US diplomatic cable reveals Emera “trepidation” about talks with Williams on Lower Churchill

A cable from the American consulate in Halifax relays concerns that Emera had about negotiations with Danny Williams on the Lower Churchill.

Dated 15 January 2010, the cable is a summary of a meeting between the American consul general and James Spurr, a senior executive with the Nova Scotia-based company. The cable is available from Wikileaks.

Emera and the Lower Churchill: "Are we being used here?"

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¶4. (SBU) Closer to home Spurr talked about another possible venture for Emera: transmitting power from the proposed Lower Churchill River project in Labrador to New England. Nova Scotia and Newfoundland-Labrador (N-L) have an MOU to explore this option which would require the construction of sub-sea and overland power lines to transmit the power. Money issues aside, there would be technological challenges to overcome in this scenario. However, Spurr emphasized that with Emera's experience in dealing with transmission systems, natural gas pipelines and its knowledge of regulatory processes, it would not be an impossible feat. The unknown factor, as Spurr explained, is N-L Premier Danny Williams. Spurr explained that N-L had been the victim of bad resource deals in the past which have left Williams very cautious if not suspicious in his business negotiations. Given that legacy, Spurr remarked that he and his senior colleagues are equally cautious in dealing with the premier, with knowledge it makes more financial sense for N-L to do a deal with Quebec than with them. In fact, Spurr indicated he wouldn't be surprised if William ended up doing just that, and leaving Spurr and colleagues to speculate that Williams might be using them to exert more pressure on Quebec to offer a better deal for N-L.

That would have been a pretty savvy guess for Emera, given that in September 2009 Kathy Dunderdale revealed publicly that she and Williams had tried unsuccessfully for five years to lure Hydro-Quebec into taking an ownership stake in the Lower Churchill.

Conventional news media in Newfoundland and Labrador have never reported Dunderdale’s comments or made any other references to talks with Quebec despite the audio of Dunderdale’s comments being readily available.

In 2010, as part of his political exit strategy, Danny Williams signed a term sheet with Emera that could lead to development of a dam at Muskrat Falls. Under the deal, Emera will receive 35 terawatt years of electricity from Muskrat Falls in exchange for the cost of building a transmission line from Newfoundland to Cape Breton. In a conference call with reporters at time the tentative deal was announced, Emera executives’ comments suggested they had balked at earlier versions of the deal in part because the cost of power from Muskrat Falls was too high.

The current proposal is based entirely on the sale of power within Newfoundland and Labrador at full cost plus a guaranteed rate of return for the provincial government energy company. Premier Kathy Dunderdale acknowledged in the House of Assembly earlier this year that Muskrat Falls power will be too expensive to sell outside the province except at discount rates.

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Conservative householder a multi-level bust

Someone on the mainland decided to design a campaign householder for the federal Conservatives.

Pretty picture.

Nice little headline there.

You can tell the person is not from the province where it got dropped this past week.  There are two rather obvious  - and related - problems.  See if you can guess what the problem is.

No?

The name of the province is Newfoundland and Labrador and that’s Problem One.

Bigger problem is that in Labrador – where this thing is going as well as on the island – there is considerable opposition to the project because it is all about power for Newfoundland…

and shag-all for Labrador.

Stunned enough that the provincial Connies conned their federal Connie cousins into backing something that only 3% of people think should be a major priority for the province.

Stunneder still is the fact that the Pavement Putin of the Permafrost and his crowd are attacking Liberal Todd Russell’s opposition to the project as if that was somehow going to work against him come polling day.

Stunnedest of all, the Harper Bunker drops this little gem across the province, especially in Labrador where it will go over like the proverbial fart in church.  Todd Russell will be laughing all the way to the polls.

There are no wounds as painful as self-inflicted ones.

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Economy not sizzling in Tom Marshall’s home town

Finance minister Tom Marshall has always had a curious relationship with reality.

He likes to talk about debt reduction, for example, but he never really does anything about it, or as in his plan for Muskrat falls, he actually wants to increase the public debt by upwards of 50% of its current size.

When Marshall delivered the most recent budget – and set a record for public spending in the process – he told reporters that “our economy is sizzling right now.”

Tom must be referring to Bermuda or Barbados or wherever it is he takes the sun during the colder months.

He certainly isn’t talking about his own district of Humber East.

The Western Star reported on Thursday that the major container line serving the province is dropping Marshall’s home town of Corner Brook from its destinations.

Capt. Sid Hynes told The Western Star Thursday afternoon that export freight from Corner Brook has dropped by around 70 per cent and imported cargo has declined by about 30 per cent in the last five years.

Exports down by 70%.

Imports down by 30%.

Since 2005.

Now it surely doesn’t take an expert to tell that this is not an economy that is sizzling.

Anyone who claims it is sizzling might be fried though.

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The cost of doing business: Muskrat Falls version

Building the gravity base structure and drilling production wells for the Hebron project are now estimated at $8.3 billion, according to news stories on Wednesday.  In its story, The Telegram cites documents filed as part of the Hebron consortium's development application.

That's two thirds more than the original estimate of $5.0 billion.

Okay.

So if a project estimate prepared by people highly experienced in these types of projects and who have a keen interest in cost control has climbed by 66% in such a short period, odds are good that we can also change any cost estimates for a bunch of people with a lot less experience in building gigantic projects.

Like say Nalcor, a company that has, contrary to its own claims, shag-all experience in megaprojects.

They tell the world that a dam on the Lower Churchill river and a bunch of transmission lines will cost exactly the same as it would have in 1998:  roughly $6.2 billion.

Yeah, sure, buddy.

Put a Hebron cost multiplier on that sucker and you get $10.2 billion. We have not even factored in any inflationary impact.

But that is bad enough.

We are not done yet.

According to Premier Kathy Dunderdale, Muskrat Falls power would cost 14.3 cents per kilowatt hour to produce.  That is based on the project cost of $6.2 billion.

So if we can reasonably increase project costs by 66%, you can increase the cost per kilowatt hour by a similar amount.

Do the math.

It isn't pretty.

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Advance Poll turn-out comparison #elxn41

For the vote geeks out there, take a gander at this lovely chart showing turn-out in advance polls held in federal general elections from 2004 to 2011 for each of the ridings in Newfoundland and Labrador.

Some of the media reports have compared the 2011 advance polls votes to 2008.  That would be a misleading comparison since the federal Conservatives suffered from an unusual problem due to the Family Feud.  If you look at the two before that, you can get a better feel for recent trends.  2006 was a year of change nationally and it marked the last time the provincial Conservatives actually worked closely with their federal cousins.

Here’s what you can see:

Turn-out is up in every riding but the magnitude of the change is more dramatic in some cases than others. 

The easy number is in St. John’s East.  Lots of media reports have noted it had the highest advance poll turnout at 4474.  That corresponds to a 56% increase over the next largest turn-out in 2006. The rest of these numbers compare 2011 to the next largest turn-out.

St. John’s South-Mount Pearl is up 91% compared to 2006.

The lowest change in turn-out is Bonavista-Gander-Grand Falls-Windsor, up 2.3% compared to 2004 and Random-Burin-St. George’s, up 3.5% from the same election.

Avalon is showing a 47% increase compared to 2006.  That’s almost exactly the change in Labrador (48%).

What does it all mean?

That’s hard to tell. 

Look at the anomalies first.

On the face of it, there’s no reason why St. John’s East should show such a dramatic increase in total number of votes cast. The incumbent appears to be safely in his seat.  There is no heated contest in the riding.  While it looked potentially like a harder fight before the writ dropped, the reality has been that incumbent New Democrat Jack Harris could be vacationing in Las Vegas with his future Quebec caucus-mates and he’d still slaughter his competition. If there was some sort of surge toward the NDP, this would be a real sign since the seat is already orange.

Ditto Labrador.  There’s no sign of any dramatic change in the riding.  When you look at the riding with almost exactly the same rate of change – Avalon – it gets weirder.  

Avalon is the scene of a vicious fight between Scott Andrews for the Liberals and former Conservative incumbent Fabian Manning who Andrews beat in 2008. One would expect numbers there to be up way compared to another year when they had a hard-fought contest. 

