Zombie TV

So Jay Leno is going back to late night television, thereby displacing Conan and Jimmy and undoing the great change that NBC brought to television last fall.

Globe television critic John Doyle puts it down to a guy thing.

maybe it’s much simpler.

Maybe NBC’s great cock-up is based on the mistaken idea held by the geniuses at NBC that people might find Jay Leno funny when they were awake.

It’s times like this that the words of Bobcat Goldthwaite must come back to people.  He was banned from the Tonight Show early in Leno’s tenure in the chair after setting the set alight.  Literally.

As Bobcat sarcastically joked about the incident afterward, it was the only time that the words “on fire” and “the Tonight Show” were used in the same sentence once Leno took over the spot once occupied by Johnny Carson.

Turns out he was right.

-srbp-

Changes to pensions just tip of public sector fiscal iceberg

The provincial government is considering making some changes to public sector pensions, according to the Telegram.

Options include additional funding for the plans, reducing benefits, or increasing premiums, according to Finance Minister Tom Marshall.

The review includes not only the pension plans themselves, but also other financial liabilities associated with retired workers.

Anyone trying to figure out why pensions are under review need look no farther than advice from the guy who appeared to be the guru of financial policy in the Williams administration during its early days.  That would be a former deputy minister of finance during the 1980s, David Norris.

He wrote a paper for the Vic Young royal commission on the provincial government’s finances. What’s interesting is that what Norris identified as the major problems coming out of the grimes administration has actually turned out to be true for the crowd that replaced Roger Grimes and his crew:

Expenditure:

i)  Escalation in Health Care Costs associated with increased drug costs, service costs, increased demand, new diagnostic and other equipment, facilities upgrading, expansion and replacement.

ii) Salary and Wage Settlements over the past two to three years which are only now being fully reflected in the Budget.

iii) Relatively High Program Spending per capita which reflects the fact that as the population base has declined, program spending has not been reduced on a pro rata basis. Furthermore, new spending initiatives have been undertaken in successive budgets.

iv) Interest costs associated with funding the province’s annual deficits and new borrowings to retire obligations associated with the $3.4 billion unfunded pension liabilities.

Now while a lot has changed in the past six years, the period of abnormally high oil prices really has served to mask the underlying problems with the provincial government’s financial situation. For example, Norris projected  a cash deficit in 2003-04 of between $250 and $500 million on a cash basis;  that’s a figure he clearly found alarming since he suggested the need for a dramatic change of policy.

As it is, the provincial government maintained a policy of deficit budgeting.  The salvation came each year as abnormally high oil prices produced staggering cash windfalls.  This year is different.  There’s a $1.3 billion deficit forecast (on a cash basis) and that doesn’t looks pretty good to come true.

But fundamentally, the financial problems Norris identified have remained, hidden by the oil money.  That, too, is something Norris warned against, noting that oil revenues would decline within a decade as production dwindled.

In light of the news that the provincial government is taking a look at pensions and is starting to think about program cuts – think radiology review – it is rather interesting to look at Norris’ recommendations from eight years ago and compare them to what the current provincial administration actually did.

i) A comprehensive government-wide program review (including government agencies) to evaluate the effectiveness of the various programs, to reassess relative priorities, and to reduce/eliminate programs of low priority;

[BP: They started it but let it die quietly without producing any tangible results.]

ii)  A concentrated overhead reduction initiative aimed at reducing the overhead costs of government in recognition of the population decline of over 10 per cent in the last decade (and which is ongoing);

[BP:  They never even tried.]

iii)  A thorough assessment of those program areas where the cost of program delivery exceeds the national average and where the differential continues to grow. While it is to be expected that some of the differential will be attributed to demographic factors, the analysis should examine the potential areas where the method of program delivery might be modified and the cost structure reduced;

[BP:  Again, there’s no sign anything of this sort was even attempted.  program spending has grown apace and new programs have been introduced without eliminating any old ones.]

iv) Maximize the attrition opportunity. It is understood that the age profile of the public service indicates that a significant number of public servants will be retiring in the next three to five years. This could present a crucial opportunity to implement the cost reductions in a way that is less harsh than would otherwise be the case;

[BP:  Using Stephenville and Grand Falls as prime examples, the Williams administration has continued the trend of the post-1996 Liberals using public sector jobs as a substitute for private sector economic development.  There are more public servants in the province today than there were in 2003.  People think the boom on the Avalon is fuelled by the oil industry.  Guess again.  Hebron can’t be causing anything since Hebron doesn’t really exist yet. It’s all public money spent by public servants:  more people with big wage increases does wonders for local businesses.]

v) An assessment of the cost escalation associated with all the public sector pension plans. This would include a review of the benefit trends, the rate of escalation in the unfunded liability, and a reassessment of the province’s funding strategy to determine if modifications are required;

[BP:  Here’s the one the Telly uncovered.  Don’t expect the provincial government to opt for putting more cash into the pension plans.  The objective will be to cap what’s going in and reduce the financial burden over the medium- to long haul.  Think benefit reductions and higher premiums for those still working.]

vi) Consideration should be given to regular increase in various fees and certain taxes to preserve the revenue base on a go-forward basis. But, in so far as possible, increase in sales tax, personal tax and corporate income taxes should be avoided;

[BP:  Some fees went up but they came down again in 2007 as an election gimmick. Personal and corporate taxes went down.  ]

vii) The potential merits of privatizing various functions currently  provided by government and its crown agencies should be examined. In this regard it may be instructive to explore the experience of other provinces and any successes that have been recorded to date in this generally sensitive area;

[BP:  Consider that this one was laughed out of the room as cabinet voted to create an energy company funded through cash hand-outs from the treasury and permission to borrow over half a billion dollars.]

viii) Leadership from the top - a demonstration of commitment to the process through high profile expenditure reductions by the Premier and cabinet members.

[BP:  Anyone have any sign of anything that looks like a cut in the cost of cabinet?]

Changes are coming to the province’s public sector pensions.  Some of those changes will be very hard for some to swallow.

One thing you can count on, though, is a reference to the cost of the debt associated with those pensions.  David Norris’ paper was working with a figure of $3.4 billion in unfunded pension liabilities.

Guess what figure turned up in finance minister Tom Marshall’s briefing notes, as reported by the Telegram?

Combined, unfunded pension shortfalls and those other retirement benefits represent a $3.3 billion liability on the province's books.

Newfoundland and Labrador's total net debt in 2009 was a shade under $8 billion.

"These two unfunded liabilities are something that obviously we look at," Marshall said. [Emphasis added]

They be looking at it alright.

Count on it.

-srbp-

Related: 

• “Unsound financial management:  the stunning Oram admission.”
• “Budget 2007: a quick look at the numbers.”
• “The past in our present, once again.”

Province may lose big-time in Hebron royalty give-away

According to the Telegram, the Hebron partners won’t be filing their development application for the project until December 2010.

That’s a full year behind the original schedule but the companies claim it won’t impact anticipated first oil in 2017.

This is the second change to the project in two months.  The full implication of cancelling pre-drilling still hasn’t been determined.  It appears to have been dumped to avoid significant challenges posed by dropping the gravity base structure onto a pre-drilled template.

