Financials key to Lower Churchill

From 2006, an article by Craig Westcott that appeared originally in the now defunct Independent. 

Premier Kathy Dunderdale went to Ottawa today with her hand out looking for some federal financial aid to get the Danny Williams retirement project off the ground.

The key is still in the financials.

Let’s see what, if anything, she gets.

And then let’s see what that will cost us.

Growing interest:  Solving interest rate riddle critical to Lower Churchill project

At a Memorial University lecture hall one evening last week, Gilbert Bennett stood and gave a 45 minute talk on the challenges and opportunities of the Lower Churchill River hydroelectric project.

Then his real work began. For the next 45 minutes, people in the crowded lecture hall peppered the vice president of Newfoundland and Labrador Hydro with questions.

They asked him about everything from the chances of getting redress on the infamous Upper Churchill deal to what kinds of benefits the Innu Nation members can expect from the project.

Then came one of the toughest questions to answer, but one that is critical to the viability of the $6-billion to $9-billion project that Hydro is hoping to have on stream by 2015.

“The surprise for me tonight,” said one man, “was that this project, to get off the ground, is going to take as much as 10 years. Interest rates are starting to rise. Isn’t there a risk in taking this project so far out?”

Bennett allowed there is. “I’m with you in that interest rates are going to be essential,” he admitted.

And that was putting it mildly.

<Growing interest>

As Bennett himself pointed out, there are a number of key factors that have to be resolved before the Lower Churchill hydro project can get sanctioned for construction. A land claim and impact benefits agreements must be negotiated with the Innu Nation. The federal and provincial governments have to agree on the form the environmental impact statement will take and who will head the review. And the province must decide who will develop the power plants at Gull Island and Muskrat Falls, who will get the power from them, how they will get it and how the whole thing will be financed.

“As you can see, we have a lot of work to do,” Bennett told the gathering.

But among all the challenges and risks, perhaps none is more important than the matter of interest rates. If the Upper Churchill was a boondoggle because of BRINCO's inability to negotiate a re-opener clause to cover inflation, the killer for any Lower Churchill project could be interest rates. And that’s because just like the man in the lecture room observed, this project is going to take a long time to develop.

“If you had the right contract, it doesn’t matter,” says Cyril Abery. “You’d have to build into the contract that the price you’re agreeing to (sell the power for) is based on certain interest rates and you’d have to have a clause that if interest rates went up, the price gets adjusted. Otherwise you could get screwed. There has to be re-openers in there. If they do that, there‘s no problem. But if they don‘t do that, yes, it is a problem, especially since today interest rates are low and they‘re probably going to go up.”

When it comes to interest rates and the Lower Churchill project, Abery knows what he’s talking about. From 1985 to 1991, he was the president and CEO of Newfoundland Hydro. He helped negotiate a Lower Churchill deal with Hydro Quebec in 1991 that Premier Clyde Wells ultimately rejected.

“He was nuts in my opinion,” says Abery. “It’s a long story, but the long and short of it is I thought he was nuts. I’m not so sure we haven’t got another one now.”

Abery wasn’t at Bennett’s lecture, but he well understands how interest rates could cripple the development.

So does another former Hydro president and CEO, Bill Wells. He headed the provincial Crown Corporation from 1995 until about a year and a half ago. Like Abery, he too tried hard to reach a development deal on the Lower Churchill.

The problem is that while interest rates may be low now, nobody knows what they will be in 15 years time, if the project is even completed by then. Nobody even knows what they will be next year. And once the project is sanctioned, the developer will be borrowing money every year until it gets built.

“You’re borrowing, borrowing, borrowing, spending, spending, spending (until 2015),” explains Wells. “Somebody’s got to lend you that and that interest cost during the period of construction, that just adds on to the principle because you’re not paying anything back. So at the end of the day you’ve got this lump sum of money that you owe and when you close out your financial agreement going forward for 30 years or 40 years financing, what you’re going to pay in interest is determined at that time, it’s not determined now. So interest rates in 2016, who knows? They may be up, they may be down. And one of the things is, who takes the risk on interest? That used to come up in previous negotiations. It‘s a critical factor.”

Wells says the province, or Hydro, could try at the outset of the construction project to get a lender to agree to a range of future interest rates, as some measure of protection, but that would cost a lot of money.

“Interest is a big factor and then it depends on how you’re financing it,” Wells says.

<Quebec again>

One of the ways the province is looking at raising money to build the project is on the strength of a power purchase agreement with a future customer of the power. That’s how BRINCO financed the Upper Churchill deal in the 1960s. Back then, the only customer BRINCO could get to sign a guarantee that it would buy the electricity was Hydro Quebec. With Ontario and some United States utilities facing the prospect of energy shortages, it may be easier to find other buyers this time around. There will be enough electricity from Lower Churchill to power 1.5 million homes.

But the power will still have to go through Quebec.

“You can’t get the power out of Labrador without going through Quebec,” says Abery.

Williams has raised the prospect of building a transmission line through the Maritimes.

Abery is sceptical.

“We always put that out there to make it sound like we had options,” Abery says. “But everybody in the business knows that’s foolishness. It sounds good in the newspaper. Joe Smallwood started that back in the 1960s calling it the Anglo-Saxon route. It was crazy then and it’s crazy now.”

Abery says any talk of a Maritimes route doesn’t fool Hydro Quebec.

“They just smile,” he says. “I mean you’re in the middle of Labrador. The only border we’ve got is with Quebec. So you’ve either got to sell it to Quebec, or go through Quebec. And there’s no reason you wouldn’t sell it to Quebec. Their money is just as good as anybody else’s money as long as you got enough of it.”

Abery says Newfoundland could sell the power to another customer, in Ontario say, and simply pay Hydro Quebec to wheel it across its transmission lines. The fee for doing it wouldn’t be unreasonable, he notes.

“But the farther you sell it, the more transmission lines you’ve got to build and the costlier it is,” he points out. “The simpler thing is to just sell it to Quebec and let them deal with it. But if you’re getting enough money out of Ontario, then sell it to them. If you’re getting enough money out of Manitoba, I suppose you’d sell it to them. But it would be expensive power. The further you go, the more expensive it is. Transmission lines are not cheap. And you lose energy on the transmission line. That’s why you can only go so far with the transmission line, otherwise there’s no energy at the end of it.”

Wells, meanwhile, sees one way around a purchase power contract with Hydro Quebec or any other customer as the main way of financing the project. But it’s one that didn’t get anywhere in the past.

“If the federal government said ‘We’ll back the project,’ well nobody is going to argue the federal government is going to go broke over (it),” says Wells.

Bennett says obtaining federal backing is an area the utility is going to explore very carefully. He notes Premier Williams raised the idea with all three parties during the last federal election. Stephen Harper, then the Conservative Party Leader, now the Prime Minister, said his party supported the idea of a project “in principle.”

Whether that includes a financial commitment remains to be seen.

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The old hum on the Humber

Politicians running for the government party in Newfoundland and Labrador usually have a simple message;  vote for me or the district won’t see pavement again. 

Now they often get more sophisticated in the presentation these days:  Vaughn Granter, for example, is telling voters in Humber West that he will be their strong “voice” but the idea is basically the same.  Having someone in government will help to bring home all the pork you need.

In Granter’s case, his comments give new meaning to Squires-era political slogan about putting the “hum on the Humber”. 

After all, Humber West has been represented in the House of Assembly by more Premiers than any other district in the province.  Period.  If the good burghers of  Corner Brook are missing something it is not from a lack of patronage, pull, pork or anything else.  Face it: it’s doubtful that Vaughn could succeed where the likes of Joey, Frank, Clyde, Brian and Danny failed miserably.