So while those three seats looking odd, the other four seats,  the voter turn-out pictures look like what you would expect.  In the ridings where there’s been a really small change in turn-out, there’s no sense of a hard contest and the change in turn-out reflects that.  The numbers for Humber-St. Barbe-Baie Verte are up, but only 25%.  Again, that reflects a strong Conservative campaign, most likely, but it is hardly a sign of big change. In the absence of any other signs of revolution, this vote change looks relatively normal.

In St. John’s South-Mount Pearl, the blood feud between the New Democrats and incumbent Liberal Siobhan Coady has been intense since before the election started.  Seeing turn-out up by 91% is no surprise in what appears to be a tight race between two highly motivated and highly organized teams. The Conservatives don’t seem to be a factor, at least if the only publicly available poll is anything to judge by.  Any jump in turn-out is likely not coming from the Rain Man’s effort to get back in elected politics.

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Pavement Putin of Permafrost falling down on the job #elxn41

CBC news reports that residents of Labrador are complaining about the poor state of provincial highways in their part of the province.

"It's insulting that they think it's fine the way it is and that we should accept it the way it is," said [Kristin] Pardy.

Hmmm.

Makes you wonder what John Hickey has been doing with himself.  He holds down a cabinet portfolio responsible for Labrador Affairs. 

Hickey – who once launched a law suit against former Premier Roger grimes for something Danny Williams said – is rather proud of the roads in Labrador.  When Hickey hasn’t been trying to claim to have contracts with the federal government that don’t exist, he’s been known to pose for publicity shots featuring him shovelling pavement.

The simple answer to what Hickey has been up to is shovelling something other than pavement on behalf of his federal Conservative buddies. 

You can find a clip of Hickey that someone posted to twaudio of one of Hickey’s lengthy calls to local talk radio on behalf of his buddies from up-along.  He’s in the middle if you really feel the need to listen to a provincial cabinet minister who has clocked more time campaigning for the federal Conservatives since 2003 than any other current member of the provincial Tory caucus.

That might be a slight exaggeration, but only a slight one.

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Bloc NDP would change party’s NL position #elxn41

If the current trends hold, the New Democratic Party is poised to make record gains in Quebec.  EKOS is projecting that the NDP could win as many as 100 seats with a majority of those seats coming from Quebec.

The party’s new support in Quebec comes, of course, as a result of Jack Layton’s active campaign to court support from soft nationalists and sovereignists who had supported the Bloc Quebecois.

There’s no accident in this.  Layton knows exactly what he is doing and the model he is trying on is actually the one pioneered by Brian Mulroney in the 1980s.  Layton is even using the same language Mulroney used with his references to the idea that somehow Quebec is outside the constitution and needs to be brought in.

While national attention might be focused on the national implications of recent developments, there are some likely implications for people in Newfoundland and Labrador if Layton becomes leader of the opposition with a caucus half of whose members are from Quebec.

For starters, people who think the NDP will be able to represent interests of anyone in Newfoundland and Labrador on fundamental issues can think again. Such an NDP caucus would be driven by the fundamental division in its membership and the need to manage that relationship over time.

If people think the seven seats in this province count for little in the federal parliament any way, they can consider the implications of having an opposition leader whose position is based entirely on his seats in Quebec. 

Support for a loan guarantee? 

Gulf of St. Lawrence boundary?  

National electricity grid?

Money for energy infrastructure?

More federal money for Goose Bay?

Quebec soft nationalists and sovereignists would effectively control both the Bloc and the NDP on those issues.  Take three guesses how Layton and his crowd will stand on those issues.  The first two don’t count. That would be especially true on any initiative that couldn’t also be matched with a comparable cash outlay for Quebec.

T’would be interesting to see what happens if people in this province start asking politicians about these sorts of things.  Get ‘em on the record now.  Their comments could come back to haunt us all.

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Attack of the Fluffy Bunnies #elxn41

You can tell we are in the final week of a federal election campaign.

The attack ads are out.

Everybody has one.

Some people are whining about them.

Some candidates are trying to distance themselves from them, as in NDP candidate Ryan Cleary:

The NDP is distributing a flyer questioning Ignatieff's trust and attendance in Parliament.

The party's candidate in St. John's South–Mount Pearl, Ryan Cleary, said the negative advertisements are coming from the national NDP campaign, not his.

"I've seen that and that's one of the strategies they want to take, so, yeah," he said.

There’s no small measure of hypocrisy in the NDP attacks, of course.  Cleary’s supporters have been whining about since 2008 about some material Liberal incumbent Siobhan Coady circulated in the last election about Cleary.

There’s a reason why campaigns use so-called attack ads or negative ads:  when they are done properly, they work and they often work better than anything else.

“Done properly” means factual comments that address a concern voters have about a candidate, a party or a leader.

A campaign team will figure out the voter concern through polling.  Forget the horse-race stuff.  That’s just bumpf for the people who need to feed their tweets.   A well-organized campaign can turn around the run-away races or quickly eliminate a close race using solid research coupled with good communications and a willingness to use the tools correctly. 

Make no mistake:  it isn’t that simple or formulaic. Campaigns are as much about the battle between teams as anything else. Teams are made up of people. People make decisions and sometimes they make bad ones.  But given the situation, most campaigns will use the tools they have, including negative or attack ads.

What makes the spate of local attacks ads curious is that they seem to be bizarre.

According to the Telegram, the NDP dropped a postcard in St. John’s East this weekend that, like its counterpart in St. John’s South-Mount Pearl attached Liberal leader Michael Ignatieff because of his poor attendance in parliament?

Okay people.

Jack Harris needs to run attacks ads to fend off the Liberals?  According to the only poll publicly available, the Liberal contender in that riding is running at less than five percent of the vote.  The thing can’t have an spill-over because it was delivered to households.

But then there’s the issue. People loved Danny Williams all to pieces and he had such naked contempt for the legislature he set new record lows for sitting in the legislature by a serving Premier.  On the face of it, this is not what you would call a vote-determining issue.  But hey, maybe they have some sooper sekrit research that shows people in Kilbride and Torbay are parliamentary channel nerds.

Then there are the Conservative ones.  Loyola Sullivan is hammering away at the idea that without a Conservative government in Ottawa the loan guarantee for Muskrat Falls is a goner.

In February, 2011 CRA’s polling for the provincial government showed that three percent of respondents thought that the Lower Churchill should be the top priority of the provincial government in the next few years.

3%.

That’s not a typo.

That’s all.

Even if Loyola was running in Labrador, his Lower Churchill scare piece would appeal to only the 4% of respondents there who thought it was an issue.  Again, not exactly what you would call a topic that is going to drive voters to the polls, let alone make them pick a particular candidate.

For their part the Liberals, their bizarreness is the absence of any local negative pieces this time out. That’s not to say there aren’t;  maybe there are.  It’s just that your humble e-scribbler hasn’t seen or heard anything. 

Not like there isn’t plenty to hammer away at for either the Conservatives or the New Democrats and their candidates just like their could be for blue and orange to toss at red. It’s the kind of stuff you’d expect in a race like St. John’s South-Mount Pearl that is, supposedly, too close to call.

Maybe the clue is the way all the candidates and all the media are fixated on Muskrat Falls. Grits and Dippers are talking about it because the Connies made it an issue. The media are covering it because the pols keep telling them it is big. But there is no sign the voters give a tinker’s damn about the dam.

Bizarro.

No one should be surprised if – in the end - the Newfoundland negative ads in this federal election are likely to fall completely flat.  The reason is simple: they obviously aren’t driven by what voters are interested in. 

As a result, they may look aggressive but they are the equivalent of hitting your opponent with fluffy stuffed bunnies. 

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When the rubber hits the road…

The current provincial government discovered innovation as a word they could use to describe something they thought might sell well with the punters.

You can reduce the thing down to a word because, as much as they talk about innovation, the current provincial government seems to be incapable of doing anything novel.

New.

Different.

Take, for example, the problem of recycling tires.  The current crowd inherited a problem from the crowd before them:  mounds of tires stockpiled at a couple of sites in the province and nothing that apparently could be done with them.  A couple of ideas cropped up but the companies behind them never got anywhere.

So the current crowd shipped them off to Quebec where they burn them for fuel.

