Actions and words #nlpoli

The provincial cabinet has known since January - at least - that the powerhouse at Muskrat Falls is only 15% completed despite a huge payout to the contractor.

That's what Nalcor reported to the committee of provincial bureaucrats named by the Conservatives to get a report from Nalcor every now and again.  They can't do anything else except receive the reports and pass them on to cabinet.  They still do it under the Liberals.

The company hired by cabinet to conduct yet another review of information supplied by Nalcor that government already had included a little table of progress on major components at Muskrat Falls.  The powerhouse is a major component.

But it isn't on EY's table, shown at right and released earlier this month.  It's lumped in with "spillway" and shows it is supposedly almost 40% complete.

There's a lot of difference between 15 and 40.

Responsibility #nlpoli

In the middle of all the screaming as the government unveiled its budget on Thursday,  the editor of a regional business magazine asked,  apparently in all seriousness,  "Biggest question of #Budget2016, How did NO ONE know that prev gov't spending was so out of line with revenues?"

Writing from her sabbatical in far-off England,  a CBC reporter with more than 20 years experience offered that the budget had "the reek of the wickedest hangover after a long, massive binge to end all binges."

"In 23 years in the biz,"  said the one to the other,  "what I'm seeing from afar looks like no other budget I've ever seen."  

"Same,"  said the other to the one.  "I've been following budgets around Atlantic Canada for 18 years and can't remember anything quite like this."

The simple observation on the second point is that we have seen budgets precisely like this one before, at least in the extent that it raised taxes and fees on all sorts of things.  We went through it routinely in the 1970s and in the 1980s and even into the early 1990s.  Budgets just like this one are well within the experience of both those observers' lifespans in this province and certainly within their professional lifespans.

So in observing the observers,  your humble e-scribbler found their shock a wee bit curious.  The only thing that was even more bizarre was the question about how no one had seen any of this coming.

The Austerity Budget Pantomime #nlpoli

According to the Oxford dictionary, financial austerity means "difficult economic conditions created by government measures to reduce public expenditure."

Reduce government spending.

Three key words.

The most important is reduce,  meaning to lower or to  lessen.

Keep that in mind.

The Rasputisa and the 2016 Budget #nlpoli

The speech finance minister Cathy Bennett read in the House of Assembly on Thursday was as horrible as the reaction most of the province have been having to it.

That's not surprising given that the entire budget communications program was the product of precisely the same folks who delivered repeated political and policy disasters for the former Conservative administration.  And if that wasn't bad enough, everyone - the Liberals included  - picked the anniversary of the Titanic disaster to deliver a very hard budget.

To get a sense of the problems with Thursday's budget, take a look at two fine examples of just how politically tone deaf the speech was.

The first one:  "As our Premier has said, knee-jerk reactions have created mistakes that, unfortunately, Newfoundlanders and Labradorians are paying for now."

Bennett's speech writer didn't give an example so folks will likely fill in their own.

The Incrementalists #nlpoli

Today is budget day.

There's been lots of speculation flying around, most of it a confirmation that people have little real information about anything. If you have been paying attention, though, you can probably make a fairly good guess at what Thursday's budget will look like.

What follows is based entirely on what Dwight Ball and his ministers have done and said in public, combined with a general knowledge of the provincial economy, the budget process and that sort of thing.

Read this now and in a few hours you can see how close this is to the actual budget.

The Rasputitsa #nlpoli

Before we even get into this, let's be clear:  the EY review commissioned by the provincial government was never, ever about cancelling Muskrat Falls.

Not even remotely or theoretically.

Dwight Ball said so in December:  "cancelling this project is not what this review is about.”

The provincial government just wanted the external contractor to give it a better sense of what the project would finally cost.  Faced with a record deficit on top of the government's financial problems, the Liberals wanted to know how much they were on the hook for.

That's it.

Bring out yer dead #nlpoli

In the end there was something perfectly fitting in the way New Democrats dumped their failed leader.

Every pundit around and lots of New Democrats believed that Mulcair would easily pass the leadership test.  They figured he'd have no problem getting close to the 70% vote against a leadership convention.

Last fall, all sorts of people  - including a raft of New Democrats - assumed the party would coast to victory in the general election.  Just 30 more seats to go they told us just before the vote.

And in both cases,  the result was quite the opposite of what everyone believed.

The value of inquiry #nlpoli

Information is good.

Information is the basis of knowledge.

Information is also power.

That's why people who have information don't want others to have it.

The power that comes from knowing is why some politicians, government officials and others, historically, have raised all sorts of objections to laws that allow people to obtain government information.  They like the fact that they have power and they aren't anxious to let others have it

Sun burn #nlpoli

On Friday morning, Memorial University political scientist Amanda Bittner told a CBC Radio audience that the Telegram’s government-compiled list of public servants making more than $100,000 a year served no useful purpose.

Lists like this are often called "sunshine" lists after the first one, published in Ontario since 1996.

Bittner dismissed the results of a dozen access to information requests as nothing more than a "patchwork" of information in a  “random Google document.”

On Saturday,  the Telegram showed how stunningly wrong Bittner was.

Bill 29 didn't go far enough: public sector unions #nlpoli

The teachers' union doesn't want the public to know the names of public servants in Newfoundland and Labrador.

The news late on Thursday is that NAPE - the province's largest public sector union  - and the nurses' union are thinking about joining the fight against the public's right to know who works for the public service and what they earn.

The teachers' union is going to court to try and block disclosure of the names of public servants in response to a request from the Telegram's James McLeod for a list of public service positions in which the person holding the job makes more than $100,000 a year.

McLeod is compiling the list because both the former administration and the current one have committed to publishing one but haven't done so yet.  Several other provinces publish similar lists of public employees who make more than $100,000 a year.

The teachers' union says it's okay to have the position title and income but we can't have the name of the person holding the job, even though that information is readily available under access laws in every province and the federal government and it's been legal to obtain in this province for 35 years. Neither the teachers' union nor any other public sector union has raised this as an issue in the 35 years since the first provincial freedom of information law passed the House of Assembly in 1981.

Doesn't make sense, right?

Of course, it doesn't.  At least, it makes no sense if you look at it from the public interest.

It only makes some sense if you understand that these folks complaining about public disclosure aren't concerned about the public interest at all on any level.  They are concerned only about their own interest.   Unions who have members who will turn up on the lists are defending positions every bit as as private and self-interested, in other words, as the people the unions have been quick to attack for running public-private partnerships.  The hypocrisy is staggering but, sadly, not surprising.

None of the folks criticising the public disclosure have offered a solid reason why the information shouldn't be public.  Most of what they've claimed are undifferentiated fears of what unnamed people might theoretically do with the information.  They might... you know... gossip.  or worse,  the complainers have just offered the view that adding the names is unnecessary or serves no "journalistic" purpose.

What's most striking about these complainers is not the fact they offer no substantive argument, nor even that they don't feel the need to offer an mature, coherent, intelligent reason for their position.  It's the intensity of their feelings, of their unfounded fear.

Many of the people making big money are professionals:  teachers, lawyers, judges, university professors, nurses and doctors. We all know they make higher salaries than the average. They went to school for a long while to learn their business and they work pretty hard.

In other instances, like say a lineman working for Nalcor,  their pay reflects the hard nature of the work they do.  Master mariners make good money.  The job they do takes skill and carries a lot of responsibility.  As for the rest, presumably they are well qualified for the jobs they have, too. teachers, for example, are paid based on their educational qualifications, responsibilities, and years of service.  There's a correlation between their merits and their compensation. For all these folks, the pay and other benefits they get were set by government, not them, and should be enough to compensate them for the work they do on behalf of the public.

