Math problem: oil production, oil prices and oil royalties

“Back of the envelope calculations”,  a recent Telegram story assured us all, “put royalties for the first three months of the [current] fiscal year on pace with government’s $2.1-billion target.”

But, the Telegram headline says, that’s because “surging production” is offsetting “softer” prices.

Unfortunately, the Telegram didn’t see fit to show us the back of the envelope so no one can tell exactly how they came to that conclusion. It must be a provincial government envelope, though because the numbers don’t quite add up.

As forecast

As it looks,  revenue projections are likely to be on target with the forecast.

The provincial government’s oil royalty is a function of oil prices and production. The Telegram reported  - quite rightly - that the provincial government forecast oil royalties of $2.1 billion based on total production of 90 million barrels and and average price of oil at US$83 a barrel.  The provincial government also allowed the Canadian dollar would be close enough to the American dollar that there wouldn’t be any sizeable windfall from a cheap Canadian dollar.

The Telegram also reported that oil production is on track to come in around 101 million barrels.  The offshore regulatory board’s actual figures for the first four months of 2010 (April to August) show oil on track to hit 99 million barrels. Still, that’s 10% above the government’s spring forecast.

As for crude oil prices, they have not averaged US$83.  The Telegram puts the average price of Brent crude at US$80 a barrel the week the story appeared. This is where it gets interesting.

For the first four months of the current fiscal year, Brent crude has averaged US$77.71 a barrel. That’s about six percent below forecast.  If you take out the April average of $84.98 – because it is the only month averaging above $80 dollars this year – you get an average price about 10% below the government’s forecast average.

With production above and price below, the one pretty much cancels out the other.

No surge

Production isn’t actually surging, though.  In fact, production at about 100 million barrels is only slightly above last year’s production total of around 97 million barrels. As for price, there’s no surge there either.  The average currently showing in 2010  - including April - is only about a dollar above the 2009 fiscal year average.

In other words, everything is tracking to bring in the same average price and the same yearly production as 2009. The provincial government forecast an increase in royalties to $2.1 billion from $1.8 billion. 

All three fields should be in payout and according to the pre-2003 royalty deals, that means they’d be paying more to the provincial treasury.  Hibernia didn’t hit payout until June last year, so it appears the extra cash is solely the result of having the big field paying higher royalties for a whole year instead of just part of it.

That means that the slightly higher royalties are coming from old development deals, not from something happening to oil prices and production.

Still on track for another big cash deficit

And what does that mean for the provincial budget? if you relied only on the  Telegram story you might be fooled into believing that the provincial government might balance its books this year.  It might do so using accrual accounting, but there won’t likely be a balanced budget on a cash basis.

In fact, the current fiscal year looks a lot like the last one, including the fact everything is on track for another whopper of a cash shortfall.

For some unfathomable reason, the Telegram decided you didn’t need to know that the provincial government’s budget forecasts a cash deficit of nearly a billion dollars. Nor did they mention that last year the provincial government had a cash deficit of about $500 million. 

Instead, they left you with the Pollyanna-ish view that everything is looking great.

Maybe it is, but one thing is for sure:  it has nothing to do with “surging” oil production or “soft” oil prices.

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Second escape from police, accused faces two sexual interference charges

A man who escaped police custody on the Burin Peninsula for the second time in two years is facing two charges of sexual interference and two charges of breaching probation orders.

The Provincial Court docket for Grand Bank shows that Andrew Kenneth Parsons is due back in court on Wednesday, September 1, 2010 for election and/or plea.  Parsons was remanded in custody last week.

But he won’t make that court date unless police can get him back in custody.

There’s no word on how Parsons managed to escape. This is the second time in as many years that Parsons did a runner from the Royal Canadian Mounted Police detachment in Marystown.

Media reports on the escape don’t give any indication of why police had Parsons in the nick. The Telegram quotes unnamed police sources as saying that Parsons is scheduled to appear on “a number of serious criminal offences.”

Nor do the local media reports have much else to say beyond giving Parsons’ physical description.

According to vocm.com, police said that Andrew Parsons is “not a threat to the public.” 

The Telly appears to have also gotten the same line on safety from police:

Parsons is not considered dangerous but the police said because of the nature of his charges, “there is a definite need for public concern.”

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Update:  Kudos to Glen Payette of CBC’s Here and Now for adding way more details to this story on a whole bunch of levels.  CBC Radio Noon got the details of the escape by interviewing the CBC division media relations officer.  Payette did the same thing, but he also added the guy’s crim record and – for the first time today – someone other than your humble e-scribbler reported what the guy’s been charged with.

A big part of this story, though, has been the bizarre approach B Division took to this escape and the news release.  For some unknown reason, they refused to say what the guy was charged with. 

CBC Radio Noon host Ramona Deering started the interview with the straightforward question of why the guy was in custody.  Media relations officer Staff Sergeant Boyd Merrill ducked the question referring only to the guy having been remanded in custody pending another court date on charges Merrill obviously wasn’t going to talk about.

Maybe they are sensitive about the escape.

Okay.

Well, if that’s the case, then the little darlings can get over that one pretty quick.  If you are going to traipse through the words looking for marijuana plants in some grow-op near St. John’s then you can suck it up and talk about a more embarrassing moment.

Sound media relations practice for organizations like the police is built on simple ‘just the facts’ story telling using – we can only hope – plain English instead of CopSpeak.   Ducking obvious questions or dancing around issues that are apparently quite simple (even if a wee bit embarrassing) just aren’t part of a good MR practice. 

And hey, reporting every possible tip or lead as if each was credible doesn’t balance out the credibility ledger.  At some point, people will start to wonder whether or not this guy is doing a third-rate send up of the Scarlet Pimpernel:  “They seek him here.  They seek him there.”

Statoil explores renewables

Norwegian energy company Statoil is expanding its interest in renewable energy.

The company plans to develop the world’s first floating offshore wind farm.  Possible sites include one off Maine, two off Scotland or another off Norway.

Statoil has other offshore wind farms already in development.

Meanwhile, in Newfoundland and Labrador, the provincial government is focusing its energy future on eventually developing a $15.5 billion hydroelectric megaproject.  According to the 2007 energy policy, everything else is on hold until the future of the Lower Churchill wet dream is settled.

Unfortunately, the future of the Lower Churchill, a.k.a. the Great White Whale, is also up in the air indefinitely.

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Maine’s energy future

Maine Governor John Baldacci can easily list off the elements of his state’s energy future.

“This year Maine signed a Memorandum of Understanding on tidal energy with Premier Dexter of Nova Scotia, on offshore energy research. There is a huge development in Eastport with the Portland-based Ocean Renewable Power Company. We can learn from each other and share our experiences with each other.

“We are working collectively as a region. It’s important that we are in sync, especially with the issues surrounding Hydro-Québec and New Brunswick’s nuclear plans.

Newfoundland and Labrador didn’t make the cut.

Wonder why not?

Maybe it has something to do with the current administration’s obsession with a $15.5 billion wet dream for which there are neither markets nor money.  There are plenty of other generation and transmission opportunities, smaller and more financially feasible, even on the island of Newfoundland. 

None will be developed  - including a connection from the island to Nova Scotia – unless it involves the Great White What of the Lower Churchill.

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Danny Williams and the National Post: Fact Check

No surprise Danny’s miffed at the National Post. 

Nor is it any surprise that the most thin-skinned person on the planet  - short of someone actually without an epidermis at all - claims that it isn’t about him.

And it’s really absolutely not the least bit of a shock that between the two of them -Danny Williams and the National Post -  readers will wind up being about as in  touch with reality in Newfoundland and Labrador as people who get everything they know about the universe from Glenn Beck.

Rather than go through the errors and nose-pullers in detail let’s just take the biggest whopper for each of them:

For the Old Man, it would be the contention that “Abitibi operated in our province for 100 years”.

Sure 65% of the province’s population may have trouble with numbers, math, logic and reasoning but few likely would have listed the province’s best-known Rhodes scholar among the innumerate.

