Inquiring Minds? You don’t want to know. #nlpoli

Denial and evasion, wrote Andrew Coyne last week, are only making worse three political scandals. He’s referring to Toronto Mayor Rob Ford and allegations of substance abuse, Prime Minister Stephen Harper and the Mike Duffy Affair, and former Ontario Premier Dalton McGuinty and a police investigation into McGuinty’ s staff, missing e-mails and a gas plant.

Coyne is his usual insightful self.

What’s more, added Telegram editor Peter Jackson, these three have made matters worse by making “false or misleading statements”. Not a good idea, sez Peter, since people “are naturally suspicious.”  You can’t have a good conspiracy because people will sniff out the foolishness.

And in some cases, people will even make stuff up. Peter points to the 9/11 Truthers and the Obama birthers as examples of people who will connect the unconnected.

In short, it’s bad enough when irresponsible rumour-mongers start the ball rolling. 

The last thing politicians should do is feed the flames with fibs and subterfuge.

Wonderful stuff, that, if only we could all safely rely on those inquiring minds to quickly ferret out the truth. 

Concerning Partisan Communications from Non-Partisan Government Officials #nlpoli

Keith Hutchings issued a news release on Tuesday to respond to”inaccuracies on CETA negotiations.” That’s what the headline on the release said it was about.

He did so in his capacity as a cabinet minister, a non-partisan provincial government official, not as a Conservative.  The media contact name listed is for the departmental communications director.  If this person didn’t write the release, then she approved it, as did the minister and at least one senior official in Cabinet Secretariat.

If you want to understand the communications problem facing the provincial government, then you have a tidy example in this release.

And then magic will happen: Kennedy #nlpoli

Corporate Research Associates obscures what little useful information there is in its quarterly polling by converting party choice numbers to a share of decideds instead of a share of all answers.

Nowhere has this been more obvious lately than in its second quarter polling in Newfoundland and Labrador.

Report the numbers as CRA released them and you get what CBC and the rest of the conventional media will tell you:  big Conservative drop; Liberals and the NDP in a tie, with the NDP down slightly, but within the margin of error for the poll. Liberals up a bunch

Yeah….well…no.

If at first you don’t succeed… #nlpoli

Shoot your self in the foot yet again.

The Conservative candidate in Cartwright – L’anse au Claire is committed to proving his party runs the government to suit its own partisan interests not what’s in the best interests of all the people of the province.

And this is not the first time Dennis Normore has told the people of the district that his party is deliberately punishing them for voting for someone other than the Conservative candidate.

Get worried-er #nlpoli

Here are a bunch of stories all of which would deserve a post of their own but that are presented here cut down to the barest of bare essentials.

King of the Keystone Kops Strikes Again:  Not content to demonstrate his incompetence with his earlier budget shag up, justice minister Darin King (Twitter:  @King_Darin) announced on Thursday that 25 fisheries officers his department had booted out the door in the 2013 budget cuts would be rehired to a man and/or woman in very short order.

What can King possibly do to top this besides light his own underwear on fire during a live television interview?

Hide the matches, Tory staffers.

The other king named Darin:  Darin Pike will head the new Anglo school board for the entire province come the fall, the head of the provincial selection committee announced on Wednesday.

Pike’s experience includes a stint running the Eastern School district, which was the bureaucratic trial project for the creation of a single board for all English-speaking students in Newfoundland and Labrador.  Pike’s appointment is the penultimate act in the bureaucratic plan to eliminate public oversight of public education and replace it entirely with a system run by education bureaucrats who answer to no one except a cabinet minister who has no meaningful authority within the department. 

The plan started in 2004 when education department bureaucrats pitched the idea to the noob provincial Conservatives as a way of saving money.  In the event, they didn’t save a penny, but that was never the real purpose of the scam, err scheme. 

The plan did successfully consolidate de facto power in the hands of the deputy education minister and his four key subordinates, the chief executives of the districts.  The four district boards created under the re-organization scheme were powerless to do anything except as they were told.  This was perhaps most evident in the Eastern District where, from the chair, down to the lowliest anonymous character the board was populated with faceless cowards intent primarily on avoiding any public accountability for decisions they rubber-stamped.

Pike’s experience in implementing the plan makes him the ideal candidate.  D‘uh.

Faithful readers will recognise the similarity between an unaccountable education bureaucracy and the unaccountable provincial energy corporation, Nalcor.

Parochial or what?:  Apparently IOC has laid off some people.  The company won’t say how many.  The CBC story only talks about events in this province. 

The Quebec weekly Le Nord-Cotier broke the story a couple of days ago.  SRBP linked to it a couple of days ago.  The Quebec paper mentioned all the towns and cities where people got the boot, including the ones not in Quebec.

The World Stops at Donovans:  In Nova Scotia, the province’s utilities regulatory board is up to its eyes in the Muskrat Falls controversy.  Search the Internet and you’ll find a raft of stories about the UARB hearings and on public debate about the project.  On this side of the Cabot Strait, you’d be hard pressed to know there is anyone living there. 

The only local mentions of the story have been questions posed to Nalcor boss Ed Martin, who was characteristically vague and uninformative. 

Nice to be wrong Update (7:50 AM):  Telegram.  Top of Page 4.  Canadian Press story on Nova Scotia Premier Darrell Dexter’s lack of concern about the Nova Scotia opposition to Muskrat Falls and the Maritime link.

The Norwegian Model:  Norwegian energy giant Statoil announced this week that was reconsidering a major offshore project in part because of changes to Norwegian tax rules. 

"In addition, the Norwegian government has recently proposed reduced uplift in the petroleum tax system, which reduces the attractiveness of future projects, particularly marginal fields and fields which require new infrastructure. This has made it necessary to review the Johan Castberg project," says Øystein Michelsen, Statoil's executive vice president for development and production in Norway.

The Norwegian government is a majority shareholder in Statoil.  Norway manages its state-owned companies like all others, though, subjecting them to the same laws as private sector corporations. 

The Nalcor Model:  On May 31, Nalcor cleared the final bureaucratic hurdle for the Labrador-Island transmission link for Muskrat Falls with news that the provincial environment department had accepted the company’s environmental impact submissions. It’s all in the minister’s hands now.  He must recommend to cabinet whether to approve the project or not.

What are the odds Tom Hedderson would suggest to cabinet  that Nalcor stop work?

More than Muskrat Update (7:50 PM):  On the top of page three of the Friday Telly, there’s a second story by Ashley Fitzpatrick about the Nalcor AGM.  The headline:  “More than Muskrat discussed at Nalcor AGM”. 

Sure there was.

According to the story, Nalcor senior management talked about how Nalcor spending (i.e. cost) is up across the board. 

The reason they didn’t want to discuss as such? 

Muskrat Falls: it’s been driving up everyone’s costs and that’s going to get worse before it gets better.  "It would be easy to blame Muskrat," according to Nalcor vice president Derrick Sturge.

Easy, yes.

Accurate?

Absolutely.

What else wasn’t Muskrat Falls? 

Energy marketing, which, of course, has nothing to do with Muskrat Falls except when the gang at the AGM talked about selling surplus power from Muskrat and all these other sales into markets that are not there.…
that’s right there in the story with the “Not Muskrat”  headline.

Big sales potential over the next three or four decades, according to Ed Martin. 

Really?

Interesting then that Nalcor hasn’t been able to nail down any long-term sales already (hence the reason to force taxpayers to buy 100% of Muskrat for only notionally using 40% of the power.

Sure.

They talked about a lot that wasn’t Muskrat Falls.

-srbp-

Get Worried #nlpoli

Not surprisingly,  a band of familiar faces turned up at Nalcor’s annual public meeting to put questions about Muskrat Falls to Ed Martin, the man more and more people are calling the de facto Premier of Newfoundland and Labrador.

And equally unsurprisingly, Ed Martin continued with the sort of uninformative or misleading comments of the sort he made most notoriously about water management and generating capacity in 2012.