That’s not all. Over most of the past 20 years Corner Brook has had not one but two senior cabinet ministers.  For the past seven alone, they’ve been pork-teamed by none other than a townie who never lived in Corner Brook for more than a couple of nights at the Glynmill in his life and local boy Tom Marshall.

If this much isn’t clear by now make no mistake: Corner Brookers who might be persuaded by Granter’s truly pathetic appeal can rest easy on the future of their city.  Vote for Mark Watton.  If Tom Marshall, the province’s finance minister, cannot keep the provincial tax dollars flowing for the next 10 months, all by himself then it is only because there isn’t any space left to stuff another ounce of pork inside the Lewin Parkway anyway. 

If none of that makes voters in Corner Brook suck some air between their teeth, then let them consider the sad example of one David Brazil.  He’s the newly minted member of the provincial legislature who replaced the late Diane Whelan.  Brazil campaigned on improving the ferry service to Bell Island, a big voting block in the Conception bay East-Bell Island district.

On January 9, Brazil spoke to VOCM and pronounced himself pleased with his colleagues in government  Great job.  Bright future. VOCM’s disappeared the story but you can still find traces of it via google.

David Brazil won a by-election in Conception Bay East-Bell Island in December, and he feels the PC Party is well positioned. He says they have a good caucus ...

And now as his pal the transportation minister is cutting the service back, all Dave can do is smile and try to foist the blame on someone who had nothing to do with the decision. The best he could say is that the cuts were “unwelcome.”

Voters in Conception Bay East-Bell Island are discovering, likely much to their annoyance, that Dave is not their strong voice inside government.  Instead, he is yet another basenji, a dog that won’t bark.

Is there any reason to believe Vaughn Granter will do any better?  Not really.  There are plenty of decent people sitting on the Tory back benches but take all of them together, plus a buck and a half and you might get a decent cup of coffee somewhere.

Such is the fate of a backbencher in the current Tory administration.

Such will be Vaughn Granter’s fate if he’s elected.

Count on it.

Meanwhile, the people of the Straits-White Bay North voted against Danny Williams himself and look at what happened to them. Not only did they get a member of the legislature who kept the government under close and very public scrutiny, they also got a new health care centre that some would have had you believe would disappear unless there was another basenji sitting faithfully at the feet of Premier of the moment.

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The sun whose rays…

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The January Traffic 2011

Okay so if January comes in like a political nut-bar, it makes you wonder if it will go out in a straightjacket.

Like is this the most sane the year will be or is this like a tiny taste of the mania to come?

Maybe the traffic pattern for January will give us a clue.  The numbers are still running at more than 20,000 readers a month with close to 40,000 page loads.  There’s no shortage of interest in political commentary and that’s a decent thing for someone who writes a political blog.

See if you can find a pattern in what dominated the news based solely on the top 10 posts as selected by the readers:

1. Tory angst may be well founded
2. Connie leadership rigged?
3. Watton to carry Liberal banner in Humber West
4. Brad and circuses
5. Rick Hillier?  Tim Powers? No thanks, say NL Tories
6. Is anyone surprised?
7. Logically challenged Conservatives
8. Cabana candidacy causes Connie caucus consternation and Dunderball Run! [tie]
9. Fear and Loathing in the Caucus Room and Democratic Deficit [tie]
10. Coo-coo for Connie Puffs

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A Hugh Shea for our time

In the most recent twist of an already bizarre tale, Brad Cabana has managed to turn what had been a fiasco inside a tragedy into a farce.

There is no other word for it, but farce:  a member of the federal Conservative party and wannabe leadership candidate for the provincial Conservatives expresses his fervent desire to perpetuate Dannyism in the province…and having been rejected by his own party now proposes to take that bag of ideological and other wares to the Liberal party.

Not to be left out of the play, some local Tory supporters – the most ardent of Danny-ite diehards among them - are claiming that this is proof that Cabana was just the tool of some dark Liberal or Harperite conspiracy in the first place.  The smallest problem with that thought is that they are deadly serious about the idea.

Some might put this down to being nothing more than another symptom of a political system still working through a great shock. Danny Williams’ hasty departure would certainly count as that shock.  And perhaps Cabana is nothing more than the usual local political gadfly or eccentric character with a rare opportunity to get more attention than he might otherwise.

There might be something to that.

Then again, if that is the case, we may well have yet more proof that the province’s political culture is in a precarious state.

Forty years ago, as Joe Smallwood’s political empire crumbled around him, even the most ossified corner boy could rhyme off four or five potential premiers from the Liberal or Progressive Conservatives.  Most of the prospects had served in Smallwood’s cabinet at one time or another.  And there were the colourful characters thrust into the limelight at different times over the course of 1971 and 1972 as they changed parties and plotted and planned. 

These days, the most addled patient in a methadone program couldn’t name a single politician, most likely, let alone a brace.

And as for the others, let’s just say that as the province seems to be missing the broad range of political talent it once produced, so too is it short the rest of the spectrum.

Brad Cabana is no Hugh Shea.

Not by a long shot.

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Strings and all

Frank Moores was the second premier to hold office in Newfoundland and Labrador after Confederation.  He led the Progressive Conservative Party to victory in the 1972 provincial general election, defeating Joe Smallwood and ending Smallwood’s 23 year reign.

That was no mean feat and Moores didn’t do it single-handedly. He led a large group of people who organised themselves in a political party that was distinctly  different from Smallwood’s Liberals.  Until the late 1960s, the Liberal party had no district associations, for example.  Smallwood maintained a hand-picked fixer in every district who handled all the party business.  Smallwood himself picked candidates and until the 1969 convention, there’d been no leadership debate of any kind.

Moores won the Tory leadership at a convention held in May 1970.  A group of influential Conservatives, including Danny Williams’ mother and father spearheaded a drive to get Moores back from Ottawa where he sat as a member of parliament.

Now, in itself, that’s fascinating in light of the political outlooks of provincial Conservatives like Chick Cholock.  Ross Wiseman’s executive assistant wrote an e-mail to Brad Cabana, the Tory leadership hopeful back in late December.  Cholock wrote – you may recall – that “in an ideal world there will not be a leadership challenge.”  As Cholock saw it, a leadership battle “always hurt the party for years.  Any Party at all…”.

In the 1970 leadership convention, the Tories had a handful of candidates.  The list included Herb Kitchen, John Carter, Walter Carter and Hugh Shea.  Moores won handily and there was a minor controversy but for the most part, the party managed to sort out the difficulties and carry on.  Almost a decade later, the party held another leadership convention and managed to avoid any lasting controversy. The Tories stayed in power for another decade.

That hardly sounds like a series of unmitigated disasters, does it?

In the 40 years since Moores’ convention victory, the provincial Conservatives have certainly changed.  They’ve become – in essence – a fairly typical local political party for Newfoundland and Labrador.  Now, as before Confederation, the parties aren’t programmatic. They don’t have ideologies or set agendas.

And, at least as far as the province’s Conservatives have shown over the past few weeks, they certainly aren’t driven by grass-roots members.  They are most certainly not, as Danny Williams described them last year, a Reform-based Conservative party.  The Reformers believed very firmly that political parties ought to be directed by their members.  Policy used to get set at regular conventions.  District organizations picked candidates.  The party constitution laid down clear and unmistakeable rules and people paid attention to the rules.

No one could mistake the difference between that approach to politics compared to the provincial Conservatives in Newfoundland and Labrador.  Sure the party has a constitution and bunch of people have titles.  But even the rules about something as crucial as membership aren’t clearly spelled out in the party’s fundamental document. And when it comes to deciding what those rules mean, only the insiders get to decide who the insiders can be.

In that sense, you could say that the local Tories aren’t democratic.  Now before anyone goes off the handle, understand that is not the description offered up by your humble e-scribbler.  A Tory supporter posted a comment on Twitter last week that said exactly that:  “a political party is not a democratic institution.”  Open Line host Randy Simms said exactly the same thing last week as well.