But the wider implications are still uncertain.  Pre-drilling would have allowed the project to get to full production very quickly.  As it is, production wells will now be drilled from the single derrick planned for the Hebron GBS. It took Hibernia five years to hit full production and that was using two derricks.

Delays in hitting full production will affect the timeline for the project to hit payout and that will affect the provincial government’s royalty take over the life of the project.

In signing the Hebron deal, the provincial government agreed to a flat one percent royalty until the project recovers its development costs (payout).  The generic royalty and the regime used for Hibernia and Terra Nova used a sliding scale that saw the provincial share increase steadily to a maximum of 7.5% based on cumulative production.

In 2007, natural resources minister Kathy Dunderdale said the flat royalty was a way of giving the companies insurance against low oil prices:

“The rationale behind these changes was the companies needed some downside protection if the price of oil went very, very low,” Natural Resources Minister Kathy Dunderdale said.

“So, that was the tradeoff [sic] for us — to give them protection if oil prices really plummeted, to get a gain if prices were high, above $50. So, we traded off some risk on the low end for significant gains on the other end.”

The provincial government’s entire assumption about the royalty give-away seems to have been based on the idea that payout would occur quickly.

But if oil prices remain high, the period during which the basic royalty remains at just one per cent shortens significantly.

“Normally, in terms of the basic royalty, even under generic, you go through those stages pretty quickly,” Dunderdale noted.

However, even at relatively high oil prices, lower production rates would drag out the time needed to pay off development costs.  And – looking at it logically -  the provincial government would lose significantly more in the process. That’s a point Dunderdale didn’t mention in 2007.

Dunderdale did mention the price of oil, which appears to have been a huge factor in provincial government thinking.  In exchange for the flat royalty give-away at the front end, the provincial government banked on recouping its losses if oil stayed above US$50 per barrel.  As Dunderdale told CBC in August 2007:

"You know, it's going to be a long time by anybody's estimates that we're ever going to see oil less than $50 a barrel," Dunderdale said. "We gave something on the downside which is low-risk to us to achieve a very high gain on the upside."

The “long time” turned out to be two years. [Time Travel Update:  or is Mathematically Challenged?  Oil hit 50 bucks a barrel within a year or so of her  great pronouncement.  it was less than 40 bucks a barrel a few months after that.]

The Hebron changes in December raise once more questions about the assumptions used by the provincial government in negotiating the royalty regime.    Slower time to full production could stretch payout to 10 years or more.  The provincial government appears to have operated on the assumption that oil would remain high throughout the initial production and post-payout phases.

A decade to payout is one one of the implications noted in Bond Paper’s preliminary look at the Hebron royalty.  The following chart used a relatively low price for oil and assumed high development costs.  It didn’t consider any delay in getting to full production but did anticipate taking a decade to hit payout.

-srbp-

A statement of fact isn’t a criticism

Finance minister Tom Marshall told the Telegram’s Dave Bartlett a few interesting things in an interview that appeared in the Saturday print edition but hasn’t turned up on line yet.

Like this bit about the annual “consultation” farce:

He also said it's not true consultations are a waste of time or that he's made up his mind already on where he will spend taxpayers' money.

Marshall said every year someone raises that criticism.

"We're open minded. We're prepared to listen. But we're listening to a lot of people and the problem is ... everybody can't get what they want," he said.

Marshall said if he gets 100 proposals, 95 of them make sense, but there's simply not enough money to go around.

Okay well, the consultations aren’t a waste of time for Marshall since he uses them as a way of sending a message to people of the province.  He isn’t really looking for substantive input on how to spend public money.

That’s because – as your humble e-scribbler noted last year – the major decisions are already made. The same point turned up the year before, with an entirely different example of how the major spending decisions are already made long before the finance minister hits the road.

Not a waste of time for Marshall, but for anyone else looking to shift budget priorities via the consultations?  Yeah, pretty much an exercise in the utmost futility.  The people who show up for these things would have better chances of changing Marshall’s budget if they gathered around a kitchen table, held hands and stared at the magic blue spot from the National Enquirer all the while thinking nice thoughts.

And sure, Marshall listens.

But, as he noted, five percent are patently OTL.

And the other 95% of the ideas he listens to are sensible.

But Marshall can’t do anything about them because he just doesn’t have the money for them, as he told Dave Bartlett and the Telly.  A guy who has more money in temporary investments than his predecessors  had to spend in total some years doesn’t have the money for these great ideas for one simple reason:

By the time he gets to the “consultations” he’s already decided where the money is going.

And that’s why the whole exercise is a farce.

You see, a statement of fact is not a criticism.  It’s like unsustainable spending.  Marshall knows it’s a matter of fact.  He just won’t admit it until he has no choice.

-srbp-

Budget 2010: Slowly the facts emerges

From an interview with the Telegram (not online) here’s a telling little statement from finance minister Tom Marshall:

He said corporate and personal income taxes may be "softer than originally anticipated."

That’s true.  Incidentally he meant the revenue coming from the taxes, not that there were plans to reduce taxation.

Corporate and personal income taxes may not be the only thing that is “softer than anticipated” this year.

-srbp-

Jeff, the SCC and senate reform

Canada’s Ersatz George Will should learn to do that or at least take his own advice.
Jeff Simpson implores – presumably the prime minister and premiers – as follows:

Go right ahead, gentlemen. Climb into the sandbox of Senate reform and start playing. But before doing so, pause and read at least a summary of a Supreme Court of Canada ruling of 1979 that will complicate every game you might wish to play.

The ruling -  issued in 1980 – is readily available online and makes for easy reading for anyone with a rudimentary knowledge of only the English language.  It does not, as Simpson claims, mean that the federal parliament can “unilaterally do almost nothing to the Senate.”

The ruling came in response to a specific set of questions posed to the court.

But more importantly, the reference came at a time when any amendment to the constitution had to be done as an act of the British parliament.  If you read the SCC decision, you can see the extent to which that circumstance drove the reasoning, particularly the impact of a 1949 amendment to the section of the constitution which  defined how constitutional amendments were to be made.

The Supreme Court answered a specific question – in paraphrase: can the federal parliament unilaterally amend the constitution as it was in 1979 to eliminate the senate – with a resounding “No”.

The reasoning is simple:  the senate was created to represent the “sectional” interests of the country and to do so equally and nothing up to 1979 gave the federal parliament the power to alter so fundamental a notion.

Here’s what the learned justices said in the summary at the front of the decision and the same words are repeated throughout its lengthy explanation:

The apparent intention of the 1949 amendment to the Act which enacted s. 91(1) was to obviate the necessity for the enactment of a statute of the British Parliament to effect amendments to the Act which theretofore had been obtained through a joint resolution of both Houses of Parliament and without provincial consent. Legislation enacted under this subsection since 1949 has dealt with matters which, according to the practice existing before 1949, would have been referred to the British Parliament by way of a joint resolution of both Houses of Parliament, and without the consent of the provinces. It did not in any substantial way affect federal-provincial relationships. The legislation contemplated in the first question is of an entirely different character. While it does not directly affect the federal-provincial relationships in the sense of changing federal and provincial legislative powers, it does envisage the elimination of one of the two Houses of Parliament, and so would alter the structure of the federal Parliament to which the federal power to legislate is entrusted under s. 91 of the Act.