Those that did can go to the head of the line.

The Anglo-Newfoundland Development Company opened the Grand Falls paper mill in 1909.  Abitibi started operations in 1912 but not in Newfoundland and Labrador.

This is 2010.

Right off the bat, anyone with that information would know that it is absolutely utterly and totally impossible for a company that is 98 years old to have been in operation more than two years before it existed.

I am my own grandpa indeed.

But then you have to consider that Abitibi didn’t arrive in Newfoundland and Labrador until 1969, a fact noted in some of the AbitibiBowater bankruptcy proceedings and a point that has curiously escaped every single reporter in this province for the 18 months or so the Premier has been saying this complete bit of nonsense.

Even a Rhodes scholar ought to know that 100 is not 41.

As a result of his repeated numerical blunder, one must wonder if Danny actually reads anything laid in front of him, whether his high-priced help are really that incompetent, whether he cares about facts at all, or if what we see here is some combination of all three.

Now for the Post stuff:

Well, the name of the province is Newfoundland and Labrador but that’s really the smallest part of the problem with the Post editorial.

The rest of it is a litany of things that never happened, as Williams easily pointed out.  Most of his comments in reply were just the usual self-serving blather but there’s no denying that the  magnitude of the factual errors in the editorial would stun a herd of the hardest-headed mountain goats in British Columbia.

The easiest thing to do is take the biggest error:  “… time and again, Ottawa graciously bails Mr. Williams out from his blundering anyway.”

The idea that Canadians have paid for all Williams’ blunders is just foolish.

Sure he managed to score a couple of billion extra from the feds in 2005 but for the most part, the major blunders of his administration haven’t cost all taxpayers in the country a penny.

Only provincial taxpayers will bear the load – way more than $130 million – from the expropriation fiasco.  They’ll also be taking their proportionate chunk of the NAFTA settlement as well.

Only the taxpayers in Newfoundland and Labrador will be coping with the huge cash deficits Williams’ administration is racking up.  They’ll be the only ones dealing with the fall-out from a record of wild public spending even his own cabinet ministers agree is unsustainable.

His huge gift to Big Oil  - section 5.1 of the Hebron financial agreement - won’t affect Ottawa a tiny bit even if it makes the provincial government nothing more than a vassal of the oil companies on some issues.

In the end, though, the Post is still the Post.

But word is Danny is looking for a post-politics gig.

Maybe Kory should give him a call.

If the guy can handle a piece of chalk, there’s the makings of a new star in the Reform-based Conservative Party news heavens.

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The Return of the Konavalov

Once more, we play our dangerous game, a game of chess against our old adversary…

Russian hunter-killer submarines are stalking Royal Navy ballistic missile submarines in the North Atlantic.

Royal Navy submariners report the highest number of contacts with Russian submarines since 1987.

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Traffic Drivers: August 23-27 2010

Saludos, my darlings, and you know who you are.

Top post this week is from 2006.

Believe it or not.

1. Government by Fernando.
2. VOCM “news” has no source.
3. AbitibiBowater reaches expropriation settlement.
4. Mr. Premier, what are you trying to hide?
5. Lower Churchill costing:  recap.
6. Bashing your own guys over the head is soooo strategic.
7. Could nothing be further from the truth?
8. And the NAFTA/expropriation winner is…?
9. The old trading federal cash for a deal with Quebec trick.
10. Good to the last fish.

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Still more orcas and minkes

Via cbc.ca/nl, comes yet more video – the fourth – of orcas hunting minke whales off Newfoundland.

You can find other video in an earlier Bond Papers post.

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Does Danny have them all cowed?

Craig McInnes of the Vancouver Sun asks a good question – make that a very good question  - about the federal party leaders (Jack, Ig, and Elizabeth) and other provincial premiers:

It's not that surprising that Williams' parochial vision is wildly popular back home on the Rock, given his success in turning Ottawa-bashing into a profitable enterprise. What surprises me is how timid our federal politicians have been in taking him on. Two days after the announcement of the $130-million settlement with AbitibiBowater, none of the leaders of any federal parties and no other premiers have criticized either Williams for getting us into this mess or the federal government for picking up the tab. [Emphasis added]

Does the bull of St. John's have them all completely cowed?

It would certainly seem so.

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Good to the last fish

Two stories this week each highlighted in their own way the ongoing and largely ignored fisheries crisis in Newfoundland and Labrador.

On the one hand, you have a story about a fish plant converting to produce canned whelk – sea snails – for an overseas market. A local fish company will – as the Telegram described it -  “start with between 12-14 positions for four to five weeks with a possibility of future expansion.”

That story made the major media in the province.

The second story was a hearing by a provincial government agency into a request by another local fish company to move one of its processing licenses from one community on the province’s northeast coast to another on the southeast coast.  The plant is only major employer in the northeast coast town. There are no other economic prospects in the area for the plant’s aging, seasonal workforce.

For those who may not be familiar with the fisheries crisis in this province, let us put it as succinctly as possible:  there are fewer and fewer fish in the ocean.  You can see this in the fact that fish plants have now turned from processing  the creatures that swim through the water using their fins and tails to packaging up things like snails and jellyfish.

They call it fishing out the food web.  Humans started at the top with the really big animals.  Over the centuries and with no apparent slackening of blood-lust, they’ve collectively managed to demolish species after species around the globe until the humans now catch the tiny thing those bigger fish used to eat.

Toward the end of his life, the late Jon Lien used to do talks about this sort of thing.  He had a foil packet covered in Japanese or Korean writing stashed under the podium as a prop.  At the right moment in his talk, Lien would hold it up to the audience and ask if anyone knew what was in it.

None did.

Dried jellyfish was the answer, processed by a local plant and shipped off to the East as a snack food.

Yes, friends, we are moments away from a krill fishery.

At the same time, there are still thousands of people in Newfoundland and Labrador trying to squeeze a very meagre living from processing fish for a few weeks a year and then collecting government hand-outs for the rest.  A report delivered to the current administration when it was still young pointed out that the typical fish plant worker made less than $10,000 a year from labour, picking up another $5,000 in employment insurance premiums.

There are still way too many of them – plants and plant workers – for them all to make a decent living from what fish, and now snails, there is to turn into frozen blocks. The only thing that has changed in the better part of a decade since that report is that the workers are finding it harder and harder to collect enough weeks of work to qualify for the EI.

Oh yes, and the prospect of a fish plant adding up to 15 jobs for a month stuffing slimy globs of flesh into tins makes province-wide news as a positive thing.

As it turns out, there is some sort of poetic symbolism in all this.  Around the time that a bunch of West Country merchants backstopped Giovanni Caboto’s explorations five centuries ago, British fishermen were trying to find a new place to wet their lines.  Seems they’d managed to clean out their own grounds and had started to spread farther and farther in search of new species to decimate.

They found such a place in the waters off Newfoundland where the cod were supposedly so plentiful they could be had by lowering a basket over the side of the ship. Now cod are a species declared commercially extinct in 1992 and teetering on the edge of ecological extinction.

Yet still there are people who want to keep fishing them. And jellyfish, slugs and in the not-too-distant future, perhaps sea snot or microbes.

As depressing as it seems, there are solutions. As Elizabeth Kolbert wrote in a  recent review essay in the New Yorker, 

M.P.A.s [marine protected areas], smart aquaculture, and I.T.Q.s [individual transferable quotas] —these are all worthy proposals that, if instituted on a large enough scale, would probably make a difference.  … it is in “everyone’s interest” to take the steps needed to prevent an ocean-wide slide into slime.

It is indeed.

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Could nothing be further from the truth?

And it seems like only yesterday  - 2004, in fact - mainlanders could write stuff like this:

He flatly rejects the already swirling speculation about an eventual run for the federal Conservative leadership (although conspiracy theorists will be pleased to hear that he wants to become bilingual).

Then others have him nicknames. They forgot the most appropriate one, by the by.

