Actions and Words (2016) #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 yetanother 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.

A bail out, a bail out ... #nlpoli

Conversation about the province's financial state in the past couple of weeks have turned to talk of bailouts and threats to the province's sovereignty.  A Carlton University economist  told CBC in early January that the provincial government would need a bailout to keep the province from collapsing under the weight of electricity rates once Muskrat Falls arrives. Energy analyst Tom Adams talked about Muskrat Falls with Pete Soucy and Paddy Daly.

The talk about bail-out is related, in one sense, to a refrain some people have been singing for a while now that somehow the provincial government is hard-done-by because it doesn't get Equalization despite having this huge financial mess.  People who say those sorts of things don't understand a thing about Equalization.

Let's take a quick look at the province's finances and the idea of a bail out.  In another post, we'll look at sovereignty.

The Narrative War (2015) #nlpoli

The day after a massive Liberal victory in the general election,  CBC’s David Cochrane posted an analysis piece on the new administration.  CBC distributed it nationally.

Cochrane described Dwight Ball as a man “unlikely” to be Premier:

Four campaigns. Two losses. Two wins.  By a combined 75 votes.

Cochrane’s account leaves out relevant context.  When it comes to describing how the Liberals won,  Cochrane focuses not on anything the Liberals did but rather a string of Tory blunders that  - according to Cochrane  - made it easy for the Liberals to win the election essentially by accident.

And now, as Cochrane’s story goes, Ball The Unlikely will have to face enormous financial problems using a plan that Cochrane claims “was greeted with enormous scepticism in the final week of the campaign.”

In the supper hours news, Cochrane then reported on information leaked to him by someone with access to highly confidential government  information.  Their purpose  - quite obviously – was to maximise the the damage to the new administration before it even had a chance to take office.  The information fit quite neatly with Cochrane’s ongoing narrative and so, he naturally, had no hesitation in using it. 

The last man on the moon

Gene Cernan died on Monday.

He was many things in his life but Cernan will be best known as the last man who set foot on the moon during the Apollo missions.

Cernan's official website contains all you will need to know about the man who went to the moon twice: once as lunar module pilot on Apollo 10 and later as commander of Apollo 17.

His memoir - The last man on the moon - became a 2014 documentary of the same title.

-srbp-

Cognitive Dissonance (2014) #nlpoli

People like things in life to fit together.

When things don’t fit together, people get upset.  They get fidgety.  They try to make things fit together.

It’s an idea regular readers know from other posts.  Take this bit from a post from 2012 as a good example of how some people react when faced with a situation where what is happening doesn’t fit with their preconceived notions. The context was a decision by then-Premier Kathy Dunderdale to refuse to meet with the parents of a boy who had  died tragically.

Our friend the open line caller did exactly what people tend to do when confronted with this cognitive dissonance.  He made up a completely fictitious set of claims.  Kathy Dunderdale was the victim of a plot.  Some unspecified crowd called “they” had set a trap for her with this meeting.  When they tried to spring it, Kathy foiled their nefarious plot. 

The media have been pounding away at this  because they just love misery.
And the root of it all was the end of the sectarian school system almost 20 years ago.  Since the evil Liberals did away with sectarian schools, we have been set on just this course.  Politics in this province is gone down to the lowest level with this sort of mean-spirited attacks on good people, besmirching the good name of lovely people like Kathy who are only trying to do good for the world.

A muskrat by any other name... #nlpoli

Memorial University economist Jim Feehan proposed in the December issue of Canadian Public Policy that the provincial government should change the way electricity is priced in Newfoundland and Labrador once Muskrat falls comes on stream.

Now to be clear,  the way government prices electricity will already change for Muskrat Falls.  The project is so financially odious that the only way its proponents could get it off the ground in the first place is to force local taxpayers to bear the full cost of the thing, plus profits to everyone involved except themselves.  That's what will happen.

The provincial government used to have a policy to ensure we had the lowest cost electricity possible. No any more.  With Muskrat Falls, we get the most expensive electricity possible and may well wind up with the most expensive electricity in Canada.

Now Feehan is suggesting that we price electricity  based on the external markets in the fashion that the pricing will be set for the Nova Scotia block.  Unbundled transportation costs and let people see what they are paying for that.  And allow other costs of providing electricity,  like fluctuations in oil prices, show up directly on consumer electricity bills.

The Keystone Kops Ride Again (2013) #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 divisions – 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.

Watch the video of the media briefing posted by CBC

At 40 seconds into his remarks, King confirms that the direction to abandon the cuts came from the Premier herself last week.  The Lady indeed was for turning.

Conservatives and Millennials #nlpoli #cdnpoli

The talk was supposed to be about the political culture in Newfoundland and Labrador.  Does it ever change?

What Tim Powers wound up spending a lot of time talking about was Donald Trump,  millennials, and Liberal Party databases in the last election.

Not surprising, really, given that Tim is a veteran Conservative backroom guy and the federal Conservatives have been looking at how the Liberals bumped them out of power in the 2015 federal election.  They are so fascinated by the Liberals' internal campaign management system they have been complaining that the Prime Minister's national tour is just an excuse to build up a contact database.

Yes, b'y,  like there is no other way to collect names, telephones, and email addresses and collecting them is all there is to it.

Toward a fair and just society (2012) #nlpoli

The December 2008 expropriation bill was not the right thing for the provincial government and the House of Assembly to do.

The expropriation was wrong.

It was wrong, but not because it didn’t work.

It was wrong, but not because the provincial government accidentally expropriated a contaminated mill site.

The December 2008 expropriation was wrong because it was a violation of the fundamental principles on which our society is supposed to operate.