The fact that Martin does not speak plainly and therefore honestly about anything Nalcor is doing should make people extremely nervous.

Rumpole and the Big Smoke #nlpoli

Here’s the official summary of a judge’s decision in a recent arson case:

Accused was charged with arson. The Crown failed to prove beyond a  reasonable doubt that the fire was deliberately set and, if it was, that it was the accused who did it. The accused was acquitted.

Failed to prove anyone deliberately set the fire in the first place, let alone that the accused did it.

That’s pretty much the definition of epic fail.

-srbp-

Fluidity #nlpoli

As a rule,  cabinet ministers should be able to tell you exactly what government policy is on any given subject.  They all sit at the same table and they each have an obligation to support the policy they collectively decide.

When two ministers say starkly different things, then, you can understand that people tend to notice the discrepancy.  The difference usually signals a major problem or controversy and that simply cannot stand.  The principle of cabinet solidarity means that in public they must all sing the same song..

It’s bad enough when two ministers disagree. But when the difference is between the Premier and a minister, the matter becomes very serious. If there is one person who must know what government is doing, that person would be the first minister.  If there is one person who gets to set government policy, it is the first minister. Everyone else just has an opinion.

IOCC cuts staff #nlpoli

The Iron Ore Company of Canada has made cuts to its offices in St.John’s, Montreal, Labrador City and Sept Iles, according to the weekly newspaper Le Nord-Cotier.

The company would not confirm how many positions were eliminated or how many people were affected.

IOC spokesperson Natalie Rouleau told the newspaper that the positions were redundancies and affected permanent staff, temporary employees and contract employees.

-srbp-

Off track betting #nlpoli

That big, ginormous phone-banging-up, trade dispute thingy with evil Ottawa?

So not happening any more.

"We seem to be back on track.  We have alignment," Premier Kathy Dunderdale told reporters on Tuesday at an event announcing fitness grants to community groups.

Familiar tunes amid the Shifting Balance of Power #nlpoli

All the talk the past week or so about negotiations between the crowd in Confederation Building and the crowd in Ottawa  brought out the conventional wisdom about premiers using fights with the feds for political purposes.

The coincidence of a talk on nationalism the week before linked the two ideas together neatly for some people. Kathy Dunderdale was having a row with Ottawa, possibly to boost her polling and maybe as a show of nationalist fervour that we all love.

Yeah, maybe that’s true.

And then again, maybe it just isn’t.

No Surplus to Supply #nlpoli

Critics of the Muskrat Falls development pointed out over 18 months ago that the project would have problems meeting its electricity commitments.

Nalcor disputed that.

But this weekend, CBC’s Paul Withers told On Point host David Cochrane that Nalcor has refused to commit in writing to supply Nova Scotia with electricity beyond the original block of free electricity Emera will get as part of the basic deal.

That’s interesting. 

Very interesting. 

The original term sheet and the final capacity agreement basically commit the parties to work it out in the future on two conditions.  First, Nova Scotia has to want the power for the long term.  Second, Nalcor has to agree to supply it.

In the future.

If Nalcor had electricity to sell and Nova Scotia wanted it, then Nalcor should be locking them down and taking their cash.  After all, a long-term power purchase agreement for an export customer is exactly what the Lower Churchill was supposed to be about.

Instead, Nalcor has decided to force local ratepayers in Newfoundland to cover the full cost, plus profit and ship electricity to Emera in Nova Scotia, effectively for nothing.

What’s more, if they sell any electricity from the project to industrial customers in Labrador, Nalcor will sell the power at a huge discount.  According to Nalcor’s plan, everyone will get the benefit of Muskrat Falls except the people who will pay for it.

-srbp-

If they do it, it is wrong #nlpoli

On Monday, Kathy Dunderdale said it was wrong for the federal government to try and jam her up by connecting the federal loan guarantee on Muskrat Falls to free trade talks, Kathy Dunderdale acknowledged on Friday that she has been connecting the free trade talks to search and rescue.

When someone else does it, that would be wrong.

But when Kathy does it, she thinks it is sheer genius.

-srbp-

The Divide Deepens. #nlpoli

David Cochrane called it right the other day in the scrum with Kathy Dunderdale.  He asked if she was laying the groundwork for a failure at the trade talks, a failure of her personal position.

Dunderdale denied it in the scrum, but her latest claim – full of the same vague and largely unsubstantiated claims as on Monday – sounds like someone who is trying to blame someone else before the talks finish and the end result doesn’t match what she’s been personally staking out as a position.

There’s something to be said for eloquence #nlpoli

Russell Wangersky is a fine writer with a keen and insightful mind.

He is also an editor at the province’s largest circulation daily.

That’s the same place where former fisheries minister Trevor Taylor has been scribbling a column every week.

Dunderdale and Dalley tell different trade talk stories #nlpoli

Premier Kathy Dunderdale (via NTV):

We’re looking for a ‘carve-out’ on the minimum processing regulations … so they’ll be exempted, and we want access to the European market on a number of our fish lines…

Carve out. 

Hideous jargon for “not going to trade away” minimum processing regulations.

Period.

Fisheries minister Derrick Dalley (via the Telegram):

Fisheries Minister Derrick Dalley was at a media event in St. John’s Tuesday, where he assured reporters that the provincial government is not going to give away minimum processing requirements unless it’s a good deal.

Not going to trade away minimum processing requirements.

Oh wait.

There’s more.

Kathy Dunderdale's Give-Aways #nlpoli

There is something about Kathy Dunderdale’s speech to the Board of Trade that leaves you decidedly uncomfortable.

Part of it is the mention of her grandson  - yet again - at the front end end of the speech.  Kathy told a story about the advice the little fellow gave her in case someone one should break into her house.  This was apparently back in the spring.

Another part of it is the story about the loan guarantee.  “I’ve got to tell you, I never worked for anything so hard in my life as I worked for that loan guarantee,” Dunderdale told reporters in the scrum after her speech. That quote is from the Telegram account by James McLeod.

Do we have it? #nlpoli

Kathy Dunderdale had a pretty easy audience on Monday for her relaxed, ambling speech about a whole bunch of stuff.

It was the St. John’s Board of Trade. 

As a rule, the townie business community have the guts of political guppies.  They’ll run along with whatever the government says and Monday was no different.  When the Conservatives were spending and spending beyond what the province could afford, the crowd at the Board of Trade cheered wildly.  And now on cue they are repeating the Conservative line on spending restraint – when there really isn’t any – and the glories of Muskrat Falls, which is the proof the government is continuing to spend beyond the public’s means.

The crowd at the aptly named BOT know what side their bread is buttered on so they applauded in all the right spots in the Premier’s stock speech.

Well, almost stock.

Like Father. Like Son. #nlpoli

So after a teaser column in the Telegram last week that was more creative fiction than serious history or memoir, John Crosbie explained why he loves the Muskrat Falls project in this Saturday’s instalment of Geriatric Townie Pass-times.

It’s really simple.

The project will be splendiferous.

Phantasmagorical.

Amazingly, marvellously, Keebler-elves-kinda-magical.

Lowest Cost Option #nlpoli

Note:  The words glory hole and shaft in this post are terms used in the mining and oil and gas industries.

The provincial government is almost finished “remediating” the environmental contamination left from the old American Smelting and refining Company (ASARCO) mine at Buchans.

According to a news release from Tom Hedderson, tenders are due to go out on May 25 for the final phase.

Read the release and the one thing you will notice is that there’s no description of what the provincial government is actually doing to reduce the environmental risk to residents from the mine tailings and other debris from the old mine.

There’s likely a reason for that.

Polling Voters #nlpoli

If you are still mulling over the British Columbia election result and the polls, take a look at this post by Eric Grenier at threehundredeight.com.  It includes a link to his piece in the Globe on Wednesday on the same topic.

Pollsters tend to weight their samples to match the population as a whole.  Problem:  that isn’t the same as the demographic profile of voters.voters.

Grenier shows how Ipsos, for example, weighted a poll equally across three age groupings.  In the 2013 election, those age groupings didn’t turn out equally.  The over-55s made up half the total voter turn-out, not one third.

