Verbal tics (4)

Who: Danny Williams

When: Saturday, February 7, 2009

Where: Interview with Kathleen Petty for CBC Radio’s The House.

Score: 23 “you knows” in six minutes and 30 seconds.

Well, you know, I think we understood here in Newfoundland and Labrador that, you know, once the Liberal Party had made up its mind that it was going to support the budget for its own, you know, national reasons,
you know, we accept that even though we'd prefer a different outcome, but it's really Newfoundlanders and Labradoreans, I think, as a group just standing on principle and making a statement to the rest of the nation that they disagree with what the Harper Conservatives have done to try and, you know, compromise us during this budget and make us pay for democratically electing Liberals and New Democrats.

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“We want to be independent and self-sufficient”

Some views on Canada, Confederation, Newfoundland and Labrador and what it is all about, from the words of one man and his administration, sometimes within the very same interview.

1.   This land is my land!  Sort of.  Globe and Mail, February 7, 2009:

“…Separation is not something that is on my agenda under any circumstances.

This is a great country and I want to be part of it, but the country disappoints me when we don't rally to protect each other.” [Emphasis added]

Yet, what recently happened in the federal budget was not confined to the actions of one man or even one political party in a federal system:

“It should have been a legitimate celebration of coming out of the 'have not' status and being a net contributor to Canada. We're looking at that to be a very positive thing — and then Canada just struck us over the head.” [Emphasis added]

2.  Halifax, June 2001:  on the Great Plot that is Confederation…

“The more that I see, the more nauseous and angry that I get. The way that our people and our region have been treated by one arrogant federal Liberal government after another is disgusting. The legacy that the late Prime Minister Trudeau and Jean Chrétien will leave in Atlantic Canada is one of dependence on Mother Ottawa, which has been orchestrated for political motives for the sole purpose of maintaining power. No wonder the West is alienated and Québec has threatened separation. Canadians - and Atlantic Canadians, in particular - realize the importance of dignity and self-respect while Ottawa prefers that we negotiate from a position of weakness on our hands and knees….”

3.  On the goal, from the same speech:

We don't want handouts. We want our pride back. We want to be independent and self-sufficient.

4.  Eternal vigilance against the Foe:

We’re resilient, we’re survivors, ah, y’know, we basically prepared for this day. When, y’know, over the course of the last few years, you’ll notice from our Throne Speeches, we’ve talked about being self-reliant, we’ve talked about being masters of our own destiny. And we have been building up a war chest for when the feds come at us again, quite frankly.

5.  Throne Speech 2008:

As a result of our collective efforts to wrestle down the deficit, to ratchet up growth and to reach an agreement that fulfilled the promise of the Atlantic Accord, we are – for the first time in our history – poised to come off equalization very soon. This is a stunning achievement that will reinforce the bold new attitude of self-confidence that has taken hold among Newfoundlanders and Labradorians. [Emphasis in original]

The revenues that pushed the provincial treasury to “have” status came entirely from agreements signed before October 2003.

6.  On the current economic problems facing the province, Globe and Mail, February 2009:

Williams says the per capita loss is roughly six times that of Quebec or Nova Scotia. He also said his financial experts are predicting provincial revenues from dropping oil prices will be down some $1.5-billion.

"That's a double whammy," says Williams, that will "cripple" his province and force it back into deficit spending.

"We've done all the right things fiscally," he says, "and then in one fell swoop 'bang' we're pretty well back where we started."

The warnings against overspending  - that one from 2005 - from early on in the Williams administration went unheeded. The Premier had a decidedly different view of the province’s economic fortunes only a few months ago.  He wouldn’t talk hard numbers even though the ones the provincial government is currently using were pretty obvious to regular readers of these e-scribbles. All that’s happened in the past couple of months is a refining of the numbers, not a surprise shift to big ones.  $1.3 billion in November.  $1.5 billion now.  Works out to the same thing.

7.  The oldest living father of Confederation, reincarnated, Globe and Mail, February 2009:

Independence talk, he says, is once again being heard: "But that's not where I'm coming from. Separation is not something that is on my agenda under any circumstances.

"This is a great country and I want to be part of it, but the country disappoints me when we don't rally to protect each other.

Ditto, circa2007:

Premier Danny Williams says he's trying to quell separatist feelings within Newfoundland and Labrador, despite a throne speech that suggested the province should push for more autonomy from Ottawa.

"The fans of sovereignty are here. If anything, I've been trying to dampen those fires as much as I can," Williams said yesterday.

8. Autonomy!  Throne Speech 2007:

…our people have now also learned that we will achieve self-reliance economically only by taking charge of our future as a people. To that end, My Government will harness the desire among Newfoundlanders and Labradorians to cultivate greater cultural, financial and moral autonomy vis-à-vis Ottawa. [Emphasis added]

9.  What autonomy means, in greater detail,  Hansard, 24 April 2007:

Political self-reliance simply means that we cannot rely upon those elected to offices outside of this Province to deliver what is in our own best interest. We must achieve that on our own. Self-reliance will not come by depending on others to achieve it for us. That is a lesson we have learned year after year, generation after generation. So we will harness the desire among Newfoundlanders and Labradorians to cultivate greater political, financial and moral autonomy vis-a-vis Ottawa. As a distinct people and as equal partners, Aboriginal and non-Aboriginal together, we will write a new future for Newfoundland and Labrador; a future of our own design, where mutual understanding, justice, equality, fairness and co-operation are the order of the day. [Emphasis added]

10.  Foreshadowing.  If recent events are any indication federal politicians and those at the time who were wannabes clearly ignored that point, as Bond Papers warned at the time:

It should surely give pause to all those incumbents federal members of parliament from this province and those likely candidates for it means clearly that Danny Williams does not and will not trust you. These words mean, unequivocally, that elected representatives of the people of Newfoundland and Labrador are not to be trusted merely because they represent the people of the province somewhere other than in the House of Assembly controlled utterly by the current provincial administration.

Scott?  Walter?  Paul?  Peter?  Siobhan?  Fabian?  Gerry?  Loyola?

One wonders if they get the point.

11. And you want to be my latex salesman? Budget speech 2008:

We are standing tall as powerful contributors to the federation – as masters of our own domain, stronger and more secure than we have ever been before. [Emphasis added]

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The Hurt Locker: Monkey-tossing can’t work when people know the truth

Remember that right from the start Bond Papers pegged this latest Equalization flap as a way of pretending that whatever fiscal mess the government is in, the whole thing is really someone else’s fault.

Now for those who don’t know, monkey-tossing is one Danny Williams’ great political skills.  If they gave gold medals in tossing the monkey from his own back, Danny Williams would own them all.

He tried to toss responsibility his own failure in the Andy Wells/Max Ruelokke affray.  For those who are keeping score, incidentally, it’s worth taking a look at the judge’s decision in that case.  The number of times the provincial government changed its position  in the case rivals its multitude of contradictory stands on on Equalization.

He monkey-tossed the whole smelter in Long Harbour a couple of years ago, although hat one is still a wee bit odd.

Now it’s the whole $1.5 billion. 

Look at how the Premier puts the thing in a letter to the National Post on Saturday. 

Guaranteed by now the thing has been blasted over the plant internal comms system such that come Monday every single one will be talking  - on the open line shows and anywhere else plants turn up  - about the recent federal offset changes as if the impact comes entirely in one year:

Not in our most pessimistic moments did we dream that we would be negatively impacted to the tune of $1.5 billion — approximately one quarter of our annual provincial budget.

The thing is: that statement isn’t true.

The provincial budget was short for the coming fiscal year by $1.5 billion before anyone learned about the Equalization/offsets thingy.