Yet they act like they are ashamed of something or like they should be ashamed of something.  If these folks and their unions are indeed feeling a wee bit guilty then maybe we ought to do more than just publish a sunshine list. Maybe there is a bigger problem here yet to be discovered.

The last time someone tried to turn back the clock on the public's right to know we got Bill 29.  As it stands right now,  the province's public sector unions want to take us back to the time before the first freedom of information law.   Since they haven't offered a single good reason for their agitation, you really have to wonder what's driving their anxiety.

-srbp-

Joining the access fight #nlpoli

As it turns out, the "commentary" on access from information and privacy commissioner Ed Ring is tied to a lawsuit coming from the province's teachers' union to block an access to information disclosure to the Telegram for a list of teachers and principals making more than $100,000 a year in salary.

The school district hasn't sent the requested information James McLeod as they know the teachers union application is coming.

Your humble e-scribbler filed an access to information request for the school district on Wednesday evening asking for a list of all teachers employed by the district and their individual salaries.  Simple list.  Send it out in a pdf.

Here's why SRBP joined in.

The teachers' union is wrong, as a matter of principle.

The public has a right to know the name, position, and salary of every person on the public payroll.

Period.

A mess in the government access and privacy world #nlpoli

Two recent stories about the province's access to government information and privacy laws.

Both of them are essentially nonsense.

Short version for the new administration:  cock-ups in comms and access to government information helped destroy the Conservatives.  Since you've already got big communications problems, adding screw-ups in ATIPPA to the mix is just no good at all.

Us and them #nlpoli

This is the story of two politicians.

One is a successful business man with major land developments in the works.  He got into politics to defend his people against foreigners out to exploit them. With a quick temper, a tendency to just make stuff up, and hair from the 1970s, the politician loves to attack the news media and liberals for undermining him in his selfless efforts on behalf of his people.

The other politician is Donald Trump

Incompetence at city hall costs taxpayers #nlpoli

St. John's city council is in serious trouble.

They may not realise it yet.  Indeed, many residents of the capital may not realise it, but city council has made a series of decisions that residents will pay for.

They are all related to the budget.  While many of them lay at the feet of the finance committee, chaired by Jonathan Galgay, the whole council must bear responsibility for both the bad decisions but also for the deception that has surrounded them.

Why Tom Mulcair is wrong... yet again #nlpoli #cdnpoli

Tom Mulcair isn't alone.

A lot of people have been making the extremely dangerous argument over the past few days that we ought to accept any claim or accusation based solely on the fact that someone made it.

They have been using the Twitter hashtag #Ibelievesurvivors to argue that we should believe any woman making an accusation of sexual assault regardless of anything else.

A meritless position #nlpoli

The new provincial Liberal administration has made the creation of a merit-based system of cabinet appointments the centre-piece of its first session of the House of Assembly.

The bill to give effect to their policy is not perfect but by the time it clears the House later this spring,  the province will have a long way from the pernicious practice of the former administration   - from 2003 onwards is one administration - of appointing people chiefly on their ability to follow directions from the Premier's Office.

Merit is the Liberal watchword and we should all be cheering a system that will base choices as they should be, that is on qualification, and dismiss irrelevant considerations.  If the Conservatives or New Democrats can improve the Liberal bill, then the Liberals should accept the amendments and move us all forward.  We would all be better off for it.

How strange it is then, that a senior minister in the administration for merit should push the federal government to make an appointment to the Supreme Court of Canada on the basis of anything but merit.

Paying for Muskrat Falls #nlpoli

To understand precisely how insane an idea we have at Muskrat Falls, think of it this way.

In Quebec,  provincial government policy is to maintain a pool of electricity that is very cheap to produce.  This is for use inside Quebec so that the people of Quebec always have really cheap electricity.

In Newfoundland and Labrador,  provincial government policy is to force local consumers to pay double their current low rates in order to pay for Muskrat Falls.  Nova Scotians get a block of power for free and access to an additional quantity of power at Nova Scotia market rates, which are far less than Muskrat Falls will cost local consumers.  If they can sell any other electricity,  they will but again,  the cost will be subsidized by the people of Newfoundland and Labrador who are paying the whole cost plus profit.

This isn't new.  It has been the case since before Danny Williams announced his retirement scheme called Muskrat Falls.  Your humble e-scribbler pointed out the subsidy insanity before the announcement.  Williams and Nalcor boss Ed Martin confirmed it when they unveiled the Muskrat Falls project.

Trump the unpopular... maybe not #nlpoli

Apparently, Donald Trump is the most unpopular American presidential candidate since 1992.

The Toronto Star's American correspondent produced a lovely article on Friday.  It started with the results of a couple of recent comparisons showing how unpopular Donald Trump is in survey research conducted during the current primaries compared to every candidate going back to 1992.

Then Daniel Dale tells us what will happen when this trainwreck gets to the general election November.

If you've already decided Trump is the antiChrist - that is, if you are a regular Star reader - you will skim this confirmation of what you already knew.

But you might want to look more closely at this piece to see a couple of really glaring - and really obvious mistakes - it makes.

Trash talk #nlpoli

The folks at the City of St. John’s wanted to boost their curb-side recycling program.

Last fall, they launched a campaign called “Blue is the new Black”.  Blue is the colour used for recycling bags and the campaign name is fairly plain play on a very old phrase to describe something that is currently fashionable.

No one seems to have noticed the campaign until last week when the St. John’s Status of Women Council took issue with the cover illustration from the newly issued guide to city services (right).

Ghomeshi and a fair trial #nlpoli #cdnpoli

The moment when Jian Ghomeshi’s lawyer established during the trial that witnesses against him had colluded in their testimony and had lied – even if by omission – there was very little chance that the judge could possibly have found the former broadcaster guilty of anything.

“The harsh reality,”  Ontario Court of Justice Judge William Horkins wrote in his decision, “is that once a witness has been shown to be deceptive and manipulative in giving their evidence, that witness can no longer expect the court to consider them to be a trusted source of the truth.”

The standard of proof in a criminal trial is proof “beyond a reasonable doubt.”  This does not mean, as judges in Canada frequently put it, that there is some scientific or absolute proof of guilt.In reaching his decision.

The Office of Steve Kent

26 public meetings.

More than 1,000 people showed up for them.

More than 28,000 people used the government website that the folks at the Office of Steve Kent call an app to make it sound more impressive to the punters.

Another 700 ideas arrived by email, fax, or carrier pigeons.

And...

A simple question about residential schools #nlpoli

According to one of the firms involved in the class action suit by residents of Newfoundland and Labrador about residential schools:

Five separate actions were commenced alleging that former residents of five IRS [Indian Residential Schools] in Newfoundland and Labrador, operated by the Canadian Government, were neglected, sexually and physically abused.  It is alleged that the sole defendant in these actions, the Canadian Government, had the full responsibility for these residents after Newfoundland and Labrador joined the Confederation on March 31, 1949.

Yet, according to the Globe and Mail,  

In Newfoundland, the government contends, aboriginals were not isolated on reserves and were not forced by Ottawa to attend residential schools, as they were in the rest of the country. Nor did Ottawa operate or oversee schools and residences attended by aboriginal children, sometimes alongside non-aboriginal children. (The province created and ran some of the facilities in Newfoundland and Labrador; churches and religious charities also created and ran some institutions. A charity created St. Anthony’s orphanage under the auspices of the provincial welfare department.)

Since the Newfoundland and Labrador residential schools in the class action suit were not run by the Government of Canada and were not either in kind or substance anything like the Indian Residential Schools covered by the earlier apology and payment,  why is this class action suit going anywhere in the courts or outside against the Government of Canada?

Seriously.

Anyone?

-srbp- 

Resettlement story wrong #nlpoli

Access to documents from government are one thing.