Debt servicing and revenue, 2013-2016 #nlpoli

There are lots of ways of looking the government's budget. Here's one that's a bit unconventional.

Rather than look at how much the government is spending on debt servicing as a share of all expenses, let's take a look at what it means as a share of the government's income from its own sources.

Debt servicing is the amount spent to pay the interest on public debt. Own-source revenues excludes federal transfers and borrowing.

Year	Percent of Own-Source
2016b	21
2015	16
2014	07
2013	06

The percentage is a function of the amount spent to pay interest on the public debt and the amount of money the government earned from its own sources.

Debt servicing tripled in four years, going from $360 million to more than $1.0 billion. Own-source revenues dropped by about a billion dollars, going from $5.762 billion in 2013 to $4.775 billion in the 2016 budget.

That's a really good indicator of how rapidly the government's financial situation deteriorated.

-srbp-

Torque wars: media, politicians, and the Muskrat Falls loan guarantee #nlpoli (2011)

Some people will tell you there the federal and provincial governments have a deal for a federal loan guarantee on Muskrat Falls.  The provincial government has already met three criteria set by the federal government and Stephen Harper confirmed that in a speech in St. John’s.

That’s what you could take out of some stories from different media outlets coming out of Harper’s campaign stop in Newfoundland and Labrador.

Bear in mind though that the loan guarantee story took a couple of turns within the past 24 hours even for one single news outlet. 

On Wednesday, CBC reported the deal was done:

Multiple sources tell CBC News, though, that the federal and provincial governments have reached a deal on the terms of a loan guarantee.

Multiple sources.

Multiple unidentified sources.

Not even a hint if they were highly placed in both the federal and provincial governments.

Sometimes that happens.  You don’t even give the slightest clue as to the authenticity of the sources on which the story is based. Put it down to a judgment call.  Doesn’t mean that the comments are right or wrong, but it could put a question mark over the accuracy of the information.

Campaign Finance Reform: shifting attention #nlpoli

Until 1996,  there were no campaign finance laws in Newfoundland and Labrador at all.

In 2003,  the Conservatives promised to make dramatic changes to the laws governing how parties financed election campaigns.

They delivered none of it.

In 2015,  the Liberals promised changes to campaign finance laws and one year into their new mandate, the Liberals are looking at appointing some experts to make recommendations on changes to elections laws.

In the weekend Telegram,  James McLeod described this lack of action one year into a new mandate as "massive delays" on democratic reform but starts out his story by talking about something else entirely.

That's your first clue something is out of focus.

Williams announces political exit plan (2010)

Danny Williams always said that building the Lower Churchill was the only thing he wanted to do before leaving politics. He took a huge step down that road in 2006 when he rejected other options in favour of the supposed go-it-alone strategy.

With no markets and no money for the project, and with setback after setback in the environmental and land claims fronts, the odds were slim he could achieve that dream.

Slim odds, that is, until this weekend. Williams told provincial Conservatives he is trying to lure Nova Scotia and Emera  into a deal to build a greatly scaled down version of the project.  That confirms he is trying to cut a deal so he can leave politics.

If only we were New Brunswick... #nlpoli

Premier Dwight Ball has talked about it.

CBC's Peter Cowan tweeted about it Sunday night.

If only we were like all those lucky provinces that get Equalization,  we'd be right as rain.

We can allow that Peter may not understand federal-provincial finances at all, even if he does cover the legislature a lot.  If there's one thing SRBP readers will know is that most people in the country, including pretty well every reporter and politician,  hasn't got a clue about Equalization.  Well, give Peter a bit of a break but there's no excuse for cabinet ministers being stupid enough to talk about Equalization like a province was entitled to it because it was running a deficit.

You can find a summary of Equalization from SRBP last January. You can find an earlier dose from 2005. That should give you the basic understanding Dwight and Peter evidently lack. But for the fun of it, let's look at how we might fare if we were the same as New Brunswick as far as Equalization is concerned.

Behaviour Patterns #nlpoli

January 2016.

Dwight Ball tells reporters in year-end interviews that "everything is on the table" to deal with the government's financial problem.

Then, Ball took everything off the table. As SRBP put it last year:

No cuts to spending as that would slow the economy.  Ditto for tax increases.  Even “efficiency” went out as Ball told the Telegram’s James McLeod that you couldn’t deliver existing services without the existing staffing levels.

In the budget,  the provincial government boosted spending by 12%.  That was on top of the 12% boost the year before.  Ball increased taxes, largely because the bond raters and the short of cash in the markets gave him no choice.  There were some modest cuts but the cash just got shifted to spending somewhere else.

The big cuts, the serious cuts or whatever Ball hoped to achieve with the unions would come in negotiations.

All the usual suspects - opposition politicians, union activists, people dependent on government hand-outs - accused Ball and the Liberals of "austerity".

Rumpole and Justice Delayed (2009) #nlpoli

There is no question that our system provides a great method for adjudicating questions of fact and law, but given the expenditure of public funds we are obliged to the people of Newfoundland and Labrador to provide the best possible system in terms of the efficiency of the process.

Report of the Task Force on Criminal Justice Efficiencies, February 2008

Administrative changes recommended by a committee of lawyers and judges to improve the province’s justice system still haven’t been implemented over 18 months after they were made public.

In December 2007, newbie justice minister Jerome Kennedy appointed a task force that included deputy minister Chris Curran, then Chief Provincial Court Judge Reg Reid and Mark Pike, the current associate chief judge, among others.  They issued their report in February 2008because they were specifically directed “to make recommendations and to meet any necessary budgetary deadlines for the ensuing fiscal year.”