The Senate has a vital role as an institution forming part of the federal system: one of its primary purposes was to afford protection to the various sectional interests in Canada in relation to the enactment of federal legislation. The power to enact federal legislation was given to the Queen by and with the advice and consent of the Senate and the House of Commons. Thus, the body which had been created as a means of protecting sectional and provincial interests was made a participant in this legislative process.

Nowhere in that can one find anything that  - even vaguely - gives provincial premiers a function veto over all senate reform as Jeff Simpson contends.

Nor can it be found in the decision on some bits of the second question to which the court also said “No”.

The second question contained a daisy chain of changes, including giving new powers to the provincial governments. Not surprisingly the judges thought it a bad idea in a federal country to let Ottawa unilaterally change what a provincial legislature can and cannot do. The others were deemed to lack sufficient information to let the judges made a choice.

Jeff’s basically out to lunch if he thinks the 1980 decision gives the senate as it is currently constituted some sort of provincial protection.

They get that out of the 1982 repatriation and the subsequent amending formula:

42. (1) An amendment to the Constitution of Canada in relation to the following matters may be made only in accordance with subsection 38(1):
…
(b) the powers of the Senate and the method of selecting Senators;
(c) the number of members by which a province is entitled to be represented in the Senate and the residence qualifications of Senators;
…

Unfortunately, Canadians are stuck in a situation in which the provincial satraps must find agreement before anything can be done with the senate.   Don’t forget, this is the same gang that couldn’t even agree among themselves on how to keep the taps of federal Equalization cash flowing to them all.

The only difference is that in this case, there are more of them in favour of senate abolition than any other choice. The only result of abolition – supported as well by the federal New Democratic party – would be to cement the control Ontario members of parliament have on the federal legislature.  The sectional balancing effect that the senate is supposed to have from the original constitution would be gone.

That would adversely provinces like those in Atlantic Canada or in the west. The scary part of the abolition movement is that where it was once confined to those with a naked self-interest in such a move, the idea has now caught on in Nova Scotia and elsewhere.  Not only is Darrell Dexter hoodwinked into believing that the Lower Churchill exists but he has also been fooled into thinking no senate is better than senate reform when it comes to protecting his provinces interests in Canada, the federal country.

The only part of Jeff’s column where he seems to get it right is at the end and that’s really the easiest of all bits when it comes to assessing federal-provincial relations. Odds are that any move to reform the senate in a meaningful way will simply open the doors to more constitutional demands and the sort of indecision we have seen repeatedly on issues involving the 11 first ministers.

Aside from the normal, eternal divisions among the provincial premiers, Canada is also beset at this sad time in its history with three major federal party leaders neither of whom holds the vision necessary to counteract the premiers politically.

For the Prime Minister, senate reform is another of his tiny tactical manoeuvres to stay in power.  For Jack Layton, he’s already locked firmly in favour of Ontario with the NDP cry for abolition. Heck his party constitution doesn’t even believe in fairly representing the “sectional interests” of the country.

And Michael Ignatieff?  So far he has shown himself to have as sensitive and informed a view of Canada, the country, as he had of the ethics or efficacy of binding some poor sod to a board and then draping his face in wet towels until he suffocates. National support for the Liberals speaks rather clearly to Ig-man’s lack of appeal.

Senate reform could occur if there was any leadership in the country worthy of the description. Leadership could deal with the situation imposed by the 1982 constitution.The country needs leadership. 

Sadly, the people of Canada cannot find leadership among the 10 premiers, or the federal party leaders.

And that, Jeff Simpson ought to know, is the real political problem with senate reform.

-srbp-

Let me fish off Old Wyoming

You be the judge.

Otto Kelland is best known in Newfoundland as the writer of  the ballad “Let me fish off Cape St. Mary’s”, written in 1947.

 Now take a listen to this song - “The Hills of old Wyoming’ -  which dates from 1937 at the latest.

And if you really want to do a spit-take, try this sample of the song recorded in 2009.

Now that really isn’t the end of it. 

Same song?There’s a much older song – “Barbara Allen” – which has been documented from its first printing in 1750 and is mentioned in Samuel Pepys’ diary from 1666. There are a great many variations on both the lyrics and tune for this song but some of the more common tunes sound suspiciously familiar to Kelland’s work and to the Wyoming song.

-srbp-

Updated with new video links:  June 2016

Senate reform, again

One glaring point the Globe and Mail front pager on senate reform missed is blatantly obvious.

The Globe claimed that:

Analysts say that provincial opposition in smaller provinces could stem from premiers' fear that their already weak national voice will be further limited if newly influential senators appear on the scene.

That’s crap.

All provincial premiers oppose any reform of the senate that would give it real power and political legitimacy.

All premiers are afraid that they will be eclipsed by a group of politicians representing Canadians in Ottawa elected on the basis of geography.  They all fear being reduced to the status of American state governors.

Frankly, that would be the best thing for Canadians as a whole.  The federal parliament should be comprised of two houses, one elected by population and the other representing the provinces equally.

No provincial government should control in any way shape or form the second chamber in the national parliament.

Elect senators directly, with equal numbers from each province.

It’s that simple, but if we let the premiers get involved we will do nothing but reinforce the anti-democratic, paternalistic attitude some of them have and the anti-democratic executive federalism they love to practice.

-srbp-

There’s even a local version…

of the Canadians Against Proroguing Parliament.

Facebook sez.

And they have a rally scheduled for January 23rd in St. John’s.

Presumably more details will follow because there’s precious little on the Facebook group right now.

-srbp-

Mr. Walsh goes to jail

Former Liberal cabinet minister Jim Walsh will be spending a few months behind bars for his part in the House of Assembly spending scandal.

Judge David Orr sentenced Walsh to 22 months for fraud and 12 months for breach of trust.  The sentences will be served concurrently.

By contrast, former provincial Conservative leader, natural resources minister and government leader in the House of Assembly Ed Byrne got two years less a day for fraud and 18 months for breach of trust, also served concurrently, for his part in the affair.

Walsh is the only one of the politicians charged thus far who opted to plead not guilty and face a trial.  That likely had something to do with the sentence. The Crown recommended 18 months while the defence suggested no more than half that time to be served conditionally.

Former Liberal cabinet minister Wally Anderson was sentenced last year to 15 months for forgery and none months for breach of trust.

Former New Democrat member Randy Collins will be sentenced January 15.

-srbp-

Alberta poll in question

Ye, verily, lo and behold, good citizens:

There are problems with reports coming from Alberta about the Wild Rose party and polling.

Sounds very familiar.

One thing leaped out in particular and this had to do with the reliability of online surveys:

Unbeknownst to most Albertans – even many politically savvy ones and apparently to most political journalists, too – was the import of this statement.

First, this is an on-line survey, based on interviews with a group of Albertans, obviously interested in politics and quite possibly committed to a political party, who selected themselves for the job.

The advantage of on-line panels of this type is that they’re inexpensive to conduct. The disadvantage is that their results cannot be called scientific and they are not particularly credible.

Also unknown to most Albertans following this story is the fact that the phrase “margin of error is 3 per cent” is highly controversial in professional polling circles when applied to this kind of survey.

The implication is that the survey was based on sound scientific methodology and can be counted on to be accurate within a margin of 3 per cent.

