Ruelokke, Rowe and the Rule of Opposites

A couple of years ago, you couldn’t swing a dead cat without hitting a comment by Danny Williams to the effect that Max Ruelokke as head of the offshore regulatory board would be a really bad thing.

How bad?

Andy Wells would be better kinda bad.

The hysteria surrounding that nationalist cause of that moment – Ruelokke is hardly a Newfoundland name, is it? – prompted at least one local journalist to question the value of the rule of law since it was obviously [insert eye roll here]working against “us”.

Ruelokke and the offshore board are looking a lot like O’Brien/50% and the 1985 Atlantic Accord: something that was officially “bad” when it suited the current administration’s purposes but which turned out to be good in actual experience.

It’s yet another manifestation of The Rule of Opposites:  what is correct is the exact opposite of what the official government line was at the time.

Hibernia management and Development Company and Petro-Canada are suing the offshore regulatory board over its rules on local research and development.

At issue: new offshore R&D spending rules brought in by the Canada-Newfoundland and Labrador Offshore Petroleum Board in 2004.

Those rules require HMDC and Petro-Canada to spend a percentage of their annual offshore revenue on research, development, education and training activities in the province.

That money was estimated by the board in 2007 at $25 million annually, depending on world crude prices.
Under the new rules, the board has the right to suspend production licences if oil companies fail to meet their R&D spending obligations.

Both HMDC and Petro-Canada say the board has unilaterally changed the rules in midstream and they question its authority to do so.

Incidentally, the Hebron deal includes a huge give-away on research and development but that’s another story.

So this case has been working its way through the courts with the offshore board winning at every turn. The oil companies are now headed to the Supreme Court of Canada for the last legal round of the fight.

Odds are they’ll win again.

But you can’t help but notice that this is running contrary to the predictions from a certain segment of local public opinion.

The courts appointed by Ottawa, the courts that ruled “our” oil wasn’t our oil in the early 1980s are here standing by the crowd at the offshore board led by Max Ruelokke as they protect Newfoundlanders and Labradorians yet who, we were told emphatically, would not act to protect the best interests of Newfoundlanders and Labradorians.

And the appeals court justice who dissented from the majority opinion  - i.e. who sided with the oil companies - was a guy Jerome Kennedy recommended to go to the Supreme Court of Canada last September 6.  Kennedy’s recommendation of Mr. Justice Malcolm Rowe – along with Mr. Justice Leo Barry - was faithfully reported by the voice of the cabinet minister at the time, even if they don’t like you reading stuff from that long ago. (you can find the story through google but clicking on it generates and “error” message.)

Amazing as it seems, in the case of the offshore board – like Equalization - you really can’t go wrong most times by taking the government position of the moment and thinking the opposite.

And what about those oil companies like ExxonMobil that were “bad” in 2006 but which are now called “our offshore partners” by everyone from the Premier to his official spokesperson in natural resources?  Well, judge for yourself.

Your humble e-scribbler didn’t accept that they were enemies when some people wanted you to think that.  These days, they aren’t friends.  They are just companies doing business in the offshore and they should be treated as such. 

In the case of the suit against the offshore board the companies are just doing what they think is in the best interest of the people they represent: their shareholders.

That’s basically what the offshore board is doing on behalf of the people of Newfoundland and Labrador. Funny though how what happened is exactly the opposite of what some people wanted you to believe.

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And what about Signal Hill, 2012?

As it turns out, 2012 marks the anniversary of several major events in Canadian history but so far there has been very little talk of any commemorations.

The last battle of the Seven Years War took place at and around Signal Hill, St. John’s in 1762.

Other major North American battles of that war have been marked already and there was a plan to mark the anniversary of the capture of Quebec with a re-enactment of the battle. That plan fell victim to an outcry from Quebec separatists. The event was supposed to draw thousands of tourists including the history enthusiasts who  re-enact these sorts of events.

Well, those people who won’t be going to Quebec should be gearing up to come to St. John’s in 2012.

At the same time, 2012 marks the 200th anniversary of the War of 1812.  The Newfoundland Regiment played a significant role in several battles, including the defence of York. There are re-enactors for that war as well and they too will likely be getting ready for the big event three years from now.

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Hydro towers through UNESCO World Heritage sites: the editorial view

The Telegram Saturday editorial takes a dim view of NALCO’s proposal to string high voltage transmission lines through Gros Morne.

The problem is that the Gros Morne proposal, on the face of it, is hardly an acceptable option for a national park. Between a rock and a hard place, indeed.

Indeed it is.

One of the comments from a reader suggests that it is preferable to do this than keep a diesel generator running at Holyrood.

Fair enough at least for a proposition.

But the NALCO proposal doesn’t address the current electricity demand and the current utilization at Holyrood to cement the case that this massive transmission project – at least $2.0 billion in added taxpayer debt – is actually the best solution to the Holyrood problem. 