The committee agreed that “with appropriate leadership, goodwill and resources, its recommendations could be fully implemented by the fall of 2008.”

Oil downturn slams petro-provinces' jobs #nlpoli

The four provinces heavily dependent on oil and gas resources took a major hit in jobs in 2016, according to seasonally-adjusted figures released on Friday by the Dominion's statistics bureau.

Alberta lost almost 35,000 full-time jobs. Nova Scotia lost more than 13,000 full-time jobs. Saskatchewan dropped 12,400 full-time jobs.  Newfoundland and Labrador lost 6,000 jobs between December 2015 and December 2016.

Growth in part-time employment in the same period offset the losses. Newfoundland and Labrador gained only 300 jobs, leaving it with a net employment loss of 5,700. Nova Scotia added almost 16,000 part-time jobs, though,  giving it a net gain in employment. Saskatchewan added 5,500 so the province ended the year with a net loss and in Alberta,  the economy added more than 16,000 part-time jobs.

None of this is a surprise to anyone who has been paying attention.  The downturn in the global oil industry that hammered Newfoundland and Labrador's government revenue has also been kicking the local labour force. In Newfoundland and Labrador, the government forecast last spring that the economy will shed jobs steadily over the next four years as the megaprojects at Long Harbour, Bull Arm, and Muskrat Falls wind down.  We got a reminder of that in August in some comments by education minister Dale Kirby.

Males fared worse than women in the Newfoundland and Labrador seasonally-adjusted full-time jobs figures.  Male full-time employment fell from 107,400 to 99,900 between December 2015 and December 2016.  By contrast,  1,400 women had full-time jobs in the province in the same period (from 87,400 to 88,800)  Part-time employment among males went from 9,500 to 13,000, while female part-time employment fell (28,600 to 25,400)

-srbp-

Media Donations to NL Political Parties #nlpoli #cdnpoli

Steele Communications and its subsidiary VOCM made a combined total of $23,600 in contributions to political parties in Newfoundland and Labrador between 1996 and 2009, according to party finance information published by the province's chief electoral officer.  All but $900 of it went to the provincial Liberal party.

Communications Ten,  owned by the publisher of Atlantic Business Magazine,  donated $7,700 to the provincial Conservatives between 2003 and 2015.  The company gave the Liberals $50, once.

Robinson-Blackmore operated a string of weekly newspapers across the province until it was bought out by TransCon.  Between 1996 and 2001, RB  made political donations totalling $7,489.20 to Liberals and Conservatives.

Electoral office records show one contribution by Newfoundland Broadcasting Corporation  to the Conservatives for $1,000 and a single donation of $150 to the Liberal party by Downhome Publishing since 1996.

Until 1996,  Newfoundland and Labrador had no rules governing election financing.

-srbp-

The poverty of "we so po'" rhetoric (2008) #nlpoli

“People need to understand government cannot write a cheque for everything,” said Williams.  

“We can’t be all things to all people.” “On the other hand, even in poor times, we have tried to do the best we could for people who were, for lack of a better term, in poorer positions.” 

Those were some comments made by the Premier to news media in Corner Brook after a two day cabinet retreat.

The first reaction would be to wonder when, over the past four years, has the provincial government actually experienced "poor times".

Putting the sunk in sunk cost #nlpoli #cdnpoli

Muskrat Falls is basically an $800 million tax on the people of Newfoundland and Labrador. That's roughly the amount you get using numbers Nalcor chief executive Stan Marshall made public last summer.

Muskrat Falls is a tax on the people of Newfoundland and Labrador.  Always was that.  Never was anything else.  The plan was to collect the tax by doubling electricity rates.  Regular readers have known this since *before* Danny Williams announced the scheme.

Take all that as the starting point when you hear Dwight Ball tell Anthony Germain on the CBC St. John's Morning Show that Ball is spending a lot of time trying to figure out how to keep our electricity prices from doubling.

Williams concedes on royalties (2007) #nlpoli

As Bond Papers noted on Thursday, part of the Hebron deal will involve a change to the provincial royalty regime local media are characterising as a concession.

The Telegram reported on Friday morning that the province will indeed lower the initial royalty to a flat 1% on gross from an escalating regime that maxed at 7.5% until the project recovered its initial development costs.

After that, royalties jumped to a combined 305 in two separate tiers. After simple payout, provincial royalties were based on net profits which provided the companies with a rate of return allowance.

Under the royalty regime for Hebron, the province will collect 1% for as long as it takes the project to recover start-up costs.

Public Support for Muskrat Falls #nlpoli

Corporate Research Associates isn't the only pollster in the universe, no matter what some people locally seem to believe.

CRA released  the results of a question the company asked during its omnibus last November.  They found support for Muskrat Falls at 45%.  That's down from 54% in May 2016,  65% in May 2015, and 63% in February 2013.

"For the first time",  CBC reported on Wednesday,  more people don't support the project than support it.

First time?

For CRA maybe but not for others.

The Danny Brand (2006) #nlpoli

 The defining characteristic of Danny Williams' term as a politician - and particularly his term as Premier thus far - has been his relentless use of specific marketing approaches to maintain a permanent campaign.

The notion of a permanent political campaign is not new. The concept of a party continuing to use campaign communications approaches when in government first appeared in a memo from Democratic political consultant Patrick Caddell to Jimmy Carter before Carter's inauguration in January 1977.

Former American president Bill Clinton and British prime minister Tony Blair have been accused of handling their communications once in office no differently from what they did during an election campaign. As Catherine Needham has described it:

[Permanent campaigning] captured a sense that there was no stark distinction between campaigning and governing given that the personnel, tactics and tools of the election campaign followed the successful candidate into office. The permanent campaign concept involves more than a recognition that politicians start gearing up for re-election well before the official campaign begins. It is a claim that campaigning is 'nonstop'.