The loss represented by the offset changes – even if we accepted the provincial government assumptions and projections -  would be a little over $400 million in 2009. That works out to be six per cent of the 2008 budget and, as we’ve said before, it’s not even a real number.  It’s entirely made up base don a raft of assumptions which might not turn out to be true.

What is true, as it turns out, is the Bond Papers prediction  over the past few months that the provincial government is facing a $1.5 billion shortfall on the annual budget.

That is about 25% of the upcoming budget.

The culprit?  Oil mostly:  down a billion next year over last year using an assumed value for oil in the mid—50s Canadian.  Incidentally, for all accounts that is exactly what the provincial government is currently using for their estimates.

The other culprits?

Well, you can hack off another few hundred million for the collapse of mineral prices.

Then, there’s the impact of tossing 1,000 highly paid paper workers to the curb.

On top of that there’s the 4,000 or so migrant labourers who were making Alberta money but now will have to subsist on the earnings from Lotto 10-42.  Notice that the downturn in the oil sands alone is having four times the job impact in Newfoundland as Abitibi.

That means fewer purchases and hence a drop in sales tax.  That means a sizeable chunk of income tax revenue will disappear.

By the time you add it all up, the provincial government is in the financial hurt locker:  expenses as big as 2008 – around $6.0 billion  - and the income from 2004 – somewhere around $4.5 billion.

No wonder the Premier is trying to toss that monkey off his back.

In 2004, he could toss the fiscal monkey onto the shoulders of the crowd who’d been in office.

He did.

He also tossed the cost of cuts onto the backs of the province’s public sector workers. 

The Premier could monkey-toss for England.

He does it all the time.

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Verbal tics (3)

Who:  Danny Williams

When: February 3, 2009

Interview:  Scrum video.

Score:  55 “ya knows” in 16 minutes and 56 seconds. Does not includes coughs, “quite franklys”, “nothing could be further from the truth” or shoulder twitches.

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Dog-whistle

In politics, dog-whistling is the use of words that are likely to be interpreted by certain segments of the population in ways that others wouldn’t get.

Penetrating insight into the obvious warning: It comes from the idea of the whistle that is pitched high enough such that only one species of mammal can hear it and react.

In his scrum yesterday, the Premier said something which might be a dog whistle, what with all the anti-Confederate comments being tossed around since last week:

We’re resilient, we’re survivors, ah, y’know, we basically prepared for this day. When, y’know, over the course of the last few years, you’ll notice from our Throne Speeches, we’ve talked about being self-reliant, we’ve talked about being Masters of Our Own Destiny. And we have been building up a war chest for when the feds come at us again, quite frankly. [Emphasis added]

War chest for when the feds come at us again.

Curious.

It wouldn’t be the first time that some incongruous phrases have turned up in Newfoundland and Labrador politics over the past five years or so.

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A duff in the…

So maybe Senator Mike Duffy was a bit over the top in his remarks a couple of days ago – and grossly inappropriate in the senate chamber -  but he still managed to generate a laugh or two among Newfoundlanders in this CBC streeter raw video.

If you’ve got a sensitive disposition, then don’t follow the video link. [CBC video]

Then again, it’s not the first time over-the-top sexual metaphors have found their way into Canadian political discourse over the past six months.

For his part, Duffy didn’t apologise for the remark but he did withdraw it in the senate.

From the Premier’s perspective, it appears shafts are a bit like sledgehammers; it depends on who is doing the shafting.

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Face-off!

A study in contrasts between two hockey players.

The one:

Kovalev said he talked to Lang when he got out of the hospital.

“He didn't sleep at all last night because the nurses were asking for autographs like, five times a night, but otherwise, he feels fine,” said Kovalev.

The other:

"Instead of making money, I'm just turning grey and trying to stay away from getting sick because I'll have to face the doctors and the nurses if I end up going to hospital," he said, to a loud round of applause.

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I wanna be your sledgehammer

“But you don't get hit over the head with a sledgehammer,…”

The legislature is supreme and that is good, as Premier Danny Williams assured us in December.

But then again, maybe it isn’t so good and it isn’t so supreme.

Guess it matters who is swinging the sledgehammer and who is getting it in the head.

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PurPle haZe

“Who the f*ck’s he trying to impress?” came the voice of a steadfast friend as soon as the phone came up close to an ear.

“Who?” says your humble e-scribbler still choking back the hello.

“Ignatieff” he said, then reeled off a section of some online story about the Liberal leader’s statement that he will let Liberal members of parliament from Newfoundland and Labrador vote against the federal budget this evening even though the party caucus will be voting for it. Five of the six had already said publicly they’d be bucking Iggy and the caucus anyway.

“No one,”  says your scribbler.

“Well, he’s doing a great job.”

“You know,” he added after a long silence, “sometimes it seems like you and me are the only ones around this place not on acid.”

He hung up the phone as if this was just a snippet of an ongoing conversation.

A couple of days ago, another old friend brought up Michael Ignatieff’s increasing tendency to refer to the country  - Canada  - as The Federation.  “I thought Danny was the only trekkie”, he’d said over a coffee, “but that stopped once he got a piece of the action and became a have province.”

The second friend took to calling him Sarek after that. “Buddy started out playing a Romulan, you know,” he reminded, tapping his finger on his nose, as if that meant something.

The Canadian Press story my steadfast friend had been reading over the phone had a few more of those mind-benders in it.

There was Danny Williams praising Sarek for letting members of caucus buck the whip:

“He shows real courage this early in his leadership to be making a move like that. The MPs are being allowed to do what they need to do on behalf of their province and I think the fact that a national leader recognizes that is very important.”

Williams’ own caucus, of course, is not allowed to think for themselves without permission from the Premier’s Office, let alone follow the direction of another party leader. 

The six federal Liberals from Newfoundland and Labrador got bombarded with telephone calls and e-mails this past week, most of them coming from Williams’ caucus directly or at their behest. The original orders came from the 8th, of course.

Someone on the 8th even managed to rouse John Hickey out of his hibernation.  Hickey, who is rumoured to have some  cabinet responsibilities, has been all-but-invisible until the day after Groundhog Day. He called the local morning call-in show on voice of the cabinet minister to list all the wonderful things for Labrador his master could have done with federal money. 

Things like the a power line designed to take the hydro-electric power that wasn’t going off to somewhere else in North America down to the island of Newfoundland.  This would somehow benefit Labrador even though there was no provision for any juice to bleed off to light the odd home in Labrador.

Or the Trans Labrador Highway.

Never mind that Hickey, as highways minister once claimed to have a deal with Ottawa on the thing already on his desk only being forced to admit that he really didn’t.

This is the same John Hickey, incidentally,  who sued former Premier Roger Grimes not for what Grimes said but for what Danny Williams said Grimes said. No one knows what became of the lawsuit.

On another part of the front, the mayor of St. John’s, good Provincial Conservative that he is, took time from walking by a Tim Hortons drive-through to insist the Liberals must vote against the budget or risk their political careers.  At the same time, he tells a national radio audience he can’t wait to get his hands on the federal infrastructure cash.

The foolishness isn’t confined to this latest racket the Premier’s Office acknowledges something called purple files it creates to prepare the Premier for media interviews. The most accountable and open government in civilization denies they exist when reporters ask for them under the province’s open records laws.

Then there is Equalization.

Aside from anything else, a surprising number of the crowd filling up comments on news websites or calling the talk shows on the voice of the cabinet minister think it is time to separate from Canada.  Ottawa is not giving us enough handouts, they say, so we should pack up and leave and get no handouts at all. 

The more loopy of the crew have taken to suggesting that Newfoundland should join with Quebec in a separate country.