It just doesn’t stop #nlpoli

There’s a new anti-Conservative picture around town. 

This one is via Twitter (@openionated ).

-srbp-

Beth and Expenses #nlpoli #cdnpoli

All this talk of Senator Beth Marshall and her hefty annual stipend for chairing a committee that has met once in two years brings to mind the good senator’s role in the House of Assembly patronage scam, a.k.a. the spending scandal.

Marshall is credited with first sniffing something was amiss when she went hunting for Paul Dick’s expenses in 2001-ish.  She was barred from the House by the legislature’s internal economy commission.  The members were Liberals and Tories and, as accounts have it, they unanimously wanted to keep Beth’s nose out of their files.

But if you go back and look, you’ll have a hard time finding any indication Beth thought something else was on the go.  While we didn’t know it at the time, subsequent information confirmed that members had been handing out public cash pretty generously by that point. Yet Marshall has never, ever indicated she felt something more than a few wine and art purchases might have been amiss.

That’s important because of Marshall’s record once she got into the House herself as a member in 2003.

There’s no crap like old crap #nlpoli

And John Crosbie’s recent column (May 18) in the Telegram about Churchill Falls contains some of the oldest  - and completely unsubstantiated – crap on the go.

Political Grab-Bag #nlpoli

For the first day back after a long weekend, here are some short snappers on some issues swirling around these days at the national scene.

Stagnation and Decay #nlpoli

The House of Assembly finished its spring session on Thursday after what appears to be one of the shortest sessions in the past 30 years.

The government presented only seven bills for debate, only a quarter of the normal load for the major sitting for the House.  That seems to be a record as well, and not of the sort any government would wish to hold.

For good measure,  the people of Newfoundland and Labrador could watch some of the most abysmal behaviour in recent memory, including a political lynching aided by a partisan and incompetent Speaker of the House.

What they are really watching, though, was nothing as trivial as a finance minister Jerome Kennedy’s second session of embarrassing  verbal attacks on other members.  People are watching a governing party that is in the advanced stages of stagnation and decay.

The NAPE Poll Income #nlpoli

As it turns out, Harris-Decima used household income not individual income for weighting the poll they did for NAPE. Keith Dunne, NAPE’s communications co-ordinator tweeted the correct information on Thursday morning.

Your humble e-scribbler thought it was individual income and therefore concluded – wrongly – that there was a skew in the poll toward higher income urbanites.  That didn’t invalidate the survey results but it might have explained the strength of the rejection of the provincial government’s budget.  The Tories might have had a chance to bounce back politically, especially among the lower income types out there.

Turns out that hope was pretty much dashed.

Self Skew-ered #nlpoli

Two thirds of tax filers in Newfoundland and Labrador report incomes of less than $35,000 per year.

The Harris-Decima poll released by the Newfoundland and labrador Association of Public Employees on Wednesday has only 27% of the sample with an income less than $40,000 per year.

Still, the results show that the provincial government either didn’t have a communications strategy or whatever strategy they had failed miserably.

In fact, it was a stunning, utter, complete, abject failure of their entire communications effort.

The Fruits of A Very Poisonous Tree #nlpoli

Premier Kathy Dunderdale said on Tuesday that the province will have problems now that it doesn’t have a federal cabinet minister from this province.

As CBC quoted her from a scrum outside the House of Assembly, Kathy said:

“It always makes it more difficult when you don't have somebody inside the tent,…”

This is not just a difficult position, it is a stupid position, but it is exactly the stupid policy that Kathy Dunderdale advocated.

The Decline of the Forest Empire #nlpoli

While an official with Corner Brook’s municipal government  understandably has to say wonderful things about the economy in the west coast city, a look at some numbers shows the city is feeling the effects of a larger problem in the province.

SRBP took a look at newsprint production levels and the value of newsprint exports from 2003 to 2012.  The numbers are all from the annual editions of the budget document called The Economy.

The picture is not pretty.

Steep Curves and Third Place #nlpoli

Liberal leader Dwight Ball told CBC’s David Cochrane this past weekend that his job as Opposition Leader came with a steep learning curve.

Indeed it does and on Monday, Ball proved just how steep the curve is.

The $150K Communications Audit #nlpoli

Poor Jerome Kennedy.

They sent him out Monday to explain to reporters what the government got for its $150,000 audit by Fleishman-Hillard in later 2011.

Kennedy had a hard time explaining it.

He went all over the mass of talking points floating around in his head.  he said – without a hint of a joke – that the departmental communications directors are not political staff.  on paper, maybe, Jerome, but in practice, they are either partisans or have been heavily politicised.

Keep on churnin’ #nlpoli

You can add another five changes to the record of senior executive appointments cabinet has made since the beginning of the year, according to orders-in-council posted to the provincial government’s website.

That brings the total for Calendar Year 2013 to 20.

Six the 20 are acting appointments, meaning that cabinet will either have to confirm the appointment or put someone new in the job.

Cabinet remains on track to make 60 such appointments in 2013, setting an all-time record for changes in the 121 deputy minister and assistant deputy minister positions in the provincial government.

-srbp-

Where was Fairity’s contract chopper? #nlpoli

In the wake of the tragic death last week of Joseph Riche, it shouldn’t be surprising that some people, including some politicians, are blaming the tragedy on the Department of National Defence.

That’s what politicians do in this province.  Blame Ottawa is a time-honoured political strategy even if it is usually a political lie.

As with the Burton Winters tragedy, these provincial politicians are aiming public concern in the wrong direction.

More on the 2009 Rift #nlpoli

The Kremlinology post on Trevor Taylor, Paul Oram and the apparent policy disagreement in cabinet in 2008/09 generated two contacts (a tweet and an e-mail) that are worth discussing.

Let’s take them one at a time.

Kremlinology 44: the 2009 Rift in Cabinet #nlpoli

Trevor Taylor left politics in 2009 in an unseemly hurry.

One minute he was there. 

Next minute?  Gone from cabinet and the House of Assembly.

Very odd.

Then right on his heels went Paul Oram, who muttered something about unsound financial management by the Conservatives as he ran from the Confederation Building.

A very big clue to what was going on at the time turned up on Tuesday in Trevor Taylor’s column in the Telegram.

Tom Marshall’s Dead Muskrat Sketch #nlpoli

Tom Marshall used to be the finance minister. 

He’s the guy who consistently, year after year, spent more than the people of the province could afford. Tom didn’t do it by himself:  he had the support of all his colleagues in cabinet.

And since 2009, Tom and his colleagues have admitted that they mismanaged the provincial government accounts by overspending.

Deliberately.

Along the way, Tom has claimed some things that aren’t true.  Like saying that he and his colleagues lowered the provincial debt when they didn’t.

So now that he is natural resources minister, Tom Marshall is still telling people things that aren’t true.  This time it is about the glories of the 2008 expropriation.

What Tom says.

The truth.

Two different things.

And you want to be my latex salesman? #nlpoli

Last week SRBP noted that the provincial cabinet seems to be having some difficulty getting legislation into the House for debate.

Normally, we’d see upwards of 30 bills handled in the spring session.  In 2011 they had almost all the bills introduced by the early part of May.  In 2012, the provincial government had more than twice as many bills on the go as they do this year.

Well on Monday, finance minister Jerome Kennedy gave notice he has one more bill to add:  an amendment to the Revenue Administration Act.  He called it amendment number three.

Except it isn’t.

Ground Control to Major Tom #nlpoli

New Democratic Party leader Lorraine Michael asked natural resources minister Tom Marshall in the House of Assembly on Monday about Husky’s plans for natural gas development offshore Newfoundland and Labrador.

The story appeared in upstreamonline.com on May 3 and SRBP told you about it the same day.

Here’s what Marshall said about the article:

I have not had the opportunity to read the particular article that which she is referring to, but I would also be happy to have a discussion with the company.