Understanding what they say is quite another.

CBC requested batches of documents from the provincial government about efforts by the people of Little Bay Islands to relocate from their isolated community to other places.

“No government money in budget for rural relocation program” ran the headline on the story last week.  The sub-head claimed there was “no way to pay up-front costs” of relocation.

Unfortunately for the folks at CBC, the documents didn’t say that.

How to say little in 34 slides #nlpoli

• Consultants have consistently reported that the Muskrat Falls project is well-managed and well-led.
• Despite that independent analysis, MFP has been dogged by significant cost over-runs, significant problems with performance on meeting project timelines, and chronic problems with communications/public disclosure.
• Review of Muskrat Falls project by a company called Independent Project Analysis.
• Consists of 34 slides
• Majority of slides (20) contain background information on project and contractor or bland statements of fact.
• No details on research specific to this assessment beyond reference to interviews.
• Remainder of slides (14) provide no evidence to support positive statements or indicate areas of concern...

Kissing in the rear #nlpoli

At the entrance to the new west-end high school, there's a sign that warns drivers that only those big yellow student transportation vehicles can go around back to the drop off point there.  Cars should go to the front of the school.

There's a simple word in English for those big yellow conveyances.  We call one of them a bus.

But what's the plural?

According to the sign, it's "busses".

There is a word in English spelled "buss".

It's a synonym for kiss in American English.

The sign looks funny if you know that.

To answer the question on spelling, go check the dictionary.

Even the Oxford shows that the plural of the vehicle may have one "s" or two.  But look up in the URL and you will see that Oxford is directing you to a site for American English if you are from an IP address in North America.

Ah.

The online version of the Cambridge English dictionary notes a difference with the two "s" version being American.  Ditto the UK English version of the Oxford, once you hunt around a bit to find it.

The online reference grammarist.com is clear enough:

In 21st-century English, buses is the preferred plural of the noun bus. Busses appears occasionally, and dictionaries list it as a secondary spelling, but it’s been out of favor for over a century. This is true in all main varieties of English. 

After bus emerged in the 19th century as an abbreviation of omnibus, buses and busses (the logical plural of buss, an early alternative spelling of bus) vied for dominance for several decades. By the early 20th century, though, buses was the clear winner, and it has steadily become more prevalent. Today, buses appears on the web about 15 times for every instance of busses.

So for about a century,  English speakers have settled on buses as the plural for the vehicle.  Hunt around a bit and you will find the "buss" version of the plural used to refer to clearing the table in a restaurant or to the computer parts.  That actually makes sense if people are aware of the multiple meanings for the same word and want to distinguish between the human transporter and the data one.

So while the way the English school district has used busses to mean the plural of the student transporter,  that isn't wrong -  strictly speaking  - if we are using American English spelling as the default.  It is just very antiquated.  And unless, they spell connection with an "x" - connexion - then they really should lop one of the "s" things off their plural form of "bus".

Odds are in this case, that the folks making up the signs got the spelling wrong and didn't check to see what was the most common spelling.

Wonder if anyone at the school has picked up on this yet?

-srbp-

Record deficit in 2015-16 #nlpoli

The deficit for 2015 will be a record.

We know that because of comments at the House of Assembly by Premier Dwight Ball and finance minister Cathy Bennett.

News media are reporting that as "raising the province's borrowing capacity" but that's not quite what is going on.  The markets will determine the province's borrowing capacity.  That is, the folks lending the money will tell us how much we can borrow.  What went on in the House on Thursday was a wee bit different.

Tiny pebbles in an empty washtub #nlpoli

For the third day in a row,  the opposition has asked one question over and over again, with a couple of minor variations.

They’ve asked education minister Dale Kirby why the New Liberal government that took over last December hasn’t called elections for the school board the Conservatives appointed in 2013 after they crammed all the English language school boards together in one pile.

Even if you have never heard of this issue before the instant you read that sentence, you know precisely where this is going.

Simple words work best #nlpoli

esquire.com last October.

 Big headline:

Donald Trump Woos Republicans By Speaking at a 4th Grade Level

Smaller head:

His competitors from both parties aren't much better.

Aren't much better.

The blindingly obvious #nlpoli

After all this time, it remains an enduring mystery how a guy who held himself out to be the great seer of oil prices still gets quoted on oil prices despite the number times he has fundamentally gotten it wrong.

Some local reporters still use Wade Locke as the go to guy on oil.

Here's a sample of what passes for insight in Newfoundland and labrador these days.  These quotes are from a recent piece at CBC by Terry Roberts:

"It's always been the case that at some point, demand would start to swamp supply."

And

"At some point in time demand will significantly exceed supply and prices will have to rise well beyond $50 as well. But again that's only a matter of time, and a matter of exactly when."

Just as there is a 50/50 chance of anything occurring - it either will or it won't - so too is it likely that, over time,  the demand for any commodity will swamp supply.  The result - inevitably - would be that prices would rise.

This is Economics 1001 kinda-stuff.

It's only a matter of time.

It is only a matter of when.

When could be tomorrow.

Or it could be a decade from now.
The thing for folks in government, having some idea about where prices are going can mean the difference between a massive surplus or, as in the more recent times, massive deficits.

Having insisted shale was nonsense and that oil was about to skyrocket any day now,  Wade is a wee bit more shy these days since those other predictions didn't pan out.

"I was one of the guys suggesting to government a couple of years ago use $105 (a barrel in preparing a budget), " Locke told Roberts.

"I don't have any pretension that anything I say with respect to oil prices has much in the way of precision."

Wade never actually had much precision, but at least now the old boy has given up the pretense.

-srbp-

Picking stuff out of the appointments hockey bag #nlpoli

One of the provincial Conservatives’ signature new initiatives in the first session of the legislature after the 2003 election was a bill that supposedly set fixed election dates. 

Changes to the House of Assembly Act also triggered a general election if the Premier left office other than within a year of an existing fixed election date and reduced the number of days the Premier had to call a by-election from 90 days to 60 days.

When the bill appeared in the House, there were some obvious problems with it.  For starters, and in keeping with the constitutional traditions of Canada, there actually were no fixed dates for general elections.  The first clause of the amendment bill made it plain that nothing in the bill change the power of the Lieutenant Governor-in-Council to call an election whenever it wanted.

No change in party support numbers #nlpoli

Despite delivering bad news about the provincial government's finances since taking office,  the provincial Liberals continue to hold strong public support, according to the most recent poll by Corporate Research Associates.

Support for all three parties remains essentially at the same level it was in the fourth quarter of 2015.

In the chart below, the Liberals are at 48% of respondents (red line),  the Conservatives are at 17% (blue), and the NDP are at eight percent (orange).  Undecided,  no answer, would not vote combined is at 27%, shown by the dotted light blue line.

CRA reports its party support as a shared of decided respondents.  SRBP adjusts the figures to show party choice as a share of all respondents.

-arbp-

Interim Supply 2016 #nlpoli

The provincial government can only spend money approved by the House of Assembly.

In parliamentary language, the House grants supply to the government, as in a supply of money.

Each year, the government asks for interim supply first.  That's a portion of next year's planned spending to tide them over from the start of the new financial year until they can get the whole budget passed.

There is no hard and fast rule as to how much the interim supply request is compared to the whole budget.  But, if you look at the past eight years or so, you can find one.

The inexplicable persistence of nonsense #nlpoli

“There was a very good job done … of boxing this province out [of the Equalization program] a few years ago,”

That was Premier Dwight Ball talking to reporters on Tuesday after the Throne Speech that set the agenda for his new administration. He was talking about the prospect that he might get some cash from Ottawa to cover the province’s massive deficit.

What Ball said isn’t true.