While you can disagree about what democracy means exactly, it is rather striking that two politically aware and presumably politically astute people in the province could state that political parties are not democratic organizations.  They weren’t troubled by the idea, apparently.  They didn’t find it odd.  In fact, it would seem that they found it perfectly natural for a political party to be run by an inner cabal accountable only to themselves.

And, as it seems comments online, provincial Conservative supporters seem to think every political party operates this way.  They don’t, but that is another matter.

What’s really striking is the way Frank Moores viewed political parties 40 years ago. You can find this quote in Janice Wells’ recent biography of the former premier:

Political parties are what people make them.  We’ve got to get people involved who don’t even recognise the need that they be involved in their own welfare, their own future, who perhaps after twenty-one [sic] years don’t even realize they have that right, and we have to get our best people involved, our best academics, artists, businessmen, educators.  I want these people to become totally involved in the work that faces us, and to know that they won’t be manipulated like puppets but will have major roles to play in reviving the province.

Political parties are indeed what people make of them.  In some bizarre twist, the people who make up the provincial Conservative Party in the early years of the 21st century have managed to turn Frank Moores’ party into something he most likely wouldn’t recognize.

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PIFO: Newly mined minister in trouble in district

Derrick Dalley?

Appointed to cabinet to boost his chances of re-election and then delivers pork to his own district?

Liberace gay.

The Tory back-room boys reject Cabana.

And now this.

So many shocks in a row.

Call it a penetrating insight into the frackin’ obvious but still fun to point out, just as your humble e-scribbler did the day they swore him into cabinet.

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Binary politics

Okay so finance minister Jim Flaherty says there’s a 50-50 chance of a federal election this spring over the budget.

And about 25 years ago, Gwynne Dyer predicted there was a 50-50 chance we’d get out of the 1980s without a nuclear war.

For those who aren’t into the really out-there, mind-bending conceptualising and thinkerising, let’s make it simple:  there’s a 50-50 chance of anything.  It either will happen or it won’t.

What bullshit artists count on when they pour out this pseudo-analytical crap is that there are only 10 types of people in the world who understand binary:  those who do and those who don’t.

Get it?

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Traffic for small buildings, the last week of January 2011

1. Coo-coo for Connie Puffs
2. Irresponsible Government League:  free-wheeling in Dunderdale’s department
3. Connie Leadership 2011:  a small but apparently overlooked point
4. One sign of the political Apocalypse
5. The same old excuses
6. Unsound public finances:  Tom Marshall’s travesty
7. Watton to carry Liberal banner in Humber West
8. A country apart?  More like a world apart
9. No wind, please.  We’re Nalcor.
10. Stelmach bails

Trivia bonus question for people who get the humourous reference in the title:  Two Conservatives with last names referring to small buildings. Name ‘em.

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Breaking news and breaking wind

Loyola Sullivan thinking about running as a federal Conservative. [Update: CBC online story]

News in 2011?*

Try 2008.

Tom Rideout eyeing a Conservative nod.

News in 2011?*

Try 2008.

Unless they’ve made the official announcement – Jerry Byrne did -  it is still just  as much a case of scuttlebutt as it was in 2008.

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Addendum:  John Hickey looking at a federal run?  Posted here in December:

Of the crew listed above, John Hickey has had his five best years to fatten up the pension and there’d be no real reason for him stick around anyway.  Future premiers might be less inclined to keep him in cabinet.  Doesn’t matter, though, since Hickey’s apparently got his sights on going federal in the next federal election.

Don’t forget Tommy Osborne, too, in St. John’s South-Mount Pearl, another perennial favourite.

* Date fixed

How to be a Tory

The bunker team that ruled on Brad Cabana’s appeal of his rejected leadership bid made a fascinating – and most likely inadvertent – description of what standards they used to determine who might be considered a member of the provincial Conservative Party.

You can hear this in a debrief CBC Provincial Affairs reporter David Cochrane did with the St. John’s Morning Show’s Jeff Gilhooley on Friday morning.

Cochrane reported that the Conservative appeals team found that only three of the names on Cabana’s nomination forms were considered to be party members.  They came to the conclusion after scouring membership lists from district associations, youth groups and other affiliated organizations as described in the party constitution.

Sounds good and official so far, right?

And then Cochrane started listing the three.

The first one he described was a person who may have – note the conditional language – put up a few signs during an election campaign.

Hold the phone.

That’s it?

May possibly have been vaguely recalled to have helped out on a sign crew. 

Okay.

So how many signs do you theoretically have to stick in the ground? 

Is it one? 

A dozen?

Do the signs have to be in the ground or could you have been seen holding one lovingly at some point?

Do you actually have to have done it or is it a function of someone else’s efforts?  After all, maybe this was back in the 1990s when every Tory householder included a sign.  Junior sticks it in the window to piss Dad the Dipper off and presto the whole family is down in some registry of known Tories kept in someone’s basement?

Maybe the whole membership process isn’t even that specific.

Maybe you only have to look like someone who might have erected a sign: Yes, by. That fellow looks like a guy who helped me out years ago.  He’s a member then.

After all, as Cochrane related the tale, the Tories weren’t even sure this guy or gal actually wielded the hammer or got the splinters from holding the two by two. They thought he may have.

And while they weren’t even 100% certain of that they were prepared to say that the person was a member in order to meet the clear and stringent requirements set down in the Tory party constitution.

We know this is such a document since coronation chairman Shawn Skinner – with no real or perceived conflict of interest whatsoever, surely – duly blessed the outcome.

Now that sign guy doesn’t sound like someone whose name wound up on an actual membership list. After all, the party  doesn’t really have membership lists as such since the party doesn’t have members, as such. There are no cards or dues or any formal way of identifying as a member of the party.

In fact, the party considers every person in the district over the age of 18 years to be a member for the purposes of voting in nomination contests.  And under the party constitution only members can vote.

So basically before Cochrane even got that far in this tale, the story totally demolished the bit before it. If the Tories had actual membership lists to scour, they wouldn’t have had to be beggar someone’s failing memory of a sign crew that could have gone off with a van and the dozen bear and a few dozen signs at any time back to 1972, at least.

And if they really had some sort of membership lists with rules that are clear, widely known and fairly applied, they wouldn’t be crediting Cabana with finding a possible Tory sign jockey.

In case you'd forgotten, the same people who are living this tale of membership stupidity are the same people who control about seven billion a year in public money.

it would all be hysterically funny if that were not true.

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Connie Leadership 2011: a simple but apparently overlooked point

So now the Conservatives’ appeal team have tossed a decision out of the bunker that says Brad Cabana had only three names they recognised as members of the party.

Appeal denied!

Never saw that coming.

Liberace was gay and now this.

Anyway, while this Cabana-gate fiasco has been dragging on and on, the Conservatives held a nomination to select a by-election candidate.

The requirement to vote in the nomination – as widely reported – was that the person had to be over the age of 18 years and resident in the district.  Bring along a couple of pieces of identification and they let you vote.

Now it doesn’t take a rocket scientist to figure out that such an approach means the party actually recognises any person resident in the district and over the age of 18 years to be, by default, a member of the Conservative party.  If they required someone to sign a statement that they supported the aims of the party, then that’s only a minor additional wrinkle.

And what does the party constitution say about voting in a district nomination fight?  That’s really important because the Conservatives down the bunker are using the party constitution to claim Brad’s list of names doesn’t qualify.

Article 12, Section 6 of the Progressive Conservative Party constitution reads:

Eligible voters entitled to vote for a person to be elected as the Party Candidate are those persons who are members of the District Association, ordinarily resident in the Electoral District at the date of the Nominating Meeting and who are not less than eighteen (18) years of age either at the date of the nominating meeting or at the date of the election, if the date of the election has been set…

read that first bit again.