Not the arse-end of the world … #nlpoli

Check out the 2012 Hydro-Quebec annual report and you will find a lovely chart showing trends in energy prices in northeastern North America.

“After reaching a historic peak in 2008, natural gas and electricity prices in northeastern North America dropped sharply in 2009, then rose slightly in 2010 only to fall again, such that prices in 2012 were at their lowest in 10 years.” (page 11)

From an historic peak to the lowest prices in a decade a mere four years later.

Why separate? #nlpoli

Last week, the federal Auditor General pointed out many serious problems with the state of offshore search and rescue.

Last week, the usual gang grabbed any microphone they could find to call  - yet again - for everything from a provincial public inquiry into the state of search and rescue in the province to a new agency to regulate safety in the offshore oil industry.

The idea that we had to split safety from other aspects came up during the offshore helicopter inquiry.  The idea is popular.  Helicopter safety inquiry commissioner Robert Wells included it as one of his recommendations in volume one.

But here’s the thing:  what is a so-called separate safety agency supposed to do that we aren’t doing now or couldn’t accomplish any other way?

Husky sizing up natural gas offshore Newfoundland and Labrador #nlpoli

Husky Energy is sizing up the potential of developing natural gas offshore Newfoundland and Labrador within the next decade, according to the leading petroleum industry news source upstreamonline.com.

First exports could begin in 2025, if enough resources can be certified, according to upstream. The likely export destination would be western Europe, a market very close to Newfoundland and Labrador and where prices are considerably stronger than they are in North America.

upstream’s story notes that the provincial government “quashed” any idea of using local natural gas in place of Muskrat falls, but reports that since then the “the idea of LNG exports appears to now have more traction, suggested one source…”.  upstream reported that “Husky is said to be taking a fresh look at known and potential gas resources to see if their scale would justify, technically and commercially, building a liquefaction plant.”

upstream reports that Husky commissioned a report from IntecSea to explore potential development of the 4.2 trillion cubic feet of natural gas offshore Labrador. 

Industry sources suggested a potential timeline towards first LNG exports could see pre-front-end engineering and design studies taking place in 2016-2017.

Front-end engineering and design would take place through to 2019 in advance of a firm decision, according to upstream.

-srbp-

Light Session #nlpoli

As of May 2, there are a mere six pieces of legislation on the list of bills currently set for debate in the House of Assembly.  It seems to be up to date because on Thursday they added links to a couple of the bills that are ready to start debate.

But they didn’t add any to the six listed there.

Seen on a pole somewhere #nlpoli

-srbp-

Political Translator: No’durn Strategy #nlpoli

Former premier Tom Rideout has an accent typical of the northeast coast of Newfoundland.  in his days as a cabinet minister after 2003,  Rideout often used the word “northern”.  It came out in his pronunciation as “no-durn” or “know-durn”.

Tom’s legacy leaves on, even inadvertently.  Four years or so after Rideout got fed up and left provincial politics,  Labrador affairs minister Nick McGrath confirmed recently that the Northern Strategic Plan the provincial Conservatives talk about so much doesn’t exist.

There’s no durn plan.

Province settles Fortis asset grab for $76 million #nlpoli

Natural resources minister Tom Marshall announced in the House of Assembly on Tuesday that the provincial government had settled with the last of a string of private companies victimised by a 2008 asset grab of hydro-electric generating facilities by the provincial government.

Taxpayers will cover a $54 million debt owed by Fortis, one of the partners in the Exploits Partnership, as well as pay the company an additional $18 million.  Taxpayers have already paid more than $4 million according to media reports, bringing the total to about $76 million for the Fortis asset swipe alone.

In 2011, the provincial government took responsibility for a $40 million loan owed on Star Lake, another part of the 2008 hydro asset expropriation.  The government also paid $32.8 million to Enel one of the partners in the project.

The provincial government seized the hydro assets in an extraordinary expropriation bill that government original touted as being aimed at Abitibi in punishment for closing a paper mill in the central Newfoundland town of Grand Falls-Windsor. 

Information subsequently came to light that confirmed the government’s real target in the expropriation were the lucrative hydro-electric generating assets owned by Abitibi, Enel, and Fortis in two separate partnerships.  The provincial government turned over the assets free of charge to the Crown-owned Nalcor Energy. 

Nalcor will now use the generating stations to help meet its commitments to provide Emera with free electricity for 35 years under the Muskrat Falls deal.

For now, though, taxpayers are being forced to pay for the seizure and for the electricity Nalcor makes at the seized plants.  Under a cabinet order dated April 4, 2013,  Nalcor sells electricity from the Exploits plant to its subsidiary Newfoundland and Labrador Hydro for the fixed price of four cents per kilowatt hour.  Hydro sells the power to consumers at much higher rates, thereby pocketing a sizeable profit entirely at public expense.

In its original plan, government intended to skim off any valuable assets and leave Abitibi with any environmental liabilities. As it turned out, the expropriation seized one of the most polluted properties Abitibi held.  The expropriation freed Abitibi of any liabilities since they went with the ownership.

There is no independent estimate available of the costs of the environmental clean-up of the seized facilities.

-srbp-

Wanted: a good row #nlpoli

One of the unreserved joys that comes from writing these scribbles is the moment when a post sparks something.

Like on Monday, when a simple post looking at change in the provincial gross domestic product prompted an exchange among a few of the provincial Twitterati (Twitteratini?) on the whole business.  Was it useful?  What did it mean?  Wonderful stuff considering that the post was intended to provoke thought of just that sort, not reach any hard-and-fast conclusions.

Annual GDP Change #nlpoli

A release on Friday from Statistics Canada showed that the provincial economy shrank by almost 5% in 2012.  They even supplied a lovely chart to illustrate the GDP changes in each province as well as the national average.

This wasn’t just modest growth or even a  modest drop.  We are talking one of only two provinces with a drop in GDP and the biggest change – positive or negative – of any province or territory in Canada. 

Alberta is even more dependent on commodities than Newfoundland and Labrador and it still managed to see gross domestic product grow by almost four percent.

Not so in the former Republic of Dannystan. 

Down.

By almost five percent.

 

The 2013 Q1 Churn Appointments #nlpoli

One of the great things about having orders in council readily available is that people can find information.

That’s exactly why the current administration has kept them as secret as possible since 2003 and continue to censor them, even though orders in council are entirely public documents.

But at least in the wake of the Bill 29 Freedom From Information measures,  the Conservatives seem to have been shamed into opening the vault on their secrets a bit even if they still censor public documents.

One of the things we can now readily see, though,  is the number of appointments made by cabinet in the first quarter of 2013 to deputy minister and assistant deputy minister jobs.

Today in history…

April 25 is the 218th birthday of the Royal Newfoundland Regiment.

-srbp-

Wiseman violated privileges and rights of all members #nlpoli

Ross Wiseman violated Gerry Roger’s rights as a member of the House of Assembly.

He did so, by his own initial ruling, with no evidence whatsoever that the member had committed any contempt of the House.

He thinks an apology is good enough.

Ross Wiseman is wrong again.

Here’s why.

Don’t feed the Crazies #nlpoli

First,  slander is something defamatory that someone says.

Libel is what you call a defamatory comment that is printed.  So a poster would be a libel since it is printed.

Second, the story on the VO website about a bunch of posters contains an editorial opinion, not a fact, when it says that the posters “slander” the Premier.

“Who wants Kathy Dunderdale as Premier?” is hardly defamatory.  The last line on the poster is strong, saying that the Premier is a “source of shame for us all.”

Unless the bad words on the poster that you edited out for the website say something really awful, it sure doesn’t look like you have something defamatory.  As it turns out, the words are reputedly “Liar, Bully, and Fool”.

Strong but it is still looking like an opinion and not a defamation.

Best thing for VOCM to do:  leave the opinions to others, like say a lawyer or a judge, and stick to reporting the news.

Third, this poster seems to be something we could reasonably expect after last week’s events.  That doesn’t mean it is right.  It just means that the botched attack on Gerry Rogers and the Facebook group might just be getting some people a bit more riled up than they would be otherwise.