The host of the night-time version of this psychedelic extravaganza of the airwaves fuels the chat with his preamble to the show the night of the budget vote. This is the same guy who, as editor of a local newspaper – the Independent – mused about separatism, denied he was a separatist when he ran for the New Democrats last time out and now is back banging the drum about a need to rethink the place of Newfoundland and Labrador within Canada.

Such is politics in Newfoundland and Labrador these days.

Such is public policy in Newfoundland and Labrador these past five years.

And a week after declaring that the budget changes would cripple the province’s economy, Danny Williams is praising Ignatieff for something that, in the end, means absolutely nothing. The budget still passed and the money will go – if it ever really would go – and anyone not in a state of altered conscious would wonder what the fuss was about in the first place.

What about the cash? 

Even Danny Williams is nonplussed this Tuesday.  Williams admitted to reporters on Tuesday afternoon that the federal government will only lift the O’Brien 50% option for this year.

This warp in space-time continuum - Newfoundland circa 1959 - once confined to one part of The Federation has spread.

The five members of parliament who panicked when Danny called did not waste time thinking of what they might do. Like say, finding out if what Danny said was right.

And if it turned out he was, come up with a plan of their own.  Maybe work on the caucus and government to see if a deal could be worked.  Maybe even try proposing an amendment that suspended the specific change for one year. That’s something Danny Williams wanted at one and – since it was aimed at once province – likely wouldn’t upset too many applecarts.  It might have passed.

As it turned out, the one year suspension was an option that the feds already tossed out at some point – did any reporter think to ask when the feds told the province this? - and Danny Williams accepted.

But the Liberals couldn’t even take credit for having anything to do with it.

Instead, Michael Ignatieff asks Stephen Harper if he would entertain a change.

Harper says no.

Case closed.

The six MPs get a pass on the whip – just this once, Iggy insisted – because springing a change is no way to run a Federation. Other provinces, affected as seriously or moreso than Newfoundland and Labrador by the Equalization changes, get no such consideration.  While it is no way to run a federation, according to Iggy, it is apparently not enough of no way to cause a change in who is running the place.

No clearer message could they send.

They might have even considered saying they did not want to become party to the excuse that whatever bad budget decisions this current provincial administration makes over the next three years, Danny Williams can say it’s all Harper’s fault even though that wouldn’t be close to true.

They could have left the job of backing Danny against the unions to the provincial labour leaders, the head of the province’s labour party and the former provincial labour party politician now sitting in Ottawa from this province.

And even if the amendment failed, the whole Liberal caucus might have showed it was willing to try something substantive. Something that ultimately didn’t look like they were responding to the sound of a bell coming from the blackberry upside Danny’s head as he drove his Avalanche down the Parkway.

Or was it the Queensway?

Meanwhile, the Liberals ought to know – every single one of them in Ottawa – that this is not a one shot deal. 

Williams will be back.

He knows what he can do to the federal Liberals and Ignatieff’s promise that this permission is a one-off won’t mean a thing. 

A guy who tells a gaggle of national and local reporters that he has been building up a war chest for when the “feds” come after “us” again, is not a guy who is going away any time soon. 

In a year’s time, Sarek might be the fed Williams is at war with. 

He’ll be back sooner than you think.

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Breaking: Iggy owned by DW

Michael Ignatieff will try and save face in today’s budget vote by claiming he is asking Liberal members of parliament from Newfoundland and Labrador to vote against the budget.

This comes after a dinner at Stornoway last night and five of the six stating categorically they’d be voting against the budget anyway.

Such a transparent media line won’t hold for 30 seconds among the sharks in the national press gallery.

Prediction:  Iggy will be gone within a year.

Question:  Would Stephane be willing to come back?

How about if we said please?

 

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Wagging the dog

Evidently it’s far better to pound at Equalization than take some action against American protectionism on behalf of a provincial economy that is more than just a wee bit dependent on exports to the United States.

Heck, maybe the Premier could give Obama some more pointers on how to run an economy.

“You know what I like the most is Barack Obama is listening to what we're doing here,” Mr. Williams said during question period to roars of applause from his Conservative caucus.

“That's a great compliment to this province because I have a lot of respect for that person.”

Just don’t mention any expropriations.

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It is better to give than receive…

but when you both can give and receive, it’s even nicer.

$10,000 for the group, and a couple of hundred for the candidate of the party in power during the election that same year.

If nothing else, it just looks bad.

We need election finance reform.

 

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Equalization “best of” times, the worst of times

As your humble e-scribbler writes this latest Equalization post,  Liberal member of parliament Scott Simms is telling some reporter at CBC that – quelle surprise – he will be siding with Danny Williams on whatever it is Danny wants on Equalization this time.

Scott’s got a history of playing follow-someone-else’s leader on the basis of bogus information.  He did it in the first round of the Equalization Follies and he’s apparently bent on keeping at it despite the previous experiences.

Simms joins a group of politicians from Newfoundland and Labrador who belong to the same club or who – inexplicably  - have been stampeded into creating problems in their own political backyard, robbing them of whatever influence they did have and setting themselves up for yet more of the same old pattern of hysteria and blackmail.

Politicians who refer to the e-mails and phone calls to justify their decision should note that the whole thing was orchestrated.  If they’ve been alive in this province at all over the past five years, they should know how things work. Sounds like they are just hunting around for convenient excuses.

If a Provincial Conservative member of the legislature is on the phone it is usually because someone in the Premier’s Office directed or approved the call.  They don’t have the luxury of voting against the wishes of their leader, at least not if they want to keep their seats, let alone get into cabinet.

Ditto e-mails.  You get one from “at gov.nl.ca” and you know it’s been approved from the top.

And all those calls from listeners to talk shows at the voice of the cabinet minister are pretty much from people who have faithfully followed whatever position the current administration is pushing irrespective of the fact it contradicts the position taken a year ago.

Or yesterday.

Is there an issue on Equalization this time?

Not really.

It all has to do with the words, some of them on agreements signed by the provincial government over time.

The 2005 transfer deal, for example, states in part that if another province gets a better deal than this one on Equalization and offsets, then the provincial government here gets it too. 

That’s the reason why the previous round of discussions by which Nova Scotia can toggle back and forth between the different Equalization options also applies to Newfoundland and Labrador.

It’s that ability to pick the “best of” that sits at the heart of the current round of nonsense.  Danny Williams is a little miffed  - or so he claims – that there is only a choice between two options instead of three. A better-of choice, instead of a best-of.

But then that new Nova Scotia thing cuts in and the whole problem vanishes. Odds are that the budget implementation deal, and that’s the bill that matters,  will apply the best-of provisions to both Atlantic oil and gas provinces. They have before.

This thing isn’t about and never was about screwing over Danny Williams, as much as he might like to think so.  It was about dealing with Ontario receiving Equalization and not bankrupting the federal piggy bank Williams lusts after in the process. 

Now if you really want to get a sense of how much a problem this Equalization thing isn’t, bear in mind that under the Equalization program there have always been provisions that shield a province against catastrophic drops in Equalization from year to year.

If that wasn’t enough, since 1994 Newfoundland and Labrador has had the ability to chose an Equalization option retro-actively to always ensure that it gets the one which gives the most cash. In a month’s time – March 1 to be precise – the provincial finance minister can pick which Equalization option delivers the most cash for the year that is almost over.  And then next year, he gets to chose again based on actual experience for the year that is already past.

That too makes this whole thing a bit premature if not downright silly.

Then there’s oil prices.

News stories this weekend refer to oil prices being close to the province’s projected US$40 a barrel from the December budget update.  The only problem is that the price they give isn’t for the local oil.  The local oil has been trading considerably above US$40 and with the 25% premium for a weak Canadian dollar, the provincial treasury is getting more cash from oil than it forecast.