But then someone notices a curious turn of events since 2008:

Oh, by the way — anyone notice that Danny hasn’t been criticizing Stephen Harper quite so much any more? Gee, I wonder why.

Hmmm. 

Good point.

Maybe it would be good to wonder why.

 

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And the NAFTA/expropriation winner is…

In their offices in the Sun Life Building in the heart of Montreal’s financial quarter, the boys at AbitibiBowater are likely making toasts using the finest single malt scotch they save for just these special business occasions.

There haven’t been too many of them for the managers at the financially troubled company lately but this week, they can crack open the bottle and enjoy themselves.

And while they are at it they can make two toasts.

Their first one should be to Danny Williams. 

Were it not for the Premier’s unshakeable  - and entirely unfounded - belief in his own infallibility, AbitibiBowater could not have achieved its monumental success in Newfoundland and Labrador. 

Not only did Danny Williams’ astonishing business and legal prowess relieve them of the huge liability for environmental cleanup in Newfoundland and Labrador, he voluntarily took their financial liabilities to some of their former employees and handed them all to taxpayers in his own province.

On top of all that, AbitibiBowater will get a nice cheque from the federal government for their troubles. That money will easily cover the minor costs for remediation at the couple of properties they still own in this province and leave pretty much all of Stephen Harper’s $130 million intact.

Sweet. 

And if all that were not good enough, they still get to watch their lawyers humiliate the provincial government in its own courts over those environmental orders cooked up during the NAFTA war. Lay money on judge after judge stuffing the orders up Danny’s nose for as many appeals as he may want to make.

AbitibiBowater could use more enemies like Danny Williams. If he wants to practice corporate law after he retires, AbitibiBowater would hire him in an instant to go to work for their competitors. He’s just that good.  

The other toast would be to the biggest losers in the expropriation, namely the people of Newfoundland and Labrador.  The five hundred odd thousand people of the island – and Labrador -  are stuck with the bill for all this. The environmental messes, the legal bills to Toronto and Montreal firms, the severance and all the rest of it.

But supposedly the raggedy arsed artillery of Newfoundland and Labrador have mighty assets now, according to Danny Williams, to cover those liabilities.  These assets would have been sold to unnamed others had Williams not struck with his expropriation sword.  Of course, he fails to mention that the liabilities go with the assets such that who ever owns them cannot get one without the other. But then again  Williams the Great Lawyer knows this already even if he does not share his knowledge with his clients.

That is really part of Williams’ brilliance as a lawyer, however and why companies like AbitibiBowater will want him to work for their competitors once he leaves politics.  Only a truly amazing talent could shag his own clients so completely and yet have them lust for the rogering like a pubescent suicide bomber eager to get down with the 72 virgins he’s been promised.

Both are in for a rude shock, of course.

But unlike the child-fanatic, the people of Newfoundland and Labrador have a good clue that these very expensive assets are far less valuable than they’ve been made out to be.

One of the three companies interested in the timber – and one very seriously considered for a while – was a bankrupt German paper maker looking for massive government hand-outs.

Another even less appealing prospect wanted to turn prime logs to sawdust in order to make wood pellets out of them. To appreciate just exactly how lame is that idea, one need only realise that wood pellets are most often cited as a way of using the scraps left over from making major wood products like furniture or paper. Anything else is a waste of a very valuable log.

Yet to be tallied into the cost of this expropriation fiasco are the payments the taxpayers in Newfoundland and Labrador will have to make to a bunch of companies who are essentially collateral damage in Danny Williams war against – or is it on behalf of? – AbitibiBowater.

Settling fairly with these companies was a condition of the federal government’s payment to AbitibiBowater, according to Danny Williams. Undoubtedly the rather obvious preferential treatment given to these other companies compared to AbitibiBowater, not to mention Williams’ own comments attacking AbitibiBowater, coloured the expropriation bill to the point where the lawsuit could have cost the federal government much more dearly than the $130 million it did.

As it is, Fortis, ENEL, Clarica, Sun Life Assurance, Mutual Life Assurance, Standard Life Assurance, and Industrial Life Assurance will all be restored to their former financial position, according to the Premier during his scrum with local reporters.  Talks are still going on, but according to the Premier, they will get cash or a power purchase agreement or some other arrangement. Fortis is already getting cash: the provincial government assumed responsibility last year for a $60 million loan Fortis and AbitibiBowater had for their hydroelectric partnership. Keep an eye on those talks.  Their outcome could be most interesting indeed.

Whatever the conventional media may be saying about the latest part of the expropriation saga, the winners and losers are not as they initially appear, nor is the magnitude of the loss yet known.

The saga’s last chapter has yet to be written.

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Sticks and stones: NAFTA edition

Danny Chavez?

Danny Arafat?

How about the Cuckoo of Corner Brook?

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Bashing your own guys over the head is soooo strategic

An article in the current issue of Embassy magazine examines the European Union’s seal ban and how it is that Canada found itself outmanoeuvred by the anti-hunt movement.

University of Calgary political science professor Donald Barry told Embassy that two things gave the otherwise moribund seal crowd a new lease on life.

One was a hike in quotas that brought the number close enough to a million to give it some propaganda value again.

The other was…

Mr. Barry says another key development was the fierce exchange between Newfoundland Premier Danny Williams and former Beatle Paul McCartney and his then-wife Heather Mills McCartney on CNN's Larry King Live in March 2006. During the show, Mr. Williams alleged, among other things, that the FBI was investigating the International Federation for Animal Welfare and other animal-rights groups for terrorism, and that the McCartneys were being used by the groups.

"The publicity propelled [IFAW] right back into the forefront of the opposition," Mr. Barry says. With IFAW's ability to mobilize support and the Humane Society's strong public relations machine, "you have a series of groups whose strengths complement each other and they're practiced at what they do."

So basically that whole Larry King foolishness turned out to be a gigantic help to the other guys.

And that one trip to Europe did exactly diddly-squat.

Like, no one saw that coming.

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Lower Churchill costing: recap

How does $15.5 billion grab you?

Feel any better about $12 billion?

Maybe $11 billion?

Since the subject is back in the public eye yet again, here are some figures  - yet again -  related to the estimated costs for the Lower Churchill project.

1.     Danny Williams’ estimate of costs to build two dams, line to St. John’s and line to Quebec (House of Assembly, May 2010):  $12 billion. Note:  Williams gave a range of $6.0 to $12 billion. 

Based on other information in the public domain, Williams’ estimate of $6.0 billion would be for the dams alone without any transmission infrastructure or for the highly unlikely scenario of one dam and limited transmission infrastructure.  The project description used for these comments is the one contained in NALCOR’s environmental assessment submissions.  It consists of two dams, a line to St. John’s and a tie to Churchill falls and out to Quebec.  There is no plan in public for any connection to Nova Scotia or any other part of the Maritimes.

2.     Cost for two dams, line to St. John’s and connection to Quebec (1998):  $10.5 billion.

3.     NALCOR estimated cost for two dams and line to Quebec (Telegram, August 2010):  $9.5 billion.  Consists of $6.5 billion for two dams and $3.0 billion of transmission facilities.

4.     2009 value of the 1998 project cost estimate, accounting for inflation:  $13.75 billion.

If you accept NALCOR’s current cost estimate for the project – in the Telegram story linked above - you would have to believe that they have been able to negate over a decade of inflation and at the same time further reduce construction costs in a province where government capital works projects routinely go over budget, some by as much as 70%.

Inflation alone would put the 1998 project (that is, essentially the same one NALCOR is proposing) at something around $14 billion.  A line to Nova Scotia would add a minimum of another $1.5 billion to that for a cost of more than $15.5 billion.

5.     Estimated cost of tie to Nova Scotia (Chronicle Herald, Jan 2010 not on line):  $800 million to $1.2 billion.

6.     Estimated cost of tie to Nova Scotia (CBC Here and Now, 24 Aug 2010, not on line):  $1.5 billion.

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AbitibiBowater reaches expropriation settlement

The Government of Canada and AbitibiBowater announced a settlement today of AbitibiBowater’s NAFTA challenge of the 2008 seizure of its property and assets by the House of Assembly.