-srbp-

Taxing the Imagination #nlpoli

What is it about the provincial Conservatives and income tax?

Kathy Dunderdale rabbited on about it last fall and again in January.

Last week, the provincial Conservatives were at it again, with a private members resolution in the House that praised the government for cutting taxes and for not raising them now that they’ve fallen on hard times.

Some free advice #nlpoli

The Premier’s daughter tweeted this comment last Wednesday night.

Few people consider the impact that political life has on the families of politicians and political staffers.  Steve Paikin’s book The Dark Side deals with it, as SRBP noted in 2006.

That tweet is a reminder of that.

Here’s some advice for the Premier’s daughter from an old political hand.

Dunderfarce 2 #nlpoli

As if the week hasn’t been going badly enough for her, Premier Kathy Dunderdale decided to make it all the worse on Thursday with her scrum about her Twitter account.

Here’s what we have learned:

#Dunderporn and #Dunderfarce #nlpoli #cdnpoli

What was the tragedy of the orchestrated political lynching of an innocent member of the House of Assembly by the provincial Conservatives has now turned to farce.

On Tuesday, Premier Kathy Dunderdale was on her high horse: Conservative members of the House of Assembly "understand very well how Facebook works," Dunderdale told reporters outside the House of Assembly, “and as an MHA, when you're on Facebook, when you're engaged in Twitter, then you have to have an obligation to pay attention."

Neither Dunderdale nor several of her colleagues apparently were paying attention.

The Keystone Kops and their Kangaroo Kourt #nlpoli

The Conservatives in Newfoundland and Labrador are politically deaf.  They only hear themselves.

Former fisheries minister Trevor Taylor used his Telegram column on Monday to issue a few hypocritical tut tuts about the state of public discussion in the province.

Too negative he whined, sounding for all the world like someone was holding a small dog turd under his nose as he typed.  His political pals on da Twitter chimed in as they are programmed to do.

Shortly after 1:30, government house leader Darin King rose in the House on a point of order.  He wanted the Speaker to suspend Gerry Rogers from the House of Assembly not for something Rogers said or even endorsed but merely because her name appeared on a group critical of government on which some moron had posted threats against the Premier.

The Tories sealed the triple play when Speaker Ross Wiseman ruled that while there was no evidence on the face of it that Rogers was guilty of endorsing the threats, he would invent a reason to condemn her anyway.

They are blind, too.

New telephone tax to pay for 911 service #nlpoli

The provincial Conservatives could haul in up to $7.7 million through a new tax on telephones to be introduced ostensibly to pay for province-wide 911 emergency service, municipal affairs minister Kevin “Fairity” O’Brien announced on Tuesday.

According to the official backgrounder, the provincial government will introduce a new tax of “less than one dollar per month” on every landline and cellular telephone in the province.  At a news conference, O’Brien and fire and emergency services boss Mike Samson estimated there were upwards of 650,000 phones in the province. 

Although the release describes the approach as a “cost-recovery” model, neither O’Brien nor Samson would estimate the annual cost of operating the system. 

Other provinces use the same approach.  PEI charges 70 cents per telephone or working line while Nova Scotia charges less than 50 cents. Quebec, Saskatchewan, Alberta, and New Brunswick also tax telephones to pay for 911 service.

-srbp-

The “Significant Impact” of Open Line #nlpoli

Cleaning out the home office has turned up a few forgotten gems.

One of them related to the political impact of open line shows in the province.  Last week,  your humble e-scribbler moderated a lunch-time talk by Professor Alex Marland and Randy Simms on just that topic.  The pile of papers included a Canadian Press story that appeared some time in early May, 2008. 

Headlined “Williams lashes out against accusations of tight message control”,  the story was Danny Williams’; reactions to comments during the Cameron Inquiry by John Abbott, the former deputy minister of health and community services.

Newfoundland [sic] Premier Danny Williams says a former public servant made "offensive and stupid" remarks when he told a public inquiry that radio call-in shows influenced the government's handling of an emerging scandal involving flawed breast-cancer testing.

Oblivious Neutron Bomb #nlpoli

Even at the worst of their leadership feuding Jean Chretien and Paul Martin never frigged each other over the way Kathy Dunderdale and Jerome Kennedy did last week.

While Kennedy was trying to tell everyone that the justice reversal wasn’t going to happen to all the cuts, Dunderdale (right, poppy eyes and all) was on the open line shows and everywhere else someone had a microphone, telling us that if people could make “compelling arguments” she’d have another look at the budget cuts.

What is a “compelling argument”, you might ask?   

No one knows.

The Keystone Kops Ride Again #nlpoli

We already knew that the provincial cabinet had abandoned their budget before the document had been debated in the House.  That happened last week when the Premier ordered the justice minister and the attorney general to abandon the cabinet-approved cuts in the justice department.

Less than 12 hours after meeting with the same officials justice minister Darin King consulted before cabinet approved the cuts, King and attorney general Tom Marshall (right, not exactly as illustrated) told reporters that whatever those officials had said would now be the policy.

The change of policy is breathtaking enough.  Not only will some of the laid-off court security officers be rehired, but cabinet has also lifted the hiring freeze to allow the High Sheriff to immediately hire more staff.  Someone will also be appointed to conduct operational reviews of the three departments – High Sheriff,  legal aid and Crown prosecution service – involved in the cabinet flip flop.

But that’s not the truly striking aspect of this abrupt change.

Talk Radio – Communication Tool or Just Local Banter #nlpoli

International Association of Business Communicators (Newfoundland and Labrador) presents a professional development luncheon:

According to Statistics Canada (2007), Newfoundlanders and Labradorians listen to more talk radio than any other provincial group of Canadians.

Is it a useful communications tool for community engagement and the sharing of local information or is it just bantering?

Join IABC NL for lunch and an interesting and interactive open panel discussion on Talk Radio in Newfoundland and Labrador.

Randy Simms, retired Open Line host, Dr. Alex Marland, Associate Professor (Political Science) Memorial University, and moderator Ed Hollett discuss the pros and cons of Talk Radio.

When: Thursday, April 11, 2013, 12:00 - 2:00 p.m.

Where: Capital Hotel, 208 Kenmount Rd., St John’s

Register:  Online – http://iabcapril.eventbrite.com/
Email – eventsiabcnl@gmail.com

$50.00 – IABC Members
$75.00 – non-members.

-srbp-

The Transformation #nlpoli

Provincial Conservatives in Newfoundland and Labrador have a political philosophy that is equal parts Machiavelli,  Kafka, and the Three Stooges.

For the first few years they seemed to be constantly plotting and manoevring, always one step ahead of their opponents at home and abroad. 

Those days are gone, now, replaced by a surreal landscape of bizarre shapes and hideous shadows.

The Conservatives have already admitted to their continuing financial mismanagement of the province.  They admitted in 2009 that what they spend of the public’s money every year is unsustainable. They continue to spend like that even though the public cannot afford it.

Yet these same profligates attack their political enemies with the accusations that the opponents are financially irresponsible.  These same bankrupts defend recent cuts to education by pointing to their previous spending which they have admitted is unaffordable and which is the reason for the cuts.  They censor public documents and at one and the same time, crown themselves most open government the province has ever seen.

This heady mixture now comes to slapstick comedy, courtesy of Trevor Taylor.

F*ck you in ASL

-srbp-

Edging #nlpoli

Over at cbc.ca/nl, John Gushue has an excellent column on the recent prosperity, in particular the apparent contradiction between a supposedly booming economy and the government cuts or the sense some people have that they aren’t part of the boom.

Take some time and go read John’s observations, if you haven’t already.  You will always be rewarded by John’s accessible style that reveals some very sharp insights.

For all that, though, there’s a sense that there’s something missing from Gushue’s column.  The piece gets right up to the edge and then just doesn’t bring the thing to a satisfying conclusion.

Never fear.

The relentless labradore fills in the bit John missed.