Needham contends that the permanent campaign concept is too limited to explain both Clinton's and Blair's repeated electoral success in highly competitive and complex political markets. Both Clinton and Blair have experienced highs and lows in public support, reflective of their respective political environments that are characterized by strong two-party or multi-party systems and the difficulty of sustaining a deference to political authority in systems where dissent from popularly held ideas is commonplace. Instead, Needham applies notions of branding and relationship marketing to explain the Clinton and Blair approach to government in a more complex form of permanent campaign.

However, in Newfoundland and Labrador, the political environment is small, does not have a strong party system and has certain conventional ideas that both suppress dissent and encourage a deference to dominant ideas and political actors. In such an environment, permanent campaigning - coupled with a rudimentary notion of branding - can explain Danny Williams continued strong popular support.

Books, tents, fishing rods and such #nlpoli

Don't ask why but Statistics Canada groups books in with sporting goods, hobbies, and music.

The picture shows total sales in Newfoundland and Labrador each months from january 2014 to October 2016 for these items.

The figures are in thousands of dollars.

The average per month over the whole period is about $9.8 million.

The two peaks are the pre-Christmas rush.

Everything on that list right there was subject to provincial sales tax for the whole list, except for the books. In 2015,  the sector generated a little under $130 million in retail sales, in total.

The government's own estimate puts the value of the book tax at $2.1 million.

-srbp-

Taxing our understanding #nlpoli

Over the past week, there's been a flurry of comment about gasoline prices and the fact that, as of New Year's Day, a  provincial sales tax now applies to books.  It's 10%, on top of the federal sales tax of five per cent.

All sorts of people are talking about these two things as if they are the most important things in the world and the most horrible things in the world.

Let's look at the book tax.

Spending the future (2005) #nlpoli

" [The change in the province's financial outlook] That's very dramatic...Some people are going to stand back and say 'Oh yeah, that's just because your very lucky. That's because the oil prices have gone up.' Well, no. That's part of it. But we had a tough budget, a prudent budget. We've managed the province, fiscally, very tightly."

Premier Danny Williams

Quoted in "Cash boon may fund province's infrastructure"

by Rob Antle, The Telegram, 22 October 2005, p. A3

Premier Danny Williams is absolutely correct.

The provincial government's financial state is a direct result of oil and gas revenues. High oil prices have produced a boost beyond what the Real Atlantic Accord, the offshore royalty regimes and development at Voisey's Bay would have produced anyway.

Unfortunately, the premier's positive comments may have two unwelcome results. First it may make it seem as though the province can afford to increase spending in a number of ways. Second, his comments divert attention away from the fundamental failure of the Williams administration, two years into its mandate, to produce integrated plans to address the province's financial windfalls in a way that will yield the greatest long term benefit.

Newfoundland and Nutrition in the 1940s #nlpoli #cdnpoli

Scholarly papers seldom get news media attention.

When a paper combines a well-known, emotionally charged issue – aboriginal residential schools – with intimations of racism and unethical medical experiments on unwitting human subjects, it’s hard not to get noticed.

Ian Mosby's paper published in 2013 deserves attention for many reasons, but one of the areas not likely to get noticed by most readers is one that would be familiar to many in Newfoundland and Labrador. 

And it's also a major problem with Moseby's historical spin.

On Meaning #nlpoli

Brexit supporter and insurance magnate Arron Banks got into a tussle on Twitter late last year with Cambridge classicist Mary Beard. Banks tweeted that Rome had been done in by immigrants, with the obvious implication that western European countries should be wary of letting all sorts of people cross their borders and settle down.

Beard took issue with that rather superficial view, and things went down hill from there. Banks pitted his very best recollection of grammar school history  - as well as Gladiator and I, Claudius apparently - against a Cambridge don.  Even J.K Rowling got in on the act.

This sort of clash is going on more and more these days with the rise of a nationalists and nativists across western Europe and North America.  As in the discussion of the Beard-Banks exchange, lots of people decried the comments as an example of the post-factual world we live in.  Facts don't matter any more. Folks believe what they want to believe and will act accordingly.

Lots of people on the political left or in the centre are decrying this supposedly new trend but there's a bit more to it than the rise of ignorance or the end of western civilization as we know it.

Praying for a miracle #nlpoli

People are talking about austerity but the simple truth is the people talking that way have a vested interest in exaggerating what is going on in the provincial government.

Yes, we *are* in a very dangerous financial state.

But... the provincial government is doing the bare minimum to keep the creditors happy while waiting nervously for oil to come back​.

In the meantime, there is no austerity and anyone who says otherwise is either ignorant or a liar. 

Some folks are looking at the price of oil and get excited over the teensiest of changes in the price per barrel.  They are missing some simple stuff, though, and at the start of the New Year, it is worthwhile for us to take a quick refresher in basic oil royalty math.

2016 in books #nlpoli

1.  Brand Command by Alex Marland.  The book that political marketing and communications academics will be quoting for a while to come.

2.  Observing the outports by Jeff Webb.  An accessible examination of the role the new university, its professors, and students played in the social and economic changes in Newfoundland and Labrador during the first 30 years after Confederation.

Two copies at Broken Books by the war memorial.

3.  Beating against the wind by Calvin Hollett. On one level,  a history of a theological dispute among Anglicans in Newfoundland 150 years ago but on another a book offers greater insight into the country and the people who built it. History from the ground up.