The fact is the survey is based on the opinions of people who selected themselves to join the panel and answered questions on-line. In other words, this is not necessarily a particularly trustworthy poll.

That probably refers to issues like the ones raised in this businessweek.com article in 2008.

And it points out again why reporters need to ask more questions about polls and pollsters before they report the results.

Lie say this little gem from an American association of polling firms giving 20 questions journalists should ask about polls:

6. Are the results based on the answers of all the people interviewed?

One of the easiest ways to misrepresent the results of a poll is to report the answers of only a subgroup. For example, there is usually a substantial difference between the opinions of Democrats and Republicans on campaign-related matters. Reporting the opinions of only Democrats in a poll purported to be of all adults would substantially misrepresent the results.

Poll results based on Democrats must be identified as such and should be reported as representing only Democratic opinions.

Of course, reporting on just one subgroup can be exactly the right course. In polling on a primary contest, it is the opinions of those who can vote in the primary that count – not those who cannot vote in that contest. Primary polls should include only eligible primary voters.

Yes, ladies and gentlemen, reporting poll results as a percentage of “decideds“ is “one of the easiest ways to misrepresent the results of a poll…”. Some people won’t be shocked by that nugget.

If you scroll down you’ll also find a good section that points out methodological problems with online poll results.

And that’s before people misread news reports that seemed to suggest Danny Williams scored a 70% approval rating with all Canadians surveyed by Angus Reid last fall during the local poll goosing month of November.

At some points, local news organizations will either stop reporting obviously unreliable poll results or hold off until they get answers to some tough questions from the people flogging the polling fodder.

-srbp-

Brent Price Comparisons

For those who have been following along with the discussion of oil prices and provincial government revenue, it’s interesting to compare the price of crude oil at comparable parts of the fiscal year.

On Monday, as you may recall, we took a look at production.  As the chart showed, offshore oil production in 2009 is well below production last.  It’s so far down in fact that the provincial finance department’s predictions for 2009 might prove to be as accurate as the work of some late-night television psychic.

Well, prices are not doing much better.

Here’s a rough look at daily spot prices for Brent crude for the period 01 April to 30 June in both 2008 (blue) and 2009 (red).

Basically prices in the first three months of 2009 were running about 50% below the same period in 2008.

So prices were down by something on the order of 40 to about 50% and production was down by 14% in April, 39% in May, and 18% in June.  That pretty much guarantees that revenues would be off as well compared to the previous year. 

Sure enough,  figures obtained from Natural Resources Canada confirm that. Figures for September confirmed the general pattern for the first half of the fiscal year. Oil revenues are running about 15% below the provincial government’s budget forecast.

Not 15% below the December fiscal update that talked about bringing in something like $1.8 billion in oil royalties but 15% below the budget forecast of $1.26 billion.

Provincial government oil royalties are a function of  production, the royalty formula and the exchange rate for the Canadian dollar.  In the front end of the fiscal year there was a bit of a premium for a cheap Canadian dollar.  But as the Canadian dollar has climbed against the American greenback during the past six months, any premium that resulted from selling oil in U.S. funds and then converting to Canadian dollars vanished. 

And if you look at the actual royalty figures it’s pretty clear that the improved royalty rate coming from Hibernia in payout couldn’t offset the drop in production, the drop in price and the shifting exchange rate.  That’s a clue to the magnitude of the change in oil revenues.  Even with all three fields in the optimum royalty condition, royalties are well down in 2009.

Just to keep close track of all this, your humble e-scribbler will have to go looking for the October and November royalty figures later this month  That way it will be much more clear if the trends established in the front end of the year are continuing. Odds are they have carried on, despite the claims from the finance department in December.

As a last point, consider that a forecast by the Canadian Association of Petroleum Producers in 2009 showed offshore oil production declining in Newfoundland and Labrador over the next five to seven years.  There’s a bit of a peak close to 2020 and then things trail off again as some of the older fields dry up.

 

That’s the sort of information that should be guiding provincial government budgeting. Revenues aren’t going to be climbing ever higher.  Demands for essentially services will, however, and the costs associated with that will rapidly escalate. This is an old refrain around these parts as regular readers well know.

That doesn’t mean there have to be spending cuts;  it just means there has to be greater fiscal discipline, consistent and prudent planning and some serious attention paid to reducing the province’s debt load. In other words, the provincial government needs to be doing exactly the opposite of what it has been doing for the past three years.

There is hope.

Until last fall, you’d never have heard a cabinet minister admit what your humble e-scribbler and others have been saying for years.

But first Paul Oram and then others admitted the provincial government’s fiscal plan  is unsustainable.

Acknowledging there is a problem is the first step toward doing something about it.

Let’s see what happens.

-srbp-

Sikorsky settles with NL S-92 families/survivor

There’s a settlement in the lawsuit launched by the sole survivor and the families of passengers and crew who died in the crash last march of a Sikorsky S-92 operated by Cougar helicopters.

A spokesperson for Sikorsky told Canadian Press:

"All of the claims in regard to the Cougar Flight 491 crew and passengers have been resolved…The settlement agreements are private and confidential, so I must decline to provide any details."

Last June, the families and the sole survivor filed a lawsuit against Sikorsky and related companies in Pennsylvania.  The case was withdrawn in July in an effort to reach a settlement.

-srbp-

In your wildest dreams…

You likely never imagined a popular revolt at the idea that parliament would not be sitting for about the same number of days that Tom Rideout was Premier of Newfoundland and Labrador.

[Okay, well, it would actually be longer than that but just go with it for now.]

But revolting the people are.

Well, at least a chunk of them.

Susan Delacourt surveyed some of the online efforts, including this tee being flogged by the crowd at rabble.ca. 

Click and you’ll get the rabble.ca Cafepress store.  Go ahead.  Click it. Your humble e-scribbler doesn’t get a cut.

Meanwhile in Newfoundland and Labrador, does anyone care that the provincial legislature only sits  - in total  - for the same number of  days Tom was Premier?

-srbp-

Oil production remains lower than forecast

Provincial government oil production forecast remains way off track.

Budget 2009 predicted oil production would total 98 million barrels in 2009.  In December, the financial update raised the forecast to 101 million barrels.

But as of the end of November the offshore had produced only 59 million barrels and with only four months left in the fiscal year, it would take a miracle to hit the spring projection let alone the December number forecast by the provincial finance department.

Offshore oil production in October 2009 was 32% below the same month in 2008 and November production was down by 28.4%, according to actual production figures from the offshore regulatory board.  BP presented earlier figures in November.

To give a sense of of how far down current oil production is compared to previous years, take a look at this chart that compares April to November for each of the past three fiscal years.  The grey bars are 2007.  The back is 2008 and the red is 2009.

In order to meet the provincial government’s Budget 2009 target, oil production in the last four months of the current fiscal year would have to run higher than April 2009 in each month.

To hit the December projection, production would have to run at levels of about 10.5 million barrels a month, and that’s a figure the offshore hasn’t hit this fiscal year at all. 

Overall, if production is running below forecasts, it will be that much harder for the provincial government to hit its revenue forecasts. After all, even the finance minister admitted in a year end interview that virtually every major sector of the provincial economy – he didn’t really mention oil - was in decline.