The Lady is for Turning #nlpoli

Only a few days ago, natural resources minister Tom Marshall was telling us that the Premier was an Iron Lady.  A compassionate one, mind you, but an Iron Lady, nonetheless.

Firm in her decisions.

Unyielding under pressure.

Tom was telling us that Kathy Dunderdale and Margaret Thatcher were made of the same stuff.

What?

No. 

Tom was not drunk.

No.  He was not stoned, either.

And it was not April Fool’s.

Knock it off and keep reading.

Kremlinology 43: We Love the Leader! #nlpoli

Twice last week, provincial Conservative politicians offered unprompted endorsements of Kathy Dunderdale’s leadership.

Natural resources minister Tom Marshall praised her as a compassionate Iron Lady who had his full support.  Here’s the story VOCM ran:

Natural Resources Minister Tom Marshall says the premier has his full and complete support. Kathy Dunderdale has come under fire for a tough, cost-cutting budget that includes widespread layoffs and funding cuts. On VOCM Open Line with Bill Rowe, Marshall used a label which came into prominence during the term of former British Prime Minister Margaret Thatcher. Thatcher came into power in the UK in 1970s and developed a reputation of being tough and uncompromising during a time of economic recession, earning the title "Iron Lady". Marshall says Dunderdale is also an Iron Lady, but one with compassion.

Meanwhile, Steve Kent – noteworthy in the past for his lack of Dunderlove – had this to say [via CBC and labradore]:

"Premier Dunderdale is a compassionate and principle-centered leader. I remain inspired by her vision and strength," Kent wrote.

…

Kent added that Dunderdale enjoys the full support of the PC caucus.

Political Will and Public Policy #nlpoli

The SIDI simulation of government spending that we’ve run this past week might not be everyone’s cup of tea, but these sort of thought exercises are always useful.

The most striking thing is the amount of money from oil and mining that the provincial government has spent in the past seven years:  $15.6 billion.  That’s enough to wipe out the entire public debt plus the unfunded pension liability and have a couple of billion left over for an unprecedented capital works program. 

It’s a staggering amount of money and the only thing more amazing than how much money there was is how easy it was to do something far more productive than just spending all the money, as the current provincial government has done.

The SIDI simulation included:

• a steady, sustainable increase in spending each year,
• an unprecedented, sustainable capital works program,
• a $3.675 billion real decrease in public debt,
• the prospect of a complete elimination of public debt within a decade, and,
• an income fund that would continue to grow with further oil money and generate new income for the provincial government for as long as the fund existed.

The only thing needed to make the simulation a reality was a political desire to do it.  Had the provincial government done any one of the elements of the SIDI approach, then the provincial government could have either avoided the current crisis altogether or significantly altered the profile of the crisis and the prospects for coping with it.

Well on the way to Debt Freedom #nlpoli

According to economist-consultant Wade Locke, the provincial government’s “Sustainability” Plan includes a debt commitment:

The long-run target is to bring the province’s net per capita debt gradually down to the all-province level within ten years.

Locke made it clear in another part of his March 25 memo to finance minister Jerome Kennedy that the purpose of any surpluses the provincial government achieves within the next decade will be to fund Muskrat Falls.

For those who haven’t figured it out yet, the Locke-Conservative plan isn’t actually to reduce public debt.  They want to book the Muskrat Falls asset and – since that’s what net debt is -  make it appear they have lowered public debt when they likely haven’t moved it down very much at all.

By contrast, the SIDI model shows that the provincial government could have reduced direct public debt by $3.675 billion.  The net debt would currently stand at $4.6 billion with a downward trend.  According to Budget 2013, the net debt is is forecast to be about $8.5 billion, continuing an upward trend.

Big difference.

Responsible Public Spending #nlpoli

You don’t need drugs or alcohol to get the feeling of dizziness or stupor like you smacked your head with a hammer. Hard. Repeatedly.

Just listen to a representative of one of the special interest groups talking about the provincial budget and public spending. It doesn’t matter which one.  As your humble e-scribbler was finishing off this post on Tuesday, a representative of the appropriately named St. John’s BOT was on television talking about how government had to cut public sector jobs and tear into public sector pension benefits because of the hideous unfunded pension liability. 

Corporate lawyer Denis Mahoney even quoted the distorted, misleading government claim about the unfunded liability as a share of only a fraction of the public debt to bolster his position. He never mentioned the billions going to subsidize his members, of course. 

In the process, Mahoney looked about as convincing as the labour mouthpieces like the Canadian Centre for Policy Alternatives who said in 2004 that the government wasn’t spending too much.  It just didn’t have enough money.  Of course, they never mentioned that the government was outspending just about every other province on a per capita basis.

Listen to this sort of mindless crap long enough and you don’t have to wonder why people wander around in a daze.

To clear your head, take a look at a chart showing the actual government spending from 2005 to 2012 (in blue) compared to the income from sources other than oil and minerals (in red).

The Road Not Taken #nlpoli

The number is a hard one to wrap your mind around.

$15.6 billion.

That’s the amount of oil royalties and mining royalties the provincial government collected from 2005 to 2012.

Once you think you have that figure in your mind and understand what it means, think about this:  with the exception of about $1.4 billion, the money is apparently gone. 

Spent.

Never to come again.

If you want to understand how the provincial government got itself into the mess, just think about all that money.  Newfoundland and Labrador is a “have” province with a government that is laying people off and cutting programs.  Then realize that for all that cutting the government is still planning to spend upwards of a half a billion dollars a year more than it is taking in.

The idea is staggering.

Well, be prepared to be floored completely.

Damn the finances! Full spend ahead! #nlpoli

We don’t know precisely what economist Wade “the Can-Opener”  Locke is doing to earn his loonie from the Newfoundland and Labrador taxpayers.

Finance minister Jerome Kennedy hired him this year to give advice on how to manage the province’s financial mess.  According to the Telegram his contract caps of his pay at $75,000 for a couple of months work.  Locke says regardless he’ll only bill a dollar.  That’s decent of him given that the university is giving him 80% of so of his usual paycheque now that he is on paid research leave from his usual job.

Locke has given the provincial government advice before on everything from Equalization to the annual budget to Muskrat Falls.  We don’t know what, if anything, he got paid for those other stints, but that’s really neither here nor there.  The thing is that Locke is closely tied to the current administration and to what they are doing.

We may not know what else he has been doing the past few weeks but Kennedy released a short memo Locke sent him on March 25, the day before the provincial budget.  It’s a telling little document in many ways.

The Public Debt #nlpoli

One of the greatest political frauds committed by the current administration and its supporters is the idea that they have lowered the public debt.

All the politicians say it.

Wade Locke, their tireless economist, talks about the same thing – net debt – in his soon-to-be-infamous memo to Jerome Kennedy.

Talk of the net debt, reducing net debt, and having a net debt reduction strategy is nothing but a monstrous deception of the public. 

The joke’s on us #nlpoli

From the current issue of Canadian Business comes this little ad that is not an April Fool’s joke from energy company currently running the provincial government:

People following the sorry recent history of energy development in the province will instantly recognize the vicious, cruel joke inherent in Nalcor promoting itself as a company interested in developing wind energy.

-srbp-

Federalism and the Newfoundlanders: 64th birthday edition #nlpoli

April 1, 2013 marks the 64th anniversary of Newfoundland’s confederation with Canada.

Here are a few older posts on the subject that stand the test of time:

• Federalism and the Newfoundlanders (2009)
• Happy Confederation Day!  (2010)
• Thunder  (2009)
• The Confederation Referendum and Humour  (2007)

-srbp-

Budget downs and ups #nlpoli

Earlier this year, our government projected a deficit for 2013-14 of $1.6 billion. 

We are now forecasting that the deficit has been significantly reduced to $563.8 million – a billion-dollar improvement to our bottom line.

That’s the way finance minister Jerome Kennedy started the 2013 budget speech in the House of Assembly on Tuesday.  He said the dramatic change to two factors:  more money coming in and “deliberate actions” by government to “rein in spending.”

