnight, Hedy

That's Hedley.

Harvey Korman, one of the finest comedic actors of the past century died today of complications from an aortic aneurysm. He was 81.

Korman is best remembered as part of the cast of the Carol Burnett Show but some of his finest work was as Hedley Lamarr, the villain in Mel Brooks' 1974 western spoof Blazing Saddles.

In memory of Korman here are two clips, one of Korman with Mel Brooks as Governor William J. LePetomane.


The second one, well it's just short and sweet.

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The politics and challenges of education reform in post-Confederation Newfoundland and Labrador (Part IV)

by Philip J. Warren

Challenges For The Future

Looking ahead, there are several challenges in elementary and secondary education that, I believe, need to be addressed. I plan to highlight five of these.

Focusing More on the Teacher and Learning

Many post-Confederation reforms in Newfoundland education did not focus on the teacher in the classroom, but rather on the structure and governance of education. Reforming structure and governance is much easier that improving the teaching-learning process. And when it's done, its gives the appearance of political action by the government in power. As important as organizational changes are, the real challenge is to provide caring, well-educated teachers for the classrooms of the Province, working in a supportive classroom environment. Providing such teachers and such an environment is the single most important factor in improving education, even more important than class size.

I'd like to make a comment or two about the preparation of teachers. It's important for Memorial University as a whole to consider the preparation of high-quality teachers as a top priority. Budgetary and personnel decisions should be consistent with that vision. In addition to providing the resources to guarantee excellence in pre-service education, the University should ensure that the Faculty can also focus on the continuing professional development of teachers. Professors in the Faculty should be rewarded for their service in this area, as they are for excellence in teaching and research. And facilities and resources for teacher education at Memorial should be constantly upgraded. We've only just begun to examine the potential of technology to transform education at all levels.

As a Province, we must continue to address teacher workload issues and provide more support services for teachers, particularly in the increasing number of small schools. While we've made significant progress in these areas recently, in response to the ISSP/Pathways and Shortall reports, there are still too many schools, urban as well as rural, that do not have adequate teaching resources; adequate secretarial, maintenance, and computer-technician staff; adequate bathroom and lunch facilities for teachers; or a comfortable and healthy place where teachers can relax when they're not teaching. Too many teachers who work with children with special learning needs, including the gifted and the talented, lack the necessary supports. Much more must be done to support teachers working with our aboriginal children.The housing needs of teachers who serve in many isolated areas of the Province are not being met. These conditions undermine the enthusiasm and motivation of teachers, and, therefore, negatively impact student learning. They must be addressed.

Promoting Greater Parental and Public Involvement

The meaningful involvement of the public, particularly parents, is another area where reform is necessary. Greater parental involvement can be justified on the basis of efficiency and effectiveness, as well as democracy. Parents can have a huge impact in working with and motivating their children, reinforcing their school-time experiences. What the ISSP/Pathways Report said about the parents of special needs children can be used to describe the feelings of too many other parents: they often feel powerless and marginalized.

I believe that Newfoundland school districts are now too large geographically for effective parental input, using the current model. Ways must be found to increase the involvement of parents and the public generally in school board elections and educational decision-making. Effective school boards are essential to the future development of education, as are effective school councils. We must decentralize more educational decision-making in this Province.

As Denise Pike and her associates at the Federation of School Councils have demonstrated, school councils can contribute significantly to the improvement of student achievement and performance. The time has come for the Department of Education to make the development of a comprehensive parent involvement policy a major priority.

Investing More in Educational Research

Investment in research has been virtually neglected as a part of our strategy in education reform. The reality is that we don't know how to solve many of the educational problems that we face. Certainly, there are no quick fixes or magic bullets. The best way forward is to take the best evidence that we have, try a variety of strategies that seem to have some empirical or conceptual support, assess their results, communicate our findings to all involved, and make changes accordingly. As Gerald Galway has rightly concluded, we need much more evidence-based decision-making in education.

It's interesting to compare the place of research in educational policy-making today with its place in health care. Research in health care has received funding from the Federal Government, something that's not likely in education. The Province, therefore, must address this need, in co-operation with the University and its other partners, because more research, both qualitative and quantitative, will help improve teaching and learning in the classroom.

Providing Sustained Bottom-up and Top-Down Leadership

Local leadership, at the school district as well as the school level, is vitally important in the improvement of education. We must act immediately to increase the pool of potential principals, for example, and improve their working conditions, for it is they who set the tone for teaching and learning. The leadership of principals may be the second most important factor (next to the teacher) in the improvement of student learning. This Province needs a comprehensive leadership strategy in education.