There is no word on any settlement with other companies also affected by the seizure. Government seized hydroelectric assets belonging to Fortis and Enel.  Other companies affected by the seizure included Clarica, Sun Life Assurance, Mutual Life Assurance, Standard Life Assurance, and Industrial Life Assurance.

AbitibiBowater initially sought much higher damages in its claim under the North American Free Trade Agreement.

The expropriation will still hit provincial taxpayers in their collective bank accounts. Premier Danny Williams confirmed that in May.

A gigantic legal error in the wording of the expropriation legislation means that the provincial government seized not only assets but also most of AbitibiBowater’s substantial environmental liabilities.

On top of that, the expropriation bill for taxpayers also includes millions spent on futile legal arguments.

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Government of Canada news release:

“The Government of Canada and AbitibiBowater have reached an agreement regarding the expropriation of assets in Newfoundland and Labrador.

“The Government of Canada has agreed to make a payment of $130 million to AbitibiBowater upon the company’s restructuring. This payment represents the fair market value of the company’s expropriated assets.

“AbitibiBowater has agreed to irrevocably and permanently withdraw its claim against Canada.

“The Government of Canada has resolved this dispute for the benefit of Canada’s long-term economic interests. In reaching this agreement, we are avoiding potentially long and costly legal proceedings.

“This approach reaffirms the Government of Canada’s commitment to maintaining a rules-based business environment that facilitates free trade and encourages investment.

“The Government of Canada is moving forward on an ambitious free trade and investment agenda—a cornerstone of Canada’s strong economic position and future growth. We will continue to stand up for Canadian businesses at home and abroad by securing greater access to the North American marketplace.”

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Trade Media Relations Office
Foreign Affairs and International Trade Canada
613-996-2000

AbitibiBowater news release:

AbitibiBowater Announces Intention to Withdraw NAFTA Notice of Arbitration - Settlement Agreement Reached with the Government of Canada for C$130 Million

MONTREAL, Aug 24, 2010 /PRNewswire via COMTEX/ --

ABWTQ (OTC)

AbitibiBowater today announced a formal settlement agreement with the Government of Canada with regards to its assets and rights in Newfoundland and Labrador, Canada, expropriated by the provincial government under Bill 75 in December 2008. The Government of Canada will pay AbitibiBowater C$130 million, representing not more than the fair market value of those rights and assets, following the Company's emergence from creditor protection.

As part of the settlement agreement AbitibiBowater will waive its legal actions and claims against the Government of Canada under the North American Free Trade Agreement (NAFTA).

"We believe this is an acceptable settlement for our Company, stakeholders and creditors, given the set of circumstances faced by the Company at this particular time as well as the inherent uncertainty of any judicial process," stated David J. Paterson, President and Chief Executive Officer. "We are now able to move forward and focus on finalizing our restructuring process and plans to emerge from creditor protection in the fall 2010."

"AbitibiBowater would like to thank the Government of Canada for its efforts to reach this settlement and avoid a protracted and expensive NAFTA case. We look forward to continuing our strong working relationships with Canada and contributing to the country's economic, social and sustainable development," concluded Paterson.

The settlement agreement is conditional upon AbitibiBowater obtaining the approval of its terms by the Superior Court of Quebec in the CCAA proceedings and by the U.S. court in the chapter 11 bankruptcy proceedings as well as court approvals in the U.S. and Canada of AbitibiBowater's restructuring plans. Following emergence, the settlement payment will be paid to the new Canadian entity.

AbitibiBowater produces a wide range of newsprint, commercial printing and packaging papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 19 pulp and paper facilities and 24 wood products facilities located in the United States, Canada and South Korea. Marketing its products in more than 70 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ.

SOURCE ABITIBIBOWATER INC. - ENGLISH

Mr. Premier, what are you trying to hide?

Opposition leader Danny Williams would have a field day with the Old Man he’s become as Premier.

The younger Danny would be kicking the Old Man’s ass all over the political map.

Take, for instance, the billion dollar secret deal with Nova Scotia he decided not to tell anyone about and that both provincial governments are still not talking about.

The Chronicle Herald managed to find out from NALCOR that the application to a federal funding program is for $375 million. But…

The Dexter government declined to release the amount last week, but Nalcor Energy, Newfoundland’s Crown power utility, did disclose it.

Nancy Watson, spokeswoman for the Energy Department here, confirmed the figure. She said the province wasn’t going to release it because it’s preliminary and the project would eventually be subject to private bids.

She said officials here thought it "more sensible to not talk about things before we had the details in place."

Maybe what they are trying to hide is that this line to Nova Scotia is a lot less than the Old Man tried to make it sound like.

Details not in place.

“Preliminary” cost estimates.

Maybe the whole thing is just a ploy.

Maybe it’s Danny just setting up a pre-emptive excuse when the feds turn down this half-baked, incomplete “preliminary” application.

No matter how you slice it, the whole thing just makes you want to scream at Dex and Danny:

“Mr. Premier, what are you trying to hide?”

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The truth of fiction: may I have the envelope please?

Back of the envelope calculations that don’t add up.

Cabinet ministers who get to make stuff up during interviews and their comments go unchallenged by simple facts and figures in the newspaper story.

All just par for the “news” course in Newfoundland and Labrador these days, apparently, and for the second time in a week, nottawa has laid out some pretty sharp observations on local reporting and the bogus political claims they contain.

In the latest post, nottawa takes apart comments made by finance minister Tom Marshall in a Telegram story on provincial government profits from video lottery terminals:

First, while disposable incomes in Newfoundland & Labrador [sic] rose sharply in 2006, they've declined every year since.* The first year that VLT numbers rose, disposable incomes in this province were actually declining, not increasing. That tends to happen in a recession. Thus if higher disposable incomes were to account for the rise in VLT revenue, surely that rise would have occurred in the very years that Marshall himself reported that VLT revenues were declining. It's completely contradictory.

As for an increase in population, while the province did report a minor population increase in 2009, Newfoundland & Labrador's population has 6,000 fewer souls than it did in 2004-05, the baseline comparator year given by the great numerologist himself in the Telegram story.

The asterisk just directs you to the Statistics Canada data series that show the declines he mentions.

There are a couple of details that nottawa left out.

For starters, the Telegram story refers to a cut in the number of terminals and other changes to game play:

In 2006, the government launched a strategy to reduce the number of VLTs in the province by 15 per cent over five years.

That target has been exceeded. The number is closer to 25 per cent.

In 2007, the province brought in other measures to reduce VLT play.

VLT operating hours were cut to a 12-hour window between noon and midnight. Previously, the hours were 9 a.m. to 2:30 a.m.

The machines were reprogrammed to slow play by 30 per cent. And the stop-button feature was removed from VLTs, further slowing play.

Now on the surface that looks like some kind of anti-gambling move.  Yay, government! That rosy interpretation would be easy if you also heard the news stories about the Premier’s remarks on online gambling and didn’t get anything else but the superficial version of things.

But that conclusion would also be a wee bit off base once you consider the second element.

Take a look at an aspect of the Telegram story that isn’t right there in your face.  Look at the number of machines and the profit and figure out how much each machine that is in service generates for the province’s finance department in profit.  Don’t forget along the way that, as nottawa pointed out, that the lottery corporation knows in intimate detail what action each machine gets.

When you compare the profit and the number of machines, you discover that each machine made an average of $32, 266 in 2004-05.  The profit dipped to $27.761 per machine the next year but then four years later - 2008-09 - the per-machine take is back up to $34,216.  That’s roughly where it was four years earlier.

Fewer machines.

Same profitability.

And from nottawa’s observation about population, you could logically conclude the actual cash take on the machines might well have been the same in 2008 as it was in 2004. Heck, the haul might have even gone down somewhat. 

Fewer machines, same profitability and all in the absence of a huge jump in revenue.