It’s hard to know why the false version of events lives on, but it does. All sorts of intelligent people continue to believe – and repeat – the story that Equalization reforms made in 2007 were designed to screw Newfoundland and Labrador.

But it is most emphatically not true.

The New Approach #nlpoli

In 2003, Paul Davis' predecessor as leader of the provincial Conservative party went to Ottawa to beg for a hand-out.

Called it The New Approach

 He got one.

Then he begged for more through Equalization.

Got what he asked for.

Pretended he didn't, backed by some economist from the university named Locke.

Threw a childish tantrum and kept at it for years.

 Drove the province up on the rocks through unsound financial management that carried on through all his successors.

And now Danny Williams' successor is carrying on the fine tradition. The first Conservative private members' resolution in their new role as Official Opposition begs Ottawa to send money to fix the mess he and his pals created.

BE IT RESOLVED that this hon. House urges the Government of Canada to recognize the impact of the steep fall in oil revenues on our province and that it consider financial support to our province in order to prevent deep cuts in services to the people of Newfoundland and Labrador; 

and BE IT FURTHER RESOLVED that this hon. House urges the Government of Canada to modernize the federal-provincial arrangements, including the Equalization Program and the Fiscal Stabilization Program to more fairly and promptly reflect our province's needs, and to more fairly account for natural resource revenue.

-srbp- 

Open Data #nlpoli

James McLeod has released the data he compiled to produce his Saturday story on the number of people in the provincial public service who make a salary of more than $100, 000 a year.

What James has done is follow the Open Data policy the former Conservative government announced but never implemented.  The new crowd running the place are understandably a bit preoccupied at the moment but Open Data is an idea they should latch onto.  Not only does it save money, but it also puts a pile of government data in the public where folks can make good use of it.  If you want to support innovation, making information readily available is one of the best things any government can do.

McLeod submitted a series of access to information requests to the core government departments as well as the larger agencies and Crown corporations. Some responses, like the one for Memorial University, is pending. McLeod put all of the bits and pieces into a spreadsheet and that’s what he has offered up to the public to do with as they wish.

Chevron starts production at GORGON (Australia) #nlpoli

SAN RAMON, Calif.--(Chevron via BUSINESS WIRE)--Mar. 7, 2016-- Chevron Corporation (NYSE: CVX) today announced it has started producing liquefied natural gas (LNG) and condensate at the Gorgon Project on Barrow Island off the northwest coast of Western Australia. The first LNG cargo is expected to be shipped next week.

This Smart News Release features multimedia. View the full release here:http://www.businesswire.com/news/home/20160307006452/en/

Chevron has started producing liquefied natural gas (LNG) at the Gorgon Project off the northwest coast of Western Australia. The company is poised to be one of the world's largest LNG suppliers by 2020. (Photo: Busines Wire)

"We expect legacy assets such as Gorgon will drive long-term growth and create shareholder value for decades to come," said Chairman and CEO John Watson. "The long-term fundamentals for LNG are attractive, particularly in the Asia-Pacific region, and this is a significant milestone for all involved."

Chevron is positioned to become a major LNG supplier by 2020. In particular, Chevron's Australian projects are well located to meet growing demand for energy in the Asia-Pacific region and more than 80 percent of Chevron's Australian subsidiaries' equity LNG from the Gorgon and Wheatstone projects is covered by sales and purchase agreements and heads of agreements with customers in the region.

"We congratulate the Gorgon workforce on this achievement," Watson continued. "This is the result of the collaboration of hundreds of suppliers and contractors and many tens of thousands of people across the world during the project design and construction phases."

The Gorgon Project is supplied from the Gorgon and Jansz-Io gas fields, located within the Greater Gorgon area, between 80 miles (130 km) and 136 miles (220 km) off the northwest coast of Western Australia. It includes a 15.6 MTPA LNG plant on Barrow Island, a carbon dioxide injection project and a domestic gas plant with the capacity to supply 300 terajoules of gas per day to Western Australia.

The Chevron-operated Gorgon Project is a joint venture between the Australian subsidiaries of Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent).

-srbp-

The Trump Phenomenon #nlpoli

The gaggle of American political scientists at the Monkey Cage have been doing a series of posts about Donald Trump's campaign for the republican nomination.

They started with a post that reminded us that most voters aren't ideologues.  That is, folks don't conform to a text-book set of definitions of left, centre, or right and within the major parties in the United States,  there is lots of variation within the very broad Republican and Democratic tents.

In that vein,  the most recent post on the subject reports on polling that suggests Trump's views are closer to what Republican voters believe as opposed to what the party Establishment espouses.

Most people seemed to have figured out early on that  it's the economy.  And, of course, lots of disaffected or economically displaced white folks are loving up Trump's  airing of  White identity and grievances.

In sum, Trump’s “us against them” campaign resonates in an American political environment that has long been centered on social groups and has grown even more so in the Obama era. Both white identity and hostility toward minority groups are propelling Trump — perhaps even to the nomination.

-srbp-

Jim Thistle, 1954 - 2016 #nlpoli

Most of you have likely never heard of Jim Thistle.

Jim passed away on Thursday after a brief illness.  He was only 61 and until he was diagnosed with a very serious and ultimately fatal illness, Jim had more mental and physical energy than most of us had when we were kids.

Jim was blessed with one of the sharpest minds this country has ever produced.  He was kind, gentle, funny, and generous with his time and his insights. Despite being one of the busiest people around, let alone one of the busiest lawyers around, Jim had time for lots of other pursuits including working on a master's degree in history.

The Walking Dead #nlpoli

In China in these days of hard economic times, none are hit so hard as the people who work in zombie industries.

These are industries that keep producing despite there being no market for the product.  Like coal.  Or cement.  Or iron.

In most cases, the government steps in with fresh credit or other supports to keep the plants going and keep workers employed rather than close them down.

Serendipity do dah #nlpoli

Some people on da Twitter were talking about verbal tics like saying “ya know.”

One of ‘em asks if the other had counted Danny Williams’ penchant for them.

Yes, butts in yer humble e-scribbler who was not part of the original discussion:  Cameron inquiry.  270 in a four hour stint, plus eight “quite frankly”s. If anyone on the Internet had that kind of obscure information, it would be The Scribbler or labradore.

Ya knows, right?

So then, you know your humble e-scribbler had to check the record by searching on SRBP for all appearances of the phrase “verbal tic”  and the plural.

The persistence of uncommunication in government #nlpoli

For some interesting insights into the way government works, take a look at an access to information request someone submitted for documents related to the bond ratings for the province issued earlier this year.

First, notice that the department responsible for openness and transparency continues to follow the decidedly closed and opaque practice of printing electronic documents,  scanning them, and then posting a picture of the document.  This makes it harder to find information in the documents and use it and of course that is precisely the intent of the practice.

Second, notice the enormous amount of effort spent by finance department officials to obtain comparative credit ratings for other provinces and for Newfoundland and Labrador over time.  It’s a relatively meaningless piece of information but it sucked up an astonishingly large amount of email traffic.

A tax to build a tax #nlpoli

A tax to pay a tax.

Interesting idea, no?

Well, that’s what Jim Feehan suggested last week.  He told a luncheon meeting of the St. John’s Rotary Club that the government should consider financing the rest of Muskrat Falls through a special tax. Start paying today,  Feehan said, and avoid borrowing money and paying that money plus the interest in the future.

Don’t dismiss the notion quite so quickly.  There is some sense in the idea.  But before you give a big thumbs up to Feehan’s idea, though, consider all the details.

Lions, jellyfish, and a quotable Italian fascist #nlpoli

American media circles were all abuzz this weekend about a little episode on Twitter featuring Donald Trump and a quote he liked.