Education reform must be accompanied by sustained leadership from the top as well, focusing on longer-term as well as shorter-term goals. Cabinet ministers tend to establish agendas shortly after their appointment, but all too often, before much has been accomplished, they are moved to another portfolio, and new briefings required and new priorities established. Keeping successful Ministers of Education in their portfolios for longer periods of time would facilitate sustained leadership at the Provincial level. Ministers, of course, must be supported by highly-qualified officials in their Department, who, along with the Minister, keep in constant touch with what's going on in the field.

Recognizing the Political Nature of Reform

Education reform is very much a political process, requiring expert planning and a great deal of hard work. Change in education is very slow, and never moves in a straight line: the direction is determined by the forces at work at any one point in time. And there will always be opposition. Individuals and institutions have a predisposition to maintain the status quo in response to external demands for change. Those who oppose change or lose something in the process will often persist in their efforts to undermine its implementation. Educational leaders must understand the politics of change and be able to work with all stakeholders in the policy formulation, policy implementation, and policy evaluation processes.

Conclusion

I'd like to conclude where I began, by suggesting that education is now in a period of relative quiet and calm. In fact, things are too quiet in education today. With few exceptions, one being the discussion around the importance of establishing an effective appeals process for special needs students, education has received little attention in the media. Education was not a significant issue in the last provincial election. While important changes have been made recently to improve the system (limits on class size in certain grades, a new approach to teacher allocation, the expansion of distance education, more emphasis on the fine arts, which I consider vitally important, and improvements in programs for special needs students), much more must be done, now that we have more financial resources. Education must remain a high political priority in the Province's financial decision-making as it competes with such things as health care and the environment.

I can't conclude without making one more general comment. As a society, we must be more cognizant of the impact of a child's home conditions on education, and what must be done in this regard. There is a strong link between socio-economic background and educational achievement. Studies continue to show that family background is the single most important predictor of educational outcomes: that a child's education is seriously affected by poverty, unemployment, poor housing, poor nutrition, inadequate health care, low levels of literacy in the home, and the absence of appropriate early childhood education programs. There are too many students who come to school unprepared to benefit fully from school programs. It may sound utopian, but these issues must also be addressed.

Newfoundland and Labrador is now known throughout Canada for its unique culture and its oil. Let us also be known across the Country for our commitment to equality and excellence in education. That policy would lay the foundation for the Province's future prosperity and the long-term welfare of all our people.

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The politics and challenges of education reform in post-Confederation Newfoundland and Labrador (Part III)

by Philip J. Warren

The 1990s – Reforming the Denominational System

For those who don't recall, let me provide a little more detail about the denominational system. When Newfoundland joined Confederation, the Province had the most denominational school system in the Country, a system that had its beginnings over a century earlier. Five separate church systems -- Roman Catholic, Anglican, United Church, Salvation Army, and Seventh Day Adventist – had emerged, four with representatives in the Department of Education. In addition, there was a relatively small Amalgamated system, largely non-Catholic. Individual denominations had the constitutional right to have their own school boards and schools, to hire and fire teachers, to receive provincial funding on a non-discriminatory basis, and to have denominational colleges. Pentecostal schools were officially recognized in 1954.

After Confederation, the system became the subject of growing criticism. Increasing enrolments, fiscal restraint, and demands for improved programs, facilities, and services highlighted the problems of duplication inherent in the system. One result was a further increase in the number of Amalgamated schools and the integration of five denominations mentioned earlier. The Integrated system served nearly 60 per cent of the Province's enrolment. After that, Integrated, Roman Catholic, and Pentecostal school boards established a number of shared or joint services, in an attempt to further improve the efficiency and effectiveness of the system.

A new Government was elected in 1989, with a caucus that included several political activists (Hubert Kitchen, Rex Gibbons, Chris Decker, Pat Cowan, Roger Grimes, myself, and later Ed Roberts). After considering all the options for improving education (and we did consider every option), the Government decided to establish another royal commission, to study, among other things, the denominational system. The Commission's main recommendation was the establishment of a single interdenominational system as the most cost-efficient and effective way of dealing with the demographic changes and educational challenges confronting the schools, while retaining many of the benefits of denominationalism,

The Commission also recommended that, where numbers warranted, children should be provided with opportunities for religious activities and instruction in their own faith; that the 27 denominational school boards be replaced by nine publicly-elected boards; that the three denominational education councils be dissolved; and that school councils be established at the local level to encourage local, collaborative decision-making and site-based management. If implemented, these recommendations would, in effect, end the denominational system as it had existed since the mid-1800s.