If those prices just hold where they are, finance minister Jerome Kennedy will have more real cash from this year to carry over to next year and he will definitely have more cash than he will let on in his April budget.  By next March, there likely won’t be an issue at all involving a mere $400 million on a budget of over $6.0 billion and an economy that churns out $25 billion in goods and services annually.

By then it will be time for yet another Equalization fooferah and people will be playing what is rapidly becoming the replacement for the March Madness of the seal hunt.

But what of members of parliament from this province?

Well, some of them will wind up having the worst of political times, yet again.  If they think this is bad, just wait for the games that are coming from the same quarter and based on the same completely false set of premises.

Those guys will be having the best of the same federal politicians yet again.

And none of those games are in the best interests of the people any of them were elected to serve.

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Shocker: Provincial Tory pol threatens federal MPs over budget

Provincial Conservative Doc O’Keefe  - the mayor of St. John’s - says that Liberal members of parliament from this province are putting their political careers on the line if they don’t vote against the federal budget on Tuesday.

"I mean this is a serious, serious blow to the economy of Newfoundland and Labrador and for any MP from any party to even think about not voting with the population of Newfoundland and Labrador is just unthinkable — aside from the fact it would be political suicide."

In a CBC Radio New story running as well, Provincial Conservative deputy mayor – Ron Ellsworth – expresses confidence that one MP – Siobhan Coady – would vote the way the Premier wants. That was never in doubt, as Coady made clear on voice of the cabinet minister’s Open Line Friday morning. 

Of course, which Danny Williams’ position the federal members of parliament are supposed to support is anyone’s guess.

O’Keefe is running with the first version, coming from the late Tuesday night scrum.  That’s the serious-blow-to-economy, must-vote-against version.

CBC’s online story uses the Premier’s second position, uttered a day later, calling for a one year moratorium on the changes to the Equalization formula.

None of them noticed the Premier’s position from Friday.  He told an audience of construction industry officials that the Equalization changes didn’t matter  - at least as far as that mortal blow to the economy thing was concerned - since the provincial government already planned to spend $700 million on public works in the upcoming budget as a means of stimulating the economy.

HMV Update:  On the one hand anti-drive through crusader and notorious municipal policy flip-flopper Doc O’Keefe wants the budget defeated.  On the other hand he told CBC Radio’s The Current this morning that things in The Great City are wonderful for 2009.  O’Keefe’s also got his hand out for the federal infrastructure money in the budget.  O’Keefe said he’d like to see the money right away, something of course that wouldn’t happen if the budget is defeated and the country faces another federal elections within six months of the last one.

Meanwhile, Premier Danny Williams is morphing the message yet again in the Globe and Mail:

"They [federal Conservatives]  have to start wondering about how quickly they have to dump Harper," said Mr. Williams, who has been no friend of the Prime Minister in the past, although he said he asked him three months ago for a meeting to discuss federal-provincial relations.

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Province takes shares for cash

The provincial government took shares rather than provide loans with eight of the companies identified by the provincial innovation department last year has having received cash under its commercialization program.

One of the share purchases – for Virtual Marine Technologies – was subsequently converted to a repayable loan.  VMT  received $450,000 of the half million it was originally supposed to received.

According to notes in the audited financial statements, "[t]he Province purchased 5,000 Class A common shares at a cost of $500,000. Of this total, $450,000 had been advanced as at 31 March 2008, with the balance held back pending delivery of certain financial information which remains outstanding. Subsequent to 31 March 2008, the equity investment was converted to a conditionally repayable loan. The 5,000 common shares were then cancelled and returned to the company."

According to a Telegram report in 2008, only three of the 10 cash injections was ever announced publicly. One – cash for MedicLink  - was announced in the House of Assembly while two others were featured in government news releases.

According to the audited public accounts for 2007, the provincial government took shares in:

• Jackman Brand Marketing ($125,000 for 1250 Class B shares),
• Pixecur Technologies a.k.a. DataSentinel ($400,000 for 4,000 preferred shares)
• Dockside Appetizers ($31,000 for 310 common shares)
• Mediclink ($352,000 for 3517 Class A shares),
• NewLab ($500,000 for 5,000 Class A shares),
• Northern Radar ($375,000 for 3479 Class A shares),
• Virtual Marine Technologies ($450,000 for 5,000 Class A shares), in addition to the $500,000 in shares in
• SAC Manufacturing.

With the exception of SAC,  all companies remain going concerns. NewLab merged with Newfound Genomics in 2008.The government did not take shares in a company manufacturing a pet restraint system for cars.

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Taxpayer cash in mysterious company unrecoverable

The provincial government will have to write off  upwards of $675,000 in taxpayers money sunk into a mysterious company in 2006 according to notes in the government’s audited financial statements for 2007.

In January 2008, Bond Papers first told you about $500,000 of taxpayer’s money given to a company called SAC Manufacturing and over the weeks after that the Telegram’s Rob Antle dug deeper.

The province’s innovation department released more details on the commercialization program to the Telegram once the SAC fiasco broke in the news.  SAC received the largest grant possible even though, as the innovation minister acknowledged at the time, the company reportedly had “cash flow issues.”

There’s was no news release about the money at all and when questioned on it later, then-innovation minister Trevor Taylor could not explain why his department didn’t issue a news release on the investment.

Antle reported the company received a provincial government loan of $175,000.  In December 2006, the company received a half million under the provincial government’s commercialization program.  Four months later the company had closed its Paradise, NL offices and relocated to Alberta.  By September 2007, the company had ceased operating.

There was no notation on the company’s failure in last year’s audited financial statements even though they were finished around the time the company went under and released to the public six months after it ceased operation.

There’s been no mention of the investment in either the 2007 or 2008 auditor general’s report.

SAC Manufacturing supposedly had developed a natural gas compressor but no other details have ever been made public.

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Saturday leftovers

1.  Lana Payne, head of the province’s labour federation, writes a Saturday column in the Telegram accusing Iggy and Harper of playing the politics of fear and accusing Iggy of “caving” on the federal budget.

Caving would be the head of the province’s labour federation who  joins the Premier in the latest Equalization dog and pony show without so much as batting an eyelid, let alone asking the Premier what he planned to do to public sector employees given the record huge deficit he has anyways.

Like maybe he’d stomp on collective bargaining again and re-write laws to strip unions of rights.

She apparently was nonplussed by that labour unions nonsense but gi-normously concerned about whatever it was Danny was talking about.  He was angry, that’s good enough for Lana.

And playing crass budget politics?

That would be the entire lot of them, Payne included.

2.  Pam Frampton on government unaccountability and the whole ongoing university fiasco. It’s worth the read form a number of reasons, not the least of which is proof that the current administration knows only one way to deal with the problem of being in a political hole:  keep digging.

Pam nails it in one place:

In a Dec. 12, 2006 news release announcing the appointment of Jeanette Lundrigan and others to the board of regents for a three-year term that would have ended Oct. 27 this year, Burke wrote: “It is important we have a team that has the skills, dedication and enthusiasm to lead the university in the coming years.”

Removed from post

But on Jan. 15, 2009, Lundrigan was summarily replaced by Kathleen Roul.

In announcing Roul’s appointment, Burke wrote: “I am pleased we have a team in place that has the skills, dedication and enthusiasm to lead the university in the coming years. …”

Perhaps Burke is right, that renewal is sometimes necessary.

Incidentally, further to the freedom from information story, the Telly went looking for some briefing notes on the NAFTA implications of the Abitibi expropriation.  None exist, comes back the answer from the freedom from information co-ordinator.  Minister was briefed in many ways but no documentary record exists of any of it.  The story isn’t online, unfortunately.

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Do they give awards for non-news?

Presidency position goes public.  The provincial government decides to posts ads for people interested in being head of the status of women council.  Voice of the cabinet minister runs a news story on the event.