Could it be that the lottery corporation very sensibility reduced its costs in order to improve its profit margins? On the face of it, the cut in machines could do just that.  By getting rid of unprofitable machines or ones with low profitability the lottery corporation would do two things.

First, it would reduce the cost from payments to bar owners, cash payouts on low revenue generators and maintenance.

Second, it would redirect the cash from the less profitable machines to other machines, often in what was essentially the same business establishment.

Poof!  Lower costs would mean increased profitability even if you had exactly the same gross revenue. 

When more people start playing the smaller number of machines or start spending more cash, the profitability climbs even higher.  This might seem like magic to some people, including, apparently, the province’s finance minister.  Remember:  Marshall was taking about factors that would increase revenue, but the figures he gave the telegram were profits.  The two are connected but they aren’t the same thing.  

But really, the lottery corporation apparently just took a sensible business decision when it started to cut back on the number of machines.  The fact that it looked to some like an anti-gambling initiative was a bonus. Two birds.  One stone.  Ya gotta like them apples, or in this case cherries and lemons or whatever it is that VLTs show on their screens.

Now the lottery corporation isn’t likely to give you its gross revenue numbers for the province because that’s a competitive issue.  You can find out what the total profit was for this province in 2008, but when the corporation reports profits in the thousands of millions of dollars – instead of billions – you know that obscuring details are important to the corporation.

Even the 35% of the province’s adult population with adequate numeracy skills would have to think twice about the figure of $1,637 million to figure out how much it is.  They could just as easily have said $1,637 thousand thousand. Still the same number but not exactly the conventional way of saying $1.637 billion, is it?

All that said, though, if you follow the logic, it is compelling.

But it sure isn’t what Tom Marshall was blathering on about or what the Telegram reported.

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VOCM “news” has no source

News outlets usually give a source for the information they provide, so when the province’s largest commercial radio station gives a glowing story without a single source, one tends to get a wee bit suspicious.

And when the information contradicts reliable sources, you have to wonder what sort of shenanigans are going on over at the radio network known derisively at this time of the year as voice of the cabinet minister.

Here’s the entire “story” VOCM posted to its website under the headline “Construction Booming in Capital City”.

The audio file attached to the story demonstrates the text is just the script for the report.  And if you can’t make out the print in that picture, here’s what it says:

If you're of the opinon [sic] there's more construction activity than usual going on in the capital city, you're right. Virtually all elements of the construction industry are up in St.John's. The only area which is experiencing a decrease for the year to date is residential, which is about $5 million off last year's pace. The number of units being built has dropped from 422 to 365. Commercial is going at nearly double last year's rate, industrial has gone from next to nothing to $300 million, and government or institutional type activity has soared from $20 million to $90 million. Overall, building and reno permits are worth about 60 per cent more this year than last August.

So where did all this information come from?

That’s a good question because there isn’t any clue anywhere in the audio version or in the text file as to where they got the information.

If you go to an authoritative source, like say Statistics Canada, the most recent figures don’t show anything vaguely like the VOCM claim. 

Here’s a chart of SC’s tally of non-residential building construction in the province as a whole and in St. John’s (the blue line with diamond-shaped bullets). The numbers on the vertical axis are millions of dollars. Your humble e-scribbler ran it in late July, so some of you will be familiar with it.

For the second quarter of 2010, the value of non-residential building construction  - that’s institutional (government), commercial and industrial for St. John’s was $40 million.

Not the $300 million claimed for the industrial component alone.

$40 million.

Total.

Even if you added up the two quarters, you still would be less than one third of the number VOCM claims without any sourcing for just one category and only in St. John’s.

Hey, VOCM.

Ed Murrow called.

He wants those awards back.

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The value of education

Talk about putting the emphasis on the wrong syllable.

The provincial government thinks innovation is about how much money it spends on something. Take this quote from Danny Williams as being just one of many:

That is an area [innovation] we are now moving in. It is a very, very important area that we have to address and this government is committed to putting that money into that research. That is why the experience that I had yesterday was an incredible experience, but it goes to show the importance of using those monies in the proper areas so that we can prepare for the future at a time when the oil and gas is gone.

That event, incidentally happened actually two days before he made those remarks.  The province’s new research and development corporation announced $775,000 in funding for different research projects.

This emphasis on cash is not surprising. The crowd currently running the place seem to think that everything can be reduced to how much money government spends. 

But as good as it is to fund research and development, when it comes to innovation, education is the key.
When you look at education in the province, though, you don’t get a warm and fuzzy feeling.

Reading and writing is a challenge.

Almost half the adult population of Newfoundland and Labrador doesn’t have a literacy level that would allow them to “function well in Canadian society.”

Basic math skills are an even bigger problem.

Almost two out of every three adult Newfoundlanders and Labradorians don’t have the skill with numbers and mathematics – they call it numeracy – to function well in Canadian society.

Numeracy is actually a far greater problem because it involves not just an ability to add, subtract, multiple and divide.  Numeracy also involves logic and reasoning, probability, and statistics.  That's basically the ability to solve problems using  - for example - an }if this, then that" way of thinking.

The only place worse off than this one?  Nunavut.  New Brunswick is tied with Newfoundland and Labrador with low numeracy and literacy levels among adults.

Just think about it for a second:  half the workforce of the province lacks the ability to function adequately in modern society. It’s not their fault, mind you, and it certainly doesn’t mean they are stupid.  These figures tell you that the province’s education system failed them, not just in the past but in the present day.

The problem, you see, isn’t confined to adults. Student literacy is about the same as the adult scores, while student numeracy is nothing to write home about either. 

Now on the other hand, the drop-out rate has plummeted in the past 20 years. But as CBC Radio noted late last December, high school graduates in the eastern part of the province are more likely to graduate with a general pass than with the results needed to carry on to university or trades training.

You can see the consequences in the completion and participation rates. University participation is among the best in the country even if the completion rate is one of the worst. College and trade school education has a relatively low participation rate but a decent completion level.

It’s not like the connection between education and prosperity isn’t well known.  The 1992 Strategic Economic Plan included a section specifically on education reform. The premise was simple enough:

Education is the key to economic development. Studies have shown conclusively that skills, qualifications, innovation and the adaptability of individuals are critical determinants of economic performance and the success of enterprises.

The 1995 Strategic Social Plan, while never implemented, included significant reforms in our education system.

The answer to the education problem in the province is not merely about spending money, as much as the Premier likes to talk about how much cash winds up going out the door.  Nor is the answer found in issuing nonsensical news releases that claim the education department scored a goal when it didn’t.

The first step is to realise there is a problem.

And with half the work force unable to function adequately in modern society, there’s a pretty big problem going unrecognized.

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The old trading federal cash for a deal with Quebec trick

“This is truly a historic and momentous occasion for the people of our province, as never before have we been granted access through the province of Quebec with our own power.”

That was Danny Williams in April 2009. 

Williams was describing a deal by NALCOR Energy to wheel power from Churchill Falls through Quebec to American markets.

These days you’d hardly know the event happened.

But it did.

The April 2009 deal is the single episode which refutes all the claims Williams has made since then about not being able to run Labrador power through Quebec.

Williams told reporters at the time that the deal

“… shows that our power [in Labrador] is not stranded power," he said.

"We're not forced to just sell it at the border to Quebec at whatever price Quebec wants to pay for it."

Not surprisingly, given its position on a line from Labrador to Ontario, the Government of Quebec preferred this option to a line subsidised by Ottawa.  CBC quoted Quebec natural resources minister Claude Bechard on the April 2009 deal:

"We don't want to have a new transmission grid that will be subsidized by the federal government," Béchard said.

"That's the way that we have to work for the future. That's the way we have to work if we want to keep our capacity in our place."

All in all, Williams most recent attack on Quebec is very odd indeed.

Neither he nor the Nova Scotians should have been surprised by Quebec’s objection to federal subsidies for a new line to Nova Scotia, even if – as in the Nova Scotia line – it has nothing whatsoever to do with the Lower Churchill.