One Telegram story on the 2013 budget ran with the idea of extra cash:  “Unexpected oil revenues help with deficit”.  Eight million extra barrels of oil production will bring in $265.5 million in new cash.

A CBC online story said the billion dollars came from two places:

Just over $301 million of the billion-dollar boost over recent projections is attributed to government cuts. Another $696 million came from improved expected revenues for the coming year.

Take away the money the Telegram tallied up and you get about $440 million.  The CBC story said that came from “…royalties or corporate taxes from oil and mining.”  Another news report added in a windfall in HST money from Ottawa.

All sounds wonderful.

The only problem is that the whole story doesn’t add up.

The Debt is Passed: Budget 2013 #nlpoli

[Note – see below]

The throne speech promised that the same Conservative financial management that produced the current financial mess would continue and they delivered in Tuesday’s budget.

The strategic problem remains unchanged

The Conservatives will continue to spend billions in one-time cash from oil and minerals.  That’s the structural deficit people have been talking about and the Conservatives have done nothing to change that.

Tuesday’s budget gave us the year-end cash figures for 2012 and the forecast for 2013.  Here’s the chart from Monday’s post on deficits and surpluses that shows spending and the non-oil revenue.  We’ve updated it to include the cash figures for 2012 (actual) and 2013 forecast from the 2013 Estimates.  Remember that the Estimates are presented on a cash basis.

The debt is passed #nlpoli

Monday’s throne speech was so bad that people started making fun of it almost immediately.  On Twitter a few of us tried changing lines from famous John Kennedy speeches and giving them a local twist

You could find a variation on the moon speech:  we will go into debt,  not because it is hard but because it is easy.  Another tried German:  “Ich bin ein Bauliner!”

Or this one from the inaugural:

The debt has been passed to new generation, born in oil riches, untempered by profligacy, undisciplined by debt.

None could top the corrupted Kennedyism an actual speech by the Old Man, Hisself in 2006:

I say to Newfoundlanders and Labradorians: "Ask not what we can do for our country, because we have done enough. Let's ask our country what they can do for us."

Oil Revenues, Surpluses, and Deficits #nlpoli

The Newfoundland and Labrador Federation of Labour hired the Canadian Centre for Policy Alternatives to issue a report on the upcoming provincial budget that basically says all the things that labour federation boss Lana Payne has been tweeting for weeks.

Here’s what the report’s author said in a news release from CCPA:

“The province’s economic fundamentals are strong. The task for the government is to ensure it doesn’t rock the boat and damage the province’s economy and social fabric with spending cuts.”

Things are looking pretty good, in other words.  The government has to be very careful because any big cuts would damage the economy.

As much as some people might think this is a challenge to the governing Conservatives, that’s not really the case. 

House of Cards (Part B) #nlpoli

Continued from Part A

Terry Lynn Karl is the author of The paradox of plenty: oil booms and petro-states., one of the best known books on the resource curse or rentierism.  Karl described the essence of rentierism in an article she originally wrote in 2007 and revised in 2009:

Oil wealth produces greater spending on patronage that, in turn, weakens existing pressures for representation and accountability. In effect, popular acquiescence is achieved through the political distribution of rents. Oil states can buy political consensus, and their access to rents facilitates the cooptation of potential opponents or dissident voices. With basic needs met by an often generous welfare state, with the absence of taxation, and with little more than demands for quiescence and loyalty in return, populations tend to be politically inactive, relatively obedient and loyal and levels of protest remain low -- at least as long as the oil state can deliver.

In the extreme, oil wealth can disconnect a state from its population.  By the same token, oil can disconnect politicians from the population, transforming them from representatives who must satisfy voters in order to get re-elected to bosses controlling subordinates.

House of Cards (Part A) #nlpoli

_______________________________________________

This is the third in a four part series on the current financial crisis the provincial government is facing.  The first instalment – “The origins of rentierism in Newfoundland and Labrador” – appeared on Tuesday and the second – “Other People’s Money”  - appeared on Wednesday.  The third instalment – “Rentierism at the national and sub-national level” -  appeared on Thursday.

_______________________________________________

Finance minister Jerome Kennedy told the Telegram’s James McLeod on Wednesday that the provincial government had a structural deficit problem.

His proof was that government spent 60% or so of its total outlay each year on the social sector.  That includes health, social services, justice, and education.  If that’s what Jerome is worried about then he and his cabinet colleagues should know that in 2005, they spent 67% of their budget on the social sector.  In 2003,  the last year the Liberals ran the place, they spent about 64% of the budget on the social sector.

Before he goes all Grim Reaper, Jerome should know spending that kind of percentage on the social sector isn’t unusual for governments across Canada.  That’s been pretty much the norm since the late 1960s when governments introduce publicly-funded health care. In Ontario in 2012, for example, all but about $30 billion of the government’s $126 billion budget went to social program spending.

That doesn’t mean the provincial government doesn’t have a huge financial problem. They do. It just means that Jerome is looking in the wrong place to find a sign of it.

Rentierism at the national and sub-national level #nlpoli

_______________________________________________

This is the third in a four part series on the current financial crisis the provincial government is facing.  The first instalment – “The origins of rentierism in Newfoundland and Labrador” – appeared on Tuesday and the second – “Other People’s Money”  - appeared on Wednesday.

_______________________________________________

A rentier is a person who lives off the income from property and investments.  That distinguishes a rentier from a person who earns income through labour.

For the past 40 years or so some political scientists and economists have studied something called a rentier state.  In simplest terms, a rentier state is one that derives a significant portion of its national government income from the money they get from oil and other high-value, but volatile commodities.  [FN 1]

For our purposes, we’ll rely on a definition of “significant portion” as being 40% or more of  government income.  [FN 2] We’ll also focus the discussion on states that derive most of their income from oil.

What we are talking about here goes by several names including  the Dutch Disease or even the resource curse.   Jeffrey Frankel of the Kennedy School of Government put it this way:

It has been observed for some decades that the possession of oil, natural gas, or other valuable mineral deposits or natural resources does not necessarily confer economic success. Many African countries such as Angola, Nigeria, Sudan, and the Congo are rich in oil, diamonds, or other minerals, and yet their peoples continue to experience low per capita income and low quality of life. Meanwhile, the East Asian economies Japan, Korea, Taiwan, Singapore and Hong Kong have achieved western-level standards of living despite being rocky islands (or peninsulas) with virtually no exportable natural resources. Auty (1993, 2001) is apparently the one who coined the phrase “natural resource curse” to describe this puzzling phenomenon. …

Other People’s Money #nlpoli

_______________________________________________

This is the second in a four part series that offers an interpretation of the current financial crisis the provincial government is facing.  The first instalment – “The origins of rentierism in Newfoundland and Labrador” – appeared on Tuesday.

______________________________________________

As much as people imagine a great difference between the Confederate and anti-Confederate forces during the National Convention, the two agreed on one thing:  someone else would have to pay for Newfoundland’s return to responsible government.

The London delegation asked the British government to provide the erstwhile country with money. The British balked, pleading their own financial hardship after a long and costly war.  That refusal is largely what prompted Peter Cashin to claim that the British were trying to sell the country the Canadians.  As many words that have been spilled and as many books sold trying to prove the conspiracy existed,  there’s never been a shred of proof that such a plot ever existed outside Cashin’s frustration.

The Ottawa delegation found wealthy Canada more receptive to the Newfoundlanders expectations and after a first referendum and a run-off vote, Newfoundlanders and Labradorians voted to become part of Canada.  For Labradorians the moment was especially sweet.  The National Convention and the referenda were the first time any residents of the mainland part of the country had ever been allowed to vote.

Structural Versus Cyclical: a quick look #nlpoli

Is the government facing a structural or cyclical deficit?

Good question.  Their economist says it is a structural problem but his comments to the Telegram on March 13 suggest he is approaching the problem as if it would sort itself out.

The whole structural versus cyclical question hinges in part on the question of government revenue when the economy is working at full output versus when it isn;t.  Well, in Newfoundland and Labrador, that is a bit hard to figure, especially when the government claims that locally everything is great but that it doesn’t have any money.