“The recession, particularly the way it hit the U.S., impacted their ability to buy products from us and that hurt the fishing industry, that hurt the pulp and paper industry in a major way, and it hurt the mining industry,” the MHA for Humber East told The Western Star.

He said the major losses of revenue from those sectors, combined with losses of personal income tax and sales tax, impacts government’s ability to spend in other areas such as education and health care.

Of course, regular BP readers have a better sense of what’s going on with oil production than the anything the finance minister has said.

And just think about it for a second:  if the finance department’s offshore production forecasts are so far out of whack with actual production, what else in the December forecast was off in a bad way as well?

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ARC Silly Week

As a bit of a diversion, here are some local contributions to what is known as Silly Week at Aircraft Resource Center, a website devoted to scale modelling.

The concept is pretty simple:  contributors send in something off the wall. 

It could be an unusual subject, like say a one-holer outhouse with working front door and a roll of toilet paper.

Most contributors take an existing subject and invent a story to go with the new version.

Like say Dave Bailey from Newfoundland and Labrador who offered up a couple of new subjects.

The one below takes a real-world aircraft – the Convair Tradewind from the 1950s  - and invents a whole story about it being re-engined for the Canadian Forces and eventually winding up fighting forest fires in Newfoundland and Labrador.

After the expected fiddling to fit the new engines, successful ground tests and taxi trials indicated that the idea was eminently workable, and on May 19 1960 the aircraft left the water and performed a 45 minute flight. Over the next few weeks the trials proved the concept beyond question, and procurement of the two on option was finalised. Service with the Royal Canadian Navy commenced in 1961 and they went on to perform sterling service in the search and rescue, resupply, and evacuation roles.

As they neared the end of their military careers Canadair once again investigated further uses, and firebombing was an obvious choice. The Government of Newfoundland and Labrador bought one example as a high-speed responder to attack outbreaks ahead of the arrival of the purpose built but slower CL-215 fleet. Its bulbous nose contours meant that it was immediately saddled with the nickname Moose, but other than that there was no joking about the prestige attached to flying it into action.

Dave took a kit of the Convair, added the multi-bladed engines and did the paint job and markings himself to create The Moose.

It might be called silly week but there’s nothing silly about the talent involved.

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Imagine if they were senate vacancies…

Seems that something is holding up the announcement of four appointments to the provincial court.  The clerks’ room at Number 3 Iniquity court was abuzz before Christmas with anticipation of an announcement ‘round about the first anniversary of l’affair Singleton.

Don Singleton’s appointment was announced on December 23, you may recall, and withdrawn in a storm of controversy on January 12.

Since then, there has been no sign of new appointments and the number of vacancies is four times larger.

Four empty seats on the provincial court doesn’t look very good, especially when a couple of them have been vacant for a year or more and after things got rather squirrely out in Gander in the middle of 2009.

So unless there is something akin the shenanigans last time that is causing some sort of massive last minute re-think of the whole announcement, maybe it is time for justice minister Felix Collins to take the list that showed up in the department some time ago,  tick off four names and get the release out there. 

After all, it’s already been checked over to see who’s been naughty and who’s been nice and the only ones left have passed the sooper dooper clearance checks supposedly imposed by Collin’s predecessor after said predecessor got caught out in the whole Singleton business.

After all, at some point, even the conventional media might notice that the provincial court is short a few judges and that the vacancies are getting older and older with each passing day.

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Why I write

“In any thriving democracy, sound public policy can only come through informed debate and discussion.”

The reason for writing The Sir Robert Bond Papers remains today as it was five years ago when the first post appeared:  to support informed discussion of issues that are important in Newfoundland and Labrador.

The reason remains because the need remains. 

In the wake of political scandals and in an atmosphere of sometimes intense political thuggery, too many people of conscience have abandoned public life in our province. They have turned their backs on politics.

What’s worse, thoughtful people have turned away from talking seriously in their day-to-day lives about our province and its people and their future.

“Sound public policy” comes across as a really high-brow pile of words.  Simple put, it is about choices.  Politics is really about picking between different views, different goals, different ways and different ideas. 

In order to make choices people need to know what choices there are. So Bond Papers provides a point of view that you just don’t find in many other places, if at all. Offering another point of view has become, of necessity, the second reason for writing.

So much of what does get talked about these days in Newfoundland and Labrador is based on false information. No one can make a sensible choice based on myth and fantasy.   And that has become, again of necessity, the third reason for writing:  Bond Papers is a source of accurate information.  

All those links are there for a reason.  They take you back to where the information came from in the first place. They also take you back to the heart of what democracy is really all about.

In a democracy, everyone gets to make the choices. So when you read something here, you don’t have to just accept that it is correct because someone in authority – real or supposed – tells you so. You can go and think about it, find the original information and make up your own mind. You have a right to information, accurate information, complete information.

And in the end, you have the right to make a choice for something other than what those in authority decide is best if that’s what you think is best. You and every other individual in this province have that right. You have the right to expect your politicians to listen when you say something.  They ought to listen every day, not just when there is a by-election on. 

Anything else is not healthy.

Bond Papers continues five years after it started, five years and some four and a half thousand posts later, because the need for it remains.

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When finance ministers meet…

 

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Top Bond Papers posts of 2009

If you haven’t had your fill of lists, here’s another one.  This time it’s some of the top posts from Bond Papers for 2009.

Now by top,  we are referring to ones that proved popular with readers, ones that led to much bigger stories, ones that broke some news and -  in the case of whistleblower and breast feeding  - posts that made concrete proposals on issues of significant public importance.   Now these 11 aren’t the only great posts from Bond papers for 2009.  There are plenty every month.  These just happen to be particular favourites.

Regular readers will notice some topics have been conspicuously absent from the series of year-end posts on top stories.  Not to fear, gentle and faithful readers.  There is another post to come.  That one will deal with the 10 biggest unreported or underreported stories of the past year.  Now they aren’t ones that have been ignored in this corner of the universe.  Rather they are ones that the conventional media in the province have consciously chosen to ignore – for reasons only those editors and reporters can possible try and rationalise – or ones where the conventional media have only reported on some aspects of a much bigger, juicier story.

Now just to give you a clue, one of the stories below is tied to a larger issue.  The Rhode Island memorandum story is just one aspect of a much larger  tale.

But more on that later.