In what may have been a bit of wishful thinking, the Commission pointed out that, just as, in 1969, five churches joined together voluntarily to form a single Integrated system, now, in 1992, it was possible for all churches to create a new system which would preserve the valued Christian character of schooling, and, at the same time, recognize the educational, economic, and social advantages of participating in a fully co-operative venture. The churches strongly rejected these denominational recommendations.

For six years, following the release of the Report in 1992, there was extensive lobbying, long periods of negotiations, periods of stalemate, two provincial referendums, a provincial election, a change of Premiers, several court cases, and political threats and counter-threats. In 1998, legislation was finally adopted in the House of Assembly, leading to the abolition of the denominational system. The story of that period in our history is a most interesting one.

Forces Influencing the Reforms of the 1990s

There were many interrelated forces that influenced the denominational reforms of the 1990s. Four of the most important were: (1) the growth of secularization and the declining credibility of the churches, (2) the influence of special interest groups and the media, (3) the Royal Commission, and (4) sustained political leadership.

The Growth of Secularization and the Declining Credibility of the Churches

The reform of the denominational system in the 1990s was influenced by a major ideological transition in the Province – the growth of secularization. Secularization is the process by which traditional religion and religious rituals lose their influence over society as a whole, and other institutions take over their functions. In Newfoundland, religion once permeated all aspects of our way of life, even athletic activities, the selection of many government employees, and even the appointment of cabinet ministers.

While in the early 1990s, many citizens considered themselves religious, and identified with a particular denomination or religion, the extent to which religion influenced their lives had declined. This was reflected in the decline in church attendance in most denominations, the difficulty of raising funds for church use, the shortage of students for the priesthood and the ministry, the significant growth of interfaith marriages, and the unwillingness of an increasing number of people to see the church as the preeminent ethical and moral authority in their daily lives.

This growth of secularization, of course, was associated with urbanization, industrialization, and a higher level of formal education. It was also associated with the controversies surrounding abortion, pre-marital sex, homosexuality, and the role of women in the churches. More important was the impact of the highly-publicized sexual abuse cases involving priests and other clergy, and the subsequent hearings and reports of the Winter Commission and the Hughes Inquiry. Some say that, at that time, the churches lost their moral authority, in a province in which, until the 1960s, they had retained power almost unknown elsewhere in Canada, even in Quebec.

These forces, among others, resulted in a change of public opinion about denominational schools. That change was reflected in many surveys, particularly those by Mark Graessar of Memorial University and my own studies. While the findings were sometimes ambiguous, and even contradictory, we found growing support for a single, interdenominational system, and almost unanimous support for interdenominational sharing, provided religious education was included. More and more people criticized the traditional system because, they believed, it resulted in too many small schools, the duplication of facilities and programs, excessive school busing, the discrimination of non-Christians and non-religious, and the discrimination of teachers in hiring and firing. These survey results were widely debated, as were publications such as Bill McKim's book entitled “The Vexed Question: Denominational Education in a Secular Age.”

The Impact of Special-Interest Groups and the Media

Many special-interest groups supported the school reform movement in the late 1980s and the 1990s. One such group was the Newfoundland Teachers Association (now the NLTA). With the publication of “Exploring New Pathways” in 1986, the Association launched the first major criticism of the denominational system since the 1964 Royal Commission Report. Roger Grimes was the President of the Association at that time. The criticism was based largely on efficiency and economic grounds, rather than ideological ones.

The fact that the NLTA supported the Government in the 1990s was important because the Association was made up of teachers of all denominations. While Pentecostal teachers had a separate voice within the Association, and sometimes disagreed with the Association's stand on denominational issues, such was not the case for other teachers, including Roman Catholics. I've done some research on why that was so, and will report accordingly in the future.

Another association that became increasingly involved in the debates of the 1980s and 1990s was the Newfoundland and Labrador Human Rights Association. During and after the entrenchment of the Charter of Rights and Freedoms, that Association strongly criticized the denominational system for limiting (1) the lifestyle rights of teachers, (2) the rights of non-adherents of the system, including non-Christians, and (3) the rights of non-adherent parents to run for election to school boards that educated their children.

Other groups, such as the business community and various coalitions of parents, also played an important role in supporting the reform. The St. John's Board of Trade, for example, echoed the views of the 1986 House Commission on Employment and Unemployment, linking education with economic growth and calling for the reform of denominational education. The NL Home and School Federation and the Education First Group, a diverse coalition containing persons of all religious and political persuasions, were very influential during the referendum campaigns. Change which tapped into that kind of public support was likely to be successful.

And, then, there was the influence of the media. For three or four decades after Confederation, few journalists criticized the denominational system, and those who did received little visible public support. That changed over time, for obvious reasons.