Gawker created a Twitter account last year that spouted quotes from Italian fascist dictator Benito Mussolini but attributing the quotes to Donald Trump.  Nothing happened to the account until Donald Trump himself retweeted this quote:

Note the name on the Gawker account is ilduce2016. Il Duce, for those who don’t know is Italian for The Leader, and was Mussolini’s chosen title. German nazis took the cue from Mussolini, incidentally, when they referred to Adolf Hitler as der fuhrer.

Things are THAT bad #nlpoli

David Thompson is an independent economist in the same way that Jerry Earle and Wayne Lucas are independent human resource consultants.

But the problem isn’t that CBC couldn’t make a factual statement in the first three words of a news story.

Nor is it a problem that Thompson recently visited the province at the expense of a public sector union and met with the Premier to offer some helpful “independent” advice.

No.

The problem is that Thompson simply didn’t know anything about the province and the state of the government’s finances.

Sheilagh fits right in #nlpoli

What exactly is Sheilagh O’Leary?

Did she get elected to Council in the Ward 4 by-election or is she a re-elected councillor?

Well, never mind.  She will fit right in with the gang at Tammany on Gower, d.b.a. St. John’s city hall. They are, generally speaking, very high on themselves, and very low when it comes to competence.

CBC has one of those great money-quotes in their coverage of the by-election results.  “People have lots of issues,”  O’Leary said, “and I'm just — I'm honoured, I'm humbled and I'm so excited about getting back because you know what?  I belong in that chamber.”

“When you know that you can make a difference and that you can make that change happen, you have to follow your heart.”

Exit Reality on the Rock #nlpoli

Last fall, Conservatives, New Democrats, and assorted political watchers attacked the Liberals for the lack of detail in their election platform.

Now, most of those same people are accusing the Liberals of  hoodwinking folks into voting for them with all their great promises they never intended to keep.

Dipper slash Telegram editor  Dipper Brian Jones is a good example.

If more evidence is needed to prove Liberals are slippery creatures, ponder the election promises that were made mere months ago and the utter lack of principle in crassly breaking those promises without remorse or embarrassment.

The Tories were no kinder, accusing the Liberals of knowing that the financial arse was out of her and yet making promises anyway.

Uncle Ottawa's cash #nlpoli

The federal government would run a deficit this year three times larger next year than the one the Liberals expected during the election campaign.  The deficit this year is running slightly north of $18 billion and while the Liberals expected to run deficits of around $10 billion each year, the current projection puts the deficit at something around $30 billion.

The economy, it seems, is in significantly worse shape than it was last November.

That's the same thing that Premier Dwight Ball is saying but we should note one very importance difference.  Newfoundland and Labrador was already in a bad financial spot last spring.  By the time Ball took office in the fall things were twice as bad as they had been when he'd promised to get rid of the teensy sales tax hike.  So while the federal situation may now find itself well up the proverbial river of excrement,  they are still looking at our backside as we blaze a trail to the headwaters.

Cabinet documents and no brainers #nlpoli

Years ago,  a couple of enterprising reporters at CBC submitted what was then a request under the Freedom of Information Act for information about entertainment expense allowances for senior bureaucrats and cabinet ministers.

They got the information and aired a story that claimed that, in a time of great restraint,  the government had increased the budget for entertainment. It was a wonderful story that made the government look bad and that raised all sorts of self-righteous indignation about fat-cat politicians and bureaucrats living it up while the poor folks suffered.

Wonderful story.

Just not true.

Muskrat Falls electricity prices... again #nlpoli

The infamous JM is at it again.

"Top 10 Muskrat Myths" (via Uncle Gnarley) rebuts 10 of the arguments in favour of Muskrat Falls. All of this has been argued before in several places, but this is a one-stop summary of the key points.

One to notice is the idea that Muskrat will make money from export:

“It will generate Export Revenue”:  Initial export sales of 2,000 GWhr (40% of MF output) will generate about $80 million annual revenue, based upon current market pricing.  To put that figure into perspective, interest on the ~$8 billion (the final figure may be much higher) which will have to be borrowed for this project will cost about $320 million a year.  Muskrat Falls will not be a significant revenue generator for the province until it is paid off in 2067.

In the second part of his myth-busting extravaganza, JM tackles the claim that Muskrat Falls will stabilise electricity rates.  This is a long, dense post with lots of charts.  it will turn most people off.

The big take-away is that, as SRBP and others have told you,  Muskrat Falls is going to double electricity rates, guaranteed.  Double the rates, at least.

But the bigger point is that doubling rates will push electricity consumption down, despite the fact that Nalcor sold Muskrat Falls on the assumption that consumption would only go up.

The problem is that we pay for Muskrat Falls whether the energy is needed or not.  "The impact on ratepayers will be profound," JM notes.  If we have to distribute the cost over fewer kilowatt hours, you can expect the price for each kilowatt hour will go up. That will induce even more conservation with a similar pressure on prices.

JM notes that Nalcor hasn't produced a simple set of rate projections.  The reasons is likely that Nalcor doesn't know how it will translate the final cost of Nalcor to rate payers.  For example,  a future government may find itself under pressure to keep electricity prices down.  One way to do that would be to limit how much of the total cost of Muskrat Falls is recovered through rates.

Here's how that might look. If MF costs $10 billion all-up,  half of that is covered by the federal loan guarantee while the other half is provided by the government through additional borrowing. The provincial government might decide to only recover the half of the cost covered by the federal loan guarantee.  The government itself would pay back the other half through other taxes.

Since taxpayers and ratepayers are the same people,  the final cost will be the same.  The difference is that government can hide half the cost of Muskrat Falls with a bit of creative accounting.  There are reasons why the House of Assembly destroyed the province's transparent electricity rate system in 2012 and replaced with one ultimately dictated by cabinet.  Hiding the real cost of Muskrat Falls from consumers is one of them.

-srbp-

Evidence-based decision-making #nlpoli

James McLeod had a tidy piece in Wednesday’s Telegram on the government’s effort to find a way of out of the financial mess. it's well worth your time.

The document McLeod got through an access to information request shows the extent to which the cabinet wants to cover all the bases in finding a way out of the province’s current mess.  The document, which we already knew about,  tells government officials to look not only at what they are currently doing but also how they are doing it.

What comes back to cabinet for discussion should be as wide a range of options as possible.  It’s precisely how the government should be tackling the problem it faces, despite what the Premier’s out-to-lunch messaging has suggested.

If we dither, we die. #nlpoli

by Chuck Furey
________________


"Indecision becomes decision with time" someone once said.

The current fiscal nightmare in Newfoundland and Labrador is real.

One only need compare the amount of borrowing in 1933 (34%} to the borrowing today (30%) as a share of spending. The similarity is stark and raw and scary.

Sadness and desperation come to mind as the ghosts of history now stare down the new Ball government. They certainly didn't make this mess but they are now summoned to clean it up.

Fraser Institute, National Newswatch, and other fools #nlpoli

If the issue wasn't so serious, it would be funny.

Newfoundland and Labrador is up the financial creek, according to Charles Lammam, an analyst with the Fraser Institute,  in a new opinion piece with a couple of his colleagues..  The cause is excessive government spending.  "Had the government restricted program spending increases since 2004/05 to the combined rate of inflation and population growth, Newfoundland & Labrador would now have a small surplus, not a large deficit."

The fundamental problem with Newfoundland and Labrador’s approach to public finances over the last decade is that the government increased spending during the good times as though they would never end. When resource prices ultimately fell, the province found itself at an unsustainable spending level.

You certainly won't get any argument from this corner about those observations.

The problem is that over the last decade, Lammam and the rest of the folks at the Fraser Institute have consistently told us that Danny Williams and Kathy Dunderdale  were the finest financial managers in the country among the provincial premiers.  That's significant because they are the premiers during the period when Lammam now says the government was spending way too much.  The two ideas don't fit together.