Oh yes, Danny Williams mentioned this might be a way to run power from the Great White Whale to the Maritimes, but NALCOR isn’t really too interested in that very long and very expensive route.

You can tell this because the route it is highlighting to the never-ending environmental review process, the route described connects the two new dams back to Churchill Falls and then to the border with Quebec.  The most recent local media report confirm NALCOR is still using exactly the same development scenario described in the original submissions, which are the same as the project outlines used by Roger Grimes’ crew in 2002, Brian Tobin’s gang in 1998 and every provincial administration back to Joe Smallwood.

And it’s not like Nova Scotia Premier Darrell Dexter doesn’t realise this whole transmission connect to Newfoundland isn’t really about the Lower Churchill either. As Dex put it last January:

Premier Darrell Dexter said he’s not surprised Newfoundland and Labrador is looking for a cheaper option than an underwater cable connection to Nova Scotia for moving energy from Lower Churchill to market.

"The sheer economics of it are undeniable in terms of a transportation corridor for that energy," the premier said after a cabinet meeting Thursday.

If you want to know what this Nova Scotia line is really all about, you have to look nor farther back than April 2009.

That Ontario line and its subsidies went “poof” pretty quickly, didn’t it?

This whole Anglo-Saxon route is nothing more than a bargaining ploy the Old Man is using in his ongoing efforts to get a deal with Hydro-Quebec.

And besides, it’s not like a Newfoundland and Labrador Premier didn’t use Nova Scotia to try and leverage a deal with Quebec for Labrador power before.

Would you believe 1964?

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The Shortest-Timers

At an average of a mere 43 days, the Reform-based Conservative Party led by Danny Williams holds the post-Confederation record in Newfoundland and Labrador for lowest average number of sitting days in the legislature by an elected Premier.

The only Premiers whose administrations met the House of Assembly less frequently than Danny Williams were three people who got the job as a result of internal party politics, not as a result of winning a general election. 

Roger Grimes’ administration sat an average of 42 days, but Grimes got the job as the result of a party leadership convention.

The same goes for Tom Rideout, who won a leadership contest in 1989 to replace Brian Peckford.  Rideout served as Premier for a total of 43 days but never sat in the legislature as Premier. During the 1989 campaign, Rideout did make a public commitment that he would do so within two weeks of polling day if voters re-elected his party with a majority.

Nor did Beaton Tulk, who served for a handful of weeks between Brian Tobin’s resignation in October 2000 and Roger Grimes election as party leader in February 2001. 

At the 43 day average, Williams beats the previous record, set between 1949 and 1972, by Joe Smallwood.  He met the legislature, on average, for 53 days a year.   Brian Peckford’s third administration tied the same record after the 1985 general election.

Between 1979 and 1985, though, Peckford set what is still the record for highest average number of sitting days.  Peckford’s administration introduced scheduled fall sittings and, as a result, sat an average of 80 days annually for those six years.

That’s only slightly ahead of Clyde Wells’ administrations, which met the legislature on average 79.4 days from 1989 to 1995. 

Discounting the 1989 and 1993 election years, Wells faced the House an average of 88 days per year.  Discounting the 2007 election year, Williams has faced the House only 45.6 days per year.

In 2009, the House of Assembly sat on 32 days.

Williams himself makes no bones about his attitude toward the House of Assembly.  As Macleans related it in 2004:

He still bristles at the "wasted time" in the House, and the daily distractions that take him away from the real work of governing.

His record of attendance and his record of sitting days apparently confirms his negative attitude.

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Sources:  Parliament of Canada website and Susan McCorquodale, “Newfoundland; personality, party and politics” in Gary levy and Graham White, editors, Provincial and territorial legislatures of Canada, (Toronto:  University of Toronto Press, 1989)

Traffic Drivers, August 16-20

1. Orcas and minke whales off Newfoundland:  video
2. When it sucks to be you (link to GovSpeak translator)
3. Williams, Dexter ink secret energy deal…but with whom?
4. No surprise in Quebec’s position on federal cash
5. One Big Election
6. The Tory Tao of Political Pork
7. Housing bubble bursts – Conference Board
8. The Expropriation Fiasco drags on
9. The truth of fiction
10. Insights into the Premier’s mindset (Henley v. Cable Atlantic)

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The truth of fiction

nottawa does a fine job of laying out the completely ridiculous media coverage this week of a few words the Old Man had with Randy Simms on Open Line about online gambling.

There’s also a Telegram story that apparently took two people to pull together. it appears to be nothing more than the same rehash of Danny Williams’ call to Open Line just like all the others.

There are a couple of aspects to this that nottawa missed. 

First of all, Williams’ call came simply because we are in polling season.  Williams wanted to generate exactly this sort of coverage and the local media are all too happy to oblige him.

When cabinet finally gets around to dealing with this issue, it really won’t matter what Williams said publicly on this occasion. This won’t be the first time he or someone from his cabinet said one thing and did another.
That sort of thing is old hat.

Nor will the people of the province know until – potentially - two years from now that he said one thing and did another.  Ontario, for example, is getting a piece of the action.  The Ontario lottery commission will take 18 months to launch their project.  Even if the provincial cabinet here met as they used to on Thursday morning and blessed this proposal, there’d be no sign of it, necessarily, until well after the next election.

By then, any personal opposition Williams really has to the idea will be completely irrelevant.  Heck, even he won’t care what he said just this past week.  Williams will take a whole new position and never have to worry someone will point out that he used to say something else.  It’s like being a have province:  Good thing in November 2008;  bad thing, two months later.  Same reporters wrote both stories like the one didn’t contradict the other.

And that’s the second aspect to the online gambling unstory.

Online gambling is a serious enough issue but Williams’ statement that he opposes it is not news, especially when he says it is a cabinet decision.

His comments are certainly not news in comparison to the story last week when  he revealed a billion dollar secret energy deal.  To date not a single local media outlet has covered that aspect of the Nova Scotia transmission line story. Odds are that not a single reporter has asked Williams about it and if they have, we are unlikely to see a story saying that the administration is hiding information or is stonewalling.

The local newsrooms will oblige the Premier in what everyone now knows is a quarterly farce and yet they are ignoring a gigantic hard news story.  They are turning away from it – apparently – just like they ignored the Dunderdale story from around the same time last year. Oddly enough, she made her remarks to Randy Simms as well.

On the same show this morning, one regular caller repeated the same [old] myths, half-truths, distortions and fabrications on the same old subjects – all aligning with the frame the Premier set last week - as if any of his claims were real.

And the host agreed with it all.   In fact, Simms led off his show on Thursday with the Premier’s frame on the transmission line. He [even] added a few gems of his own.

As it seems, Newfoundland and Labrador is a place where not a single public figure is concerned with facts. 

None of them is concerned with reality.  Politics and the the news media is about fiction.

Sixty years ago, Walter Lippmann wrote that even in their lifetime the people he called great men are known to the ordinary citizen only through “a fictitious personality.”

Well, these days, the entire scope of public life in Newfoundland and Labrador is fiction.

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Updated 1920 hrs to fix capitalisation, add words to correct flow in two sentences and delete the word “province” where it occurred in the wrong spot.

The Expropriation Fiasco drags on

Danny Williams hasty, ill-considered and thus far unexplained expropriation of AbitibiBowater assets may well end up costing the people of Newfoundland and Labrador untold millions of dollars.

A healthy chunk of their loss will go to a raft of expensive Montreal lawyers Danny Williams is using to pursue legal action in Quebec courts.

Now that the Quebec appeal court refused to hear the government’s appeal of lower court decisions, the only place left is the Supreme Court of Canada.  Odds are against that court hearing the case simply because the provincial legal arguments are week and they have already been thoroughly demolished at the lower court level.

One must wonder why Williams persists.  His track record in court isn’t good.  Take Henley v. Cable Atlantic or Ruelokke v. Newfoundland and Labrador and the preposterous privative clause argument as good cases in point. 

You can then add the AbitibiBowater cases to the list. Anyone who takes the time to read the record of government’s actions in the whole bankruptcy can only shake their heads in disbelief at the amateurish actions.