The media played a very significant role in the promotion of the work of the 1990 Royal Commission. They gave extensive coverage to the hearings, the recommendations, the negotiations, the referendums, and the court cases, often supporting the Government's position. Through newspapers, radio, television, and films, the media became a powerful influence on how people saw the denominational issue and how they responded. There was no doubt that they helped to set the reform agenda in education, greatly influencing policies, politics and values. Many supporters of denominational education believe, to this day, that they were unfairly treated by certain journalists and certain media outlets.

The 1990 Royal Commission

The Government believed that having a Royal Commission study the very sensitive denominational issue as part of a more comprehensive review would not only demonstrate the Government's commitment to providing a better education, but also its willingness to provide strong leadership in these challenging times. The Government knew that there were political risks associated with the Commission's appointment, but it was prepared to take that risk, knowing that when the report was completed, it could choose to take no action, some action, or accept the recommendations entirely.

Looking back, perhaps the most important contribution of the 1990 Royal Commission was that it provided, at a very important point in time, a vehicle for the public discussion of educational issues. In the process, the Commission captured a surprising amount of public attention and provoked the most lively debate in years. School boards, teachers, students, parents, and the general public were truly engaged. The Commission conducted a considerable amount of research and traveled widely to examine developments elsewhere. In addition to its recommendation on the denominational system, it made recommendations on improving the operation of school boards, the curriculum, instructional time, teacher education, the education of children with exceptional learning needs, and even the way we fund education. In the end, unfortunately, the implementation of many of these latter recommendations was overshadowed by the debate on reforming the system.

Sustained Political Leadership

With few exceptions, politicians and political parties in Newfoundland have been careful in their dealings with the churches. Even after Confederation, a political “understanding” between the churches and politicians remained in tact, where one seldom criticized the other. The churches often remained quiet on social and political issues about which they should have been concerned. And few politicians publicly questioned the authority of the churches.

The Governments of Premiers Wells and Tobin were responsible for providing leadership in the reform of the system. As a rationalist in policy development, Wells, like Trudeau, believed that the state should aggressively promote economic and social justice. He saw a modernized school system as the key to our future in a knowledge-based economy. That philosophy was reflected in the Government's newly-developed Strategic Economic Plan. To achieve the new order, the school system had to be made more efficient, more cost-effective, and more responsive to the needs of children.

While Wells preferred the single, unified, interdenominational system proposed by Williams, and wanted to reach a consensus with the recognized denominations, his Government negotiated what he considered a compromise Term 17 amendment, between what the Commission recommended and what the churches were demanding. That proposed Amendment provided for separate denominational schools where it could be demonstrated that such schools had sufficient numbers of students to provide quality education. Under the proposal, the Province would have both uni- and inter-denominational schools, operated by common school boards. The proposal was unacceptable to the churches.

While the constitutional amending formula did not require a referendum for approval of the compromise proposal, the Government decided to hold one in 1995 to give the public an opportunity to debate the issue and decide. Wells refused to aggressively campaign in the referendum. In the end, the proposed Amendment was approved by a narrow majority -- 53 to 47 per cent -- with a relatively low voter turnout. Much more could be said about the Wells Amendment and the referendum, but I'll leave that for another time.

The essence of political leadership is knowing when to think and act quickly and when not. Building on what Wells had accomplished, Tobin (with Minister Roger Grimes) acted quickly and decisively to complete the reform process. After the Barry court case in 1997, which halted the implementation of the Wells proposal, the Premier sensed that the political mood of the Province had changed, and support for the Government had increased. So, he called a second referendum on a fully public system, eliminating denominational rights entirely, with some provision for religious education.

While not being critical of Wells, Tobin sought to distance himself from the first referendum campaign. He presented a clear and straightforward question to the public, and campaigned aggressively, focusing not only on the inefficiency and ineffectiveness of the denominational system, but also the philosophical arguments on which it was based, particularly that Christians should be educated in separate schools. He claimed that the real issue was the correction of a “moral wrong” inherent in the system. By using this argument, he shifted the campaign from primarily economic grounds to the greater welfare of all students and society generally.

With the enthusiastic support of many special interest groups, and individuals of all religious and political persuasions, the referendum was successful, with 73 per cent voting in favour. The Government was assisted by the fact that, unlike the first referendum, the Roman Catholic campaign was not well organized, had few funds, and had lost some of its supporters and enthusiasm.

In my research, I've reviewed the political campaigns of the churches to preserve the system, and the Government to reform it. I will comment on these findings in the future, including the important debate concerning minority rights.

Part 4...

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