It’s not news that provincial government is running job ads for cabinet-appointed jobs.

The provincial government advertised for a new chairman for the province’s public utilities board in 2007.

They held a competition.

Then cabinet stuffed Andy Wells into the job even though he wasn’t in the competition.

Of course, then again there’s the offshore board boss job. 

Competition, complete with ads.

Danny tries to stuff Andy into the thing anyway.

Competition dies.

They appoint a panel to pick someone.

Andy still doesn’t get the job.

It would be news if the provincial public service commission held a competition for a cabinet appointment and the cabinet appointed the person who actually won.

Oh yeah, and that PUB story turned out to be a masterpiece of unaccountability in the public service.  Simple question:  no answer.

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Steadfast shifting

A day after a Bond Papers post documenting the flips, flops and contradictory positions taken by the provincial government on Equalization over the past five years, voice of the cabinet minister reassures all that Premier Danny Williams “is steadfast in his approach”.

The Premier “says this is an issue of principle”.

Of course it is, just like it was an issue of principle to oppose previously the Equalization issues he now supports.

The principle is cash.

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Iceland set to name new PM

The new Icelandic prime minister is the country’s longest serving parliamentarian with previous experience in cabinet.

She’s also openly gay, which is the thing most news media outside Iceland have picked up on.

Like that defines her much better than those first two qualifications.

Johanna Sigurdardottir will lead the country until elections this spring.

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Equalization flips, flops and fumbles

Danny Williams once scorned the O’Brien formula that counted only 50% of the province’s oil and mineral revenues saying that the concept had “Ralph Goodale’s fingerprints” all over it.

Premier Danny Williams called the report "some kind of joke - otherwise it was just a bad dream."

He said the idea unfairly penalizes Newfoundland and Labrador, and is essentially the same plan that led him to storm out of first ministers' meetings in the fall of 2004.

"It's got (former Liberal finance minister) Ralph Goodale written all over it," Williams told reporters at Confederation Building.  [Rob Antle and Jamie Baker, “Report would erase Accord gains”, Telegram, 6 June 2006]

Instead, Williams wanted a formula that didn’t count any of the province’s non-renewable resource revenues.  Danny Williams wanted that 100% exclusion so badly he went to war with Stephen Harper hurling every name imaginable at the Conservative leader for not living up to the campaign promise in two elections.

Never mind that in letters to the federal party leaders in December 2005 Williams stated that the provincial government wanted to see the 100% inclusion of non-renewable resource revenues.

Now, that 100% exclusion isn’t the good deal after all.

Now the one with Ralph’s fingerprints all over it is the right one.

And Danny Williams wants it.

The fingerprints one.

Not the no-greater-shame-than-a-promise-unkept one.

He wants it so badly he’s prepared to go to war to undo a slight targeted directly and deliberately at Newfoundland and Labrador.

Well, maybe not war, exactly he said a couple of days after launching the latest Equalization jihad.

Maybe a one year delay.

Still keeping track?

The tale of Danny Williams’ positions on Equalization since 2003 has more twists and turns in it than a road along Newfoundland’s rugged coastline, and the feisty Premier has followed every one doubling back on himself countless times in five short years.

Actually, the O’Brien 50% formula is good this time only because it apparently allows the 1985 Atlantic Accord – the real Atlantic Accord – to unlock more cash for the provincial coffers.

But Danny wasn’t always in love with the 1985 Accord.

Shortly after coming to office, Danny Williams launched the first of his now trademark hyperbolic assaults on a deal he said was robbing Newfoundland and Labrador of its offshore oil revenues and sending them off to Ottawa.

Nothing could have been further from the truth and those of us who dared say so publicly at the time suffered either scorn or curious pity for daring to doubt the Premier’s judgment.

When Williams snagged a $2.0 billion cheque from Paul Martin and Ralph Goodale in January 2005 as part of a new offshore transfer deal, the first thing he had to admit was that nothing had been further from the truth than the line he’d been spinning:

Newfoundland and Labrador already receives and will continue to receive 100 per cent of offshore resource revenues as if these resources were on land…

What’s more, a Telegram story from late January 2005 by Rob Antle contained this nugget of truth:

Because of quirks in the system - Accord offsets are tied to previous-year equalization drops - Newfoundland actually got back slightly more than 100 per cent between 1999 and March 2004.

The province took in $429 million in offshore revenues, a senior federal official said, while receiving total offset payments of $466 million.

Senior provincial officials had no beef with those figures, acknowledging that contention sounded accurate.

In effect, up to March 2004, the so-called clawback had no claws.

It never did.

And that 2005 deal?

Well, the public heard all sorts of predictions  - at the time - that the deal was worth $2.6 billion up front (even though the cheque was for $2.0 billion) and maybe even more later on.

Jack Harris, then the provincial New Democratic Party leader predicted $4.9 billion.  Wade Locke, destined to become the Premier’s favourite economist, predicted $5.2 billion over the first eight years of the deal.

Of course, at the time, projections (including one by Wade Locke) had the province going off Equalization within five years – just as it did – even without the insanely high oil prices that turned up.  The odds of getting more cash was in doubt from the beginning.

Nonetheless they persisted.

In fact, at least one of them got annoyed when someone point out that his math skills were suspect.

As it turned out, the deal was never worth more than the first cheque.

The provincial government doesn’t qualify for Equalization any more and as such can’t earn any more credits against the cash advance.  There is more than $1.1 billion sitting  in the credit column, according to the latest audited public accounts for the province  and odds are it will never be drawn down let alone generate double as the politicians originally predicted.

This pattern of flips, flops and alarums on the big issues isn’t the only aspect of the annual Equalization tirade.

In December 2007, former finance minister Tom Marshall announcing the government had opted for the O’Brien formula in late 2007, kicking the crap out of the 1985 Accord offset formula and former premier Brian Peckford along the way.  Four months later, Marshall announced the provincial government would be sticking with the old Equalization formula and the 1985 offset in his spring budget.  All the while, Marshall fell over himself trying to explain offsets and the virtues of O’Brien versus 1985.

Note at the time that Marshall indicated sticking with the old formula would offer the best cash return over the following five years.

Then there was the Great Cap. Wade Locke’s initial assessment [full article here] of the 2007 federal budget led him to recommend switch to O’Brien/50% in 2009 to maximize revenues.  He then sparked a controversy when he discovered caps on the province’s offset deals the feds hadn’t previously disclosed.  Locke’s analysis served as fuel for the provincial government’s attack on the federal government.  It produced no assessments of its own but relied exclusively on Locke’s public analysis.

Locke then produced a new analysis that still excluded an assessment of 100% exclusion but which found that  - get this -  the old fixed formula delivered a better deal than O’Brien/50%.

Incidentally, Danny Williams told a CBC Radio audience on March 26, 2007 that the provincial government planned to flip to O’Brien in 2009 to maximize its cash take.

Then, most recently, Wade Locke told NTV News on January 28 that the net loss to the province would be $500 million or less from the most recent federal budget.  Less than a day later, he revised his projections after speaking with provincial finance officials.

A proviso on his estimate prepared for the Atlantic Provinces Economic Council  released January 29  suggests more information is needed.   Nevertheless, Locke’s new assessment – prepared and released less than a day after his first assessment  - now backs the provincial version.

Oddly, Locke’s new observations do not appear to include an assessment of O’Brien/100%. It’s even more odd considering that his 2007 analysis suggested 100% exclusion was the best.  Now it is supposedly not good at all.

Confused?

That’s not surprising.

Confusion appears to be the order of the day when it comes to Newfoundland and Labrador and fiscal issues.

Makes you wonder, though, with all this flipping, flopping and general policy confusion, why would anyone – including reporters and politicians  - accept anything these guys say without evidence.