Many of its actions has been as astonishingly lame as the government’s performance in that other Quebec legal action, the Regie appeals. One would scarcely believe that government’s lawyers did not call a single expert witness to support its case or refute Hydro-Quebec’s assertions but that is exactly what happened.

According to the Globe and Mail, [link above] the provincial government contends there are three issues that need the attention of the nine wise old owls in Ottawa.

Newfoundland said the case raises three specific issues: – ensuring consistency across the country by resolving a conflict between provincial environmental law and federal bankruptcy and insolvency law; – who should bear the cleanup costs when a company is attempting to restructure; – does the CCAA give a court power to remove all hurdles under provincial law that impair a company's ability to restructure.

Now your humble e-scribbler isn’t a lawyer but the answers to these questions seem fairly obvious.  They are obvious because AB is still on the hook.

The answers are in the Quebec court decisions: at no point has the company been relieved of any of its liabilities for clean-up of its properties in this province.  When AbitibiBowater set up the remaining properties in a holding company, the provincial government’s lawyers did not raise a single objection in court.  AB is still on the hook.  The liabilities have not been extinguished.

The Quebec court decisions are there in black and white.  The language is not complicated. One can only wonder why Williams persists in pursuing what is essentially a lost cause.

Perhaps, he carries on because of the intense embarrassment, the ignominy of such a massive mistake as the expropriation turned out to be.  As the Globe out it:

The province wants to force Abitibi to clean up five sites it ran between 1905 and 2008.

Unfortunately for Williams, he and his lawyers screwed up the expropriation. The provincial government now owns some of the most contaminated of the sites. His clever little scheme – seize the assets and leave the company with all the liabilities – blew up in his face.

And what must be especially galling is that Williams knows  the law is absolutely clear on this as well:  the liability flows to the new owners.  When Williams seized the property, he seized the pollution and the responsibility for cleaning it up.

If things go as they are likely to go, the SCC won’t waste time hearing the appeal. Unfortunately for the people of Newfoundland and Labrador, though, a quick end to the legal action only limits a small portion of the costs that will flow from Williams’ monumental shag-up. The final tally for that mess has yet to be calculated

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Orcas and Minke whales off Newfoundland: video

Video from Trinity Eco-Tours of an orca pod attacking a minke whale in Trinity Bay Newfoundland:

Last week, CBCNL posted video of a similar attack off Tors Cove on the Avalon Peninsula.

Trinity Eco-Tours has other video on its website including this one of a humpback in relatively shallow water.

From the company website:

Robert Bartlett is your skipper. A native Newfoundlander, his love of the sea and of Newfoundland history drew him to the Trinity area where he has chosen to live.  He has over 25 years of sea experience and is fully certified in boat and tour operations.  

Robert is an avid SCUBA diver.  Newfoundland has many shipwrecks spanning many periods of history.  In the Trinity harbour alone, there are three separate known wrecks that can be visited including the wreck of the HMS Spedwell, an English frigate that sank in 1750. Robert does offer SCUBA tours to these wrecks for interested and experienced SCUBA divers only.  He also offers dives to see the various sea life in the bay.  If interested in knowing more about a diving adventure please call and let us know. 

"One thing that I love to share is my love of the ocean, its secrets and its occupants. Yours will be a day trip experience that will be treasured as the highlight of your travels here."  - Robert Bartlett 2009.

Pictures and videos on the website highlight whales, icebergs, wrecks and the awesome rugged beauty of the ocean, cliffs and majestic nature of the bay. Most of the pictures were taken by Robert Bartlett above and below the water. All pictures were taken on our tours and used with express permission of the photographer. Their experiences were unique, so will yours.

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Housing bubble bursts – Conference Board

The hyperactive St. John’s housing market will be slipping back toward demographic requirements in the second half of 2010, according to the Conference Board of Canada.

“We had that little bubble in the first few months of this year, which means that moving forward, we’re going to move back more toward the demographic requirements,”

according to the board’s senior economist Jane McIntyre.

Meanwhile, Deer Lake is experiencing a mini boom of its own, according to the Western Star. The town council issued 30 building permits in May.  On top of that there’s a new 31 unit apartment building going up.

But it gets interesting if you look at the source of the growth in town:

With new homes come new residents, and local real estate agent Carol Anstey of Remax Realty Professionals Ltd., said the clients she deals with cover a broad spectrum.

“There’s a certain percentage of people whose husbands are flying back and forth to Fort McMurray who live on the Northern Peninsula.  We’ve had a few of those families relocate here because the airport is here and they don’t have to do the drive up the coast,” she said.

Anstey said some customers are moving from other parts of the country to Deer Lake to retire, while other younger families are growing out of their starter homes and looking for newer and bigger.

People from the Great Northern Peninsula are relocating to Deer Lake because someone in the family is actually a migrant labourer working in Alberta. It’s easier to live In Deer Lake because that’s where the airport is.  Meanwhile another bunch of people are actually retired from working somewhere else – not in the province either – who have decided, quite rightly, that Deer Lake is a beautiful place to retire.

Nowhere in there did anyone mention that the town is growing because the local economy is booming with new manufacturing or service businesses.

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The Tory Tao of Political Pork

For members of the Reform-based Conservative Party in Newfoundland and Labrador, road paving is done in an electoral district.  Sometimes, the release refers to an “area” but the name for the area is curiously the same as the electoral district. 

Take this one for example, even if the headline makes it sound like the program in Torngat Mountains gave the money instead of got the cash.

Torngat Mountains Recreation Programs Provided $15,565

The media release will include a quote from the local representative of the Reform-based Conservative Party. In the one cited, the member turned out to be a cabinet minister.

In another release, the reference is to the Southern Shore, but the district of Ferryland covers pretty much the whole thing.  The locals would understand the two things are synonymous.  There is the obligatory thankful quote from the local Conservative Party member.

But if the cash is going to a district represented by an opposition member, any references to the district or anything that might be construed as the district get obliterated.

Take, for example, this release about money for the district of Cartwright-L'Anse au Claire.  It’s represented by Opposition Leader Yvonne Jones. Money for that district is going to the area around Pinware.

The only quote is from the transportation minister.

All government spending is partisan pork for Tories.

That is their eternal, unchanging rule.

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One Big Election

Back after a brief absence, nottawa poses the provocative suggestion that we might see simultaneous federal and provincial elections across the country in the fall of 2011.

The implications both locally and nationally are bigger than you might think.

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Should I stay or should I go?

Something for everyone.

1. Political humour version – featuring Tony Blair:

2.  The original version - The Clash:

3.  Ukulele mania!

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When it sucks to be you

What else do you need but a website that takes trendy, hideous business jargon and translates it into plain English?

You know the garbage-words and crap phrases.

Things like “on a go-forward basis”. 

Pure drivel.

So run it through the grinder at unsuck-it.com and this is what you get:

On a Go-Forward Basis

We will be leveraging core competencies across the enterprise on a go-forward basis.

Unsucked: In the future.

Some of you might be surprised to find out that “on a go-forward basis” means nothing more grandiose than “in the future” or “from now on.”

Others of you are no doubt wondering why some people use jargon quite so much or why it is that politicians like to use gobbledy-gook when there are perfect simple words available in English that everyone can understand.

And then there are the people who work for those politicians who will be thankful there is a website that spits out this shite so they don’t have to do the miserable job any more.

Don’t say your humble e-scribbler didn’t try and help you all out.

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No surprise in Quebec’s position on federal cash

No one should be surprised that the Government of Quebec is objecting to federal funding of an electricity line between Newfoundland and Labrador and Nova Scotia.

Since talk started up again about an East-West electricity grid in Canada, Quebec has objected to federal funding.

A cyberpresse.ca article on August 9, 2007 gives Quebec’s succinct position, straight from the lips of Premier Jean Charest:

« Est-ce que le gouvernement fédéral devrait intervenir pour financer la construction de lignes ? C’est là-dessus où le Québec dit non », a-t-il déclaré.