Last week, the provincial government unveiled another contract to ship a few million used tires to Quebec, entirely at government expense, so that a couple of coal-fired cement plants there could supplement coal with tire bits.

Newfoundlanders paying to ship energy to Quebec in a deal where they get the benefit and the locals get to pick up the tab.

Churchill Falls.

Muskrat Falls.

Tires.

Same pattern.

Or burning them in Quebec before. 

Burning more in Quebec now.

More of the same, no matter how you look at it.

The cost for shipping the tires in the new contract is apparently about $3.0 million or more and while the provincial government has billions of dollars in cash, it hardly seems sensible that someone couldn’t figure out a way to use the tires productively in this province for less than six or seven million bucks it is likely costs to ship tires all told.

Heck, just for good measure, let’s make the figure $10 million. If we cannot do something within the province with our tires for less than $10 million and an environmental bonus, then shipping them is a good idea.

Right off the bat, we can scratch anything involving burning the tires.  Sure there are studies saying it is okay and yes, it is better than coal.  But there is something about burning tires in a place where we don’t burn coal any more that just doesn’t make sense.

And there are only so many blast mats you can make so there’s got to be something else out there.

Hmmm.

Google search!

Try a few possibilities and you can wind up at the website maintained by the Nova Scotia government’s recycling agency.  They had a problem figuring out what to do with their used tires.  After a report  identified serious questions about using tires as fuel, an expert committee recommended shredding the tires and using them in road construction and similar applications.

They call it tire-derived aggregate or TDA. It’s a pretty lightweight and inexpensive substitute for gravel in some construction.  In places prone to frost, TDA can actually help improve the lifespan of pavement.  There are some questions about TDA.  For example, some people regard using it as aggregate to be the same as burying the tires.  On the whole, the Nova Scotia committee thought that TDA was the way to go.

Then there’s the cost.

One presentation on the tire recycling site comes from an American company with experience in shredding tires. The presenter put the cost for the trucks, storage facility and shredders – the infrastructure – at about US$1.6 million.  You’d have to add labour costs in there to get the likely total cost but that hardly seems very costly to get started shredding tires.

And that’s just one alternative to shipping the mounds of used tires in Newfoundland out of the province and paying someone else to burn them.

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The peter principle #elxn41

What is about Conservative candidates and their tackle?

One provincial Conservative used a bunch of elections signs that touted the viability of his equipment.  He was  - or had? – the sign assured us “a member that works.”

Now the Conservative candidate in Labrador seems to be …  ummm… err… generous.

Yes.

That’s it.

Generous.

His signs carry the slogan “Peter for all.”

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Nail ‘em up, I say

The provincial government’s human resources, labour and employment department started a neat little promotion early last year to encourage young people to take a look at skilled trades.

It’s called Try the Trades.

So at the Telus Cup game this past Friday night, three provincial cabinet ministers took part in a little demonstration to draw some attention to it. 

Wonderful stuff. 

Great idea.

Except maybe the timing was a wee bit inappropriate.

This past Friday.

Driving nails.

Think about it for a second.

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“The prize is worth the fight”: Hearn rebuts Skinner on Muskrat Falls

Former Newfoundland and Labrador Hydro director Ed Hearn rebuts natural resources minister Shawn Skinner’s claim that anything other than doubling electricity and adding to the per capita debt load in the province by developing Muskrat Falls is too risky a venture:

While there would undoubtedly be a legal challenge to such legislation, a court challenge is not a valid reason to fail to pursue this initiative.

If the province’s right to reserve energy from the Upper Churchill were confirmed, the province would have access to sufficient energy to meet all its future needs on the island and in Labrador with energy priced at approximately 1/5th of a cent per kilowatt hour at cost.

The prize is worth the fight.

Hearn sensibly suggests that Skinner and his colleagues could refer a question to the Court of Appeal for an opinion before introducing any legislation on Churchill Falls power.

It really is that easy so one must wonder why Skinner and his colleagues are hell-bent on the other course.

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Easter Traffic 2011 #nlpoli #elxn41

So this Easter with all the politicking going on, will people get a visit from the Dunderbunny instead of the Easter Bunny?

As far as the federal Conservatives seem likely to find, a visit from the Dunderbunny doesn’t net you a stash of lovely votes or even chocolate. There just seems to be a little pile of odd-smelling brown buttons - if there is anything at all – and it’s probably best not to nibble them.

Maybe that’s what we will have to call members of a political leader’s fan club or her caucus?

Sounds like some cartoon comic-bookish all-girl band from Riverdale, though.

Josie and the Pussycats?

Meet Kathy and the Dunderbunnies.

Anyway…

On this second last week of April, the growing number of readers of these humble e-scribblers enjoyed these 10 posts more than others.

Alliteration is apparently quite popular.  You know.  The repetition of an initiation consonant sound, as in A fish called Wanda;  K-K-K-Ken’s c-c-coming to k-k-kill me. late week posts that get into the weekly Top Five are there for some reason.

Maybe it is alliteration.

Maybe it is something else.

Who knows?

In any event, here’s the list:

1. Buckingham not only local Tory to buck Dunderdale line on Harper
2. On minority governments
3. NTV/Telelink poll:  close, closer, no cigar and a referendum on Dunderdale
4. One big happy Conservative family…maybe
5. Kathy’s Keystone Kops Konfused on Konservative Kampaign
6. Seen on the campaign trail
7. The view from Flower Hill
8. Risky Business
9. The unsustainable lightness of Tom Marshall
10. Recycling a tire recycling story

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The Speaker is neutral…supposedly #elxn41

Another name leaped out from the Conservative’s news release on family unity in central Newfoundland this federal election time.

Roger Fitzgerald.

Spotted at a Conservative nomination for his old friend Loyola Sullivan.

Challenged on the absolute requirement for neutrality given his job as Speaker of the provincial legislature, the old Conservative warhorse snorted something about just being there to support an old friend and stomped off.

Maybe if they had a piano he could have claimed he could have channelled another nose-puller and claimed he was just there to play that. 

Anyway…

The release – available at the Connies’ Facebook space – proclaims:

Bonavista South MHA Roger Fitzgerald, the only other MHA in the
federal riding in which Hynes is running, is obliged to remain neutral
due to his role as Speaker of the House of Assembly.

Pointing that out so conspicuously is a bit conspicuous, isn’t it?

After all, no one familiar with Fitzgerald’s abysmal performance in the House would believe for a second he has neutral and unbiased in his job ever.

And anyone who turned up the first weekend of April at Premier Kathy Dunderdale’s coronation of April as leader of the provincial Conservatives would believe it either.

There was Fitzgerald, large as life, hob-nobbing with his fellow provincial Conservatives in an entirely partisan setting, celebrating his new boss’ new job.

Roger Fitzgerald neutral and unbiased?

Pull the other one.

It’s got bells on it.

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One big happy Conservative family… maybe #elxn41

Apparently there’s just one big happy Conservative family in central Newfoundland.

The federal Conservatives issued a news release on Wednesday to counteract any story, no matter how well founded,  that there are gigantic problems in Kathy Dunderdale’s campaign to elect more federal Conservatives in Newfoundland and Labrador.

They apparently wanted to answer your humble e-scribbler’s question about Kevin “Fairity” O’Brien, well-know Dan-Club member and – from local scuttlebutt – noticeably absent from the doorsteps of his provincial district of Gander this election.

Even Kathy was sounding like she was abandoning her effort to be the anti-Danny of this federal election.  You will recall Dunderdale’s predecessor vowed to make sure there were no Conservatives elected in 2008.  He delivered by suppressing his own crowd enough to turn over the three Avalon seats to the Liberals and the New Democrats.  Time will tell if Dunderdale’s plan will work but let’s just say for now that things aren’t looking so smurfy for her.

Scotia Capital: definitely read the fine print

Anyone who reads Scotia Capital’s summary on the recent Newfoundland and Labrador budget would be well advised to read the disclaimer on the bottom of the first page:

While the information is from sources believed reliable, neither the information nor the forecast shall be taken as a representation for which The Bank of Nova Scotia or Scotia Capital Inc. or any of their employees incur any responsibility.