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The tolling of the bells

While most of us don’t understand the intricacies and complexities of Equalization, we’ve had enough experience to know that when Danny Williams decides to take a political leak on someone’s loafers, what he says and the facts might be a little at odds with each other. There’s usually more to the story – sometimes much more – and the full story might not turn up until much later.

Like say a tirade against Evil Stephen who had nothing better to do these past couple of months  - if you accept the view of the Premier and his hand-bell choir - than figure out how screw Danny Williams out of about a half a billion each year for the next three years. 

The whole country is at varying levels of the economic shitter but revenge against one man and the province he leads is all that Evil Stephen could think of.

Give us all a break.

Conditioning and old political habits obviously work wonders in these parts.   A bell dings and you need your old red soles to keep the feet dry and to keep from slipping on the saliva.  Never mind, of course, that a mere 24 hours after declaring the jihad to bring down Evil Stephen, the Great Tinkler had decided on another route, namely of just having a one year delay in making any changes.

And don’t forget that this relatively small amount of money – 2% of the entire value of all goods and services in the province in any recent year - will “cripple” the provincial economy according to the Premier.  Undo in one tiny gesture years of hard work to turn the corner.

Sure it will, mate.  The claim could be put down to mere laughable hyperbole were it not repeated in earnestness by everyone of the faithful manning the ramparts to defend something from something just because they heard a noise.  It could be dismissed as more of the same if it did not spur comparisons between the people of the province and fleas nipping at the nether regions of some mythical beast.

In this latest Equalization tirade, the whole thing is merely cover for the real story:  a year after finishing a string of record surpluses, this place is facing deficits that will run, according to the first townie first minister in this place since the Great Depression, somewhere between $500 million and $1.2 billion in just a single year. No forecast for what may come after that.

A year after finishing a string of record surpluses, Danny Williams’ Provincial Conservatives are set to record deficits the likes of which have not been seen in Newfoundland and Labrador since before 1934.

For those who do not know, 1934 is the year the Newfoundland voted to give up democracy.  Bankrupt on war debt and  a raft of foolish schemes, the country’s legislature opted to let the place be run by a bunch of appointed commissioners. Newfoundland and Labrador is nowhere near the financial mess it was in the early 1930s, largely due to the economic security offered by Confederation.

But just imagine the headlines come April after Jerome delivers the news. That’s what makes their blood run cold.

These guys are worried.

The should be.

No amount of poll goosing could unring that bell.

The provincial government revenues are so bad next year  - forget this Equalization offsets stuff - that the government is planning spending cuts, as Jerome reportedly told one audience of people he was listening to last week during the annual “consultation” farce.   

These guys are worried.

How worried?  Worried enough of the decision right in front of them – never mind a plan for the years ahead – that they would be willing to change the goal a mere 24 hours after starting the latest war if only they can get their hands on a few hundred millions for the coming year.  Even the appearance of a few bucks would make it look rosier than it.  Like say being able to draw down some of that 2005 money on paper, anyways.

Worried enough that they didn’t wait five figurative seconds from launching the tirade to drop the collective bargaining hammer on doctors, nurses, cops, turnkeys and assorted other public employees who had the misfortune of not simply rolling over on their contracts from the get-go.  Forget that 21% wage offer the government made of its own accord  last year.  That’s done and gone.

In its place, another budget taken from Seinfeld. 

From masters of our domain – yes, that was actually in the budget speech – to “No soup for you” in the space of 12 months.

But the bonus of this latest political gong show is that in one fell swoop, every single cut and cancellation from here on out gets blamed not on the people who made the decision but on the old, very familiar Danny Williams enemy:  Ottawa.

Labour unions are already onside to back the cuts:  labour federation president Lana Payne either voluntarily jumped on board the first night or got a call from Danny to pull her to his side. Lana endorsed the Equalization thing so hard, she will sound stupid criticising the provincial government later on when she’s already accepted that it’s Ottawa’s fault.

Ditto local labour party leader Lorraine Michael.  The erstwhile official opposition is now officially screwed.  The Dippers cannot criticise the government for a thing without appearing to be the biggest hypocrites in history. 

At least the leader of the official opposition  - Yvonne Jones  - had the good sense to morph her message a bit once she got over the shock of getting a call from Danny. She’s been distancing herself from the whole political charade and good on her for doing it.

And then there is the crowd in Ottawa.  Two of them had cause to quake when their political godfather called due his marker.  They wouldn’t be there without him and unsurprisingly they’ve been delivering their lines as if the words arrived straight from the 8th.

But the others? 

Baffling. 

Baffling considering that thus far there is not a single independent corroboration of a single thing Danny Williams said Tuesday night. 

That, in itself, should get everyone’s attention in the province.

It would, too, if it wasn’t for that damn bell that keeps ringing.

Or is it tolling?

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Vale Inco nickel processor a go

The company’s release:

In December 2008, Vale Inco Newfoundland and Labrador submitted a draft Implementation Plan for the Long Harbour processing plant to the Provincial Government, and, in recent weeks, has been reviewing the details of the draft Plan with Provincial officials. The Long Harbour processing plant is a larger and more complex undertaking than envisioned when the Voisey’s Bay Development Agreement was signed in 2002. The overall construction complexity has grown significantly – requiring 43 months to complete construction rather than the 32 months originally thought possible. Initial work will begin in April 2009 with construction wrapping up in February 2013.

The government release took most of the afternoon to get ready, with the news conference being repeatedly postponed so the paperwork – i.e. the news release and backgrounder – could get finished.

Predictably, the government release makes it sound like the provincial government wrestled huge changes from the company.  That would be like claiming credit for the Hebron gravity-based structure, something the proponents had said publicly from they outset they were committed to building.

In this case, there are a couple of funky claims that have the same GBS ring to them. 

For example, there’s this statement from the provincial government release: “Discussions with the company continued after the extension expired under the understanding that no nickel concentrate would be shipped out of the province while negotiations were ongoing.”  That understanding was explained last week by former Premier Roger Grimes.  Vale Inco’s license to mine nickel at Voisey’s Bay included an exemption from a requirement to process the ore in the province.  The exemption expired on 31 December 2008.  Sure there was an “understanding” but that wasn’t linked to the extended timelines on the discussion.

Then there’s this chestnut:

To improve certainty around the schedule, Vale Inco has also agreed to change the original development agreement to remove a clause that would have allowed them to delay the project schedule for such reasons as a shortage of labour or supplier interruptions.

Improve certainty around the schedule?  The company doesn’t really have to worry about labour shortages these days given the global economic downturn.  The development agreement clause was originally developed in a time when the local workforce was in Alberta.  Things have changed in the past six months, thanks to slowdowns in the tar sands.

The company has also agreed that it will pay the island industrial rate for its power supply, surrendering its option to have a better rate should other industrial customers obtain a better rate for whatever reason.

Now that the provincial energy corporation holds a virtual monopoly on hydro generation, that one was pretty much a no-brainer. Something says the Abitibi expropriation – introduced so hastily and rammed through the legislature in December  - was about something other than rocks and trees and “repatriating” resources.

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The Halo Effect

Handlers always have to keep an eye for the background where their boss is speaking. 

They look for potted plants, odd colours, people or anything at all in the background that would turn up in a still picture or video and detract from the image.  In well-prepared situations, there is a carefully prepared backdrop that conveys the image or message they want. 

Sometimes that doesn’t work.  There’s a famous picture of Margaret Thatcher from the early 1980s speaking at one of her party’s conventions.  A clever photographer managed to take a picture of her with only three letters from the slogan on the backdrop in the shot.  The result was a beautiful shot of Thatcher in full rhetorical flight, but with the word “WAR” over her shoulder.