In the interest of full disclosure, Hollett is no close relation relation but a key figure in the book - Thomas Edward Collett of Harbour Buffett  - is my maternal great-great-great grandfather.

4.  Conflicted colony by Kurt Korneski.  A study of five conflicts that broadens and deepens our understanding of Newfoundland in the 19th century by applying a new lens to our view.  Far from being culturally or politically homogeneous,  Newfoundland in the 19th century was a frontier where diverse groups formed and reformed relationships in a constantly changing environment.

5.  Sweat equity by Chris Sharpe and AJ Shawyer.   This is the story of how the Commission government and the new provincial government after 1949 first recognised the desperate need for decent housing and then tried to meet the need using the resources available.

-srbp-

Top 10 Posts of 2016 #nlpoli

These are the posts you read the most of all.

01.  Balls digs himself deeper into hole - May 2016 and yet another twist in the tale of Ed Martin's departure from Nalcor,  Dwight Ball knew and when he knew it.
02.  A no-holds-barred review - Bill Rowe's latest book, reviewed.  Shoulda been the No Punches Pulled review.  No holds barred was John Crosbie's 1997 memoir.
03.  Jim Thistle, 1954 - 2016
04.  Anger Ball - June 2016 - Dwight's head exploded
05.  Thank you, Danny Williams - Hebron is on the way but it won;t be as lucrative as people might hope.  Prices are down, Hebron oil will be discounted by the market, and to cap it all,  the development agreement with the province included a huge give-away on royalties.
06.  Worst possible time for HQ deal - Lots of talk that there's a deal in the offing between Hydro-Quebec and Nalcor.  Not a good time for it.
07.  Water rights, Muskrat Falls, and the Muskrat Falls Disaster - Controlling water flows on the lower Churchill River are crucial to operating Muskrat Falls properly.
08.  The Rasputitsa and the 2016 Budget - We are still mired in a financial sinkhole
09.  Not just another pretty face - Stan Marshall
10.  From a decade of prosperity to $2 billion deficits:  what happened?  (Roger Grimes)

-srbp-

Reality Check: gas tax and debt/deficit #nlpoli

Comment on Twitter:

"If my household spends too much and goes into debt I don't expect others too pay for my mistakes, yet govn makes us pay for theirs."

Reality Check:

The provincial government is your household.  It's heavily in debt and seriously overspending. No one else is going to pay for it.  This one is on you and the rest of us. Glad you understand the principle, though, and will cheerfully help clean up.

Comment on Twitter:

When the gas tax was introduced Ms. Bennett promised: "that as oil prices rise the gas tax will go down"

Reality Check:

That bit in quotes isn't anything Cathy Bennett ever said.  Nobody has been able to find any comment anywhere that comes close to saying that the tax will go down as the price goes up.  That implies the government has some maximum price in mind and it suggests the tax will go down proportionately as gasoline increases.  

Here's finance minister Cathy Bennett during the budget speech:   "Effective June 2, 2016, gasoline tax will temporarily increase by 16.5 cents per litre. This tax increase will be reviewed ahead of the fall 2016 supplemental budget."  She said the same thing in the House of Assembly during the spring session. 

In the fall, the government opted not to have a supplemental budget and they didn't review the gasoline tax.  Bennett just promised there'd be "more clarity" come the spring budget.The closest anyone could find - including the guy who tweeted the comment - was a comment by the person who wrote a CBC story.   

Nothing from Bennett, though.

Meanwhile, if someone does find a quote that Bennett said the tax will go down as the price goes up, this post will change.   Stay tuned.

-srbp-

Fact-checking CBC and Food Banks #nlpoli

The headline on the CBC story just felt wrong.

The kind of over-the-top exaggeration that just sounds biased.

Distorted.

Wrong.

"Food bank need jumps in N.L., ending years-long trend."

The first sentence was the same:  "After six years of near-consistent decline, food bank usage has jumped in Newfoundland and Labrador."

The second sentence, though, wasn't quite so emphatic.  Now there was just a change from 2015 to 2016 in the proportion of people in the province using food banks.

Time to check the data:  in this case, a report from the national food banks association. You cand find the same data and more besides in a report from the group Canada without Poverty.

The Tibb's Eve Accord #nlpoli

Health minister John Haggie said that the health deal signed with Ottawa on Tibb's Eve was the best deal that could be got.

Haggie's probably right.  At least, the deal contains a clause that if another province gets a better deal, we can opt for that one instead.

It's been so very long since we've seen federal-provincial rackets over money that most people in Canada seem to have forgotten what they look like.  Stephen Harper didn't run federal-provincial fiscal relations like other prime ministers so the provinces stopped squabbling publicly.  Even Paul Martin was basically about handing out cash so, aside from premiers who postured entirely for the show of it, there was never really much of the sort of disagreement and negotiation that Des Sullivan reminded us all about on Monday past.

Bullying and Bennett #nlpoli

Cathy Bennett is the finance minister.  She's one of the most powerful and influential people in the province, bar none and certainly she is among the most powerful and influential women in the province.  If you just counted politicians, her role as finance minister puts her among the most influential people in Canada at the moment.

Shortly before Christmas, Bennett held a news conference to say that she had been bullied by people making comments on social media. Some of the people were anonymous and at least one of the comments Bennett complained about came from a group that was specifically protesting the government's budget.  In fact, every single comment Bennett mentioned, no matter how harsh,  came as a result of the spring budget.

Bullying is an interesting word to use here because it involves a power relationship.  What Bennett claimed  - in essence - was that anonymous people on the Internet were more powerful than she was. Lots of people were quite quick to agree with her. People like Lana Payne, an influential union leader, who devoted her Christmas Eve column in the Telegram to affirming that Bennett was weak and impotent because she was a woman in the face of anonymous men  - or people she assumed were men on social media.