So there you have it.  We are giving you this information but we don’t stand behind it, verify it or anything else it other than copy it onto a page.

Big Red Flag Number One should come when you see a chart that shows the provincial net debt at little more than $4.0 billion.  Note the asterisk indicating that this chart – prepared by the bank people – excludes unfunded pension and similar liabilities.

This chart enables the bank to make this forecast right up at the top of page one in a lovely box to get your attention:

With its sharply reduced debt burden, including its unfunded pension liabilities, its infrastructure replenishment and its tax relief, the Province is now better positioned to undertake the first stage of the major Lower Churchill hydro-electricity project.

Massive problem:  the net debt is not a shade above $4.0 billion with great revenue streams as mapped out in the rest of this document.

It is, in fact, that $4.0 billion ish number with another $5.2 billion.  The official government documents contain the accurate information. If you look at the total gross debt, it’s somewhere above $10 billion.

Not surprising that the bank will put a disclaimer in there:  when you present misleading information on page one and bury the information on page three, it’s a good idea to disown it somewhere.

What’s worse, the bank also buries another hint of other problems related to the Lower Churchill on page three of its budget summary:

…following less-than-expected cash outlays by the Province for capital assets in FY11 (sic) …

That would be a well established pattern of booking capital projects and then having problems getting them done without massive delays and gigantic cost over-runs.

Then there’s this little gem:  forecast deficits of almost $800 million dollars each over two years are not the result of overspending or any other sort of fiscal imprudence.

Nope.

The bank states that the cause of these chunky deficits “is a forecast net revenue decline of almost 6% in FY13, primarily reflecting the loss of the Atlantic Accord 1985 payments after the $536 million transfer in FY12.”

A provincial government that is bringing in oil revenues that would stagger a team of Alberta-sized oxen can’t balance its books because a limited set of federal hand-outs that were known to be limited have finally run out.

In other words, the provincial government plans to spend almost a billion more than it knows it will bring it but that is not their fault or any sign of dubious financial management.

You have got to be frickin’ kidding, Bank of Nova Scotia economist types.

They aren’t done yet, those bank analysts. 

Apparently, Muskrat Falls will be

a major source of new export revenues and a key factor facilitating Labrador’s development, but the undertaking is still ambitious, placing a high premium on the Province’s fiscal flexibility.

This sort of comment is nothing beyond government-sourced spin and sheer crap. The project cannot be a source of new export revenues given that the Premier has already publicly acknowledged the government intends to sell any export power it does manage to flog at a price below production costs.

And it’s not like any of this information is not already in the public domain, but obviously when anyone reads a Scotiabank economic assessment of anything, they might want to check for disclaimers and pay close attention to them.  If the Newfoundland and Labrador budget analysis commentary is anything to judge by, these guys have no idea what is going on beyond what they read in a government news release.

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Kathy’s Keystone Kops Konfused on Konservative Kampaign #elxn41

Even Kathy Dunderdale isn’t backing Kathy Dunderdale on support for the federal Conservatives.

The Premier is apparently no longer quite as cozy with Stephen Harper’s party as she was a few weeks ago.  Not surprising is that, given that evidence is mounting that both members of her caucus and rank and file Tories in the province are jumping from Dunderdale’s bandwagon.

In the House of Assembly today, Dunderdale told opposition leader Yvonne Jones:

Mr. Harper is in Newfoundland today, I suggest you go and have a chat with him and find out what his commitment is and what he has to say, because nobody over here has to answer for Mr. Harper. We answer for the Progressive Conservative Party of Newfoundland and Labrador and the Progressive Conservative Government of Newfoundland and Labrador, and we welcome every opportunity to talk about the great things we are doing for this Province.

Nobody on the Conservative benches are answering for Harper’s party.

Bit of a problem.

Dunderdale said that right after  - mere seconds after, in fact - the Pavement Putin of the Permafrost, none other than Labrador affairs minister John Hickey stood on his haunches and proudly spoke for the federal Conservatives:

The federal government placed $40 million in a new airstrip, the longest airstrip up on 5 Wing Goose Bay. They also invested in a new air terminal building. They promised 650 troops that we did not see, but we did not see them anywhere across the country. Let me say to the hon. Member: While your government was there what did you do? What did your Premier today do when he went to Germany and did not even as much as go to see the German parliament that thanked him for the low level flying that was happening in Happy Valley-Goose Bay at 5 Wing Goose Bay?

Seems there are some serious divisions within the provincial Conservative cabinet.  Either that or Kathy changed her mind based on the most recent polls and news reports.

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Buckingham not only local Tory to buck Dunderdale line on Harper #elxn41

St. John’s East member of the House of Assembly Ed Buckingham is known to be thoughtful and frank in his views.

No surprise therefore that Buckingham told the Canadian Parliamentary Affairs Channel (CPAC) that he is sitting on the sidelines in the current federal election campaign.  As CBC quotes him from the CPAC interview:

"I'm not aligning myself with anyone, I'm just going to sit on the sidelines and let events unfold as they will," ….

Buckingham isn’t alone.

Other provincial Conservatives aren’t banging doors to get their federal cousins elected even though in pretty well all cases, the federal candidate is a former provincial Conservative caucus member.

Your humble e-scribbler’s had a few e-mails and tweets about local Tories who are changing the air in their tires or sorting their DVD collection rather than work for a Muskrat Falls loan guarantee via Stephen Harper’s pledges.

Anyone seen Fairity O’Brien out in Gander trying to unseat Scott Simms?

In the CBC story, at least one of the Tories who is playing along certainly doesn’t look very enthusiastic.  Tom Osborne, of the local Conservative powerhouse family, only says that he’s “lent a hand” and done “a little bit “ of campaigning with St. John’s South-Mount Pearl Conservative candidate Loyola Sullivan.  Now that’s not very much energy for a guy who reportedly thought about running for Harper’s gang at one point.

The real story here, though, is not about the number of elected provincial Conservatives who are not following Kathy Dunderdale’s lead and latched their lips to the federal Conservative leader’s hindmost regions.

Nope.

The real story here is that, according to the only poll released thus far, rank and file provincial Conservatives are likewise not supporting Kathy Dunderdale’s direction. If they were, Sullivan, Jerry Byrne and Fabian Manning would be leading in their respective seats.  They aren’t. 

Sullivan isn’t doing well at all.  That’s nasty considering that two of the provincial seats in his riding are held by members of the Osborne-Ridgley machine and every seat on the northeast Avalon is currently held by a provincial Tory.  If they really could deliver the vote – or wanted to - surely they would.

Given the way Kathy tied the federal election and her Muskrat Falls obsession together, it’s going to be hard to avoid connecting the dots should the federal Conservatives fail in their efforts to gain a seat in the province.  And if they win only one seat by a slim margin, Kathy Dunderdale cannot claim to hold a marker for some future favour.

Odd as it may seem the real political story of the federal election in this province might wind up being the implications it holds for provincial politics.

BTW, have they had the nomination for Buckingham’s district yet?  Just curious.

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NTV/Telelink poll: close, closer, no cigar and a referendum on Dunderdale #elxn41

NTV/Telelink released results Wednesday of a poll they conducted last in the three seats on the province’s Avalon peninsula.

Results:

Margin of Error = +/- 4.8%, 19 times out of 20.

A.    St. John’s East

Incumbent Jack Harris (NDP) leads with 44.9% compared to 16.6% for Conservative Jerry Byrne and 2.9% for Liberal John Allan.  Undecided was 27.8%.  The remainder were Green or wouldn’t give a choice.

B.  St. John’s South-Mount Pearl

Incumbent Liberal Siobhan Coady (26.3%) leads New Democrat Ryan Cleary (23.8%) and Conservative Loyola Sullivan (17.5%).  Undecided was 28.7%.

C.  Avalon

Incumbent Liberal Scott Andrews is at 30.4% with the guy he beat last time – form MP Fabian Manning of the Conservatives at 27.8%.  UND was 32.4%.

Commentary:

No one should be really surprised by any of these results. 

Harris has always been the clear favourite in St. John’s East.  Around these parts, your humble e-scribbler gave Byrne more credit for peeling away some of the old blue voters who went to Harris in 2008 but there should never have been any doubt Harris would win in the end.  These results confirm he should win handily.