Electricity demand is not exactly skyrocketing on the island.  Two major industrial projects have died since 2005 and the Vale Inco project at Long Harbour will only suck 75 megawatts a year, when it comes on line some time around 2012.  In the meantime, the expropriation bill gifted NALCO with almost 150 megawatts of power that costs virtually nothing to run.

On top of that there are at least six other small hydro projects that have been frozen in place since the late 1990s. According to the province’s energy plan, that moratorium is due to be reviewed in 2009.

Meanwhile, Kruger was looking at a site at Silver Mountain.  NALCO itself completed studies on two others in 2006, one at Island Pont (36 MW) and another at Portland Creek (23 MW).  On top of that, AbitibiBowater had three sites under consideration in 2006:

• Badger Shute (24 MW)
• Red Indian Falls (42 MW), and
• Four Mile Pond (24 MW).

There are others.

One of the problems facing any development of those alternative sources of power is the stranglehold NALCO now holds on development in the province.  The energy plan makes it clear that the government now considered NALCO to have a monopoly within the province even before it expropriated several private sector developments including Star Lake:

We believe this means the Energy Corporation should control the development of all small hydro developments for the benefit of all electricity users and determine whether to do this alone or with private sector partners. However, in the long term, the province, through the Energy Corporation, must maintain full control over any new hydroelectric generation assets. We will do this by adopting a policy that no new water rights for hydroelectric generation will be issued except to the Energy Corporation or another company acting in partnership with the Energy Corporation.

If that weren’t enough, changes to the Electrical Power Control Act – passed in 2007 but only quietly implemented after the expropriation in December 2008 – ensures that NALCO can enforce its control over future developments through the Public Utilities Board. 

NALCO isn’t famous for getting things done expeditiously.  It has taken the company the better part of a decade to implement several small wind power projects.  Efficiency and effectiveness aren’t the usual order of the day at any Crown corporation and as a recent study on Hydro-Quebec shows, taxpayers usually aren’t well-served by the behemoths.

Between a rock and a hard place, as the Telly-torialist put it,  doesn’t even begin to describe what else NALCO will come up with besides stringing power lines through a UNESCO World Heritage site.  Next thing they’ll want to add upwards of $10 billion to the public debt for something or other without any sign of a way of paying for it beyond borrowing.

Oh, wait.

They have already.

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Not quite so way-back machine: September 2006

Konrad Yakabuski wrote on the Romaine project in September 2006 and your humble e-scribbler linked to the story at the time and covered the follow-up stuff.

You can find the full article - “Only the brave gamble with Hydro Quebec” – various ways online.

It’s worth talking the time to go back and read it, worth it that is if you actually are looking for information as opposed to being party to the latest manufactured crisis.

Among other things, the Globe columnist puts the whole Romaine issue in the wider context of the Lower Churchill.

The real kicker, as noted by one commenter on a recent post, is that he draws attention to the local talk radio shows and their conspiracy theories. 

Yes, the local Dominion stores sold out of ALCAN foil in record time this week as new rumours abounded about some giant plot by the latest crowd of Evil [Insert name of this week’s official enemy here] who have supposedly always had it in for people who wear tinfoil hats all the time.

While you are prowling the Bond papers archives for September 2006, you can find a couple of other goodies:

• “he spoke.  and rapidly drank a glass of water.” On the 2004 Old Christmas Eve massacre of a speech on the supposed financial crisis facing the province.
• Danny channelling John Kennedy but getting mixed up in the transmission.  or maybe not.
• A discussion of the Telly-torial at the time which stoked some of the tinfoil paranoia at the time.
• The start of a series at the twice before and now finally defunct Independent on negotiating terms of union with Canada, again.  Some of us miss the Indy for its weekly dose of inadvertent humour.  Sorta like what Night Line has become: the new home of repetitive strained-reality syndrome. Where else could you hear a guy who has pontificated on everything there is to say about the 1969 Churchill Falls deal admit he just finished reading the only serious book on the subject, written by the by in the mid-1970s.  Or talk about “the latest poll” showing Provincial Conservative supported had plummeted.  Said “latest poll” was on a blog, something clearly previously claimed he never read and, in this instance, on a blog written by someone he has smeared personally before.  [Hint:  it’s obvious the night-time host didn’t actually understand whatever it was he read on the blog of the guy he smeared even if he actually read it in the first place.]
• A post on Equalization – wait, it’s only short – noting that the federal Conservatives had plans for Equalization that the most unwillingly “have” province in the country wouldn’t like one bit. “The only question that remains is how long will it be before Danny Williams declares a jihad on Steve Harper?” your humble e-scribbler asked in September.  Turned out to be less than 30 days before the Premier was urinating on the federal wingtips.  Again.