It's not as though we suddenly learned things we didn't know at any point over the past decade.  Some of us have been criticising the excessive increase in spending by the provincial Conservatives since 2006.  By the time we got to 2009,  Williams had admitted government spending was unsustainable. Dunderdale admitted the same thing every year she was in office.  It's not like the folks at the Fraser Institute could have missed the repeated admissions of fiscal mismanagement.

Yet they did.

Which Fraser Insitute conclusion should be accept?

Neither.

The Fraser Institute has produced such laughable "analysis" of Newfoundland and Labrador over such a long period of time that we can only conclude their most recent observations are a fluke.   What we should do is be extremely wary of pronouncements from folks like Fraser who can look at the same data and come to diametrically opposed conclusions.  There's a fairly obvious problem with the way they do their analysis.

And anyone pretends to be a psychic forecaster who says "never saw that coming" is someone we should just laugh at.

-srbp-

This is a revised version.  The original incorrectly identified the National Post as the source of the Lammam opinion piece

Stepping on rakes: #nlpoli version

Premier Dwight Ball has changed his position. 

That’s the first thing.

Here’s the way James McLeod described Ball’s position on cuts to the public service.  It’s from the Saturday Telegram:

“We’ve met with some of the labour organizations and leaders right now, so what we’ve committed to — and it hasn’t changed — is attrition still remains as the primary source for us to see changes in numbers around the public sector, and a fair negotiating process,” Ball said. 

“Once we get into that fair negotiation, we will see then what direction the discussion goes.” 

Ball said job cuts in the government will be tied together with contract negotiations.
“They’re all connected, because it’s all where you save money and expenses,” he said.

Clowncil should try honesty, not more secrecy #nlpoli

The problem at St. John's city council isn't the recent budget.

Council is a nest of ego and ambition.  Not so very long ago,  council members fought among themselves privately and publicly.   Some of it wasn't very pretty.  Some of it was often very petty. But in the clash among councillors the public found out about what was happening with their city.

The current crop of councillors decided that the best thing for them to do is take decisions and debate out of the public view and to move it behind closed doors, into the shadows.  They caught the disease of arrogance and entitlement that infects provincial politics. 

The budget was nothing more than a symptom of the deeper problems at city hall.

Nalcor: Generations #nlpoli

Telegram editor Peter Jackson took a hard look this week at the implications of Nalcor’s effort this week to jack up electricity rates.

As part of the company’s rate application to the public utilities board,  Nalcor said a relatively dry season on the island had deleted its water reservoirs.  As a result it had to burn more oil to make electricity and therefore ratepayers needed to cover that cost.

Jackson notes that with Nalcor’s plan to scrap the Holyrood generating station, we’ll be left to rely on Muskrat Falls and its relatively small reservoir.  That small reservoir means the Muskrat Falls generators will depend on a water management arrangement with Churchill Falls.

And then Jackson puts everything in perspective:

Politicians and Public Debt #nlpoli

Remember the debt clock?

Finance minister Tom Marshall went around the province during that year’s budget consultation – now “rebranded” as “engagement” – with this big electric counter that purported to show how much interest on taxpayers were racking up on the public debt.

$1,400 a minute back then.

“That clock is ticking away showing a tremendous amount of money on interest that I'd rather see go into programs," said Marshall,  in a CBC story about the annual budget circus.

Now here’s the real question:  what year was that?

Decision-Based Evidence-Making #nlpoli

The government’s “renewal initiative” is supposed to be guided by something called “evidence-based decision-making.”

It’s right there, right after “affordable and sustainable public services” as one of five principles listed in the colourful little hand-out the government has been using as part of its “engagement” exercise.

How odd then that so far the Liberal administration has failed to apply the principle of supporting decisions with evidence.

Using his words #nlpoli

Politicians are usually very careful about the words they use.

That’s why it’s important to notice the words Premier Dwight Ball used this weekend in an interview with Tom Clark for Global’s current affairs show The West Block.

Ball said there was “no real sure fix” for the provincial government’s financial problems. But he did say that the government’s plan would involve revenue-generation, controlling expenses, efficient spending, and “what Ottawa can do to help initiatives around infrastructure.”  Ball also said that the provincial government would be applying for the same “sustainability” funding that Alberta was getting.

So what does that mean in concrete terms?

Old whine still sour #nlpoli

"I'm concerned that we have an aging asset,”  natural resources minister Siobhan Coady told CBC in explaining the most recent break downs at the Holyrood generating station.

About two years ago, in the midst of darknl,  then-Premier Kathy Dunderdale said pretty much the same thing:  “We've talked incessantly, it seems to me, over the last number of years about the aging facility in Holyrood and the fact that that facility needed to be replaced.”  Before that, Nalcor and its supporters used “aging infrastructure” and the inevitable climb of oil prices as the excuse to build the multi-billion dollar Muskrat Falls project.

The old whine in new skins isn't any sweeter in the ear whether it is coming from Coady or Dunderdale.

Indeed, what’s most disturbing about Siobhan Coady's media interview is that in the two years since darknl we have learned that the lines someone fed Coady are not true.

Yet someone still fed Coady the false lines and Coady used them.

Get the message: get a grip #nlpoli

Two former Premiers sent a very pointed message to Premier Dwight Ball this week about the way Ball has been handling the provincial government’s massive deficit problem.

Brian Tobin was in St. John’s to present a cheque on behalf of the Bank of Montreal to the celebration of the 100th anniversary of the Great War. Tobin said people need to understood that the current cabinet felt a problem far worse than any other in the province’s history.  people need to pull together, but for Ball personally, Tobin said that while it was best to be consistent and right, if you had to pick between the two, it was better to be right.  “Do the right thing,”  said Tobin.

Grimes did media interviews on Wednesday in addition to offering a guest post at SRBP.  He told Ball that it was important to put everything on the table.  Grimes specifically cited Muskrat Falls, with the billions in borrowing to finish the project, as well as energy marketing and offshore oil equity stakes.

Fiscal Stabilization Program #nlpoli

On the one hand, it’s great to live in a country that has a program to let the federal government shunt money to provincial governments that run into financial difficulties.

On the other hand, it’s disappointing that the current provincial administration is talking up the prospect of getting more hand-outs from Ottawa rather than bringing its spending in line with its revenues.

“The Fiscal Stabilization Program, introduced in 1967, compensates provinces if their revenues fall substantially from one year to the next due to changes in economic circumstances. …  A province is eligible for stabilization payments if economic conditions cause its revenues to decline in excess of five per cent in one year. The maximum amount payable is $60 per resident.”

Unless the federal government changes the maximum payable, we are talking about a mere $31 or $32 million for Newfoundland and Labrador.

The legal authority for the Fiscal Stabilization Program is in the Federal-Provincial Fiscal Arrangements Act.  The amount of money a province can receive comes from a formula in the Act that compares one year’s provincial revenue with that of the year before. The formula distinguishes between resource revenue and non-resource revenue.

The Act sets a limit on the maximum amount available to a provincial government.  The limit is $60 per person in the province according to the most recent sentence.  If the formula gives a larger amount than the $60 per capita,  a provincial government can receive the full amount.  Anything beyond the $60 per person maximum would be considered a loan.

A Quebec government summary says that no “province received benefits under this program until 1981-1982, when British Columbia received benefits. Québec qualified for a payment twice in the early 1990s. However, since the “minimum 5% decline” threshold was restored in 1995-1996 (after having been abandoned in 1972), no province has received compensation.”

-srbp-

From a decade of prosperity to $2 billion deficits: What happened?