That result also likely goes a long way to explaining why Byrne distanced himself from his own leader at a rally today in St. John’s.  Byrne unveiled his own personal platform and made it clear that a vote for him was not a vote for Stephen Harper. That’s an odd thing to do right before your leader comes roaring back into town for a second spin through the province.

In St. John’s South-Mount Pearl,  both your humble e-scribbler and some national projections  - like threehundredeight.blogspot.com – had the race much closer with the Tories closer to the other two than they are in this poll result.  In the seat projection linked at threehundredeight from Wednesday night, the SJSMP result has the NDP at 28%, the Tories at 30-ish and the Liberals at 40%.  That’s based on an amalgam of national polls so you can see how far they can vary from a specific poll done locally.

Coady’s got a highly organised and aggressive campaign.  She’s be calling regularly.  Ditto Sullivan but while Cleary’s team are fired up and seem to doing well, there is little sign of them on the phones and anywhere other than in signs in the district.

Meanwhile, in Avalon, the blood feud is clearly on.  Manning is fighting hard to win back the seat he lost and the closer poll result shows this is a seat to keep an eye on.

But here’s a little thing to pay attention to:  NTV/Telelink asked voters to indicate how satisfied they were with the incumbent.  In all three ridings, the incumbent scored very high satisfaction ratings with Harris’ number being stratospheric.  Coady was in the low 70s and Andrews was in the high 60s.

Now the pollsters apparently didn’t cross-tabulate that with vote intention in their report. Here’s a big hint for news director Fred Hutton or political reporter Michael Connors:  you’ve got some nifty questions there.  It would be very interesting to use the data to its full potential so that viewers can get something a bit more substantial than the mere horse-race results.

Another thing:  the margin of error is big so it is theoretically possible SJSMP is tighter for all three than it seems. As it is, Avalon and SJSMP are close, closer and SJE is simply no cigar.  Harris can head to Florida if he wants and pull a Colbert.

And as a last point, consider the implications of these results for provincial Conservatives and Kathy Dunderdale.  With her endorsement of Stephen Harper at the start, Kathy made this federal election a referendum on her leadership and on the Muskrat Falls project.

There’s no sign that provincial Conservatives are following her lead. 

Period. 

Full stop. 

End of story.

Dunderdale and her crew decided very openly and obviously to take a completely opposite approach this time to the one they followed in 2008 with Danny Williams at the helm.  Williams was good at his word and at the very least made sure that the provincial Conservatives stayed away from their federal cousins.  The result was devastating for the Conservatives and earned Williams a reputation far beyond what he actually did.

But at least he delivered.

The scale of Kathy Dunderdale’s personal defeat on May 2 will be defined by how many seats the federal Tories don’t win.  As it looks right now, the only hope they have appears to be in Avalon.  Dunderdale’s candidates are losing everywhere else and in two of the ridings on the Avalon peninsula, her candidates are well back in the pack. 

It’s not like the federal Conservatives aren’t playing up Muskrat for her.  It isn’t like her own crew aren’t campaigning.  Steve Kent may have looked pretty grim at Byrne’s rally on Wednesday but he was there for the cameras.  Other provincial Tories may not be turning out as Dunderdale might wish and that’s a further sign of difficulties within the Tory camp provincially and federally.

Stay tuned to the vote on May 2.  More might be at stake than just the federal election in Newfoundland and Labrador.

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Recycling a tire recycling story

Environment minister Ross Wiseman announced on Wednesday that his department found a couple of cement plants in Quebec to take a bunch of old tires off his hands.

The crowd in Quebec will burn the tires to replace coal in their heating system or some such.

The provincial government will issue a tender call to ship the tires to Quebec.  Presumably the provincial government will be footing the bill.

Scroll down through the news release and you’ll see mention of another plan to ship tires to Quebec for burning.

It’s from 2010.

And guess what?

The provincial government is paying to ship those tires to Quebec as well.

Still, aside from the whole trading with the enemy vibe this gives off, is there anything in this latest announcement that counts as new?

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The unsustainable lightness of Tom Marshall

Tom Marshall keeps a tight grip on the provincial government’s purse strings.

He has to do that.

The damn things won’t stay that wide open on their own.

In presenting the provincial government’s budget to the House of Assembly on Tuesday, Marshall announced that the Conservative administration of Kathy Dunderdale would continue the practice of unsustainable public spending set under Dunderdale’s predecessor, Danny Williams.

Overall government spending will grow by 4.9%;  that’s about twice the rate of inflation. 

A windfall in oil prices directly attributable to turmoil in the Middle East helped to erase a forecast cash deficit of $959 million and turn it into a modest cash surplus of $133 million. (Estimates 2011 p. iv)

For the past two years, Marshall claimed the government’s profligate spending came from the need to spend cash to fuel an economic recovery. 

Now he’s got a different excuse:  we can afford it.  Marshall told reporters that the provincial economy was “sizzling”. That’s nonsense, of course.  The economy is actually becoming increasingly fragile and public spending is sustained by cash coming from a volatile source, namely oil. Marshall seems to know that just like he knows the public debt is something he should be reducing.

Oddly, Marshall never seems to do anything about it. 

Marshall forecast that the province’s net debt will increase in 2011, largely the result of continued growth in unfunded pension and benefits liabilities in the public service.

And that’s despite repeated warnings from the province’s auditor general among others.  In 2009 a provincial cabinet minister resigned unexpectedly citing concerns about unsustainable public spending.  Earlier this year, Auditor General John Noseworthy repeated the same concerns;  interestingly enough he did it in a report on Fiscal Year 2009, the same year Paul Oram left cabinet.

Two years later, the provincial government is still on the same path.

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Related:

• Fragile Economy:  Staying the course
• Fragile Economy:  reductio ad argentum
• Fragile Economy:  …and two steps back
• Fragile Economy:  now three steps back and loving it
• Fragile Economy:  hard numbers
• Fragile Economy: The Public Sector

On minority governments…

Before everybody’s head explodes, just think about this for a second.

If Canadians are still not sure about giving Harper and the Conservatives a majority, Liberal leader Michael Ignatieff is actually playing an interesting strategic card in his comments to CBC’s Peter Mansbridge about the prospect that the Liberals could form a government without going back to the polls right away.

There might be one small flaw in the logic of it though, and that remains the problem with all of these discussions about minorities dating back to about 2004.

Much of the outcome depends on what the prime minister at the moment advises the Governor General.

If Harper goes back in a dead-on tie with the Liberals, he gets to try and form a government first.  If the Conservatives fail to get the confidence of a majority in the House, he is obliged to head over to Rideau Hall.  If the prime minister advises the GG to invite Ignatieff to give it a go, then that’s pretty easy.

But what if he doesn’t?

Paul Martin had that option once and went for the writ.

What might have happened if the Governor General refused to take his advice and instead tried the course of inviting either Jack Layton or Harper to have a go?

The same thing  - GG refusing to take advice - could well happen again in the scenario Mansbridge and Ignatieff discussed.

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Risky Business

Natural resources minister Shawn Skinner has a letter to the editor  in the Telegram criticising former Newfoundland and Labrador Hydro director Ed Hearn.

Hearn, you may recall, suggested in a letter to the editor of his own that the provincial government should be looking at all its options before embarking on the very risky Muskrat Falls venture.

Hearn wrote, in part that:

Section 92A [of the Constitution Act, 1867] provides authority to tax, set export quotas and prices with respect to electrical energy produced in the province. Properly drafted legislation could allow the province to recall energy from the Upper Churchill at a cost of two mils (one-fifth of a cent) per kilowatt hour for domestic needs. Similarly, properly drafted provincial legislation would prevent the renewal of the Upper Churchill contract in 2016 unless there were proper price adjustments and energy reserved for provincial needs.

Skinner  - or more accurately his letter-writing aide - summarises it this way:

Section 92A resolved these issues by confirming and expanding provincial power to include the authority to legislate in respect of the export of natural resources and electricity.
This theoretically includes the power to impose restrictions upon the export of electricity from a province, or to require electricity destined for export to be diverted to the provincial grid.
Mr. Hearn uses the common term for such legislated action: to “recall” power.