 

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Political Darwinism

How appropriate in this week of celebrating the guy who pointed out natural selection to the rest of us that the federal Conservatives should demonstrate that, in fact, some people are doomed to political extinction.

There should be a special category for political Darwin Awards.

Those would be the people who cooked up a scandal with some guy and his trusty tape recorder and released bogus “transcripts” all in an effort to bring down the government and claw their way one inch at a time toward power.

Then, when caught in a wee political and potential legal problem over a politician on his deathbed and offers of financial help that some think look suspiciously close to being bribes, these scandal-and-tape Neanderthals scream conspiracy when someone turns up with a tape of their boss talking about said dying pol and said cash.

The source of this latest example of antediluvian politics, of course, would have to be Pierre Poilevre.  The Prime Minister’s parliamentary secretary claimed in the Commons last week that it had been proven in court that the tape in question was doctored.

Not so, of course, as anyone who has followed the case would know.

Had that part been proven, as Poilevre claimed,  it is highly unlikely the federal Conservatives would have so quickly rushed to withdraw their law suit against the evil Liberals over the whole Chuck Cadman business in the first place.

Then again, no one ever accused Pierre of being the sharpest Clovis point in the pile.

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Nurses, government do the power dance

First, government tried threatening the nurses with an imposed settlement and back-to-work legislation in hopes of frightening them off their strike vote.

Then, when that didn’t work, they tried to lure them back to the table now with a significant change of position.

Then, when the nurses didn’t cancel their strike vote and return to the bargaining table immediately, the Premier and finance minister said they were disappointed the nurses’ didn’t accept the government’s olive branch. The even tried to bring up the financial scare issue of the looming deficit.

There are a few of things to bear in mind:

1. Nurses accepted the olive branch.  They just are going back to the bargaining table with a strike mandate in their back pocket, not when the Premier and finance minister would like.
2. It’s polling season.  Don’t under-estimate that timing issue as a motivating factor for an administration that spends an inordinate amount of time massaging polls. The provincial government had plenty of time to deal with this issue before now.  Their panic at having the government pollster in the field while the nurses carry on a strike vote isn’t a reason for the nurses to simply stop everything.
3. What happened to the bubble?  Before Christmas everything was rosy according to the Premier, finance minister and the government’s favourite economist.  Bond Papers readers knew better. It seems a little disingenuous for government to be singing the deficit tune now.
4. Back to the table now interrupts the strike vote.  The Premier and finance minister – both experienced lawyers – know that if the nurses interrupt their strike vote now, they’d have to start from scratch later on.  That would give government an additional six weeks or more if talks failed this time. Nurses lose by going back to the table prematurely so they aren’t likely to do it. Claiming they aren’t interested in talks sounds a little precious  - even desperate - at this point.
5. Did you hear the eyelids slamming shut?  Government’s tactics in dealing with the nurses have been clumsy, to put it mildly.  Jerome’s year-end deadline passed as if it was nothing.  His threat to legislate vanished this week.  It’s hard for the nurses to feel any sympathy for the provincial government when it has stuck to its hard line all this time.  It’s harder again for nurses to take government seriously when they first of all make threats and then don’t carry them out.  This week nurses heard Jerome Kennedy’s eyelids slamming shut as he blinked, big time.  That may not have been his intention but that’s what nurses saw. No on is surprised they are carrying on with their strategy;  it seems to be working just as government’s obviously isn’t.
6. Bad jokes don’t help.  Danny Williams didn’t help matters with his widely reported, cheesy joke about not wanting to get sick and have to face the province’s nurses in a hospital. He needs to throw away the guide to public speaking and joke telling Roger Grimes left him.  That’s tongue in cheek, by the way.  Williams lambasted Grimes for telling an off colour joke when Grimes spoke to American bankers a few years ago.   The little jest at nurses expense delivered to an audience at a national conference in St. John’s is every bit as bad or worse.

This might turn out to be the most interesting year in recent memory.  The provincial government may have finally found a group that can’t be bullied or intimidated or even fooled for that matter.

The Premier should call up his predecessor and get some better advice.  Brian Tobin tackled the nurses and didn’t come out of it all that well off.  And Danny Williams and his wannabe replacement Jerome Kennedy should remember:  nurses won’t forget.

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Experience counts: Gerry Byrne

Humber-St. Barbe-Baie Verte member of parliament Gerry Byrne’s letter to the editor of the Western Star appeared today.

In it, Byrne outlines events of the past couple of weeks and states – on behalf of his caucus colleagues presumably– their commitment to the province and the interests of the people it represents. 

Byrne’s political experience shows:

Joined by our leader, my fellow caucus members and I announced our commitment to fight Mr. Harper last Tuesday together.