By Roger Grimes

Reflecting upon becoming the eighth Premier of Newfoundland and Labrador 15 years ago this month, I found myself chatting with a few friends and associates about where the province found itself fiscally at that time, what happened during the next decade, and where we find ourselves today.

During my tenure as Premier, we were a persistent “have not” province with a deficit problem of roughly ten percent. We ran annual deficits of roughly $500 million on a total budget of $4.5 billion. Now, after a decade of unparalleled prosperity and “have” status within the Equalization system, we find ourselves with a twenty-five percent deficit problem comprised of a $2 billion deficit on an $8 billion total annual budget.

Using data aggressively #nlpoli

These days campaigns are about collecting information on voters and using the data.

The Ted Cruz campaign has been especially aggressive in  Iowa with a mailer that highlights the poor record of some voters of participating in caucuses.

The thing came in a brown envelope (above) and consisted of  single sheet of yellow paper (below) marked like a ballot that showed a score and percentage grade for voters named on the sheet. 

These folks don’t typically turn out to vote, so Cruz was trying to goad them into participating. Voting records are public in some American states so campaigns can tell who voted and who didn't.  Your neighbours.

You can tell if it worked by the results from Monday’s caucuses.

-srbp-

Newfoundland government finance, 1832 to 1949 #nlpoli

Before Newfoundlanders stopped governing themselves in the early winter of 1934, they’d run a sometimes arduous course.

Newfoundland gained a limited form of self-government in 1832 and in 1855 gained Responsible Government.  That gave control of  virtually everything except defence and foreign policy to a cabinet made up of members of the elected assembly and the appointed upper chamber of the legislature. 

By the 1880s,  the government wanted to expand the economy beyond the fishery.  They started a railway project to open up the interior of the island and the western coast, much the same way that the Americans and Canadians had used the latest technology – the railway – to expand to their west.

Junkyard wars

Syrian rebels have been using modern technology in the simplest of ways in their war against the Assad regime in Syria.

In the picture at left,  a rebel crew are shown using an angle meter app for the iPad to check the alignment of a mortar barrel before an attack.

According to a story in the Daily Mail last September,  the photo shows members of the 'Ansar Dimachk' Brigade, which operates under the Free Syrian Army, using a tablet "to help fire a homemade mortar towards a battlefront in Jobar, a suburb of Damascus."

The rebels have also been using iPads for other purposes as well, as the following video shows.

-srbp-

AG reports on suspected frauds in FY 2014 #nlpoli

In his most recent report, Auditor General Terry Paddon disclosed alleged frauds identified during his review of the provincial government's accounts:

• The finance department's Professional Services and Internal Audit Division discovered a potential fraud of $42,000, less about 10% that had been repaid, that occurred in the the division's examination of the Provincial Courts bank reconciliation processes. The Department of Justice and Public Safety referred this matter to the police for investigation. 
• The same division reported a suspected fraud in the Department of Transportation and Works' depot involving thefts of automotive fuel and supplies as well as inappropriate use of employee resources. "It was concluded by the Division that due to the poor state of records and lack of effective internal controls at the depot, it was not possible to prove that any fraud had occurred. No further action was taken."
• During a routine review of travel claims, the Department of Justice and Public Safety identified irregularities that totalled approximately $1,300. The Department forwarded the matter to the police for investigation. 
• The Department of Child, Youth and Family Services reported that A foster parent may have committed fraud by submitting claims for funding for overnight babysitting when no babysitting services were provided. CYFS turned the matter over to the police and the individual is no longer a foster parent. 
• The Department of Advanced Education and Skills identified an alleged forgery of documentation submitted for reimbursement of approximately $30,000 for medical transportation costs and possible false documentation to support $27,000 in client rental payments.  Both cases are with the police.
• The Forestry and Agrifoods Agency identified an alleged misappropriation of funds by an employee of the agency that involved deliberately delaying the submission of cash remittances and personally using the funds during the intervening period.   The agency recovered the $21,000 involved,  terminated the employee but did not report the matter to the police.  
• Nalcor Energy identified a theft of petty cash of $360.  Nalcor revised its procedures for handling petty cash.
• The Provincial Information and Library Resources Board informed the AG of a fraud against the board involving a cheque that had apparently be altered.  The board subsequently recovered the $7,100 from its bank but did not report the matter to the police. 
• The Newfoundland and Labrador Housing Corporation identified an instance of improper retention of public money in which two employees were using their assigned corporate procurement cards to make purchases for personal use. Overall, the improper transactions amounted to $5,156 ($4,698 related to one employee and $458 to another). The $5,156 has been recovered from both employees and one employee has resigned. The other remains an employee of the Corporation. The Corporation has not referred the matter to the police. 

 -srbp-

S and P lowers NL rating, cites uncertainty of fiscal policy #nlpoli

Standard and Poor's said on Friday that the company had lowered its credit rating for the Government of Newfoundland and Labrador and Newfoundland and Labrador Hydro from A+ to A with a negative outlook.

In a news release, the company said the "negative outlook reflects our view of the uncertainty of the magnitude of the government's expected fiscal policy response to lowered offshore royalties and projected operating and after-capital deficits."

S and P's base-case forecast for 2014 to 2018 gives the government an "average operating deficit of about 7% of adjusted operating revenue and average after-capital deficits of close to 19%

of total adjusted revenues."  S and P calls this weak.  The company also said that it considers the government's "budgetary performance is subject to considerable volatility, given its high reliance on resource royalties...."

The company said it considers both the province's debt burden and contingent liabilities level to be high.  The company cited unfunded pension liability and the risk associated with Nalcor and Muskrat Falls as key issues in these areas.  "We believe the province has an incentive to provide extraordinary government support to Nalcor in the event of financial stress." Standard and Poor's also considered the government's luiqidity level to be low.

S and P  noted the strong federal-provincial financial relationship,  the provincial government's financial management history,  and strong budget flexibility as factor's working in the provincial government's favour.   "We believe that the province's economic and fiscal situation will make public acceptance of fiscal measures, such as tax increases and spending reductions, much more acceptable despite their unpopularity."  

The negative outlook reflects the uncertainty of the magnitude of the government's expected fiscal policy response to lowered offshore royalties and projected operating and after-capital deficits. We could revise the outlook to stable if the newly elected government takes the fiscal measures necessary to establish an improving trend in its budgetary performance beyond fiscal 2017, and develops a credible plan to restore budgetary balance in the medium term. Conversely, we could take a negative rating action should the province's budgetary performance show signs of weakening further beyond what we expect for fiscal 2017, particularly if projected after-capital deficits remain near 23% of consolidated operating revenues or the tax-supported debt burden reaches 270% of projected consolidated operating revenues [currently 100%].

-srbp-

E.A.M.

-srbp-

Moody's warns NL government on finances #nlpoli

Moody's Investor Services is the second rating agency to give the Government of Newfoundland and Labrador a negative trending  in light of the government's financial problems.

In a release, Moody's said that the "negative outlook for the Province of Newfoundland and Labrador reflects the rising risk that the province's fiscal position will deteriorate further than previously expected in an environment of protracted low oil prices and reduced economic activity. Without corrective fiscal action, this will lead to significant deficits, resulting in rapid debt accumulation across the medium-term."

Moody's expects oil to sell at US$33 a barrel in 2016 rising to US$38 a barrel in 2017 and US$43 a barrel in 2018.  The company expects that this will lead to significant deficits, with the deficit for the current fiscal year expected to reach 32% of revenue.  

"The outlook could be revised back to stable if the province introduces and implements a comprehensive fiscal plan that limits debt accumulation and debt service at levels in line with similarly rated peers, or exceeds these levels for a short period only."