For now, here are some of the best stories of the past year here at Ye Olde Scribbler’s Shoppe:

1. Equalization flips, flops and fumbles (January).  This one was topping the traffic counter for weeks in the early part of 2009.  it basically documents the raft of different and often contradictory positions the provincial government has taken on Equalization since 2004.  It’s only when you actually sit down and list things off chronologically you can see the entire convoluted mess.
2. BP’s draft whistleblower law (January).  The provincial Conservatives might not be able to deliver on their 2007 election promise, but your humble e-scribbler helped them out in January.  Here, in its entirety is a workable, draft law that would protect people who reveal dirty secrets in the public interest.
3. Uncommon tourism potential (February).  Really one of a series of posts on the idiotic idea of stringing hydro power lines through Gros Morne park.
4. Enhancing east coast search and rescue (March).  BP’s proposal on improving search and rescue capability offshore without resorting to the knee-jerk townie crap about putting helicopters in St. John’s.
5. Wheeler deal numbers and stuff (April).  How quickly everyone forgot that the provincial government’s energy corporation  can wheel electricity anywhere it can find a market. The April deal was good news when it happened and it is still good news even if the official version tries to pretend the whole thing doesn’t exist. This post puts some hard numbers on the deal.
6. Kremlinology (June).  The first post in what has become a running – and successful – series.  In June, your humble e-scribbler pointed out that something was off with Trevor Taylor.  By September, the old boy had thrown in the towel and left politics. Sometimes big stories grow out of the very smallest of clues.
7. The Wookey Hole Witch (July)  Okay so this one is a bit different.  A post on a search for a new tourism actor in a small English town has turned out to be a popular hit for people searching the Internet.  The witch has replaced Janice Mackey Freyer as the queen of the regular search hits.
8. Rumpole and the Summer of Discontent (August).  Problems in provincial court in Gander and four vacancies on the bench that still haven’t been filled.  
9. RI contradicts Dunderdale (September)  Natural resources minister Kathy Dunderdale told the people of Newfoundland and Labrador a bit of a nose-puller about why a memorandum of understanding on Lower Churchill power went nowhere. Your humble e-scribbler got the straight story from Rhode Island.
10. Unsound financial management (September)  Cabinet minister Paul Oram admits what your humble e-scribbler has been saying for four years:  provincial government spending is unsustainable.  finance minister Tom Marshall and others chime in to agree.
11. 66 at 6 in 2 (October).  A simple idea:  improve public health by having 66% of new mother’s still breast feeding at the end of six months after delivery, and hit that goal within two years.

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New Year’s Contest: name the new NL senator

So parliament will start anew in the New Year and all the empty seats in the senate will have new bums to fill them.

Who do you think will get the nod?

Who do you think should get the job, if it wasn’t a partisan wank-fest?

Drop a name in a comment space. See if you can beat some of the suggestions on a post from last October.

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The Spin Economy

Spin is bullshit.

Plain and simple.

In this Canadian Press story, much is made of the fact that 29% of employers in a survey by careerbuilder.ca said they planned to hire next year.

Logically, that means that the overwhelming majority – 71% – planned to keep things just as they are or reduce staff.  And since the story says only nine percent of those surveyed planned to decrease their staff levels, that means that – you guessed it - twice as many of those surveyed weren’t planning to do anything with their staffing at all next year as indicated they’d be hiring.

So where in the name of merciful heavens did Canadian Press get the idea this means the survey is “adding optimism” that the year-long job doldrums are over?

They got it from the news release, of course written by a company which has a vested interest in hyping the crap out of expectations for a boost in hiring.

And Canadian Press isn’t alone.  Others have picked up the pure, undiluted bullshit from careerbuilder.ca and its American parent.  It’s all in line with the line coming from different sources for about a year now that the recession was over and the recovery was underway.  Unfortunately for the purveyors of all this nonsense, repeating the same crap over and over doesn’t actually do anything least of all make the untrue suddenly and miraculously true.

What’s really more interesting in all this is not that organizations with a vested interest in hyping the crap out of something – like government for example – actually hypes the crap out of something.  Nope.  Notice instead that even the venerated Canadian Press  is now being affected by the same problems that have afflicted other news outlets.  Reporters and editors aren’t suddenly innumerate. They just don’t have the ability any more to weed out bullshit, even when the bullshit is so patently obvious as in this news release.

If only 29% of employers plan to hire next year – or 20% in the United States version of the survey – rest assured of one thing: the recession ain’t over.

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Top 10 Best/Worst Communicators of 2009

From Bert Decker, his list of the top 10 American communicators.

Some you will recognise and agree with.  Some you will recognise and wonder: “WTF?”

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Top 10 Stories of 2009

No need for elaborate commentaries for this one. 

Here are the 10 stories that  - in the not so humble opinion of your humble e-scribbler - had a huge impact on Newfoundland and Labrador in 2009 and/or which will continue to affect the province into the future.

Odds are this list will look like all the other locally generated lists of top news story for 2009, even if the ordering may be slightly different.

1. Cougar 491:  A tragedy that prompted a genuine outpouring of sorrow across the province and left a mark on psyche of many that just won’t go away any time soon. A public inquiry will examine offshore helicopter safety and make recommendations in 2010.
2. H1N1:  The health pandemic dominated the news in the front of the year and again in the fall. People changed their habits and many organizations changed the way they conduct their affairs:  for instance, shaking hands in greeting was out for a while in many churches. In the end, this province wound up ahead of the country in percentage of population inoculated.  That’s something everyone can be proud of.
3. The Recession:  It’s been walloping Newfoundland and Labrador much harder than many have acknowledged and the effects of the largest global economic downturn since the 1930s are being felt in everything from layoffs and temporary closures at mines to a continued increase in people from  returning to this province other parts of Canada because they can’t find work anywhere else.  Expect the recovery to take a while.
4. Hibernia South:  So many people lined up to criticise the Hibernia deal over the past 20 years and everyone one of them turned out to be full of crap.  From Ian Doig to Bill Callahan to Danny Williams, they were all dead wrong.  Danny Williams was so wrong about give-aways he used the Hibernia royalty regime as the basis for his deal to bring more oil into production. The royalty regime hashed out two decades ago and adjusted in 2000 will pour billions into the provincial treasury. The new deal added a couple of tweaks but all the heavy financial lifting is coming via the old deal. The new deal will bring new oil ashore, swell provincial coffers, produce more jobs and set a foundation for future developments around the Hibernia oil field.  The development deal didn’t need all the hype and bullshit the provincial spin machine laid on it:  it could stand up on its own merits and garner well-deserved credit for the administration that delivered the signed agreement.
5. Double political suicide:  First Trevor Taylor, then Paul Oram.  Two stalwart Tory politicians ended their political careers  - unexpectedly - in the space of a couple of weeks last fall and in the process sent shockwaves through the provincial Conservative party. When Tony the Tory has to write letters to the newspapers defending his team’s future viability, you know the province’s governing Tories were badly shaken. In the subsequent by-elections, the Tories swept one and lost one.  More political changes may well be on the way in the run-up to the 2011 general election.
6. AbitibiBowater:  A carry-over from 2008, the closure of the century old paper mill at Grand Falls in March shock the economic foundations of the central Newfoundland town. The reverberations are still being felt. Plenty of people never imagined the company was serious.  Surprise!  They weren’t bluffing.
7. Have Province:  The provincial economy finally generates enough revenue so the provincial government can deliver its constitutional obligations without hand-outs from Uncle Ottawa. Announced prematurely in November 2008, “Have” status arrived in 2009, much to the chagrin of some politicians. 
8. No Hydro Lines Through Gros Morne:  “The argument was made, quite rightly, by people that you don’t want to create an eyesore in…one of our best tourism attractions in the province.”  Amen to that. There were other political climb-downs in 2009, but this one stood out because it was the most unusual one for the provincial government to stand on its haunches about in the first place.
9. The ABC’s are over/The End of the Ig-man: The rapprochement between the revanchist provincial Conservatives and their federal cousins happened quietly but the fact it happened will wind up having a profound impact on politics in the province.  That’s especially true at the federal level where the sitting members of parliament have already been dismissed by the national media as DW’s bitches.   What will they do when the next federal writ drops?  What price might the provincial Tories have to pay to get back in Steve’s good books?  Will the whole thing fall apart? Only time will tell. The other half of this story is the Ignatieff implosion.  So much hype; so little delivery.  When their boring stuffy academic  - and an economist to boot – is more popular than yours, you can be assured there is a giant political crisis desperately needing attention.  The second half of the problem:  Bob Rae as the only apparent alternative.  Nice guy but an aging former premier is not likely to catch fire with the electorate.
10. Darlene Neville. As Russell Wangersky already noted, this is just the latest in a series of problems with people hired to fill important jobs reporting to the House of Assembly.  The problems aren’t confined to one office or to one government administration.  The offices are important ones, however, so there is a pressing need to sort out how they are filled.  Maybe one solution would be to get cabinet out of the game entirely and leave the running of House offices to a special committee of the legislature. 