Policy is people #nlpoli

Kim Keating is a member of the newly-appointed council to advise the provincial government on oil and gas issues.

She's a professional engineer,  a senior official with a local company in the oil and gas business, and in the recent past she was the president of the St. John's Board of Trade the year that the Board wholeheartedly endorsed Muskrat Falls.

That's important because the Board not only endorsed Muskrat Falls for all the benefits that flowed to companies like the one Keating works for, but also because the Board was willing to trade away free enterprise in order to get those juicy business goodies. A key element of making Muskrat Falls work was the creation of a monopoly for Nalcor so that the company could force local consumers - and local businesses - to pay whatever it would take to satisfy Nalcor's creditors.

In other words, no matter how high the price for the project went,  local consumers would be stuck with the costs. Keating and her associates were okay with that.

But there's more to the issue than that.

Beethoven's 9th Symphony

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O come, o come Emmanuel

Canada-NL Health Deal: Warning Signs #nlpoli #cdnpoli

Late Friday evening, the provincial government announced it had signed a deal with the federal government on health funding.

We don't know what the arrangement is on the annual increase in funds but if it looks like what New Brunswick bought into,  Newfoundland and Labrador won;t see anything significant.  Once we've got more details, we'll get back to you on that.

As for the money tagged for home care and mental health,  there will be another $160.7 million over 10 years.  That works out to $16.7 annually. Since we get $738 million annual now from both the Canada Health Transfer and the Canada Social Transfer,  that works out to an annual increase of  zero point two percent (0.2%).  New Brunswick's deal got them zero point three percent (0.3%).

These health transfers will be delivered based on the population.  Since the government's own optimistic forecast has the population shrinking over the next decade, we may well wind up with less money from Ottawa at a time when our demand for health care funding will increase.

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Es ist ein ros entsprungen

In the bleak midwinter

Spin, illustrated #nlpoli

Spin is a bit more than a mere biased interpretation or a clever reframing of an idea.  In other words, there's more to it than saying the glass is half full rather than describing it as half empty.

Spin is deliberately deceptive.

On Wednesday,  the folks at Nalcor announced they had a new contract with Astaldi valued at more than $1.8 billion.  Nalcor boss Stan Marshall told reporters and they all dutifully repeated the comment that the new contract would add "$270 million" more to the $11.4 billion estimated cost of Muskrat
Falls.

The original contract with Astaldi had a value of  CDN$1.0 billion.  Astaldi actually booked the contract at about CDN$1.24 billion.  That was 2014. In its online account of the latest twist in the tale, CBC actually inflates the announced price of the original contract to the number Astaldi claimed in 2014.  Make no mistake:  Nalcor pegged the cost of the contract at $1.0 billion. Period.

By late 2016,  after Nalcor disclosed that the company had completely screwed up the contract, Nalcor folks started to describe the original value of the contract as $1.1 billion and allowed that a "bridging agreement" meant Astaldi could earn up to another $150 million by meeting performance milestones on construction of the powerhouse.

So now we have a new contract that increases the original contract by $830 million,  not the $270 figure Nalcor used to describe the increase in their most recent estimated cost of the whole project.

Why against $11.4 billion,  $270 million sounds like nothing at all and it is precisely that deceptive comparison  - dutifully repeated by every reporter on Wednesday  - that Nalcor is relying on to mask the real magnitude of Nalcor's shag-up with the Astaldi contract. In truth,  the new Astaldi contract is responsible for an 83% cost overrun on the contract price of the powerhouse and we are not done yet.

The original estimated cost of the dam and line to Newfoundland was supposed to be $5.0 billion.  We are now more than double that figure and well on the way to tripling it.

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Ding dong merrily on high

Gender Gap - Sunshine edition #nlpoli

The House of Assembly passed a bill during the last sitting that would allow the government to publish a list every year of all the people working for government who make more than $100,000 a year.

With all the fuss about the so-called Sunshine List,  maybe it is worth taking some time to have a look at some of the information we already have, thanks to Statistics Canada (CANSIM 111-0008)

 In 2004, 396,050 people in the province reported an income.  6,500 of them made $100,000 or more.  That's 1.6%.*

1,010 of them were women, which works out to zero point two percent of all people with incomes. That leaves about 1.4% (5,490), namely the men,  who earned more than $100,000 in 2004.  Women made up 15.5% of the people who made more than $100,000.

Now flip ahead to 2014.  The number of people with incomes grew by 6% (25,100) but the number of folks making more than $100,000 grew by 443% (28,840).

People making more than $100,000 made up 8% of people with incomes in 2014. Interestingly, 6,320 women made more than $100,000.  Interestingly the male/female ratio of folks in the income category stayed very much the same.  18% of the folks earning more than $100,000 were women.

That jump in the percentage of people making large salaries mirrors what James McLeod found in the public sector. Unfortunately, the Telegram has disappeared McLeod's blog posts in their redesign of the Telly website.

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* Re-written for clarity.

Gender Gap, 2004-2014 #nlpoli

In 2004,  the median income for men in Newfoundland and Labrador was $10,000 higher than the median income for women.  By 2014,  the gap in median income between men and women in Newfoundland and Labrador had grown to $16, 130.

The median income for women had grown $8,810 between 2004 and 2014.  But the median income for men grew by $14,940.

That's a pretty chart showing the median income in Newfoundland and Labrador for the period 2004 to 2014.  The data is from CANSIM 111-0008.

Turquiose line = men.  Red line = women.  Orange is the median income for both sexes.