People get confused.

Well, one  way to start getting a handle on this is to look at the 2011 and 2012 budgets and the related income and spending.

The Origins of Rentierism in Newfoundland and Labrador #nlpoli

______________________________________________

Over the next four days, SRBP will offer an interpretation of the political underpinnings of the current financial crisis.  This series goes beyond the immediate to place recent events in both historical and comparative, international perspective. 

The first two instalments briefly describe some characteristics of the political system and Newfoundland political history before 1934 and from 1949 to about 1990.  The third post will look at the concept of the rentier state and the relationship between dependence on primary resource extraction and politics at the subnational level (states and provinces).  The fourth post will place recent developments in Newfoundland and Labrador in the larger context. 

_______________________________________________

Before 1949, the Newfoundland government’s main source of income was taxation of imports and exports.  The Amulree Commission reported, for example, that the government brought in around $8.0 million dollars in the fiscal year ending in 1933.  Of that, 71%  - $5.7 million  - came from customs and excise duties.  The next largest amount was $700,000 (about 9% of total) that came from income tax while the third largest source of income was postal and telegraph charges totalling slightly more than $587,000.

Newfoundland also had almost no experience of local government before the Commission Government in 1934.  St. John’s was the only incorporated municipality and the city council was quasi-independent of the national government. 

Beyond the capital city, the national government “managed a highly centralized system through the stipendiary magistrates stationed in each electoral district, “in the words of historian James Hiller in his recent note on the Trinity Bay controverted election trial in 1895(FN 1).  The central government also appointed the members of some local  boards to manage education and roads.  The money for all of it came from accounts controlled by St. John’s.

The members of the House of Assembly had enormous control over government and that public money.

Hobson’s Choice #nlpoli

The provincial Conservatives love to spend public money. 

That doesn’t sound very conservative and it isn’t.  Politically, the provincial Conservatives in Newfoundland and Labrador are more like Republicans than the Progressive Conservatives who used to run the province in the 1980s. American Republicans like to cut federal taxes and jack up federal spending and then blame the resulting financial meltdown on the Democrats.

Around these parts, the Reform-based Conservative Party, as the Old Man used to call them, blames everything on the Liberals.  That is the Liberals who, in case you missed it,  haven’t been in power in a decade.

After ever after

-srbp-

Not so funny now, is it, Peter? #nlpoli

-srbp-

The Wrong Tool #nlpoli

About two thirds of the people in the province who file tax returns earn less than $35,000 a year before taxes.

It’s the kind of detail that you cannot banish from your mind when you read about the politically popular economist Wade Locke.  The guy who directly and indirectly helped the provincial government create the current financial mess is on a leave from his university job to help with the new budget.

As the Telegram reported on Wednesday, Locke’s “contract with the government stipulates that he'll be paid $250 per hour for his consulting work to a maximum of $75,000.”  That would be on top of the 80% or more of his university salary that he is entitled to for being on what the faculty contract calls a “sabbatical” leave.

The Telegram also reported that Locke said he would only bill taxpayers one dollar at the end of his contract.  Let’s take him at his word.

Still, you have to wonder why he would sign a contract in the first place for more than twice what most people in the province make in a year.  Don’t misunderstand.  A consultant should get what he can earn and if Locke can get someone to pay $250 an hour for his services, then more power to him.  Given the context, though,  the contract is still rather distasteful.

Locke’s supporters will defend any amount of money because they value his advice. And that’s really where we can peel back the cover on this little can and see what is inside.

Land of Confusion meets World of Hurt #nlpoli

From Tuesday’s Hansard comes this chilling reminder that even the Premier has no idea what is going on with the province’s finances.

Mr. Speaker, I again have to implore the members opposite to stop pretending that you do not understand the fiscal structure of the Province. The $600 million that was earmarked in the Department of Natural Resources was not contained in the current budget, Mr. Speaker. That was contained in investment. There is a difference between a capital budget, the investment budget, and the current budget. 

Muskrat Falls has nothing to do with the deficit we are experiencing this year…

Let’s break it down.

The Ongoing Net Debt Fallacy #nlpoli

In a post that starts out about Muskrat Falls, the Telegram’s James McLeod does a fine job of laying out some basic information about debt, deficit, current account, capital account and other bits of the provincial budget.

Read it.  Unless you have been living this sort of stuff up close for years, you will learn something.  If nothing else, you’ll get some insight into how some local politicians have been buggering up this sort of stuff because frankly it is complicated and they don’t understand it.

Regular readers of these scribbles will know that SRBP includes Kathy Dunderdale and Tom Marshall among the people who get confused.  You can add others from all parties.

The Arse that Laid the Golden Turd #nlpoli

The provincial cabinet has been burning the midnight oil the past couple of nights. 

Literally. 

Late night sessions that ended God-knows-when, night after night.

Apparently, they are trying to figure out what to do in order to get out of the massive financial and political hole they have dug for themselves over the past decade.

As bizarre as that might seem to some people,  the politicians who created the mess have no idea yet what they are going to do.  All that Premier Kathy Dunderdale and finance minister Jerome Kennedy have been able to offer lately are lots of vague comments about when the budget might be or how many lay-offs there might be. Dunderdale put a number of 500 lay-offs out there a few days ago but frankly, that’s about as reliable as her forecasts from last year. 

And when Jerome told David Cochrane that they were still working out the Sustainability Plan, he was not bullshitting.  He meant it, even though he claimed they had already started implementing the plan last year.

If you are familiar with government budgets and how these things normally get sorted, then odds are you are reading this now that someone has been able to revive your unconscious form.  

Are you ready for this again? #nlpoli

It seems like only yesterday that the young man from the Pearl was the mayor of the cozy city.

-srbp-

Tories below 30 #nlpoli

By now you’d be living in a cave if you hadn’t heard any news of the latest Corporate Research Associates poll.

The NDP are slightly ahead of the Tories and both are about 10 percentage points ahead of the Liberals.  More people want Lorraine Michael as Premier than want Kathy Dunderdale.  And a majority are unsatisfied with the government.

Now this is an historic set of poll results as Don Martin tweeted to tease people about the release on Monday morning.  The release doesn’t make any reference to that, preferring instead just reporting the results blandly.  By contrast, Mills hyped the living crap out of poll results a few years ago that hit historic highs. 

More and Less #nlpoli

Finance minister Jerome Kennedy is supposed to know about the economy and stuff.

During an interview with CBC provincial affairs reporter David Cochrane for On Point, Kennedy said that in the 1990s the government was the main employer in the province.  The implication was that the public sector wasn’t what it used to be.  People laid off from the public service could find work much more easily in the private sector as a result.

Well…

Err…..

No.

Muskrat Falls weakness: the North Spur #nlpoli

The north side of the site of the future Muskrat Falls dam has a problem.  The soil is made up of clay that has a tendency to sheer away in landslides when it gets too wet. The North Spur, as it is known, is a key part of the reservoir.

Cabot Martin has documented the whole thing in a slide presentation based on documents released during the environmental reviews of the project.

According to Martin, Nalcor won’t have a potential solution to the problem or know the cost until sometime this year.

No adult supervision #nlpoli

Not even 24 hours after the Premier insisted that the daily layoffs would continue until finance minister Jerome Kennedy delivered his budget speech,  Jerome issued a news release  - at 1:30 PM - announcing that they would be holding off on further layoff announcements until he delivered the budget speech.

As it turned out, NTV’s Mike Connors had tweeted around noon that the “Premier says government has decided to stop the trickle of layoffs until budget day.”  CBC’s David Cochrane tweeted the same thing.

Cochrane and Connors also noted that -  as Cochrane put it -  “Premier says more than 500 jobs will be cut in budget. Not all layoffs. There is retirement incentive. No more cuts until budget.”

Meanwhile, 17 employees in a raft of departments got word today that they were headed for the door. 

Apparently, those are the last ones until the budget speech.