That commitment is inflexible; it is our tactics that will change. While we are different in many ways, the premier of my province is regarded as an ally in this fight. Our ally was told of our intentions and he has called it reasoned and just. Unlike Mr. Harper, my leader and Mr. Williams have already opened a dialogue with each other as equals under a relationship of mutual respect. Both men, I believe, are smart enough to know that playing into Harper’s hands is to let him win.

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Hydro towers in national parks: first Gros Morne, now Mealy Mountain

The proposed Lower Churchill infeed will also involve stringing an electrode from the main transmission line into the territory of the proposed Mealy Mountain National Park.

Apparently hitting one national park in the province wasn’t enough.

The Mealy Mountain park has been under development for most of the past decade. 

Gros Morne Update: From CBC -

Peter Deering, manager of resource conservation at the park, said it's important the park not be disturbed by transmission lines.

"We do not support the proposal and we are not prepared to accommodate the proposal at this time," Deering told CBC News. "One of the reasons Gros Morne was designated as a UNESCO World Heritage Site was because of its wilderness values."

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IOC expansion on hold until markets improve

Rio Tinto Group will be cutting its capital expenditure budget from US$9.0 billion to US$4.0 billion in 2009 in an effort to deal with the global economic downturn. The company will fix capex for 2010 at sustaining levels.

As a result it appears that IOC’s expansion in western Labrador will be slowed or deferred beyond 2010. That may change if markets improve in the meantime.

Rio Tinto announced its 2008 results and 2009 plans on 12 February. 

At the same time the company announced a new venture with Chinalco which will see the state-owned Chinese company obtain interest in eight Rio Tinto mines globally. 

IOC is not among them.

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Freedom from Information: Nat Res Two-fer Thursday

The province’s natural resources department had rough day Thursday when it came to answering straight questions with straight answers.

As Dunderdale herself might say, the openness “piece” was missing, “big time.”

First, there was the bizarro refusal by a department spokesperson to discuss anything to do with the expropriation compensation process because there was an expropriation compensation process.

Then the Telegram had more on the recent trip by natural resources minister Kathy Dunderdale to Ottawa.  Readers will recall the minister – also the deputy minister – turned up in the gallery of the House of Commons this week.  She got a courtesy acknowledgement from the Speaker.

There’d been no public release that she would be in Ottawa so her sudden appearance raised a few eyebrows.

Dunderdale was attending a meeting of federal and provincial ministers responsible for agriculture. She ducked out of the obligatory team photo at the end claiming she had other meetings.

She did manage to find time to scoot to the Commons though.

Other than that, all her department spokesperson would say is that she “took the opportunity to meet with a number of federal ministers who were available while she was there on issues pertaining to Newfoundland and Labrador and that is the extent of it. She is not commenting further."

No further comment.

It’s becoming the departmental mantra.

Turns out – according to the Telegram’s Rob Antle – that Dunderdale met with federal natural resources minister Lisa Raitt and the province’s representative in the federal cabinet, Peter Mackay.

MacKay's communications director, Dan Dugas, confirmed that MacKay and Dunderdale discussed a variety of issues, including unemployment in central Newfoundland. The AbitibiBowater paper mill in Grand Falls-Windsor is expected to shutter within days, throwing hundreds out of work.

That “shuttering” turned out to be today, incidentally.

As the Telegram notes, Dunderdale’s mission to Ottawa comes shortly after the Premier’s latest Equalization tirade. Maybe they kept her trip quiet in order  to maintain the appearance that things are still tense between the feds and the province.  Maybe they kept their lips zipped at natural resources to avoid building up any expectations that Dunderdale might find some way to ease the tensions or even come up with the missing $400 million from the federal budget Dunderdale’s boss had been banking on.

All in all, the whole thing is a wee bit odd.

At least Dunderdale and her handlers learned a lesson.  When in Ottawa don’t take the minister to hang out in the visitor’s gallery of the Commons. 

Leave that job to the Premier’s personal emissary, a.k.a. Our Man in a Blue Line cab.

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Expropriation bill companies report financial results

Two of the companies affected by the expropriation bill last December reported dramatic financial turn-arounds last year.

Manulife reported a loss of $1.8 billion in the last quarter of 2008. Sun Life Financial reported an earnings drop from $2.2 billion in 2007 to $783 million in 2008.

Both companies either had original interests or acquired interests from other companies in hydroelectric developments, laid out in Schedule E of the expropriation bill:

1. The "Acknowledgement and Consent Agreement (Water Use Authorization)" dated 24 April 1997 between the Star Lake Hydro Partnership, the Mutual Life Assurance Company of Canada ; and the Crown, and all amendments including the Supplementary Acknowledgement - Crown Water Use Authorization dated 9 May 2001 and assignments of them.