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Kids say the darndest things

Before Christmas Memorial University political science prof – and former Williams administration spin-meister -  Alex Marland had some choice observations about his former boss and said boss’ apparent popularity with voters.

Umm, that bit of context didn’t appear in the Telegram story, by the by, even though it is more than a wee bit relevant to the story.

But anyway, Marland had this to say:

"It's something in political science we call economic regionalism," he said, explaining Williams is seen as somebody who's not trying to favour any particular group. "It's almost like he's trying to help out the Newfoundland society as a whole," Marland said.

Williams has also learned to target his anger and desire for reform against outsiders, he said, like Hydro-Quebec, New Brunswick or Prime Minister Stephen Harper, as opposed to people in the province.

Target his anger outside the province?

That’s what political scientists used to call bullshit.

Just ask all the traitors and quislings just exactly how far outside the province political anger gets targeted.

And economic regionalism?

Let’s just say that Marland was about as far off base on that one as he was on the anger ball thing.

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Scenes from a parking lot: recycling at Walmart

Discarded chewing gum is used to pave in front of every Walmart.

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Scenes from a parking lot: Big Truck

There’s is no amount of l’il blue pills that can overcome the inadequacy symbolized by the honking great, brand new pick-up trucks to be found in parking lots around St. John’s these days.

Just sayin’.

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The Cure and The Disease

The guy who tried to blow up a Christmas Day flight to Detroit hid two containers of flammable materials inside his underwear.

His unsuccessful effort  - he set fire to his own scrotum and created some minor panic – end when passengers seized him and doused the smouldering bits of his crotch with anything liquid close to hand.

In the security,  American and Canadian authorities made it even more difficult to get on an airplane in the first place without actually making it any less likely that someone with stuff secreted around their genitals can get on an airplane in the first place.

The initial response included manual searches of carry-on baggage.

Remember that the guy hid the package next to his package not in his luggage.

They also conducted pat searches.

Again, unless they grabbed everyone’s package the odds of finding a little do-it-yourself flame kit would be slim.

Now the geniuses who now decided passengers can’t take a whiz in the last hour before landing  - will they now hand out catheters at check-in? - have decided to ban carry-on luggage.

Not surprisingly, real security experts – as opposed to the Mensa masterminds actually in charge of security screening at airports – are pointing out that the stuff happening across North America this holiday season is nothing more than theatre.

That’s right.

A show.

Something to make it look like they were doing something to prevent loons with glowing Johnsons from getting on airplanes.

And in the process they have virtually guaranteed the airline industry will lose passengers.

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Innu seek halt to water management application

In a 51-page letter filed with the public utilities board on December 15, the Innu of Ekuanitshit are asking the border to refuse to approve any agreement or suspend NALCOR’s application based on NALCOR’s failure to adequately consult with them as provided under the Constitution Act, 1982.

Specifically, the Ekuanitshit Innu are seeking:

AN ORDER refusing to approve the agreement or, in the alternative, suspending Nalcor’s application and setting aside for future examination the duty to consult and accommodate the Innu of Ekuanishit; and

AN ORDER: that on an interim basis and in any event of the cause, Nalcor pay all expenses incurred by the Conseil des Innus de Ekuanitshit in connection with Nalcor’s application to the board, including costs of counsel, engineers, valuators, stenographers, accountants and other experts or assistants retained by or for the Conseil des Innus de Ekuanitshit in and about the inquiry; and
that Nalcor and the Conseil des Innus de Ekuanitshit are to attempt to agree on a procedure whereby, upon incurring costs and disbursements from time to time up to the end of the inquiry, trial, the intervenor will so advise the applicant and the applicant shall
pay them within a given time-frame, unless Nalcor objects, in which case it shall refer the matter to the Board.

The application for costs is based on the magnitude of the project, the scope of the potential infringement on the Innu’s aboriginal rights and the Innu’s lack of financial resources.

In a separate 143-page letter dated December 21, 2009, the Innu of Uashat Mak Mani-Utenam make the same application to the public utilities board.  Both letters include commentaries on aspects of the NALCOR proposal for the Lower Churchill.

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TWINCO seeks intervener status in water management decision

The Twin Falls Power Company is seeking intervener status in the hearings at the public utilities board into the water management application by NALCOR Energy for the Churchill River.

In a letter dated December 17, 2009, TWINCO president James Haynes said his company may be affected by any decision in the application.

2. Twinco has a Sublease with Churchill Falls (Labrador) Corporation Limited ("CF(L)Co") whereby CF(L)Co is obligated to supply 225 MW and 1.97 TWh of power and energy to Twinco, included as Exhibit 4 of the Application. Twinco supplies power to two customers, 10CC and Wabush Mines, both of which are located in Labrador West and as result Twinco could be affected depending on the disposition of this matter.

3. Twinco owns and operates two 230kv transmission lines that transmit power and energy from Churchill Falls to Labrador City and Wabush in western Labrador and as a result could be an affected transmission provider.

Twin Falls Power company is owned by Wabush Mines, IOC and  NALCOR with each company holding one third of the shares.  It supplies power to the mines in western Labrador. 

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The Imaginarium of Spin-doctor Marshall

According to finance minister Tom Marshall, estimated growth in the province’s population is due to people flocking home to find work.

“More people moving to Newfoundland and Labrador represents a further sign of confidence in our economy, way of life and the plan the Williams Government has put in place to continue along a path of stability and prosperity,” said Minister Marshall.

Okay.

They are being drawn to the province by its supposedly buoyant economic prospects, right?

Well, if that’s the case, the good spin-doctor of finance might want to explain why the employment levels in the province in November were actually lower than they were the year before.

Wait.

Don’t bother asking.

The answer is readily apparent.

People are leaving places like Alberta because there are fewer job prospects there than there used to be.

That’s a trend some people have noticed for some time now.  In other words, the growth in the provincial population over the last year and a half or so is actually not due to all the splendiferous tax cuts and other budgetary bunkum the provincial government spin machine claimed.

Even if some bank economists have been fooled  - badly – the reality is something other than what the provincial government claims and the conventional media dutifully reports.

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The fly in the soup clinging to the hair

Writing in the Globe on Christmas Eve, Fabrice Taylor noted the strong performance of Labrador iron ore in the market place, bouyed by increased global demand.

Then he notes the relatively high value of the Canadian dollar against its American counterpart. 