“Eligible voters”, that is, those people “entitled to vote for a person to be elected as the Party Candidate” in a by-election or general election are… “persons who are members of the District Association”.

Sounds simple.

The people who can vote are members of the District Association.

Okay.

So how can you tell who are member of the association?

Well, look at the official party announcement.

It merely refers to “voters”, as in:

“Voting will be held on Wednesday, January 19, 2011, from 4:00 p.m. to 8:00 p.m. in two locations; they are:

• Corner Brook - Elks Club
• Gallants - Town Hall

Voters are reminded to have two pieces of I.D., one of which must include a street address and picture.”

And in that case as in every nomination since 2003, the Conservatives have allowed anyone with an address in the district and matching identification to vote.

Only members of the district association can vote and members means anyone living in the district over the age of 18 and possessing some valid identification.

So how exactly can a party that – by repeated practice – accepts anyone living in a district over the age of 18 years claim that a list of 73 people over 18 years of age and living in the province actually contains 70 names that are not members of the Conservative party?

Sounds like the party has the same legal geniuses on this cases as the ones employed in the AbitibiBowater expropriation, the 1969 contract litigation and the Ruelokke thing.

A clause that says the tribunal decision is binding on both parties actually says a judge can’t rule on the decision.

That one got laughed out of the courthouse and all the way down Duckworth Street.

Uh huh.

Next think the Legal Genius(es) will try and insist that a judge has no jurisdiction over a corporation registered in the province and operating under the Companies Act.

There are judges on Duckworth Street already drawing lots to see which of their numbers get to sort out that little legal turd and the turd-wrangler who gets to lay in in front of his or her bench.

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Connie Leadership 2011: Tweet of the Week

…how is it not democratic. [?] A political party is not a democratic institution. Decisions are made by members.

Seen in the twitter-verse from an ardent Conservative supporter in Newfoundland and Labrador in a discussion on the never-ending saga of the Conservative efforts to keep Brad Cabana from upsetting their carefully laid back-room plans.

 

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The Double-Dippity-Do

While teachers may be the largest group of people the Auditor General found to be double dipping, the problem isn’t confined to them.

Auditor General John Noseworthy found 60 pensioners drawing salaries from government departments and the House of Assembly in 2009. And while he didn’t check to see if any of the politicians were double-dipping, Noseworthy did find that the pols liked to hire double-dippers:

For 2009, departments indicated that 10 of the 60 (2008 - 7 of the 47)  rehired pensioners were political appointments such as secretaries to a  member of the House of Assembly or research assistants and, as such, Cabinet approval would not be expected.

Cabinet approval might not have been needed but the provincial government’s finance rules should at least be instructive in the legislature especially in the wake of Chief Justice Derek Green’s report on the 1996-2006 slush fund scandal.

This chart from the AG report shows the distribution of double-dippers making more than $25,000 per year, by department:


There’s no indication of what a “private MHA” is in that entry for the education department.

The child and youth advocate appears to be the retired judge appointed to replace Darlene Neville. No surprise there as the province’s justice minister blessed the double-dipper in the House of Assembly in early 2010. Your humble e-scribbler also raised the point around the same time along with the note that the judge’s salary was actually way higher than that of the person he replaced.

Talk about big stamps.

Then there’s the numbers by salary and pension amount:


The problems here are way beyond the idea that people are drawing a pension and collecting a new salary at the same time.  That’s a gigantic one, in itself, but this is an old issue and one that government policy has clearly addressed since 1993, at least.  People aren’t supposed to be collecting a pension and drawing a salary from what is, in essence, the same pot of cash.

The policy is clear on this, but as Noseworthy points out, the policy is honoured more in the breach than in the observance.  At the same time, departments aren’t properly documenting the hiring and the re-hiring.

What there seems to be in this case, as with the ATV issue, is a chronic management problem. responsibility for the problems has to start at the top and that’s the only place that can set both the tone and the general management approach to fix it.

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The same old excuses

Seems like the last time double-dipping was a public controversy, proponents of the scheme used exactly the same excuse:  people won’t take the jobs for the money that’s offered.

Wasn’t true then and, given the Auditor General’s report, it still isn’t true.

Maybe the teacher’s association needs to rethink its ancient talking points.

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Tentative deal in Voisey’s strike

As reported by CBC.

As reported by the Telegram.

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Coo-coo for Connie Puffs

yes, those busy little political beavers in the Confederation Building are still obsessing over certain questions on VOCM’s question of the day.

They learned their Danny-lessons well.

The latest question to get goosifed was one about the Conservative leadership race and the back-room deal Brad Cabana is fighting to bust wide open.

10,616 clicks, 80% of which went in the “no” column for a question asking if Brad should be allowed to run for the Tory leadership.

Now in all likelihood the past practice holds, which means that tax dollars in some government office got spent paying some staffer or bunch of staffers to bust up a computer mouse casting these “votes”.

But aside from displaying a pretty shagged set of priorities, this little display does illustrate the lengths to which the back-room boys over at Connie headquarters are prepared to fight off any attempts at bringing modern democratic ideas inside the Bunker that Danny Built. Hisself’s legacy is apparently too precious to throw away on such frivolities at fair voting, open membership and debate free from intimidation and afternoon visits from executive  assistants.

It’s a pretty sad commentary on how far the once mighty and respected party has fallen lately. The only thing sadder would be the plants clogging up comments sections defending the party’s anti-democratic bent.

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Coincidence?

Auditor General criticises a department.

Minister got shuffled in a surprise move in January.

Bear in mind that the provincial government knew the contents of the Auditor General’s report long before the public did.

Department of Child Youth and Family Services: 

As a result of issues with the delivery and monitoring of the [long-term protection] LTP component of the [protective intervention program] PIP we determined that there was an increased risk that harm may occur to children.

Kathy Dunderdale suddenly shuffled Joan Burke, who had headed the new department from its creation two years ago, back to head the education department.

Meanwhile in another part of the report …

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Irresponsible Government League: free-wheeling in Dunderdale’s department

From the Auditor General’s most recent report on the provincial government’s handling of public funds, released on Wednesday:

As at 19 March 2010, the EMS identified that 56 (12.0%) of the 465 recreational vehicles were missing.  We also found that 49 of the 56 missing recreational vehicles were assigned to the Department of Natural Resources.  

We note that the 2006 Report referred to 80 missing recreational vehicles and indicated that "To have this number of machines unaccounted [for] is unacceptable and increased monitoring of both ATVs and snow machines is strongly recommended.” The Report noted that 67 of the 80 missing recreational vehicles were assigned to the Department of Natural  Resources and the Department of Fisheries and Aquaculture.

Yes folks, Premier Kathy Dunderdale’s former department lost 49 snowmobiles and all-terrain vehicles and that accounted for 87.5% of the government’s inventory of missing ATVs.

How do you lose a snowmobile or a quad?

Well, sez the purist, the vehicles aren’t really lost. It’s just that the department officials don’t know where they are.

For those of us paying the bills, that lousy record keeping and the poor management practices that go with it still pay for all that waste in government.

Meanwhile, 49 somebodies may well have sweet rides courtesy of your tax dollars.

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Same and different: Alberta and NL Conservatives’ leadership issues

Alberta premier Ed Stelmach is leaving politics in the face of a revolt within his caucus, according to the Globe and Mail.

Kyle Fawcett, a first-term MLA from Calgary and one of the more fiscally conservative in his party, acknowledged there were cracks in Mr. Stelmach’s cabinet.

“I do think that there was a bit of an issue in caucus,” he said. “There were some challenges around, obviously, this upcoming budget, and some promises that had been made. And I think the Premier saw that as an obstacle that maybe he didn’t want to tackle at this point in his life of public service.”