Too risky, says Skinner, to go after something which he dismisses as theoretical.

Instead, the government will force local taxpayers to foot the bill for a very costly venture called Muskrat Falls that makes financial sense only if you accept highly speculative – and hence risky – oil price forecasts, highly dubious  - and hence risky – forecasts of domestic electricity demand, and accept the gigantic risk of imposing on the most benighted taxpayers in the province the single largest increase in public indebtedness in the province’s long, sorry financial history.

Thank merciful heavens Shawn Skinner is scared of a financial danger.

Praise be to the Almighty that Shawn and his cabinet mates are the very souls of fiscal prudence and responsibility.

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Seen on the #elxn41 campaign trail…

New Democrats Jack Harris and Ryan Cleary double-teaming the Health Science Complex cafeteria pressing the flesh, smiling and generally mixing and mingling with voters trying to grab a bite to eat.

The pair left tent cards on the tables that said something about joining Ryan or Jack’s team.

Wonderful stuff.

And right behind them,  a woman bussing tables right behind the pair who dutifully took the tent cards and chucked them into the trash next to the fries, dressing and gravy leavings.

One could almost imagine the grizzled veteran campaigner Harris whispering to his relatively younger protégé:  Now then,  young Cleary, mark her down as doubtful.

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The view from Flower Hill #elxn41

With New Democrat Jack Layton’s pronouncement in St. John’s over the weekend, all three major federal party leaders have pledged federal financial support for a plan to export cheap hydro power from Labrador into Nova Scotia while having the people of Newfoundland and Labrador pay for it through greatly increased electricity rates.

Layton actually went a bit farther than the others.  If New Democrats form the next federal government, he’ll also drop $375 million into building the link to Nova Scotia so the link that let’s them get their free power will be even cheaper for Nova Scotians.

Now if you look at the actual words of what they said, they never talk about Muskrat Falls, specifically.

They talk about the Lower Churchill, generally and what Jack, Stephen and Michael endorsed now is really nothing more than their predecessors did at any point over the past 40 years.

Well, with one crucial difference.

For the current Conservative administration in this province, there is no longer a Lower Churchill project that sold most of its power outside the province and made money doing so. 

There is now only a plan to build a small dam on the bottom end of the river and build expensive transmission lines to run the juice along to people in St. John’s and another bunch in Nova Scotia. 

Only the people in Newfoundland and Labrador will pay for the power, as Premier Kathy Dunderdale told the provincial legislature during the current sitting.  The others need only pay whatever their markets will allow. 

And that, as Premier Dunderdale well knows, is far below the price she plans to put to Nan and Pop on Flower Hill in the heart of the working class districts of St. John’s. 

The numbers for that don’t work – Michael Ignatieff’s remarks notwithstanding – unless one is quite happy to saddle the growing number of retired people in Newfoundland and Labrador with the burden of a Labrador hydroelectric nightmare…again.

Newfoundland and Labrador’s demographics are such that by the time Muskrat Falls comes on stream in the latter part of this decade, pretty close to a majority of the adults in this province will be either retired already or on their way to retirement in short order. 

Regardless of what happens to the price of oil, the provincial government wants to double their electricity costs.  Fixed income and low income Newfoundlanders and Labradorians will definitely pay more for electricity if Kathy Dunderdale gets her wish.  Now she and her colleagues have all sorts of rationalisations to explain away objections to their scheme.  Undoubtedly, those rationalisations let them sleep soundly at night even if, in the funnier versions, they sound like Pakleds from the latest episode of PC: TNG. 

Those sorts of considerations don’t really matter for the federal party leaders.  Such details are really the whys and wherefores that would only come from silly parsing of the whole scheme, to borrow a phrase.   For the federal party leaders, their stump speeches in Newfoundland and Labrador are designed to do one thing:  win a couple of votes. 

There’s not much thought in it than that, nor is there a detailed analysis of anything,  Each party leader knows nothing more than that this Lower Churchill thing is supposedly very popular and saying nice things about it will win them votes.

Jack Layton has the most ambitious version.  That’s not just because he is way behind nationally and say riskier things. It’s also a function of the fact that he has to win seats in Nova Scotia and he and his local team in Newfoundland think they have a shot at a second seat in St. John’s South – Mount Pearl.  There is no better way than to stand firmly behind something that looks hot right at the moment.

But to be frank, if someone had wanted a loan guarantee for a new reality show called Dancing the Lancers with the Stars, the boys would be lined up four-square behind that as well. Jack would up the ante by offering to play accordion for his guest appearance on the show.

As for public interest in the Lower Churchill – the thing that drives the federal interest in winning votes - let’s just you shouldn’t be surprised if someone told you that the most recent public opinion poll showed that far less than 10 percent of Newfoundlanders and Labradorians identified the Lower Churchill as the most important issue facing the province today.

We are talking single digits here.

But the whys and wherefores of it all don’t matter…

Unless you happen to live on Flower Hill.

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Libs, Cons and Dips put faith in preposterous financial claims #exln41

The people who push specific megaprojects usually over-estimate the benefits and under-estimate the costs.

That’s the result of a Scandinavian study of these sorts of things. The title is Megaprojects and risk.  They used examples taken from around the world:

Cost overruns and lower-than-predicted revenues frequently place project viability at risk and redefine projects that were initially promoted as effective vehicles to economic growth as possible obstacles to such growth. The Channel tunnel, opened in 1994 at a construction cost of £ 4.7 billion, is a case in point with several near-bankruptcies caused by construction cost overruns of 80 percent, financing costs that are 140 percent higher than those forecast and revenues less than half of those projected (see chapters 2-4). The cost overrun for Denver’s US$5 billion new international airport, opened in 1995, was close to 200 percent and passenger traffic in the opening year was only half of that projected. Operating problems with Hong Kong’s new US$20 billion Chek Lap Kok airport, which opened in 1998, initially caused havoc not only to costs and revenues at the airport; the problems spread to the Hong Kong economy as such with negative effects on growth in gross domestic product. After nine months of operations, The Economist dubbed the airport a “fiasco”, said to have cost the Hong Kong economy US$600 million. The fiasco may have been only a start-up problem, albeit an expensive one, but it is the type of expense that is rarely taken into account when planning megaprojects.

With that as background, consider that all three federal political parties are backing a megaproject in Labrador where the numbers just don’t add up.

labradore does a fine job of exposing the problem using comments from the provincial legislature last week.

Opposition leader Yvonne Jones asked Premier Kathy Dunderdale about current costs estimates for things like a transmission line from Labrador to St. John’s.  The current forecast price is the same as the price in 1998 despite the fact that  - for example – steel prices have climbed 200% in the years since.

Dunderdale’s response is really interesting.  She doesn’t explain anything but basically stands behind the contention that she and her geniuses have somehow magically eliminated the impact of inflation on this project.

Minor problem, notes labradore.

Nalcor’s geniuses told the environmental assessment panel reviewing the project that inflation still works, but only for things they have no interest in doing.  Like say a power line to the small communities in Labrador who will will only get to watch the power lines run by their communities on the way to the island and Nova Scotia:

In fact, in 2001 the Province estimated that the cost of constructing transmission lines to these communities would be in the range of $300 million. With inflation and increased costs for materials and labour, that number would be even higher today.

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End of an election sign era #elxn41

People have hung election signs on it for as long as the Waterford Hospital has had it there at the edge of its property at the intersection of Cowan Avenue and Waterford Bridge Road.

Those signs are gone now, apparently at the request of the regional health agency.

The hospital used to be well out in the countryside but as the city grew around it, the fence became a highly visible feature on one side of a busy intersection.

The federal riding used to be St. John’s West.  These days it’s called St. John’s South - Mount Pearl.  Some people think it is too close to call at the moment. Your humble e-scribbler agrees and as the election wears on, the actual battle seems to be going on between the New Democrats and the Conservatives for the provincial Conservative vote.

Now some of you are thinking that doesn’t make any sense. Just remember though, that voting in St. John’s is not along some left/right ideological axis. Something else drives it.