The hair in the soup is the Canadian dollar. Part of the drop in Labrador's financials, mentioned above, is because of volumes and pricing, but a good part is also from foreign exchange. Some pundits see the dollar going to par with the greenback. That's only another nickel or so but it would hurt.

He’s right.

But the exchange rate isn’t the only thing in the soup threatening the fine meal. There’s a fly in the soup, as well, namely the medium to long term cost of operating the mines in western Labrador.

That’s not a labour problem or a dollar problem or a market problem or an ore problem.

It’s an energy problem.

Or more specifically the threat by the provincial government back in 2006 that it would expect the mines in western Labrador to start paying commercial rates for power come 2014. 

And if commercial rates weren’t in the cards, well, the mining companies expect to be paying considerably more than they are currently. 

Never mind that the companies own two thirds of Twin Falls Power Company, built near Churchill Falls when it was still called Hamilton Falls.  And never mind either that the companies agreed to shutter their power station so BRINCO could push more water through its new plant at Churchill Falls.  In exchange the companies got a block of power for about half a cent a kilowatt hour and anything beyond that for about a quarter of a cent per. 

Either way, the prospect of higher power costs will play a role in the future of Labrador west.  Low cost power will be crucial to sustaining the mines, especially in a high dollar world, so when threats get tossed around companies tend to take notice. 

That threat is till out there.

Plus the threat’s been reinforced by the seizure last Christmas of hydro assets belonging to three companies, one locally owned and the other running a project not connected at all to the paper mill at Grand Falls.  Longstanding agreements were brushed aside by a simple vote in the legislature.  Agreements entered into in good faith and executed in good faith were crushed overnight, forcing at least one of the companies involved to default on loans.  A court case was extinguished without compensation.  Any company with any sort of operation in the province would have been insane not to revisit all their legal options.

And in Labrador west, it would be at all surprising to find out that the companies operating mines there are keeping a wary eye on what happens in St. John’s.  That power contract issue hasn’t been resolved yet and it’s much more a looming crisis than anything connected to the Churchill Falls renewal in 2016 could ever be.

Hair in the soup?

Try a fly.

And a geezly big blue bottle one at that.

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Where’s Adolph?

Interfax added to the controversy over the whereabouts of Nazi leader Adolph Hitler’s remains in early December with a story from the Russian federal security bureau – successor to the State Security Committee (KGB) – that claimed KGB boss Yuri Andropov ordered Hitler’s body cremated and the ashes scattered in 1970.

The story is essentially the same one which has been circulating since 1968 and which was confirmed by an examination of documents in the state security archives in Moscow in the early 1990s.

Hitler’s body along with those of Eva Braun and the Goebbels family were dug up from their grave at a Soviet intelligence base at Magdeburg where they had been buried secretly after the Second World War.  The  location is incorrectly identified as a military base in some accounts. it actually belonged to a Soviet intelligence organization that operated in and with the Red Army.

Soviet officials feared that the grave site would become a haven for anti-Soviet/pro-Nazi sentiment if it were discovered. The Soviets moved from the facility (reportedly at the site now having he civic number Klausener Strasse 32) at Magdeburg in 1970.

Soviet soldiers reportedly found the remains near the Chancellery bunker where Hitler and the senior German leadership lived during the last days of what the Soviets called the Great Patriotic War. Hitler reputedly shot himself.  Braun – whom he had married shortly before the suicide  - reportedly took poison.  Nazi propaganda minister Joseph Goebbels and his wife Magda also took poison after murdering their six children.

In 2009, a American research team claimed to have examined a portion of a skull displayed still held Russian authorities and purported to be that of Adolph Hitler.  The Americans said the skull belonged to a woman between ages 20 and 40.

The skull and lower jaw held by Russian authorities were supposedly retained by the Soviet intelligence unit that had found the Nazi leaders remained in 1945, buried them and then later cremated them on Andropov’s orders.

In some accounts Russian authorities deny that the Americans had been allowed to examine the remains at all.

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Keep an eye on Santa

via NORAD’s Santa tracker.

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The other movie to see this holiday weekend

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The movie to see this holiday weekend

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A gnu twist on the animal song meme

Another Flanders and Swann classic:

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The Written Word Round-up

1.  Rewriting the rules of defamation.  The Supreme Court of Canada hands down a landmark ruling on two defamation cases and in the process changes the country’s defamation rules.

The defence will operate in favour of the media outlet, “if it can establish that it acted responsibly in attempting to verify the information in a matter of public interest,” Chief Justice McLachlin wrote.

“The public interest test is clearly met here, as the Canadian public has a vital interest in knowing about the professional misdeeds of those who are entrusted by the state with protecting public safety,” Chief Justice McLachlin said. "The defendants' liability therefore hinges on whether they were diligent in trying to verify the allegations prior to publication, and it will be for the jury at a new trial to decide whether the articles met this standard of responsibility.”

2.  But did he have to ask where he left his own sock puppets?  A Quebec writer reveals that she has been writing a blog under a male nom de plume and doing better at it financially than under her own name.

3. But how will the great unwashed masses know what is true if reporters and editors do not tell them?  Yet another conventional journalist raises questions about the wild and uncontrolled world of the Internet:

Seeing as how information dissemination has become so easy, a lot of information might reach millions of people unfiltered. While this provides a great opportunity for the truth to reach millions, we may also be flooded by faulty, incomplete and outright wrong information, as well as malicious attack and some plain lies.

Amazingly enough people might cope just as they have coped with “faulty, incomplete and outright wrong information” in the conventional media.  Heck, they might even find stories that never get covered at all by the conventional media even though they are entirely true.

They might even manage to find a personal relationship with accurate information that does not require the intervention of self-appointed High Priests.

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The Hippopotamus Song, Flanders and Swann version

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They can’t re-blackball him

Publisher Craig Westcott’s recent editorial from the Business Post has found its way to a New Brunswick newspaper.

Wonder what the locals will do besides despatch another of the Premier’s fanboys to post a comment on the piece?

It’s not like they can re-blackball Westcott from government interviews.

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I want a hippopotamus for Christmas

The song that is driving people insane.

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Rumpole and the Christmas Honours List

Word coming from the clerks’ room at Iniquity Court has it that on Tuesday next the province’s justice minister will announce recipients of the cabinet’s appointments to the provincial court bench.

There are four slots open, as Bond Papers readers already know. Some of them have been vacant for a year.

Who will make the Honours List?

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Yipppeee! Bring on those higher energy prices

From the New York Times:

In 2009, some 31,000 households in Rhode Island will have their utilities shut off, and the effort to juggle energy bills and mortgages is helping push some homeowners into foreclosure, said Henry Shelton, director of the George Wiley Center, a consumer advocacy group here. (Here, as in many states, utilities may not disconnect the poor in the winter.)

Since 2000, the cost of heating a home with fuel oil has more than doubled and the cost of heating a home with electricity has risen by one third, outpacing many incomes. The recent surge in unemployment has thrown even more people into energy debt.

High energy prices will hamper any recovery in the United States.

Hindering a recovery of the American economy will screw everyone who depends on exports into the Untied States as a staple of their own economy.

Like say Canada generally and Newfoundland and Labrador in particular.

Any fiscal plan built on perpetually high energy prices is inherently flawed and prone to failure.

Catastrophic failure.

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