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The Darker Side #nlpoli

The day after Cathy Bennett talked about the hate-filled and threatening messages she'd received after delivering last spring's budget, the echo chamber that is Newfoundland politics had already absorbed the story and claimed it confirmed  that men were the only perpetrators of the violence that was aimed exclusively at women politicians and political activists.

In itself, the speed with which familiar, affiliated voices appropriated the story is a reminder of the extent to which social media  - and media generally - is not so much the vehicle of open discussion aimed at finding truth from facts as much as it is another battleground in partisan warfare that unfolds along predetermined lines.

CBC Radio Noon asked a question for its Wednesday show:  "If Finance Minister Cathy Bennett were a man, would she be such a target on social media?"

The answer is "yes" although that's not the way the show and its guest answered the question.

Brutal #nlpoli

Any Liberals who thought they were out of the political woods got a harsh reminder of the truth on Tuesday.

Their leader remains as unpopular as ever.

According to Angus Reid, only 20% of respondents to their recent poll thought Premier Dwight Ball was doing a good job. That's scarcely changed since last spring.

75% disapprove of the job Ball is doing.

Corporate Research Associates showed a curious 10 point jump in its leader-choice question last time around.  Bit of a different question, to be sure, but folks might want to notice that CRA winds up being a bit of an outlier in this respect. Other pollsters had results for party choice through October and November that were all pretty much the same. Seems odd that everything else would track but that something like support for party leader would be well outside the margin of error of the polls.

Maybe CRA was little bit high.

Maybe.

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Townie Elite #nlpoli

Add Townie Elite to your online reading.

Peter Jackson spent 25 years at the Telegram, where he used to write a regular column.

Now he's decided to come over to the dark side and offer his opinions online through a blog. These are early days for the Elite.  He only has one post up so far.  Get into the habit of reading him early on.  Peter is the kind of guy you won't always agree with but you can count on him bringing his strongly-held views to the table every time.

If we are lucky, Peter will do more than just clack out opinion pieces.  His wife is a talented artist in her own right and between the pair of them,  Townie Elite could evolve into an eclectic mix of music, writing, politics, journalism, and philosophy.

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Unacceptable #nlpoli

Finance minister Cathy Bennett did something very brave on Monday.  She did something far braver than carry on without disclosing some of the horrendous abuse she and her family has suffered since last spring's budget.

She talked publicly about the threats and abuse.  One cannot watch the video of Bennett talking about the events and not be touched by the trembling of  her lip,  the quivering of her voice as she discusses hateful comments aimed at her relentlessly.

Well, that is,  not if one is a compassionate human being in any event.  Far too many people took to Twitter to continue the attack on Bennett whether by dismissing the remarks as nothing or to justify the attacks. Just to make sure everyone understands this isn't bile coming from men alone, aimed at woman, take a look at the remarks offered by a prominent artist in the province, herself the mother of three girls.

Six dollars and eighty cents #nlpoli

We should pay members of the House of Assembly a good salary because they do a hard job that demands much of them and their family.

It is a thankless job but it is an important job for our province and its people.  One of the hazards of the job is that they must take a lot of personal criticism from ignorant people. Sometimes the ignorant people are on Twitter, as in the past week or so, and sometimes, the ignorant folks are other politicians, like in 2014 when Dwight Ball condemned their pension system or in 2015 when he arbitrarily decided to cut public representation in the House of Assembly.

We should not make decisions based on ignorance even if, as in this case, the ignorance is widespread.

AIMS refutes austerity hysteria #nlpoli #AIMS

From the latest Atlantic Institute for Market Studies paper:

"Measuring Austerity in Atlantic Canada investigates whether the use of the term austerity in the context of Atlantic Canada’s public finance is accurate. The author examines public accounts data from the four provinces, adjusting for inflation, to determine the annual amount of program expenditure in absolute and per capita terms. He also calculates the relative increase or decrease in spending from year to year, establishing the trend in provincial government expenditures in Atlantic Canada.

"The report offers three main findings:

• The budgets of southern European countries such as Portugal, Italy, Greece, and Spain (the so called “PIGS” nations) have experienced genuine austerity following the Great recession. These countries had to cut their government spending by up to a quarter, over as few as two fiscal years.
• Provincial governments in Atlantic Canada have increasingly spent more money on programs — in absolute and per capita terms — between 1980 and 2016. Per capita program expenditure in Newfoundland and Labrador saw the greatest increase at 113.7 percent. Prince Edward Island’s growth rate was the slowest at 61 percent over the examined period.
• A shifting demographic landscape in the region — notably its aging population — does not suffice to explain these significant spending increases. While the school-age population has dwindled in the four Atlantic provinces, education spending continues to grow, showing that spending increases cannot be a response to demographic changes.

"The report concludes that the use of the term austerity in relation to fiscal policy in the Atlantic Canadian provinces is hyperbolic, inappropriate and inaccurate.

"All governments spend more money than they did a generation ago, with only minor blips of restraint and no sustained or disciplined effort to cut spending significantly. The nature of Atlantic Canadian public finance, therefore, is not one of austerity but of consistent spending growth over a sustained period."

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Poll numbers not very comforting #nlpoli

A little over a month ago,  only about 16 or 17 percent of respondents told pollsters they thought Dwight Ball was the best choice for Premier.

In November, 27% of respondents picked Ball above Paul Davis and Earle McCurdy in Corporate Research Associate's quarterly survey.

That's a big jump in 30 days.

The only thing that changed in those 30 days is that folks finally got the message Ball has been sending since July:  all those layoffs and cuts we had planned for the fall are off. If public perception of Ball is that closely tied to whether or not he carries an axe,  his political fortunes will rise or fall with the provincial government's financial state.