2. The "Acknowledgement and Consent Agreement (Crown Water Power Licence)" dated 24 April 1997 between the Star Lake Hydro Partnership, the Mutual Life Assurance Company of Canada ; and the Crown, and all amendments including the Supplementary Acknowledgement - Crown Water Power License dated 9 May 2001 and assignments of it.

3. The "Hydro Consent and Acknowledgement Agreement" dated 31 July 2002 between the Exploits River Hydro Partnership, Clarica Life Insurance Company, and Newfoundland and Labrador Hydro and assignments of it.

4. The "Agreement for the Purchase and Sale of Power and Energy" dated 18 September 2001 between Abitibi-Consolidated Inc. and Newfoundland and Labrador Hydro, and all amendments, including the Assignment dated 31 July 2002 between Exploits River Hydro Partnership, Abitibi-Consolidated Inc. and Newfoundland and Labrador Hydro, and assignments of them.

5. The "Restated Agreement for Non-Utility Generated Power and Energy" dated 24 April 1997 between Abitibi-Price Inc. and Newfoundland and Labrador Hydro, and all amendments, including the Assignment dated 24 April 1997 between the Star Lake Hydro Partnership, Abitibi-Price Inc. and Newfoundland and Labrador Hydro, and assignments of them.

6. The "Acknowledgement and Consent Agreement" dated 25 April 1997 between the Star Lake Hydro Partnership, the Mutual Life Assurance Company of Canada ; and Newfoundland and Labrador Hydro, and all amendments and assignments of it.

7. The "Acknowledgement - Power Purchase Agreement" dated 24 April 1997 between the Mutual Life Assurance Company of Canada, in its own right and as agents for the Canada Life Assurance Company, the Maritime Life Assurance Company, Sun Life Assurance Company of Canada, the Standard Life Assurance Company and Industrial-Alliance Life Insurance Company, the Star Lake Hydro Partnership; and Newfoundland and Labrador Hydro, and all amendments and assignments of it.

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Freedom from information: no comment on process because the process exists

On January 8, your humble e-scribbler sent an e-mail to the natural resources department seeking some clarification of issues related to the Abitibi expropriation in December.

One of the questions sought clarification of the expropriated hydro assets:

5.  The legislation is explicit in section 5 in that the water rights, land and assets of both Star Lake and Exploits River partnership are forfeit to the Crown. Section 7 voids all the agreements and licenses associated with those projects.

At the same time, the Premier indicated in the scrum outside the House that Fortis, for instance, would continue to "maintain ownership".

Those two things can't exist in the same space.  If the Crown has expropriated the assets of the projects, the former proponents can't still have ownership of those assets.

Are you able to clarify this for me: Who owns the expropriated assets - dams, generation equipment, transmission facilities etc?  A written statement is fine or if there is someone I could speak with, then I am at your disposal.

The response – received yesterday – was that the department would offer no comment beyond what was in the public domain already since compensation discussions are outstanding.

Nothing.

Zip.

Zilch.

So who is the government in compensation discussions with? went the reply.

No further comment beyond what is the public domain came the response.

Fascinating.

Confusion is preferable to information.

And…

Denying comment because of “outstanding” compensation talks isn’t comment – now we know there are outstanding talks – but actually telling the public if talks are underway, who is party to the talks and all the other stuff that logically flows from the fact that you just confirmed talks exist or are at least “outstanding” is comment…

and is therefore verboten.

Surely the parties to the talks know they are talking or going to talk.

So finding out that they are in talks wouldn’t come as a surprise to them nor would it materially affect the talks to say something even as ambiguous as “the companies subject to the expropriation” when asking who was talking or with whom talks were outstanding.

Surely the parties to the talks – whoever they might be – know the issues well enough such that clarifying the discrepancy noted in question five wouldn’t actually affect the compensation talks.  For instance, if Fortis, Sun Life and others actually still do own stuff supposedly expropriated – as the Premier himself said - then they wouldn’t be party to the compensation talks because there’d be nothing to compensate them for.

And just to give a sense of how straightforward the questions are, here are a couple of others the government won’t comment on because of the outstanding talks:

6.  Bill 75 does allow cabinet to enter into arrangements (permissions and licenses) for the use of the assets.  Has this taken place?  If yes, what are the arrangements, with whom etc, for what term etc?

7.  Under section 10(2), persons affected by the expropriation of Schedule C assets are entitled to compensation in  a manner determined by the LG in Council:

-  Has the provincial government received representation from any parties for compensation under this section?

-  If so, who are the parties?

-  Has the LG in C  determined a manner for compensating parties affected by the hydro expropriations?

Factual questions about the process can’t be answered because the process exists.

And a government that prides itself on being open, transparent and accountable prefers confusion to factual information about a major public issue.

You just can’t make this stuff up.

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The notional national media

Go to the Globe and Mail website.

Try and find a story from the February 11 edition by Rheal Seguin on a supposed border flap between Quebec and Newfoundland and Labrador.