The unexpected news on Tuesday makes for some interesting comparisons with events in Newfoundland and Labrador over the past couple of months.

Danny Williams left politics unexpectedly in early December.  

Unlike Stelmach, Williams wasn’t facing any obvious internal political problems although he did drop hints of difficulties within his caucus.

Like Williams, Stelmach left politics with the accusation that the opposition parties would employ American-style political attacks in the upcoming provincial general election. Unlike Williams, Stelmach wasn’t a hypocrite in making such a comment.  Williams used Republican-style politics for his entire political career.

While the Conservatives in Newfoundland and Labrador cooked up a backroom deal to avoid a leadership contest, their Alberta brothers and sisters can look to a quick contest among several cabinet ministers that could be over by the end of March.

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Don’t shoot! They’re short

Of the 16 by-elections since 2003, the provincial Conservatives have set a mere 22 days for campaigns in all but three.  The minimum required under provincial election laws is 21 days.

In two of those, the campaigns lasted 23 days and in one the campaign was 24 days.

The current campaign in Humber West fits the pattern to a tee.

The Conservatives have also been super-speedy in calling by-elections.  In three – Exploits, Port au Port and Humber Valley – the writ for the by-election came the same day the incumbent vacated the seat.

But at 52 days after being vacant, Humber West is the third longest time the Tories have taken to call a by-election They took 61 days to call Cape St. Francis, 60 days to call Baie Verte,

The maximum time to call a by-election under election laws is 60 days.

The others range between three days for the Straits-White Bay North to 48 days for Placentia- St. Mary’s.

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One sign of the political Apocalypse

Seen around the Internet:

I am not confident, based on the government's past record that they have a plan to diversify the rural economy and that concerns me. It will take leadership, innovation, commitment and ability. I am not sure that those traits have been applied to the job in a while.

That comment, from one of Danny Williams most strident supporters, is an damning criticism of Williams’ and his Conservative Party in power.

Are the locusts and hailstorms far behind?

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The Basenjis of St. John’s

If there are dogs that won’t hunt, the Conservatives members of the House of Assembly representing seats in the metro St. John’s are the kind that won’t bark.

Back-bencher, cabinet minister or parliamentary secretary, they are all sitting idly by as the current administration demolishes the school system in the metropolitan area. 

Thousands of students will suffer as a result of a poorly conceived and clumsily executed backroom deal between Eastern School District and the province’s education department to close schools and move students into lashed up space.

The school district will unveil a bunch of resolutions to implement the department’s plan tomorrow night.  If you go by the versions that have already circulated to test what will get a majority, the school board trustees plan to ignore the thoughtful comments made by parents across St. John’s that oppose the back-room scheme and propose instead the plan already agreed upon by parents themselves in 2008. 

There are huge problems in the scheme.  For example, under the deal, the city core and downtown area will be left without a school of any kind.  Students will have to be bussed across town.  In another area, hundreds of students will be forced to change schools four times in five years until the provincial government finishes a new high school in the west end.

If they finish it.

If the school doesn’t get finished, the students will languish as refugees in sub-standard facilities.

The very idea of those things would be ludicrous even as a response to a disaster.  Parents across St. John’s are gob-smacked that bureaucrats and politicians would deliberately plan to implement such a hare-brained scheme and dare to defend it.

But the fix has been in since well before Christmas. Trustees, the majority of whom are from outside St. John’s, are already in favour of the scheme.

Portable classrooms are reportedly on the way to house students from one junior high school who will be forced into grossly inadequate facilities for an unknown period of time.

Not a single member of the province’s legislature from the metro area will speak out to support their constituents.

That’s not a prediction.

That’s a guarantee.

Just watch.

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Chevron announces find offshore Africa

From Chevron’s news release:

“SAN RAMON, Calif., Jan 25, 2011 -- Chevron Corporation (NYSE: CVX) today confirmed discoveries within the Moho-Bilondo license in the Republic of the Congo.

The Bilondo Marine 2 and 3 wells are located approximately 40 miles (70 kilometers) offshore of the Republic of the Congo, in 2,600 feet (800 meters) of water in the central part of the Moho-Bilondo license.

George Kirkland, vice chairman, Chevron Corporation, said, "These discoveries further demonstrate the potential of West Africa where Chevron has made significant investments to develop new energy resources."

Bilondo Marine 2 and 3 were drilled to a total depth of around 6,000 feet (1,800 m). The Bilondo Marine 2 (BILDM-2) well found 253 feet (77 m) of gross reservoir, while the Bilondo Marine 3 (BILDM-3) well, which had a different reservoir as objective, found 144 feet (44 m) of gross reservoir. Both wells were successfully tested and flowed oil.

"We look forward to continuing the work needed to further evaluate these discoveries and potential development options," said Ali Moshiri, president of Chevron Africa and Latin America Exploration and Production Company.

The discoveries follow two previous successful exploration wells, Moho Nord Marine-1 and 2, drilled in the permit area in 2007 and the positive appraisal wells Moho Nord Marine-3 in 2008 and Moho Nord Marine-4 in 2009.

The permit area's deep-water Moho-Bilondo project began production in April 2008 and is currently producing 90,000 barrels of crude oil a day. Chevron's subsidiary holds a 31.5 percent interest in the permit area with partners Société Nationale des Pétroles du Congo (15 percent) and Total E&P Congo (operator and 53.5 percent).

…”

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Stelmach bails

Alberta premier Ed Stelmach is leaving politics.

The Alberta Conservative party will hold a leadership convention to replace him before the end of March, 2011.

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Unsound public finances: pork-barrelling on steroids

If it wasn’t for oil prices, the provincial Conservatives wouldn’t have anything to crow about when it comes to public finances.

And since they have no control over the price of oil, you don’t need to be a rocket scientist to understand that building their budget plans on oil prices is something bordering on insane.

You can see that insanity by looking at a chart from the Auditor General’s recent report showing the provincial government’s budget surpluses and deficits.

Three things:

1. Remember the fiscal year numbering thing – The AG misreports the year. To find the actual fiscal year, knock one off.  In other words what the AG calls 2010 is actually 2009.
2. These are accrual or accounting surpluses.  If you look at the actual cash performance, there are some chunky deficits in these years.  Like 2009 for example when the provincial government had to take about half a billion from its cash reserves to cover that whopper of a deficit. Ye olde e-scribe wrote about this before  - in 2008 - along with a couple of lovely pictures to illustrate the point.
3. Those gigantic surpluses in the chart weren’t planned.  In fact, if they planned anything,  the current provincial government crowd planned on going in the hole.  They came out in the black because oil went to insane prices. Look at the budgets for those years and you will see that Tom Marshall and his colleagues planned gigantic spending deficits.

Take 2007, for example.  According to the budget for that year, Tom Marshall planned to come up short by $1.2 billion.  The year before he actually came up short on cash by $707 million.

While you’re at it, these charts also explode the latest bullshit bomb finance minister Tom Marshall’s been spreading now that the Auditor general’s report is on the street.  According to Tom there was a plan, tons of fiscal responsibility and then temporary deficits to make sure the nasty old recession stayed away from our shores.

If you reflect on the actual budget history of the Williams administration, you will see that only real difference between 2009 and all the years before isn’t that 2009 was a year of “stimulus”.  It actually follows the established pattern of planned overspending. 

What changed was the world price of oil. In 2009, the provincial government’s budget forecast and the actual average turned out to be pretty much the same number. 2010 might not be far off that experience, at least as far as cash flow goes.

And that “stimulus” spending?  Well about half of it was actually stuff the provincial government just couldn’t deliver two or three years before when they first promised it. The packaged it up and called it “stimulus” but it as really something a lot less impressive than it sounded. It was, however, a typical Fernando announcement:  it looked a lot better than it actually was.

The provincial government has spent the last seven years spending public money. 