Stalwart photographer Joe Gibbons may not have relished being called out to the legislature in the middle of the evening to take a shot of Danny Williams. Then again, he may be totally enamoured of the man and wanted to reflected the messianic aura of the man.

Either way, Gibbons managed to come back with a shot of Danny Williams with arms outstretched almost as if he were posing like a religious statue.  Gibbons got down low to shoot upwards at Williams so that behind Williams’ head is a light fixture from the lobby of the legislature.

Take a look;  it’s work clicking the link.

The shot made the front page of the Telegram on Wednesday in full colour atop Dave Bartlett’s story on the Tuesday night scrum.

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Shocker: coalition dead; Ig-team to vote for budget

Amazing, isn’t it?

No one could possibly have seen this coming.

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The day of reckoning

News reports are that the Premier is calling on federal members of parliament to vote against the federal budget, regardless of what they would do in concert with their caucus.

Hardly surprising, that news, given that the partisan plants were out in force today issuing the call and at least one source of constancy for the Premier even generated a little graphic to illustrate the point.

So which of the federal members is indebted to danny Williams for their seat?

One.

Two.

Three.

Three’s a no-brainer since he’s been lined up with the premier since his days as a provincial member of the legislature.  On top of that his party is already committed to voting down the budget.

But One and Two?

Their debt is being called due, with interest.

Will they pay up?

Stay tuned.

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The scrum, raw

From the cbc.ca/nl website, the raw video of the Premier’s Tuesday scrum.

Two things to note:

1.  CBC’s David Cochrane is persistent in asking the Premier to explain in simple terms what the problem is.  Time and again he pokes and probes with straight-forward questions.

2.  Cochrane doesn’t get a clear answer either because the Premier isn’t interested in giving one or he couldn’t give one.

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De-spinning the New Family Feud newser

Q:  When did Premier Danny Williams announce that Newfoundland and Labrador was a have province and  - by definition – wouldn’t be receiving Equalization any more?

03 November 2008.  Bond Papers de-spun the scrum two days later.

Q: When did the provincial government decide to opt for the O’Brien formula and start receiving Equalization again?

Well, that isn’t clear, but on November 3 the Premier told reporters that the provincial government was looking hard at it.  He said a decision didn’t have to be made until March 2009.  The Premier confirmed in his Tuesday night scrum that the province had already decided to opt to start receiving Equalization again this fiscal year, something that hadn’t been reported publicly thus far.

Q:  When did the provincial government learn that the feds were planning to cap growth in the Equalization program to keep the costs under control?

03 November 2008, if not earlier:

In today's meeting, Flaherty will reveal the Conservatives' plan to place a limit on what Ottawa sends to poorer provinces under one of its key revenue-sharing measures, the $13.6 billion equalization program.

Q:  Which provinces are affected by the cap?

Any that receive Equalization.  Ontario will be capped just the same as all the rest, including Newfoundland and Labrador, if Newfoundland and Labrador opts to start receiving Equalization again. That’s the money the Premier mentioned in his scrum. Quebec will reportedly lose approximately the same amount.

Q.  What does the Equalization formula now provide as reported by VOCM legislative reporter Cheryl Gullage?

100% exclusion of non-renewable resources from Equalization calculations.

Q.  What was the ABC campaign – better known as the Family Feud  - all about?

The federal Conservatives promised to exclude 100% of non-renewable resource revenues from Equalization calculations but they didn’t put that in place initially.  Williams went on the war path over the issue promising to work for Stephen Harper’s defeat.

Q.  How big will the provincial government’s deficit be next year?

Even before now, it was pretty clear the provincial government would be short upwards of $1.5 billion in cash based on reduced commodity prices if spending remained where it was in 2008. A cash surplus this year  - of maybe 500 to 700 million - may have helped defray that somewhat but a deficit of $500 million on a cash basis – the largest in the province’s history – was a likely figure given some spending cuts and some borrowing.

Q.  So what’s the fuss?

The Pattern of blaming someone else. It’s a stock provincial government approach.

In this case, the provincial government is in a financial bind largely due to its overspending of the past two or three years based on unreliable income.  They were warned repeatedly by the province’s auditor general. The government made spending commitments – including 20% wage increases for public sector workers  - that it may not be able to afford.

Spending cuts will have to come to keep the deficit from ballooning to unmanageable proportions.

Far better politically to blame that on someone else for provincial government problems. The facts of the situation likely won’t matter since they likely won’t be reported in the conventional media, at least if the past is any guide.

Beyond that, five years of conditioning the public might pay off.  Some initial comments – like from provincial labour leader Lana  Payne – would suggest that some knees are already jerking across the province even before the full story showed up anywhere.

Speedy Gonzales Update:  The Premier turned up on CTV apparently to make sure everyone got the story the Feud was back on:

Williams made the comments on CTV Newsnet Tuesday evening. He says the federal budget will cost his province $1.5 billion in equalization over three years because of changes in the formula used to make the payments.

"In an economy the size of Newfoundland and Labrador, at a time when they are spending a lot of money on stimulus, it seems like an attempt to basically cripple this province," Williams said. "In a time of economic downturn, I'm at a loss at why (Harper) would do it.

Words matter.

The economy of Newfoundland and Labrador is running at something on the order of $25 billion annually.  The $1.5 billion noted here – over three years – is a drop in the bucket compared to the $75 billion the provincial economy would produce in the same time frame.

A change to Equalization doesn’t cut anything from the economy per se;  it just affects provincial government spending. 

And a half billion dollars is a lot of money to a government staring at a record deficit even assuming they had somehow completely forgotten they were told about the cap last November.

Yep.

The Pattern repeats.

The Morning After Update:  Just how confusing could the Premier’s middle-of-the-night rant be?  Read CBC’s version which is short on details but long on the nasty, vindictive – and inexplicably angry  - language the Premier apparently used.

The iPod People update:  Listen to the really short clip on the CBC website. It includes the Premier’s comment that the Equalization changes will affect Newfoundland and Labrador.  Apparently, they’ll have a “pretty crippling effect in the sense we’ll survive it.”

“Pretty crippling effect in the sense we’ll survive it.”

That’s exactly what he said.

Go figure.

 

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War gilt

What better way to invest your cash than buying up bonds that helped finance the British during the Great War but which still pay dividends twice a year.

That would be the 1914-1918 war.

In 1917, the British government issued bonds  - known as gilt for the gold edging - at 5% interest. The bonds had no maturity date. 

At least, one investor has been buying them up as a hedge against deflation. The bond issue, currently valued at US$2.9 billion, is unlikely to be redeemed and individual bonds currently trade for less than one pound sterling.

Aside from the curiosity of the notion of 90 year old bonds that are still paying out, this story is interesting for Newfoundlanders and Labradorians for another reason. 

The war bonds originally carried an interest rate of 5% but this was lowered – unilaterally – by the British government in 1931/32 to 3.5% during the early years of the Great Depression.  At around the same time, Newfoundland was struggling under its own crushing debt.

The debt was incurred partially to fund the war and partially to finance a disastrous railway spur line project in the early years of the 20th century.  In any event, Newfoundland was discouraged by the British from unilaterally reducing the interest on its debt since to do so – the British argued – would call into question the financial integrity of the empire.

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Freedom from Information: Memorial University joins the government secrecy cult

Two years later after first receiving an access to information request, Memorial University and its lawyers are still mounting arguments to justify keeping information from an applicant for access, even though the arguments they make are contradicted by the very legislation they cite.

It’s like the Executive Council’s attempts to hide public opinion polls even though the polls were clearly earmarked for disclosure in the law.

You can read the full account in the most recent decision of the information commissioner. The commissioner was clearly attempting to persevere in the face of absurdity and does a fairly good, if lengthy, job of demolishing the ludicrous position advanced by the university’s lawyers.