You’ll to look a bit.  For some reason a story that was prominent is now buried away on the “Others” page instead of on the national politics section where it was.

The story is bogus.  There is no border dispute.  The matter was settled in 1927 and the Romaine river hydro-electric project isn’t even close to the 1927 boundary.  This is another of those Sasquatch hunter things about the Labrador border:  people keep hunting because they know it’s there but the only “proof” turns out to be fiction.

That’s because the border controversy, like the Sasquatch, is made up.

And the story is one of the problems when you drop into Newfoundland and Labrador every once in a while rather than pay attention to what is going on here on a regular basis.

You wind up hunting Sasquatch instead of looking at the case of a real undefined border – this one in the Gulf of St. Lawrence – which is impeding exploration for and development of oil and gas resources.

Meanwhile over at the National Post, a editorial on the latest federal transfer racket contains an astonishing amount of stuff that is not true.

Now Mr. Williams and his government have calculated that switching to the new formula would be better for the coming fiscal year — netting Newfoundland’s treasury and extra $1.3-billion to $1.6-billion — so they want to switch. However, in January’s budget, federal Finance Minister Jim Flaherty eliminated that option.

Not so.

The amounts quoted were totals over three years, not one.

More importantly they are estimates.

The only figure that seems to be plausibly correct is about $400 million that won’t flow in 2009 but even that is based on:

1. Estimates. 
2. Projections based on current knowledge instead of the actual financial situation in February 2010 when Newfoundland and Labrador will chose which of two Equalization options it will pick for 2009.
3. A set of choices that wouldn’t have existed at all if the current provincial government in Newfoundland and Labrador had gotten its way at any point in the recent past.

The National Post editorialist didn’t stop with those untruths.  It went farther with other things it actually labelled as true when they aren’t:

It’s true Mr. Flaherty and the Harper government eliminated the switching option without first consulting their colleagues in the Williams government. It is also true that this policy change only affects Newfoundland, even though the province is not singled out by name. And it is true the Harper government is tired of Mr. Williams and the constant bashing they take from him, all of which could lead to the conclusion that this is what Mr. Williams claims — an act of vengeance aimed at him and his province.

1. It’s not really clear that the feds didn’t consult.  The provincial officials knew something was up in November last year.  What happened after that is a bit murky.
2. The policy change affects all provinces receiving Equalization and provinces like Newfoundland and Labrador that are still affected by the program.  Ontario and Quebec aren’t going to draw as much from the federal teat as they would have under the program from 2008.  That’s been covered in other conventional news media.  Heck.  The changes are being made expressly to limit the impact on the program of having Ontario now drawing Equalization.

Now that last part – about being tired of the tirades  - is probably true. It’s quite the stretch though to go from that to suggest that this was a policy designed to screw over one province when the facts – as previously reported – show something else.

The relationship between the current provincial administration and the federal government – irrespective of political stripe – is dysfunctional.  It got that way as the result of a lot of hard work after 2003.  The dysfunction may be deliberate or it may be an accidental by-product of old-fashioned political posturing. That part doesn’t matter.  The fact is the dysfunction exists.

It can only change if the people  - it takes two to tango - who are causing or contributing to the dysfunction change their behaviour.

That change isn’t helped by newspapers that are notionally national printing bogus information as if it were fact.

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The dark side of local media celebrity

“The cost of celebrity” - the first of a four-parter at Geoff Meeker’s media watch blog.

Thank the stars or whatever that bloggers don’t fall into that category.

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Trouble in Harper-ville

Two senior advisors set to leave the Harper PMO is not a good sign for the Conservative leader.

Even Don Martin is talking about it.

Meanwhile, the latest Strategic Counsel poll has the Liberals and Conservatives in a tie nationally. A Harris-Decima survey shows overwhelmingly strong support for the Liberal budget initiative of regular performance updates.

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Brain drain

Eddy Campbell, acting president at Memorial University, is taking up the president’s job at University of New Brunswick.

UNB likes his unique blend of academic and administrative accomplishments.

Meanwhile, Memorial University is reportedly another three months away from starting its search for a new president.

Again.

No word on who will be replacing acting president Campbell as the acting acting president of Memorial University.

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Dunderdale a peace envoy to Ottawa?

Deputy premier Kathy Dunderdale turned up in Ottawa on Monday.  As part of the usual courtesy, the Speaker of the House of Commons drew attention to her presence in the gallery of the Commons.

So what was she doing there?

There’s no news release on her trip.

No mention of it at all locally.

Given the manifest problems in the relations between the current administrations in Ottawa and St. John’s, this would be the perfect opportunity for such a senior minister to try and repair the relationship.

More to the immediate point,  she could try to deal pragmatically with the changes to the federal budget that supposedly will cost the provincial government $400 million in the current fiscal year.