This particular statement is interesting for two reasons.  First of all, it came at a news conference during a Council of the Federation meeting on energy.  Second, the issue at the time was a potential line from Labrador to Ontario.

Hardly surprising, therefore, that Quebec continues to object to federal involvement in funding electricity lines.
And, as labradore pointed out last week, Quebec’s intergovernmental affairs minister repeated the government’s position that electricity infrastructure ought to be paid for by provincial governments but not the federal one:

«N'importe qui peut vendre de l'énergie aux Américains, a réagi mercredi le ministre provincial. Ce qui compte, c'est que les gens suivent les règles. Et la règle, pour nous, c'est que quand on construit une ligne, ce sont les sociétés d'État qui paient. Pas le gouvernement fédéral.»

The context of those comments was announcement of the interconnection upgrade between Nova Scotia and New Brunswick.

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Williams, Dexter ink secret energy deal …but with whom?

A service contract between a public authority and a private sector concessionaire, where the public authority pays the concessionaire to deliver infrastructure and related services, Typically, the concessionaire, who builds the infrastructure asset, is financially responsible for its condition and performance throughout the asset lifetime, or the duration of the agreement.

P3 Canada Fund definition of public-private partnership

Newfoundland and Labrador Premier Danny Williams and Nova Scotia Premier Darrell Dexter have apparently signed a deal to build underwater electricity transmission between the two provinces in partnership with a private sector company or companies.

Williams revealed the agreement when he launched into yet another tirade against the province of Quebec during a hastily-called news conference in St. John’s last week.

Williams said that the two provinces applied for federal funds in late June under the federal government’s public-private partnerships infrastructure funding agreement.

But that’s all he said about the secret deal.

Six weeks after the provinces reached an agreement, the people of both provinces still don’t know when the deal was signed, the conditions of the agreement, how much taxpayers will be on the hook for or the proposed financial arrangements with the private sector company or companies the two governments are or will be partnering with.

In his scrum, Williams very obviously avoided giving a simple, direct answer to a question on costs. He said only that the project cost would be billions depending on which combination of dams and transmission routes NALCOR built.

The cost of the project is currently estimated at more than $14 billion, including an interconnection to the United States. A study completed for the Nova Scotia government earlier this year  - reported by the Chronicle Herald but no longer on line - put the cost of the interconnections between $800 million and $1.2 billion.

Williams also made the false statement in his scrum that the decision of the Regie de l’energie – presumably meaning the May decision – had blocked NALCOR transmission through Quebec.

Meanwhile, though, the public doesn’t even know the name of the company or companies involved in the new secret deal on an intertie to Nova Scotia.

And obviously, there has to be a private sector partner or partners involved even if the two provincial governments haven’t said anything about that aspect of the deal.

The federal government established the $1.2 billion P3 Canada Fund in 2007 to “develop the Canadian market for public-private partnerships for the supply of public infrastructure in the public interest.” The fund will supply qualifying projects with a maximum of 25% of the projects qualifying direct construction costs. 

Typically, public-private partnerships include private involvement in everything from design to the long-term operation of public infrastructure. As the fund’s annual report puts it,

[t]he P3 procurement model is unique in that the private sector assumes a major share of the responsibility for the delivery and the performance of the infrastructure – from designing the concept, architectural and structural planning to its long-term maintenance.

The public sector gets needed infrastructure at reduced risk and cost.  Among the examples cite din the annual is the Confederation Bridge between PEI and New Brunswick.

In order to qualify for assistance under the fund, the private sector partner must have a substantive, continuing role in the project.  It must design or build the project and finance or maintain and operate it. [Round Two application, s. 5.2] 

In a P3 project, the private sector partner would also typically share in the profits of a long-term project as well as adopt risk. In some scenarios, as the application appendices suggest, the project may offer potential spin-off money-making opportunities for the private sector partner separate from the core public interest in the project.

Infrastructure assets developed by public authorities are rarely used to generate additional revenue. In some instances, private sector providers are motivated to develop opportunities for revenue beyond the public authority payment stream and this could be used to reduce the cost to the public authority.

Applicants must submit a business plan for the project between September 2010 and March 2011.

While Danny Williams mentioned a connection between the secret deal and the Lower Churchill, the Nova Scotia intertie is a separate project.  

It’s also bizarre that Williams mentioned possible shipment of power from Nova Scotia to Newfoundland and Labrador.  Demand projections used in the Lower Churchill environmental review show that demand on the island isn’t strong enough to support development of the Lower Churchill, let alone warrant importing power from Nova Scotia.

And if the intertie carried Lower Churchill power, there’d be no need to send Nova Scotia power into Newfoundland and Labrador.

A connection to Nov Scotia without the Lower Churchill would facilitate the development of untapped alternate energy potential on the island of Newfoundland.

To do that, though, the provincial government would have to abandon the 2007 energy plan and Williams’ obsession with the Lower Churchill.

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Fact Check: the mainstream and Williams/Quebec

The following quotes all appeared in recent media stories about Danny Williams’s comments on energy developments and Quebec.

Neither of them is true.

1.  Montreal Gazette:  “…after Quebec's energy regulator refused to grant a request from Nalcor Energy, Newfoundland's energy corporation, for capacity on the Quebec power grid.’

2. CBC:  “particularly after regulators in Quebec in May dismissed Nalcor's bid to move power to U.S. markets on Quebec's transmission system.”

3.  Telegram (Transcontinental):  “after Quebec’s energy regulator decided not to grant Nalcor Energy’s request for capacity on the Quebec power grid.”

Here’s what actually happened:

NALCOR started talks with Hydro-Quebec’s energy transmission division on access to the Quebec grid in order to transmit power from the future Lower Churchill project.  HQ conducted studies based on the route and load options NALCOR indicated it was interested in studying. The goal of the studies were to determine whether capacity existed on the existing infrastructure to handle the new demand or if the companies (NACLOR and HQ) would have to build new transmission lines.

Premier Danny Williams has consistently stated that NALCOR would pay reasonable prices for transmission including the construction of new transmission facilities.

HQ completed the studies and informed NALCOR of the results.

NALCOR submitted five complaints to the Regie de l’energie for adjudication.  None of these was an application for access to the Quebec grid.

Among other things, NALCOR sought to stop the clock on timelines under Quebec’s open access tariff rules that give a company with power to ship 45 days to either book the space or to signal an intention to book the space.

As well, NACLOR sought a ruling on what was including in the Quebec management grid.  One effect of the ruling on one appeal, if NALCOR had been successful, would have been to displace existing power generation and transmission from Churchill Falls in favour of non-existent Lower Churchill power. 

NALCOR lost each of the five appeals.  None of the decisions prevented NALCOR from proceeding with acquiring space on the Quebec grid.

The Regie did not, at any time, refuse to grant, decide not to grant or dismiss NALCOR’s bid for access to the grid.

As it appears, NALCOR opted for its appeals because it did not have a project and power to transmit, nor did it have a prospect of developing it within the time frames originally proposed.  It opted instead for administrative delay tactics. 

In June 2010, Danny Williams told the House of Assembly that NALCOR did not pursue other contracts for transmission at the time  “because we did not have any power to sell.”

Earlier that same month, Williams confirmed that the Lower Churchill is up in the air indefinitely.  The Telegram buried the comment  - a nugget of hard news - at the end of another story.

However, when it did have power to sell, NALCOR successfully concluded a contract to wheel power through the Quebec grid.  At the time – April 2009 – Danny Williams declared that the transmission deal was historic as it opened the way for future developments. The NALCOR appeals to the Regie de l’energie predated the April 2009 deal.

The facts of the Regie decisions on NALCOR appeals are contained clearly in the decision of the Regie on NALCOR”s appeals. They are available in English and French from the provincial natural resources department’s website as well as from the Regie de l’energie in French.

It is understandable that mainland reporters might rely on other news reports without checking the details.

It is inexplicable why local reporters continue to make false statements when the correct information is right in front of their faces as to what actually took place.

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