What’s noteworthy in this case is the extreme length to which Memorial University went to deny access.

In some instances, Memorial University and its lawyers attempted to reinvent the plain English meaning of the province’s access to information law.  If taken to its logical conclusion in one portion of its argument, Memorial University would withhold information on an applicant from the applicant himself or herself on the grounds that it was personal information and could not be disclosed.

In doing so, Memorial’s lawyers constructed an argument based on case law from another province  where the legislation does not provide that…wait for it…the privacy provisions don’t apply when the information is about the applicant.  A section of the legislation designed specifically to avoid absurdity was turned – by Memorial’s desire to hide information – into the very absurdity itself.

Memorial has also redacted Dr. Panjabi’s [the applicant] name in several places. Memorial argues that the right of an individual to his or her own personal information is not absolute where the release of information would reveal the personal information of another individual. However, there are two separate provisions (one being section 30(2)(a) and the other being section 3) in the ATIPPA that clearly provide an individual the right to access his or her own personal information. While there may conceivably be circumstances where one’s personal information may reveal information which must be protected under another exception, I believe these circumstances are not present in the case at hand.While the right of an individual to his or her own personal information may not be absolute, given the stated purpose of the ATIPPA, it will only be in exceptional circumstances where this right will be restricted. Thus, it is clear to me that in relation to the Katz Report, Dr. Panjabi is entitled to see all instances where her name appears, unless there are clear reasons why it must be withheld under an exception in the ATIPPA.

Further, Memorial has also redacted the names of administrators, professors and employees of Memorial. Section 30(2)(f) states that the prohibition of disclosure of personal information does not apply where “the information is about a third party’s position, functions or remuneration as an officer, employee or member of a public body or as a member of a minister’s staff.” Therefore it is clear that to the extent that these people are named in connection with their position and functions as employees of Memorial, section 30(1) is not applicable and they should be released. For example, where the names appear in the context of actions undertaken by these employees in the normal course of their duties, they should be released.

In another glaring instance, the university refused to explain the basis for claiming solicitor client privilege for a redaction which did not involve – on the face of it according to the decision report – the university’s legal counsel.( paragraph 59)

I note here that in April of 2008 an official with this Office sought clarification on this issue. In an e-mail dated 25 April 2008, Memorial’s designated representative on this file was asked to clarify Memorial’s use of section 21(b). There was no response to this e-mail. In a letter dated 5 May 2008 to this same representative, the official with this Office again referred to the April e-mail. Again, no clarification was provided by Memorial. I note as well that in its submission the only reference that Memorial made to section 21 was in relation to its response to Dr. Panjabi’s initial request: “Some information was redacted pursuant to s. 21, on the basis that the exemption for solicitor client privilege was engaged.” Memorial provided no reference to, nor any evidence in support of, its use of section 21(b). As such, Memorial has failed to meet its burden of proof as mandated by section 64 of the ATIPPA. As I said in my Report A-2008-012, “…if the head of a public body cannot satisfy the Commissioner (or the Court, on an appeal) that its decision is the right one, then that decision will not be upheld. It is therefore critical to the proper operation of the Act that a public body put sufficient effort into articulating the reasons for its decisions.” Based on the above, it is obvious that Memorial did not put sufficient effort into justifying its use of section 21(b).

The claim is one thing; the repeated refusal to respond to the information commissioner’s request for explanation is incomprehensible. 

Well, incomprehensible or arrogant;  take your pick.

The secrecy virus has now infected the university.

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AG quietly starts offshore board audit

Officials of the province’s auditor general have started their audit of the Canada-Newfoundland and Labrador Offshore Petroleum Board, the spokesperson for the board confirmed for Bond Papers.

The audit began earlier this month.

The board is the joint federal provincial body that regulates the province’s offshore oil and gas industry.  Last year, the board issued invitations to both the federal and provincial auditors general to conduct audits;  only the provincial auditor accepted.

In the letter, chairman and chief executive officer Max Ruelokke notes that the board is concerned about "recent comments in the media concerning its finances which may be construed to imply some impropriety in the Board's finances."

That would be comments by Noseworthy, who is no stranger to making unsubstantiated accusations.

Auditor general John Noseworthy decided last year to audit the board, despite the fact that his office had never listed the board as an entity subject to audit.  Noseworthy claimed to have legal advice supporting his new position.  The legal opinion has never been made public.

The board refused the request indicating that  - as a joint federal-provincial body – the board should be audit by both federal and provincial auditors.

This did not satisfy Noseworthy who issued a special report accusing the board of breaking the province’s Auditor General Act.

Noseworthy made reference to the special report in his annual report for the year ending March 31, 2008.  However, Noseworthy neglected to note in the report that the dispute had been resolved and his office was now conducting the audit.

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Related:

“No access restriction: offshore board”

“NL AG hoist by own petard of misleading statements”

How Icelandic are we: Coalition government collapses in face of crisis

The Icelandic coalition government unravelled on Monday after the latest in a series of public demonstrations prompted the country’s commerce minister to resign.

Prime Minister Geir Haarde tendered his resignation after trying to reform a coalition. Elections were scheduled for May.

The protests this past weekend were relatively peaceful (left). Other recent protests ended with police, arrests and tear gas.

The whole thing is reminiscent of the situation in Newfoundland 75 years ago.

In the midst of a financial crisis,  workers in St. John’s stormed the country’s parliament and besieged the prime minister, Sir Richard Squires.

Within three months, Squires was out.

A new administration formed under Frederick Alderdice following a general election which Alderdice fought on the pledge to consider placing under the government in the hands of a British-appointed commission.

In 1934, the country’s legislature voted to suspend the country’s constitution as a means of staving off bankruptcy. The government was administered by a commission comprising six commissioners appointed by the United Kingdom.

Responsible government was restored in 1949.

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10 years to turn around: Newfoundland and Labrador oil royalties

Oil started flowing from the Newfoundland and Labrador offshore a little over a decade ago but in that short time, provincial oil royalties have propelled the provincial government unprecedented financial wealth.

The royalties are set by the provincial government under the 1985 Atlantic Accord.

The table at left comes directly from the auditor general’s annual report for the fiscal year 2007 (ending 31 March 2008). 

Note that the auditor general consistently misreports the fiscal year and this can lead to considerable confusion.

The year called 2003 in the table is actually 2002;  the auditor general labels the year by the calendar year in which it ends, not begins.  Thus, the auditor general writes FY 2002 as “2003” since the end of the year is March 31 2003 

The noticeable jump in royalties from Hibernia show the impact of skyrocketing crude oil prices coupled with the escalating percentage royalty applied to the project before payout. 

Hibernia still hasn’t paid out, that is, the initial costs haven’t been recovered, but between 2004 and 2005 – actually 2003 and 2004 - royalties doubled.

That same approach applied to each of the other two projects currently in production.  In those projects, the high price of crude oil allowed the operators to recover development costs in two to three years.

The trebling of royalties in 2006 (actually 2005) from Terra Nova and the astounding jump at White Rose in 2008 (actually 2007) are entirely due to the combined impact of the royalty regimes negotiated before calendar year 2003 and historically high crude oil prices.

In order to correct this confusing date labels and to give you another visual of the royalties, the chart at right shows the royalties by project for each fiscal year (correctly labelled).

The projected cumulative royalties for the current fiscal year will be over $2.2 billion, up from the more than $1.7 billion collected in 2007.

However, lower oil prices and lower production puts likely oil royalties for 2009 at a level only slightly higher than what Terra Nova itself contributed in 2007.

That should give a sense of the fiscal problem facing the provincial government.  As noted here before, though, that’s a problem entirely of its own making.  The provincial government has consistently boosted spending to meet the astronomically high revenues.

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