What was Dunderdale up to?

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Ontario Dippers made illegal donation to NL Dipper in 2003

Unless “Ontario NDP” is someone’s really odd name, the New Democratic Party in Ontario made a donation to a Labrador New Democrat’s re-election bid in 2003 in violation of the Ontario Election Finances Act.

The donation is recorded in election finance reports on the Newfoundland and Labrador provincial elections office website.

“Ontario NDP” of Toronto Ontario gave $750 to Randy Collins’ re-election bid in Labrador West.

But under s. 29 of the Ontario election finance law, no political party, riding association, candidate or leadership candidate registered under the act can make a contribution to a political party outside the province. The maximum fine  for a general offence under the act is $5,000.

Newfoundland and Labrador’s antiquated election finance laws permit contributions from outside the province, with no limits on the amounts that can be received.

Collins resigned his seat in 2007 and moved to Ontario after being named in the House of Assembly spending scandal. Collins will appear in a St. John’s court in May for a preliminary inquiry on charges of fraud over $5,000, uttering forged documents, fraud on the government and breach of trust by a public official.

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Words matter: the Mike Duffy version

What Senator Mike Duffy said right before the words for which he was rightly criticised:

Honourable senators, I urge you to ignore the nattering nabobs of negativism on the East Coast, particularly the Premier of Newfoundland and Labrador, who, I believe, does not do Newfoundlanders and Labradorians any favours by the kind of personal attacks he has made over the last couple of years; nor by his remarks that paint Newfoundlanders, who are the among the most generous, caring and committed Canadians, as greedy and selfish. Those remarks are unworthy of the great people of Newfoundland and Labrador.

The price of Senator Duffy’s indiscretion in choosing metaphors is that what he would have wanted people to recall is the stuff they ignored.

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The smear of schmeergelder

When former New Brunswick gas regulator David Nelson couldn’t impugn a think tank report that shows – as drivers know – that gas price regulations costs them more than the unregulated system, the only thing Nelson could offer up is the suggestion the think tank is on the take.

That’s as convincing as the defence offered by local licenses and permits minister of Kevin O’Brien who took issue with the AIMS report that drivers in Newfoundland and Labrador had shelled out $65 million extra due to gas price regulation.

O’Brien said the amount couldn’t be that high because the regulatory office only costs $500K a year and that is paid by the gas retailers. 

Yes.  A cabinet minister responsible in part for looking after consumers doesn’t understand that when they pay more than they should have, that’s a cost.

But anyway…

CBC gives way too much credit to Nelson’s smear. They add their own observations at the end of the piece:

Also, the Calgary petroleum consulting firm MJ Ervin reported in its 60-city national survey that five of the 10 lowest pump prices recorded in 2008 [not including taxes] were in New Brunswick or Nova Scotia. Halifax gas prices ranked fourth lowest in the country.

One tiny problem:

Pump prices include taxes.

Check those on the MJ Ervin study and you find the ten lowest prices are in western Canada and parts of Ontario.

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Government to woods workers: you’re SOL

In December, the provincial government introduced a bill to expropriate Abitibi assets in the province.

The approach would work – said the government – since the legislature is sovereign.

What it says, goes.

But…

When it comes to a couple of hundred workers laid off this week, the government can’t help them get severance pay.

Innovation, Trade and Rural Development Minister Shawn Skinner said it's unfortunate that severance wasn't included in the woods workers' collective agreement, but the government can't force the company to pay beyond what's in the contract.

"From a government perspective, we will do whatever we can to assist them to make sure that they get whatever they are entitled to, to the full benefit of the laws of this province," he said.

Can’t force the company to pay?

Interesting idea that the existing laws on worker issues must stand as they are but seizing stuff government wants is another story.

The innovation added a penetrating insight into the obvious when workers suggested the severance be tied to compensation the government might pay Abitibi and other companies for the expropriation. "Our expropriation really had nothing to do with any contractual arrangements that the mill, and the owners of the mill, had with the employees," Skinner told CBC.

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Innu land claims vote postponed

The Labradorian is reporting that the vote on the Innu land claims agreement originally scheduled for 31 January has been postponed indefinitely.

Innu Grand Chief Mark Nui and other officials of the Innu Nation are reported to be meeting with provincial government officials this week to deal with unspecified “outstanding issues.”

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5 years and counting: still no sustainable development act

A 2003 Provincial Conservative election promise  - to ensure that economic development and the environment were in sync  - remains unfilled five years after the Provincial Conservatives took power and two years after the law was passed by the province’s legislature.

The province’s Sustainable Development Act, passed by the legislature in early 2007, has not been proclaimed and is therefore not law.

In the meantime, the provincial government’s energy corporation is proceeding with development of the Lower Churchill, including a plan to sling high-voltage power lines through a UNESCO World Heritage site.