The New Democrats are fired up though.  Some of them have a personal hate on for Liberal incumbent Siobhan Coady. It turns up in all sorts of ways, not the least of which is one  twitter idiot who tries spam-bombs Coady’s twitter feed.  All he does is show just exactly how much an an amateur pol he is. Hint: spamming only shows you are a professional horse’s arse.

But anyway…

Before the signs disappeared, the corner of Cowan and Waterford Bridge Road was a good spot to see local political signage.  The centrepiece of the affair was a big four by eight Coady affair that went up before the ink was dry on the writ.  The Grits have been aggressive, if nothing else. 

The Dippers countered with a batch of four by fours with the name “Jack Layton”, the candidate in some Toronto riding.  The local guy – Ryan Cleary – got a bunch of two by twos of the kind usually mounted on lawns.  You can see the spread in the picture.

Now from a design standpoint, there are two things to notice here.

First, look at the good sign design ideas. Coady’s big sign makes her name the largest thing.  it’s visible from quote a distance.  Her web address is there as well. The picture’s a throw-away but overall this is a well designed sign.

The Layton signs are the current NDP design and they are good.  The last name of the candidate is prominent and can be seen easily seen at a distance.  They don’t show as well at night as they should but that’s a separate issue. 

Problem – and here’s the second thing – this layout wasn’t a good thing for Cleary.  His two bys are the older type he used the first time he ran. There’s so much other info on the sign, they made his name too small to be seen at any serious distance.

The fact that Jack’s signage overwhelmed Cleary only compounds the problem and just doesn’t make any sense.  Jack isn’t a vote draw.  The fact they plastered the space like wings on Coady’s big sign only made hers stand out even more.  That just compounded the basic problems with their signage.

Cleary’s new signs are better:  they profited by following the template national design but their night-time visibility is still worse than the other parties’ signs.

When the Connies showed up, their small verticals were too small to show the candidate’s name – Loyola Sullivan – in a way anyone could read. They fixed that problem with the four bys that went up later.  The Dippers responded by a volume attack, again, that really didn’t do anything to give them greater prominence, visibility or anything else.

Just to finish it off, a local lawn care guy got into the act.  Maybe Mr. Mulch is running for the Greens.

Don’t laugh too soon, though.  You can use his signs to show just how much experienced political types have developed signs that use experience to deliver effective signs.  Mulch, by contrast is burdened with all sorts of detail.  The result is a sign you cannot read unless you right on top of it.  Given that people read most of these signs in their cars, they’ll see Mulch as they speed by and certainly without having the time to get the telephone number to call or his website.

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The Weekly Traffic

No one will miss the very fitting result of this week’s edition of your weekly traffic survey.

Frankly your humble e-scribbler was a wee bit surprised that an old post about measuring the effectiveness of your public relations program could garner so much attention.

But there it is.

Take note that two of the big stories this week discuss cheaper alternatives to the Muskrat Falls proposal and another one discusses the government’s overall plan to pay for Muskrat falls by boosting electricity rates in the province.

Maybe people are starting to catch on that this Muskrat Falls project is a money loser for the people of the province.

One other little tidbit to draw to your attention:  Friday’s post on Kathy Dunderdale possibly knowing about the JSS contract in advance (but staying silent) went up on Friday and got to Number Four for the week.

That tells you one thing and that isn;t good news for the Premier.  Friday’s usually a pretty dead day. If a Friday post goes into the Top 10, you know you have something people are very interested in reading.  That story might well carry over into next week.  Evidently this is a story that is too important to disappear in a cloud of foolishness about sexist attacks.

As for the traffic volume here at Bond Papers, it’s up again this week.

Take that for what it’s worth.

1. Mine is bigger than yours:  measuring the impact of public relations
2. Kremlinology 35:  Premier shows strain
3. Former hydro director points to another alternative to costly Muskrat Falls scheme
4. Did Kathy know about the JSS withdrawal in advance?
5. Invented story:  political appointee attacks government’s political opponent
6. Province settles expropriation with Enel, Sun Life and others
7. Making the people pay more for electricity
8. Fukushima kinda meltdown:  Collins cancer contract contradictions crumble credibility
9. Another cheaper, greener alternative to Muskrat Falls
10. Missouri lawyer adds to Collins cancer contract contradictions

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NDP: On the one hand… #elxn41

On the one hand the New Democrats want to remove HST from home heating fuel, including electricity.

But on the other hand they want to see Muskrat Falls go ahead.  That project would hammer people on fixed and low incomes in Newfoundland and Labrador by doubling their electricity prices.

At the same time, the federal New Democrats want to help Nova Scotia build a line to Newfoundland so they can import power from Muskrat Falls pretty much for free.

Of course, the NDP aren’t alone.  The federal Liberals and Conservatives also want to double electricity prices in Newfoundland and Labrador by supporting the Muskrat Falls megaproject scheme.

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Nalcor issues deceptive release linked to Muskrat Falls megaproject

The province’s energy company issued a deceptive news release on Thursday, apparently as part of its campaign to drive up electricity prices in advance of the Muskrat Falls megaproject.

The headline on the release states that:

Rising oil prices cause increase in Rate Stabilization Plan Adjustment for electricity consumers

The Telegram picked up the false headline and ran with it, even though, the first line of the release states that the company has merely filed an application for a rate increase.

So rising prices haven’t caused anything yet and they may not cause it at all.  The public utilities board must review the application and receive public comment before making a decision.  Many things could affect the application, including Nalcor’s has $10 million windfall from the Enel expropriation that they could apply before forcing customers to pay more for electricity.

That’s not the only misleading statement in the release, but it sure doesn’t look good when the headline is completely and utterly false to begin with.

The company also claims that “If we maintain the status quo of electricity generated through Bunker C oil at Holyrood,rates will continue to rise into the foreseeable future.”  That’s true but only if Nalcor neglects it responsibilities.  If the company promoted conservation, used its existing renewable resources to greater advantage and brought wind and new small hydro on stream, the price of electricity wouldn’t inevitably rise.

Nor will the cost rise if the price of oil drops.

Both of those things don’t draw the sort of connection implicit in the release between inevitable price increases and the idea that Muskrat Falls is a solution to the problem.

When a company has to rely on such deceptive claims, you can be sure it has no substantial arguments in favour of its proposal.

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Did Kathy know about JSS withdrawal in advance?

Premier Kathy Dunderdale sent the latest round of begging letters off to the federal party leaders on April 7, but one thing was curious by its absence. She tabled them in the House of Assembly but they aren’t online yet.

Sure there was the usual worn-out stuff stuff about federal presence, fisheries, the Hibernia shares and all Danny Williams-era list of grievances.  There’s a poke for yet more cash for Internet broadband and even a request for cash for childcare spaces.

The provincial government that spends more per person than any other one in Canada outside Alberta is looking for Ottawa to pay for stuff that is an exclusive provincial jurisdiction.

But missing from the letter sent on April 7 is any reference at all to the $35 billion naval shipbuilding contract.

Not a peep.

In a list of 14 or so specific topics.

Danny included the contract in his 2008 letter.

But Kathy Dunderdale did not even make a veiled reference to a contract that held phenomenal potential to keep Marystown working ships for years and years out beyond anything they have got currently in the pipeline.

That is really odd.

After all, Kathy Dunderdale took gigantic offense on Wednesday in the House of Assembly at any suggestion she did not understand the magnitude of the issue:

I take no lessons from you in terms of the Burin Peninsula about its communities, about its people, about its history, about its struggle, because I have been part of it all, I say to you.

That came after Kiewit Offshore shocked most of the people in the province when the story leaked out this week that the company didn’t want to pursue the $35 billion naval construction contract that the federal government is still trying to sort out. 

Shortlisted as one of five companies contending for the work, and yet the company brass said they just couldn’t come up with the professional help to put the bid together.  Didn’t feel they could pursue decades of steady work for their yard at Marystown on the Burin peninsula.  As CBC quoted a company spokesperson:

"The core Kiewit management and engineering folks that we would need for that proposal development just weren't plentiful enough to carry us through the process," said company spokesman Kent Grisham.

Big surprise to pretty well everyone earlier this week.