Lots of it. 

At umpteen times the rate of inflation. 

And they started unsustainable spending long before the world went into a recession.

If they had a plan, it certainly wasn’t to spend responsibly, reduce the public debt and generally look after things for future generations.  In fact, if you look at how much they spent and what they spent it on, it looks like old-fashioned pork-barrelling on steroids.

All that puts the current provincial administration is an especially hard spot.  Politically, they won’t be able to start fixing the problems they’ve created. There’s the election and then, if they win in October, they’ll have to settle the leadership thing.  They can really only carry on with the spendthrift ways they’ve followed for the past seven years.

At the same time, politically, the public is now clued in to the problem, wise to the government torque and looking for the sort of serious leadership decisions that the Conservatives can’t really deliver.

Not exactly the greatest situation to be in with an election coming in a few months time, is it?

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A country apart? More like a world apart

In British Columbia, two of the province’s major political parties are holding leadership contests.  There’ll be lots of debate and discussion.

Meanwhile on the other coast, one of the province’s political parties is desperately trying to make sure its secret backroom deal holds together so they can avoid any debate at all.

And the guy the back room boys are trying to keep out of their private clubhouse is vowing to fight what he calls the “feudal“ politics of the province’s ruling Conservatives.

The drama is national news.

Embarrassing national news.

Danny Williams’ successor is busily making sure Newfoundland and Labrador isn’t seen as the youngest, coolest province.

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Unsound public finances: Tom Marshall’s travesty

 

"It would be a travesty if we don't use this windfall we have, this oil — which will be gone one day — if we don't use that to get rid of this massive debt that our people and our governments have accumulated."

That was finance minister Tom Marshall late last year when he released the provincial government’s financial update for Fiscal Year 2010. He made the comment to CBC’s Jeff Gilhooley during a live interview.

Auditor General John Noseworthy’s most recent report on the public accounts (for Fiscal Year 2009)  pretty much demolishes Marshall’s claims that he and his fellow Conservatives have been managing the province’s finances in a sound way.

The chart shows debt expenses by fiscal year over the past decade. Incidentally, just to make sure you don’t get screwed up in this and subsequent posts, notice that the Auditor General mislabels every fiscal year.  The period covered in this chart is from 1999 to 2009.  That’s the way your humble e-scribbler will refer to the dates.

This chart shows just exactly how much money the provincial government spends every year to service the public debt.  Very little of that is actually going to pay off a debt.  The overwhelming majority of that money goes just to pay the interest that comes due every year.

Take a good look at those numbers.

In 2009, the provincial government spent the better part of a billion dollars doing nothing but paying interest on outstanding debt.

Those figures also tell you that what the province’s finance minister and even the Auditor General call “net debt” isn’t really the measure of public debt that you should be fixed on. After all, if the provincial government really had reduced public debt by almost three or four billion dollars, we wouldn’t be back paying debt servicing costs the likes of which the government hasn’t seen since 2001.

The number you need to look at is gross debt, or, as the Auditor General labels it in the chart below:  “liabilities”

That shows the total amount owed now and in the future by the government and its corporations and agencies.  When it comes to figuring out interest payments and so on, that’s the figure the banks and other creditors look at.  Think about it for a second:  if you have a mortgage on your house, the bank doesn’t check every year to see how much cash you have in the bank or anything else to figure out the interest payments you need to make on the loan.  They just know how much you borrowed and what rate of interest they are going to apply.

So when you look at that line called “liabilities” you will see that the provincial government had $13.733 billion in 2004 – the first full year the Conservatives were in power – and owed $12.559 billion five years later.  Not surprisingly, the debt servicing costs in 2009 were not far off what they were way back before Tom Marshall, Jerome Kennedy and the rest of the provincial Conservatives worked their supposed financial miracles.

Take a look at these two charts and you’ll know why your humble e-scribbler has been harping on this point for pretty well the whole span of Bond Papers. Paul Oram’s resignation in the fall of 2009  - note the year! -just highlighted the issue.

Take a look at those numbers and you’ll understand why Tom Marshall simply has no credibility when he talks about his administration’s management of public finances.

And if you look at those figures you’ll understand that, even if the Muskrat Falls deal was brilliant – and it isn’t – the provincial government has far more pressing issues to deal with rather than build someone’s political legacy. That deal would take the gross debt from $12.5 billion to between $17 and $18 billion.

Tom Marshall’s already given us a judgment of his own performance as finance minister:  a travesty. They haven’t reduced the public debt to any appreciable degree.

So what would it be if the same guy and his cabinet colleagues then increased the public debt by another 50%?

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NL Auditor General notes poor fin mgt practice

From September 2002 until March 2009, Government had been preparing periodic financial statements to show the Province’s results of operations and financial position.  Officials of the Department of Finance indicated that these financial statements were only distributed to the Minister of Finance/President of Treasury Board, other Treasury Board Ministers, the Deputy Minister of Finance, the Comptroller General, various officials of the Department of  Finance, and the Auditor General.  Officials of the Department of Finance advised that for the year ended 31 March 2010, periodic financial statements
were only distributed to the Deputy Minister of Finance.

From the Auditor General’s report on Fiscal Year 2009.

No wind, please. We’re Nalcor.

The Telegram reported on Saturday that the provincial government’s energy company isn’t really interested in developing wind energy until after they get the hugely expensive Lower Churchill up and running.

Oh yes, and they also want to sell power to Ontario some day in the misty future despite the crowd up along having a bit of a glut of power.

Regulars readers of these e-scribblers will find the first one to be a gobsmacking revelation of the magnitude of finding out that Liberace was gay.

The second one’s just funny because it really a case of Nalcor putting a very brave face on a very badly bungled job.  After all, they rejected flatly Ontario’s interest in building the project five years ago. 

Then after another five years of trying desperately to interest Ontario, Quebec and anyone in northeastern North America with a electric socket in the power they came up with nothing other than this brilliant plan:

• make the people of Newfoundland and Labrador bear the entire cost of the project and,
• let Nova Scotians get 35 terawatt years of electricity for free.

And it is funny. 

Your humble e-scribbler doesn’t relish the thought of the New Brunswick- like electricity prices that are headed to consumers on the island – guaranteed to at least double within the decade – and the extra burden of hauling around all that public debt but what else can you do but laugh?

If you didn’t laugh at the sheer stupidity of the idea, you go completely off your nut.

Heck, you might even believe that the Conservatives were seriously interested in sound management of the province’s finances.

Right. 

Laughter it is, then.

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Watton to carry Liberal banner in Humber West

Corner Brook native Mark Watton wants to represent the people of Humber West in the House of Assembly.

He has the Liberal nomination.

And he’s got a pretty good line:

…do people want a PC government that’s going to be one seat bigger or do they want a PC government that’s going to be one seat more accountable?

 

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Black Smoke Traffic

For the week of January 17 to 21, the top 10 Bond Papers stories as chosen by the readers:

1. Tory angst may be well founded
2. Tim Powers?  Rick Hillier?  No thanks say NL Tories
3. AbitibiBowater properties up for sale
4. Ontario flush with electricity
5. Non-res building up 23% in Q4
6. No power cable for PEI?
7. Fin minister Tom Marshall talks debt reduction – audience pees in pants with stifled giggles
8. Fisheries agreement delayed again
9. Iceland opportunity lost
10. New gas find offshore Israel

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Mill shelves controversial tire burning proposal on eve of by-election

Corner Brook Pulp and Paper quietly shelved a controversial proposal to burn tires as part of the mill’s power generation on the eve of  a provincial by-election.

Word came late Friday in a routine statement from the provincial environment department on applications under environmental protection laws.

The provincial environment minister was supposed to rule in December on a proposal from the west coast paper mill.  The provincial government postponed that decision to January 15 claiming that it had received more public submissions on the project than it could handle by the initial deadline.