Although the company describes the provincial debt level as low compared to its rating peers,  the company cautioned that "a lengthy period of consolidated deficits, along with a long-term expectation of recording debt in excess of 200% of revenues ... could result in negative pressures on the rating."

Gross debt is already more than 200% larger than anticipated revenues and net debt is almost guaranteed to hit or exceed that trigger, if the company includes consideration of the financial implications of Muskrat Falls.  

-srbp-

Revelation: Labrador hydro edition #nlpoli #cdnpoli

“I wonder how I would feel if a province or a region in another province prevented Hydro-Québec from building its transmission line. I would feel exactly like the people in the West do now. I understand them.”  

Quebec City mayor Regis Lebeaume had a revelation.

Great.

Let's have a chat about another transmission line, shall we?

-srbp-

Jerry Earle won't retweet this post #nlpoli

Apparently the surest way to piss off a couple of university academics a.k.a the NDP policy brain-trust is to point out how their take on the government’s financial crisis is out to lunch.

Short recap:  Math prof and Indy columnist Tom Baird got hold of an access to information response that explained the calculations behind a comment by cabinet minister Susan Sullivan on Twitter in March 2015:

In 2014 NL taxpayers will pay $744 million less as a result of tax deductions – affordable?

The ATIP request asked for a breakdown of that $744 million figure. Tom left off the cover page from the response when he posted a link to it in his Independent column in 2015.

“Tax cuts made during the Williams-Dunderdale era now cost the government $744 million in revenue each year,” Baird wrote, “ according to a recently released document from the Department of Finance obtained through an access to information request. This accounts for more than two-thirds of last year’s $1.1 billion budget deficit.”

That just doesn’t look right

Revenue problem #nlpoli

Jon Parsons  has an interesting take on the provincial government's financial mess.  It’s worth taking a few minutes to go through it.  Follow some of the links he offers as well.  Altogether they form what you might call a different perspective on things:

 The current deficit and debt…are the result of decisions that were made by a small number of people, and also because of the whims of the global trade in oil.

The key element of Parsons’ argument is that we are not dealing with a spending problem but a revenue problem.  We don’t bring in enough money largely because local elites have given away gigantic benefits to the local rich and to multi-national corporations.

The idea we have a revenue problem isn’t new and it certainly isn’t unconventional.  The province’s three political parties and the public sector unions all basically say the same thing or have made the same claim over the past year.

Turmoil tamed #nlpoli

Few people would be brave enough to start out a book on politics in  Newfoundland and Labrador with the words “Paul Lane.”

Fewer still could bring it off successfully.

Telegram political reporter James McLeod does both and more in a deftly written and insightful new book, Turmoil, as usual.

DBRS downgrades government rating #nlpoli

DBRS issued a revised rating for the provincial government on Thursday.  It remains "A" but a change to trending from "stable" to "negative" for long-term debt.  DBRS' short-term debt rating remains R-1 (Low) with a stable outlook.

In a news release, "DBRS has also confirmed the Guaranteed Long-Term Debt ratings of Newfoundland and Labrador Municipal Financing Corporation and Newfoundland and Labrador Hydro at “A” and has changed the trends to Negative from Stable."

"...DBRS believes that the Province’s ability to implement a fiscal response sufficient to slow the deterioration in the credit profile is limited. Without a material improvement in the fiscal and debt outlook supported by a credible multi-year fiscal plan, a one-notch downgrade is likely."

A chasm they can't ignore #nlpoli

That didn’t take long.

The fundamental strategic political problem Dwight Ball and his senior advisors have been busily building since last year exploded on Wednesday with the leak of a treasury board directive to departments, agencies, boards, and Crown corporations.

Ball has been promising that he would deal with the provincial government’s mess without layoffs.  As recently as last week Ball said that attrition – job vacancies due to retirements – were the only way he’d consider job reductions in the public service.

Yet,  the ministers of the treasury board have recently sent a note to departments, agencies, boards and Crown corporations asking them to come up with options to reduce spending by 30% over the next three years. There is no commitment that government will cut that much.  This is an exercise in generating options for the cabinet to consider.

Will DBRS re-do its rating for Newfoundland and Labrador? #nlpoli

Premier Paul Davis was proud of the fact that a bond rating agency had confirmed the province's credit rating.

Curiously, he never told anyone which rating agency it was and, as it seems,  very few if any news outlets reported on the release issued on November 19 by Dominion Bond Rating Service.

DBRS confirmed the provincial government's rating at "A" for long-term debt and "R-1 (Low)" for short-term debt.  They also confirmed Newfoundland and Labrador Hydro at 'A' for long-term debt and "R-1 (Low)" with stable trending.

What's interesting, though, is that DRBS doesn't seem to have had access to up-to-date financial information even though they issued the rating in late November 2015.  Here's the basis for the stable rating,  according to the news release:

Updating the Alternative Spending Plan #nlpoli

In April 2013, SRBP ran a series of posts about public spending. The goal was to show how the government could have avoided its serious financial problems by having a financial policy more sophisticated than “spend it all.”

 A couple of very dramatic years have passed since then.

 Let’s update the projections and see what we get.

Process Question #nlpoli

Finance minister Cathy Bennett told CBC that "everything is on the table and we have to make sure that we don't leave anything that potentially could help us move to the destination that we all want to get to...So, my answer would be everything is on the table."

Soooo, my question would be "where is that destination?"

‘Engagement’ can be an excuse for avoiding action #nlpoli

by Craig Westcott

The Ball administration is off to a shaky start. Actually, it seems afraid to start at all. Tuesday’s press conference announcing 15 months of public consultation on how to handle the deficit is another indication that this administration is afraid to act. To use a tired cliché, the Liberals are like the dog that caught the car and doesn’t know what to do with it.

 Granted, the party has only been in power about a month, with much of that month being down time due to Christmas and the New Year’s holidays. But the Liberals had plenty of time to prepare an action plan. It has been obvious for the past two years that they would inherit the new government. That’s why the lack of a transition plan is so perplexing.

 Ball and his ministers need to send signals, already overdue, that they are changing the way we “do government.”

Thank you, Danny Williams #nlpoli

Rob Strong has been a key player in the local oil and gas industry pretty much since the earliest days.  He knows what he is talking about.

Strong pointed out to VOCM on Wednesday that the Hebron field won’t be the cash cow for the provincial government some people hoped/pretended it would be.

Analyst Rob Strong says he fears that on the front end of a project, that will have a 25 year life, this province won't reap any benefit for being a partner in the development.
Strong says when oil was at $100, Hebron type crude was being discounted by $35. He says that means in the short term, the picture does not look as bright for Hebron owners. This province has a has a 4.9 per cent share in the development.

What Strong is pointing to is a deliberate cut in the provincial royalty offered as a gift to the oil companies by Danny Williams and Kathy Dunderdale in 2007.  Dunderdale, the natural resources minister at the time, said that she and Williams wanted to give the multi-national oil companies “some downside protection if the price of oil went very, very low.”

Clarity #nlpoli

From the announcement of "intense" public consultations to solve the provincial government's financial crisis:

Question:  Health care spending eats up as you were saying  almost 40% of the budget, you must have some idea some clue as to why that is, why are we paying more per person than on average?

Premier Dwight Ball:  Well the interesting thing about what we... Minister Bennett mentioned this in her comment, the thing about health care in particular,  I spent quite a number of years and we are certainly very pleased to have Dr. John Haggie and other many resources that we have within government and outside of government feeding into a process , Minister Bennett mentioned the aging population that we have in our province right now, so given where we are,  you'd anticipate an even higher portion of the budget but what we are not getting is as we spend money in health care we are not seeing the improvement in health outcomes aso that's going to be our focus... how we improve the health of Newfoundlanders and Labradorians...

-srbp-