Fisheries minister Clyde Jackman, whose district the yard is in, told VOCM that he was a shock to him.  Here’s their short account in the event it gets disappeared from the Internet:

Fisheries Minister and the MHA for the district of Burin-Placentia West Clyde Jackman says this week's announcement by Kiewit Offshore Services to cancel its bid in Marystown for up to $35-billion worth of federal shipbuilding work came as a shock to him. He says he's as surprised by it as others, especially since the government has been working with Kiewit for the past number of years to obtain some of this work.

This is not a new project.  In fact, the whole thing is featured specifically in the provincial Conservatives’ 2007 election platform.  You can find it on the website now labelled dunderdale2011.ca:

• continue to work cooperatively with the Canadian North Atlantic Marine Partnership (CANMAP) bidding team, which includes Marystown’s Peter Kiewit and Sons, in a concerted effort to win the federal Joint Support Ship (JSS) contract for the Burin Peninsula.

This is a big project.

And, if Kathy Dunderdale’s reaction is any sign, this is a sensitive subject.

In the House of Assembly, she even tried the rather lame spin that it was wonderful the company was so flush with work that they could turn away $35 billion in long-term ship building.

But in a letter sent on April 7, Dunderdale did not mention it at all.

It sure looks like Kathy Dunderdale knew long before the rest of us that the company was bailing on the whole thing.

After all, why else would such an important project be missing from his stock letter looking for federal handouts during an election?

Knowing in advance would also explain why she has been trying on the histrionics about personal attacks rather than just answer the questions.

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Missouri lawyer adds to Collins’ cancer contract contradictions

While a lawyer working for the provincial government never met Danny Williams, that doesn’t solve the basic problem with justice minister Felix Collin’s contradictory statements about who hired Danny Williams’ former law firm to work a potentially very lucrative lawsuit against Big Tobacco.

Kenn McClain of Humphrey, Farrington and McClain told CBC news that he hired Roebothan, McKay, Marshall as a local firm to work on the suit because of their experience and other factors.

However, a February justice department news release claimed that the provincial government retained the local firm. implicit in the date of the release is that the firm started work on the file after Danny Williams left office in December.

In the House of Assembly on Monday, Collins said much the same thing:

when the time came to expedite this process and to file the statement of claim, the American company still did not have the certificate to practice so we had to engage in the firm they had retained to file their statement of claim.

Collins added, apparently inadvertently, that RMM had been working on the suit for five or six years, not the few weeks implicit in Collin’s earlier statements and the February news release.

So which is it? 

Collins’ version and the Missouri lawyer’s account just don’t match up at all.

 

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Making the people pay more for electricity

Take a gander at Hansard for Wednesday and you’ll see an interesting series of questions put to Shawn Skinner about the settlement in the Star Lake expropriation.

You can see pretty easily that the expropriation back in 2008 had nothing to do with getting back timber and water from an evil foreign company.

Nope.

The real story was about something else.

Shawn told the House, in all earnestness, that as a result of the 2008 expropriation of the Star Lake hydro-electric facility, the people of the Happy Province could now benefit from having 18 megawatts of electricity to meet their needs.

From that, Mr. Speaker, that generating station will put electricity into the system that will benefit the people in Newfoundland and Labrador.

We now have an asset that is a fairly new asset, about ten or twelve years old. It is an asset that for decades to come will be able to provide clean, renewable power for this Province that we will benefit from.

Skinner makes it sound like Star Lake will do something now that it wasn’t doing before.

Fact is that Enel and Abitibi developed Star Lake in the 1990s in response to a request for proposals issued by Newfoundland and Labrador Hydro. The provincial government’s electricity producer wanted to add some new renewable energy to its island supply that would help reduce the need for thermal generated stuff at Holyrood.

And that’s what Star Lake did.  It wasn’t supplying power to the Abitibi mill at Grand Falls-Windsor, as Abitibi’s other hydro generators did. Star Lake made the light bulbs glow in homes on the island.

Now, NL Hydro bought the power from Star Lake and turned around and sold it to Newfoundland Power who in urn retailed it to consumers.  Skinner put the annual cost of the power from Star Lake at $10 or $11 million annually.

Nalcor tried to buy Star Lake – as it turned out – before the expropriation but Abitibi apparently rebuffed the offer.  They preferred to sell the whole affair to Enel, their partner at the time.

In the end, Nalcor got Star Lake.  The cost came in at around $73 million on a facility that cost about $50 million to build.  Skinner says it was $60 million.  Okay.  Tomato.  Tomato.

What’s interesting here is not that the lovely people of the island now have electricity, it is the financials of the whole thing.  Follow that link right there  - LINK – and you will see a couple of curious things.

In early 2009, Danny Williams pretty well blew away any idea that the island needed power from some expensive project in Labrador as a result of the Vale smelter in Long Harbour.  As the Telegram reported:

Williams explained that the province didn't need the power from the Exploits River in order to accommodate the Long Harbour plant. He said 70 megawatts were freed up when the Stephenville paper mill closed, and an additional 54 megawatts of wind power has also been added to the grid.

Williams also said that:

the most important fact is that the province, through Nalcor Energy, a Crown corporation, will take full control of the power at the end of March. [emphasis added]

Why is that important, you ask?

Well, it has to do with those power purchase arrangements.  you see, Skinner mentioned those on Wednesday as a way of saying that the $73 million for Star Lake meant the provincial energy company wouldn’t have to pay that money out any longer.

True enough.

But how, asked Yvonne Jones, would Nalcor recover the cost of the settlement?

Why silly thing, by selling power to the lovely ratepayers of the island, sez Shawn:

We are going to be selling electricity into the provincial grid. That was the point I was trying to make. I apologize if I did not make it clearly enough for the Opposition House Leader. We are selling electricity into the provincial grid. The Public Utilities Board sets a price and the people who receive the electricity pay the price, Mr. Speaker.

Hands up anyone who has seen Nalcor head to the public utilities board to lower electricity rates now that they won’t have to shell out that $10 million annually.  Of course they haven’t and one would be exceedingly naive to expect them to do it.

By having a near total monopoly on electricity production in the province, Nalcor can now pocket the $10 million annually it used to pass along to Enel along with whatever margin it took on top.  Nice windfall.

In fact, if the loan is the only thing they are directly liable for and it is for a 25 year term, the actual annual cost to Nalcor is a trifling sum.  They are basically pocketing a gigantic profit on every megawatt from Star Lake they have generated since December 2008.

Not bad, eh?

Nalcor’s bottom line is that much fatter courtesy of the good people of the Happy province. People are already used to paying the higher rates so Nalcor can just keep on making them pay rather than pass any savings that Skinner was talking about on to consumers.  he was crowing about bigger profits for Nalcor, not a brighter future for the ratepayers of the island.

And when Muskrat does come along in 2017, well the same ratepayers keep on footing the bills for the government monopoly:  Nalcor’s entire plan for Muskrat Falls is based on profitability from provincial ratepayers alone.

Just like at Star Lake.

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Kremlinology 35: Premier shows strain

Being the premier of any province is a tough job.

It’s hard to appreciate just how tough the job is unless you’ve been there or have been pretty close to the person who has the job.

You can see the effect of the pressure in how fast people tend to age in office. That’s the basic point of a post from last October titled “The weight of office.” Danny Williams didn’t look unhealthy when he left office last fall but he was nowhere near the youthful looking fifty-odd year old fellow who started in the job in 2003.

Sometimes the strain of the job shows in other ways.  Like say, the meltdown Kathy Dunderdale had at the last part of Question Period on Wednesday.  The written record doesn’t show it, but take a look at the video.

Around the 44 minute mark, NDP leader Lorraine Michael starts on a series of questions that have barbs in them. There’s nothing in any of the questions that is the least bit unusual for a politician and there is nothing at all sexist in it.

In fact, odds are that Kathy Dunderdale herself has said something far more loathsome than the question perhaps in the heat of the moment on another occasion.

On this occasion, though, Dunderdale’s reaction is over-the-top.  She gets red-faced and her voice cracks a lot. She brings up the rather obviously cheesy partisan attack Dunderdale’s political appointee made on opposition leader Yvonne Jones over a jab Jones made at Dunderdale.

Dunderdale looked flustered.

Something is bothering her but the one thing we can be sure of it:  it wasn’t Lorraine’s pair of questions.

Well, not that alone.

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