While the initial announcement of the proposal met with little public reaction, a series of protests, letters to the editor and a Facebook campaign made it clear some area residents strongly opposed the tire burning idea.

The second deadline came and went with the excuse that the minister newly appointed on January 13 needed time to review the proposal.  Shortly afterward, the minister’s office indicated he’d have an announcement by week’s end.

The decision to shelve the proposal comes on the eve of a by-election to fill a Corner Brook seat in the provincial legislature vacated by Danny Williams, who quit politics in early December.

Both opposition parties pledged to make the proposal a key issue in the by-election but by Friday only the Liberals had a candidate to face the Conservatives.  Mark Watton, a lawyer who had previously been a political staffer in the Prime Minister’s Office and chief of staff to cabinet minister Ken Dryden, is expected to be the only person to seek the Liberal nomination that closes on Friday.

On  Wednesday, high school principal Vaughan Granter won the Conservative nomination.

Friday’s decision by Corner Brook Pulp and paper doesn’t necessarily remove the tire proposal.  The mill could bring the proposal back after the by-election.  At the same time, the provincial environment department ships used car and truck tires to facilities in Quebec for burning.

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Fin minister Tom Marshall talks debt reduction - audience pees in pants with stifled giggles

According to voice of the cabinet minister, provincial finance minister Tom Marshall is interested  - again – in talking about the provincial debt.

Here’s a excerpt from the VOCM online story, quoted here since it may have been disappeared by the time this gets posted:

Marshall proposes several measures in doing so. First, the government needs to balance sustainable and prudent spending with the implementation of steps to lower taxes and net debt. He says the province has to maximize the benefits from its non-renewable resources now so that it is prepared for when they are depleted. Finally, he argues that it is important to diversify the economy, such as focusing on the Lower Churchill Project.

Marshall’s talked about sustainable spending before but only to the extent of making clear he wasn’t the teensiest bit interested in actually doing it. In fact, Marshall’s record is of a profligate spender who never met a deficit he didn’t like.

And just to get the point across, note that current provincial gross debt is about $12 billion.  That’s roughly where it’s been for the past four years and it higher than it was in 2003 when Marshall and his crowd took office. 

Tom mentioned lowering the net debt.  Well in order to do that he’d have to stop overspending as he’s done the past two years.  According to the most recent financial statements, the province’s net debt went up in 2009 and it is set to go up again in 2010 (the current fiscal year) if current trends hold.

So while that whole “sustainable and prudent spending” thing is a great objective, Tom and his friends haven’t done it yet.  After seven years, Tom’s got to have cajones the size of watermelons to talk about debt reduction and fiscal responsibility with a straight face, expecting the people in the province to take him seriously.

Ditto the part where he talks about maximising benefits from oil and minerals.  Tom and his former boss specifically rejected any suggestions to set aside sovereign wealth funds, real debt reduction and any other ways to accomplish the goal of putting the money from oil and minerals to work for the future.

And double ditto for the bit about diversifying the economy.  The current fragile state of the provincial economy is a direct result of provincial government policy since 2003. 

That leaves the Lower Churchill.

Reducing net debt, right?

Okay, Tom Marshall’s current plan is to force taxpayers to borrow at least $3.0 billion and put a total of about $6.0 on the provincial government’s gross debt load.

Tom also wants ratepayers in the province to accept electricity rates roughly double what they are currently to pay for electricity.  Can you say “uncompetitive” boys and girls? 

And he’d like to ship power free to Nova Scotia for 35 years.

Surplus power would enter the market at uncompetitive rates so the chances of export are pretty much slim and none as it now appears.

Given all that’s going on in the province and what Tom Marshall and his pals have actually done since 2003, the finance minister’s audience on Thursday must have peed in their pants with stifled laughter as he rambled on.

Surely no one would take Tom seriously, not with all the evidence against him.

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No power cable for PEI?

Federal transport minister Chuck Strahl said Thursday the federal government won’t be helping the province fund an electricity line from the island to the mainland, saying that the project didn’t make the province’s own Top 20 priorities.

The provincial government is trying to secure funding for the project through a federal green infrastructure fund.

According to the Charlottetown Guardian:

Prince Edward Island isn’t the only province looking for an electrical cable.

The $1-billion green infrastructure program has already funded an electrical cable in British Columbia at a cost of $440 million. The federal government picked up $130 million. The program also funded a $160-million power cable in the Yukon. The federal government picked up $71 million.

Newfoundland and Labrador and Nova Scotia have a joint application for a cable between those two provinces. That mega-project will cost between $800 million and $1.2 billion. They’ve asked the federal government for $375 million.

Strahl said he recognizes the province wants to construct the cable and the federal government is working to find the money to fund the project.

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Ontario flush with electricity

And so much for that market for Lower Churchill power…

Ontario residents were bemused to discover that on New Year’s Day 2011, on average, they were paid to use electricity.

If that seemed unusual – and it is – it’s only the start.

Within the next two years, the conditions that produced the bonus New Year’s power could crop up about one day in every seven, according to an analysis by the agency that runs Ontario’s power market.

A big reason: about 5,000 megawatts of wind powered generation is due to be connected to the Ontario grid in the next few years, producing surges of power that are more than the province needs.

via Toronto Star

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Fisheries agreement delayed again

Did anyone really expect that fisheries minister Clyde Jackman would actually tell the people of the province officially, with a news release that the long-awaited fisheries restructuring agreement would be delayed yet again?

Good because he didn’t.

Instead, Jackman dropped a comment to the Northern Pen, a weekly paper on the province’s Northern Peninsula.

A draft copy of Newfoundland and Labrador’s fishing industry MOU has been sent back for fine tuning delaying its release by another “two or three months”.

Speaking to the Pen on Monday, fisheries minister Clyde Jackman confirmed that he had read the 100-page document but it required some tweaking.

And if the rest of Jackman’s comments are any indication there’s no wonder the fishery is in a mess.  The fish minister doesn’t even have a sweet clue about incomes in his own industry:

One thing that really stood out was the difference in incomes for the different parties,” he said.

“In some places you have plant workers earning $10,000 and supplemented by EI while in others, they make multi thousands of dollars.”

The smart-arses can ignore the fact that ten thousand is multi-thousands.  Just note that those sorts of figures can be found readily in a report on the crab industry contained in a report government received back when Trevor Taylor was the fisheries minister.

Meanwhile, the province’s official opposition party did manage to get the story some wider coverage than Jackman may have liked.  A news release the Liberals issued did get picked up by the major media in St. John’s, likely much to Jackman’s chagrin:

“What that really means is that the plan is dead for the next year,” said [fisheries critic Marshall] Dean. “By taking another two to three months to ‘fine tune’ it, Jackman is removing the MOU from any consideration of funding in the next provincial budget, which is expected in March. If there is no funding for the plan in the budget, nothing can happen with the plan until the following year’s budget in 2012. That’s a full six months after this coming fall’s provincial general election. It looks like Minister Jackman has finally found a way to ground the MOU until after the election.”

Given this government’s handling of the MOU – which has now taken four years and gone through three different fisheries ministers – Dean thinks there is no will on the part of the PCs to deal with the fishery at all.

The story also wound up on CBC’s Fisheries Broadcast.

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Related

-   Good to the last fish:

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.

-  Tom Rideout meets the Bride of Frankenstein

-  Up the creek with Jackman and Rideout

New gas find offshore Israel

Funny the things that slip by.

Over Christmas the Globe and Mail ran a story on new oil and natural gas finds in Israel.  The twenty trillion cubic feet of natural gas in one set of offshore finds will reshape the Middle East and more energy finds could reshape global energy supplies.