That certainly wouldn’t be the popular impression since then-environment minister Clyde Jackman issued a news release in June 2007 that made it sound like the Act was in place:

The sustainable management of the province’s natural resources is now enshrined in the Sustainable Development Act that was passed in the current session of the House of Assembly. Sustainable development will ensure the province’s renewable and non-renewable resources are developed to maximize benefits for the province, while protecting the natural environment so that future generations have the ability to meet their own needs.

The release said more than half a million dollars had been set aside in 2007 to establish the advisory committee that is at the heart of the act.  No legislation, though meant no committee.

The unproclaimed act featured prominently in the Provincial Conservative Party’s 2007 election campaign platform.  The second blue print also made it sound as though the act was in force and work was underway:

Through our new Sustainable Development Act, we will ensure that development proceeds in harmony with our natural environment, securing our greatest natural strengths while promoting eco-friendly enterprise.

…

• enforce the provisions of the Sustainable Development Act regarding the responsible and sustainable development of our natural environment, ensuring that our resource development decisions address the full range of environmental, social and economic values and that workers, environmentalists, industry, communities, aboriginal peoples and others have a say in how our resources are managed. [Emphasis in original]

Without the sustainability act in place, there can be no enforcement of its provisions.

Without the act, there is also no Strategic Environmental Management Plan, even though the provincial government committed to have one in place by 2009.

The SEMP was supposed to be the document that put the commitment to environmentally sustainable economic development into action.

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Uncommon tourism potential: A vision of hydro towers in a UNESCO World Heritage site

On Friday, the provincial government announced the creation of a new bureaucracy to promote tourism to the province, as if that was the answer to the dwindling return on investment from the current approach.

You can tell a lot about any plan by the way it proposes to measure success.  In this case, the new tourism strategy – Uncommon potential – wants to double the amount of money generated by tourism in the province.  Inflation would pretty much take care of hefty enough chunk of that in the next 11 years so whatever is left can be either explained away when the time comes or simply ignored.

You can tell this is a serious plan:  it has lots of pretty pictures in it, shop-worn jargon by the shovel-full  - “world-class” and “the possibilities are endless”, two great Chuck Fureyisms from his stint as tourism czar - but no indication of how much money it will cost to do all the things listed as the various action items.

One would have to read the release to appreciate, as well, that the strategy doesn’t really get at one of the current problems, namely the fact that more than half the $500 million generated by “tourism” right at the moment doesn’t come from people travelling into the place.  It comes from locals.

Odd, though, that there is no mention in this beautiful looking document of the tourism potential of high voltage direct current hydro-electric transmissions lines.  There’s lots about pristine wilderness, natural beauty, authentic experiences and a raft of other buzzwords but nothing about giant steel girders supporting buzzing electricity cables.

Odd, you see, because that’s exactly what the provincial government’s energy corporation is planning to string from Labrador down to the Avalon peninsula to meet a demand that can be met with other sources of power.

The energy company plans to run the lines, in one part at least, through Gros Morne National Park.  That would be the UNESCO world heritage site. Now there are already lines in the park that were installed long before the park was established in 1987. 

But you’d think that a company owned by the provincial government might be looking at ways of getting out of the park altogether rather than planning on increasing the power lines in a truly beautiful place.

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Selective perception

The Telegram’s front page story on Friday reports on a study released by the Montreal Economic Institute that, according to the Telegram, shows that Hydro Quebec profits hugely from the Churchill Falls power development.

Shocking!

What’s actually much more interesting is what the study was about.

Amazingly enough, it wasn’t about how much money Hydro Quebec makes of Churchill Falls.

Rather, the Montreal Economic Institute study argued that Hydro Quebec should be privatised because it is wasteful and inefficient.

The title of the report – conveniently omitted from the Telegram story -  is one that would surely ignite even more gnashing of teeth in these parts than the amazing revelation about Churchill Falls:

“How would the privatization of Hydro-Quebec make Quebecers richer?”

The title on the news release is even better:

“Privatizing Hydro-Quebec would give $10 billion more a year to Quebecers”

By privatizing Hydro-Québec, Quebecers would get $10 billion more out of it per year through improved productivity, higher electricity rates and an end to costly subsidy programs for aluminum smelters, according to a Research Paper published by the Montreal Economic Institute. The new private company would be required to pay substantial annual royalties to the government, says the study, prepared by Claude Garcia, member of the board of directors of several corporations and former president of the Canadian operations of Standard Life.

Standard Life. 

Hmmm.

That would be one of the companies whose hydro-electric assets in Newfoundland and Labrador were nationalised by the the legislature last December.

The paper is far more provocative than the bit excerpted by the Telegram, especially in a province where the government is already committed to create in Newfoundland and Labrador a Crown corporation that is the mirror of Hydro-Quebec.

 

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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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