Megawreck #nlpoli

Over the past couple of weeks, the people of Newfoundland and Labrador have been shown more and more the lunacy that is Muskrat Falls.

Nothing better exemplifies the crazy world of the Muskrateers than Dwight Ball's claim in interviews that he has wrestled the project back under control.  Not long after, we learned that problems with the cofferdam and the powerhouse go back to the summer and yet the public have only just learned about the cost over-runs that will continue on a project that is as far from under control as possible.

We don't need to review all of this because you can find posts about the decision-making failures at Muskrat Falls long before now.  In light of the recent revelations, it's worth going back tos ee how may of the problems turned up way before anyone started building.  So enjoy these posts from 2012 on decision-making.

Try not to cry.

• "How to make bad decisions"  (May 2012)
• "The inevitable Muskrat Falls"  (July 2012)
• "Cost over-runs and Muskrat Falls" (July 2012)
• "High politics and Muskrat Falls"  (July 2012)
• "Executive Politics and Muskrat Falls"  (July 2012)
• "Going down by the front end"  (July 2012)

"The past decade has shown that even the best owners and contractors have been largely unable to scope, define, plan, estimate and execute these mega-projects with any sort of predictability. Cost overruns of 100% or more have been widely reported, along with years of schedule delays. In fact, such experiences are so common there is even a word for it: a 'megawreck'." (Westney Consulting Group)

• "The stuff we don't know" (July2012)

For fun, take a look at a post from February 2012 about the cost of Muskrat Falls and the impact on consumers.  When Danny Williams set us down this road,  Kathy Dunderdale said the thing would raise electricity prices to something like 17 cents a kilowatt hour.  

The most recent estimate - now long out of date  - was for about 21 cents a kilowatt hour.  When people talk about the new loan guarantee shaving off a bit of the cost, understand that the loan guarantee will only have an impact on future cost increases.  In other words,  we are still talking about consumer prices of at least 21 cents a kilowatt hour.  Remember that number.

In February 2012,  Nalcor calculated the cost of service price for Muskrat Falls electricity, including the approved rate of return was 21.4 cents per kilowatt hour. That's not the cost of electricity to consumers but even at that point,  Nalcor was talking about taking consumer prices from around 11 cents a kilowatt hour to 17 cents in order to cover off the cost of Muskrat Falls.

That 21.4 cents didn't include construction of the transmission facilities or any of the subsequent cost over-runs on the project. The cost of the project is roughly double what it was in February 2012.

Now do a bit of math.

Try not cry.

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Faint hope #nlpoli

Nalcor won't be able to install a boom upstream from the powerhouse construction.  The result is that there will likely be damage to the dam construction, according to Nalcor boss Stan Marshall.

Well, likely if the winter is normal or colder.  But maybe not.

"It’s weather dependent,"  said Marshall. "So if we have a very mild winter, we probably won’t have any damage at all. If we have a severe winter, we’ll probably have substantial damage to the structure."

Local knowledge would put it a little differently.

A "mild" winter usually means thicker, harder, ice.  The thaw-freeze cycle of a "mild" winter puts about three additional feet of thick, solid, concrete-like ice on the bay and rivers and lakes as the surface melts, floods, refreezes, and repeats.

Yeah.

Mild winter.

Looks like there's another thing the geniuses at Nalcor got right about Muskrat Falls.

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Get Knotted Doc O'Keefe #nlpoli

No one should be surprised that St. John's mayor Doc O'Keefe is huffing and puffing over comments by former mayor Andy Wells to the effect that O'Keefe's crowd had been doing things improperly if not illegally at city hall.

"You've got a council that's been profligate, wasteful, irresponsible and certainly immoral and possibly illegal," Wells told reporters outside Monday night's council meeting.  It's along the lines of Well's comments last September.

There's only one reason O'Keefe is pissed:  Wells is right.

And for the first time in a long while someone is calling out the arrogant, secretive O'Keefe on the shit-show he's been running in the city for the past five or six years.

Policy and sausages #nlpoli

People like to think the world we live in is run by some sort of magically rational process and the folks in charge are all much smarter than the rest of us.

This brief sketch from an early Simon Pegg television series is actually much closer to the reality some times than any of us would care to admit.



So just enjoy the humour in it.

Under no circumstances should anyone imagine that similar conversations have happened over the past six years about things like frazzle ice, cofferdams, electricity prices, or the 1969 power contract.

No.

Because that would involve both the minister and the official being complete dullards and everyone knows that could never happen.

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Mazel Tov Cocktails #nlpoli

Scottie Nell Hughes is one of the legion of ident-a-bots who turned up on news programs during the recent American election spouting lines from the Trump campaign. She's already famous as the one who gave us the mazel tov cocktail flub.  She grabbed some headlines last week for making the comment that there is no such thing as facts.

Specifically, Hughes said that "...one thing that has been interesting this entire campaign season to watch, is that people that say facts are facts—they're not really facts. Everybody has a way—it's kind of like looking at ratings, or looking at a glass of half-full water. Everybody has a way of interpreting them to be the truth, or not truth. There's no such thing, unfortunately, anymore as facts."

Setting the agenda #nlpoli

In a set of media interviews this week, Premier Dwight Ball thought he would be talking about what's he learned in his first year in office, what motivates him, and the great plans he has for the future. The election was on November 30, 2015 and Ball took office on December 15.

As the result of  a tweet at 6:00 PM on Wednesday evening, everyone else will be talking about the fact Ball is already working on his third communications director after only 11 months in office.

Then they will wonder how long before Ball is starting in on his fourth... and then his fifth.

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