Estimated to contain 16 trillion cubic feet of gas – equivalent to more than a quarter of Canada’s proven reserves and enough to meet Israel’s domestic demand for 100 years – the Leviathan field is believed to be the largest such deep-water gas discovery in a decade.

The find actually dates from  June 2010 as a story in the Jerusalem Post shows.

In January 2009, the discovery of the natural-gas field 90 kilometers offshore from Haifa, known as Tamar, in which Noble Energy has a 36% working interest, was made by the US-Israel consortium including the Delek Group, through its subsidiaries Delek Drilling and Avner Oil Exploration, Isramco Negev 2, Dor Gas Exploration. Tamar is the largest exploration discovery in Noble Energy’s history, which last year also discovered a natural-gas field at Dalit with gas reserves estimated at 500 billion cubic feet.

“The Leviathan exploration has the potential of being twice the size of Tamar, which was the largest gas discovery globally in 2009,” Richard Gussow, a research analyst at Deutsche Bank, said Thursday.

In addition, there’s been a major oil discovery onshore as well of a field roughly the size of Hibernia with additional prospects offshore.

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AbitibiBowater properties up for sale

An advertisement appearing in the Telegram on Wednesday put the Stephenville and Botwood properties still owned by AbitibiBowater up for sale.

The receivers are inviting bids for six parcels, four of them associated with the former Stephenville mill and two for land, buildings and a deep-water dock facility at Botwood.

The ad was placed by Samson Belair/Deloitte and Touche, receivers for a numbered Newfoundland and Labrador company created during the recent restructuring of AbitibiBowater.

Any environmental liabilities would pass to the new owners with any sale of the properties in the same way that provincial taxpayers are now liable for the entire Grand Falls mistakenly expropriated in 2008 by the Williams administration.

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Non-res building up 23.% in Q4

The value of non-residential construction in Newfoundland and Labrador increased 23.6% in the fourth quarter of 2010 compared to the third quarter, according to figures released Monday by Statistics Canada.

Of the $103 million in industrial, commercial and institutional construction in the province, $62 million of it was in the metro St. John’s region.

That’s interesting given a recent comment by finance minister Tom Marshall that it was time for the private sector to step in a drive the economy for a while. BMO noted recently that provincial economic growth is driven currently by capital spending. 

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Tory angst might be well founded

Conservatives across Newfoundland and Labrador seem to be in a bit of a tizzy. Danny Williams’ sudden departure has the caucus so spooked they are trying to engineer a backroom deal to avoid a leadership contest.

On some level you have to wonder why they might be so uptight.  After all, to casual observers they would appear to be guaranteed an easy victory in October’s general election with or without the Old Man.

But then you see things like an online poll at The Western Star:  “If you were a Danny Williams supporter, are you less likely to vote PC now?”

So far, 46% of respondents are saying yes, they are less likely to vote Tory. 15% say they are more likely to vote PC and the remainder  - 39% – answered “no”.

Even in the government’s own polls, Danny always ran way ahead of the party.  In the most recent government poll, though, support for the party dropped about 10 percentage points compared to a poll done three months earlier. That wasn’t good even when people thought Danny would still be around for the fall election.

Now that he’s gone, things will likely turn out very differently.  People who barely won their seats at the peak of supposed Danny-mania in 2007 might not have such an easy time of it in 2011.  They might need a boost, like say from a cabinet appointment, to try and counteract the loss of Danny Williams’ entire coat.

Stop and think about it for a second, though, and the long term trend of Danny running in front of his party’s support and the Western Star online poll are pointing in the same direction.  It would make sense that people who had voted Conservative in the recent past would now be thinking about shifting their vote.  They were Danny Tories, as it were, not committed Tories.

All that would lead explain why Conservatives in the province are a wee bit out of sorts these days. 

And if the number of soft Tory votes is actually close to the 46% the Star found, then politics over the next eight or 10 months is going to be way more interesting than anyone suspects right now.

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Layton renews call for Conservative-style tax cuts

On a visit to St. John’s Monday, federal New Democratic Party leader Jack Layton renewed his call to cut taxes from home heating:

Layton called for the federal government to cut taxes to home heating in this year’s budget, and he called on Prime Minister Stephen Harper to extend a program to provide subsidies to people who make their homes more energy efficient.

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The King’s Speech

Via the BBC, a short article on King George VI and his speech impediment.

The article includes the complete audio of the King’s speech in September 1939 that forms the climax of the recent movie.

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Rick Hillier? Tim Powers? No thanks, say NL Tories

Whatever is going on in Newfoundland and Labrador these days certainly is politics but it most certainly is not democracy.

What is dizzying, to borrow Tim Powers’ word, is the pace at which the province’s Conservatives are trying to keep a back-room political plot hatched over Christmas from exploding into a catastrophe as large as Danny Williams’ polling numbers.

“Everyone should have a right to put their name on a ballot assuming they adhere to the rules,” write Tim Powers in the Globe and Mail last week.  That is certainly true but it assumes that the rules are clearly known or, to be more accurate faithfully applied by the “officials” who, after exampling Brad Cabana’s nomination documents, “decided they didn't fit the criteria set out by the party.”

Perhaps the most useful way to look at this political farce is to use not Brad Cabana as our test subject but no less a person than Tim Powers. 

You see, when Danny Williams took to his heels and fed the Confederation Building, Tim’s was one of the first names some people offered up as a potential replacement.

Some other contenders, like finance minister Tom Marshall and then-education minister Darin King said they would take the time over Christmas to talk with friends and family.  They’d come back after Christmas end let the world know what they’d decided.

By Friday, December 24, though, that had changed.  Marshall, King and presumed heir-apparent Jerome Kennedy held news conferences to say that they’d be backing Kathy Dunderdale instead. Dunderdale, you may recall, was supposed to be the interim leader and had indicated she had no interest in the job. 

Off went everyone to Christmas holidays.

Another minister dropped out and by December 30, Dunderdale wanted the job. Virtually the entire caucus, she said, backed her.

Curiously that was the same day the party announced it would accept nominations for leader until January 10. 

Now if either Tim or Rick Hiller – living in Ottawa, were still pondering their future, they certainly wouldn’t have had much time to get their papers in order.  By the time the party announced that it would accept nominations, the race was effectively over. That’s exactly the point that cabinet minister Ross Wiseman and his executive assistant made to Cabana on January 5.  Since the entire caucus and their district associations backed Dunderdale, the odds of winning were very slim.

Besides, wrote Chick Cholock, Wiseman’s executive assistant, a contested leadership would put at risk Danny Williams’ legacy. “We do not want a Party [sic] divided now that Danny has moved on,” wrote Cholock in an e-mail.”

None of the arguments Wiseman and other Conservatives have offered about Brad Cabana had anything to do with following rules or his quality has a candidate. 

They had everything to do with an apparent desire within the caucus to avoid a contested leadership fight of any kind.  In other words had Tim or Rick decided to go all-in  now that the caucus made a decision, they would almost surely have been met with exactly the same arguments that faced Cabana:

1. They wouldn’t stand a chance since all the people now determined to be party members had already decided, and
2. a leadership contest in itself created the risk of fracturing the party beyond repair.

The Conservatives could lose the October election, as Cholock suggested in an e-mail he sent Cabana before nominations closed on January 10.

Wiseman and others did slide in another interesting qualification that doesn’t appear anywhere in the Conservative Party constitution.  Cabana hadn’t lived in the province very long, Wiseman noted in a scrum he gave after Cabana revealed Cholock had visited him on January 5 to try and discourage him from running. Nor had Cabana been very active in party functions, apparently.  There are two other grounds by which both Tim Powers and Rick Hillier would be disqualified.

If you are tired of the tedium that is federal politics, there is a drama unfolding in Newfoundland and Labrador.  But  the party that Danny Williams built is hell bent on showing that what they are up to is about as far from democracy as Parliament Hill is from excitement.

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