28 October 2005
The hard and the easy: Abitibi and government subsidies
In dealing with Abitibi Consolidated, the Williams administration faced a Hobbesian choice. Had it followed through with Premier Danny Williams' pledge from July, mills in Grand Falls-Windsor and Stephenville would now be shutting down with the loss of more than 700 jobs and the loss of over $500 million in newsprint sales from the local economy.
With the choice it made, the Williams administration is committed to subsidizing a particular company at a rate which exceeds or almost exceeds the government revenue generated by the company.
27 October 2005
Connie expense accounts
In a post Rarely Graced by Logic, Liam O'Brien claims a number of things that should strike a reader of the post here on Dave Dingwall's expenses as a little bizarre.
First of all, O'Brien claims the post stated that Dingwall had been exonerated by two audit reports on his expenses at the Royal Canadian Mint.
What it actually pointed out was the huge gap between what Connie partisans had claimed to be factual and what the facts were. The post was less a straight-up defence of Dingwall as a critique of bad political communications by Connies like Brian Pallister.
Maybe that wasn't clear.
Maybe it struck too close to home.
Second, O'Brien issued a few challenges in between following a now shop-worn tactic of attacking the person when he can't refute an argument.
One challenge was to point out any case I had where I suspected a Conservative member of parliament might have submitted dubious expense claims or, as in the cases - plural - I'll toss him, of where the size of the claims raises some fairly obvious questions.
Oddly enough, this case was covered in what I suspect is O'Brien's favourite newspaper, the pink white and green Spindy back in May.
Here's the link to my original post.
"Why then did Mr. Doyle rack up $172, 904 in travel expenses?
And why did Loyola Hearn cost taxpayers $164, 159 for travel?"
These two Conservative members of parliament live in ridings that are easily accessible by air and car and yet their travel claims look like they were heading from Ottawa to Alert and back again. Every weekend.
Even after we allow that Hearn lives in Renews, about two hours south of the riding he represents, his mileage shouldn't be pushing his travel claims into the low six digits. Since he and benchmate Norm Doyle both know when they need to travel back and forth to the riding, surely they could book some seats far enough in advance to get a discount.
or stay in cheaper hotels.
or stop gnoshing at Hy's.
To bring those figures up to date, here is the report for 2004-05.
Norm Doyle's travel, as covered by the House of Commons - i.e. you and me - was $157, 768. Bear in mind that for some of that period, Norman was on the campaign trail and off the public payroll. Otherwise, his total travel would likely look just like it did the year before when he was obviously doing alot of stormin' around.
Hearn's travel clocked in at $103, 608. Consider that Hearn was off the payroll for a little while in there. Consider too that his riding is now a heckuva lot smaller than it used to be. He can bicycle from one end to the other in a few hours or better still take the bus to all but a few corners of it. (Pssst. That's a facetious comment about the bike and the bus)
But ya still have to wonder what he was doing to rack up that kind of travel costs.
Before anyone tries to wave a wand and turn that into nothing, look at some other expenses.
Jim Abbott, from Kootenay-Interlake, British Columbia came in between the two of these guys. But he's actually farther away from Ottawa than either of our two Connie friends and he represents a largely rural riding.
Alexa MacDougall, the Dipper from Halifax only spent about $71, 500 to visit her riding once in a while.
And what of Pallister, the Connie from the Prairies? He only spent about $73, 500 getting back and forth to a lovely riding in Saskatchewan.
So why the heck are Mr. Hearn and Mr. Doyle so much more expensive?
Using Brian as the Benchmark, Hearn is 41% higher than Brian while Doyle is a whopping 114% above the Connie Guardian of Expense Account virtue.
First of all, O'Brien claims the post stated that Dingwall had been exonerated by two audit reports on his expenses at the Royal Canadian Mint.
What it actually pointed out was the huge gap between what Connie partisans had claimed to be factual and what the facts were. The post was less a straight-up defence of Dingwall as a critique of bad political communications by Connies like Brian Pallister.
Maybe that wasn't clear.
Maybe it struck too close to home.
Second, O'Brien issued a few challenges in between following a now shop-worn tactic of attacking the person when he can't refute an argument.
One challenge was to point out any case I had where I suspected a Conservative member of parliament might have submitted dubious expense claims or, as in the cases - plural - I'll toss him, of where the size of the claims raises some fairly obvious questions.
Oddly enough, this case was covered in what I suspect is O'Brien's favourite newspaper, the pink white and green Spindy back in May.
Here's the link to my original post.
"Why then did Mr. Doyle rack up $172, 904 in travel expenses?
And why did Loyola Hearn cost taxpayers $164, 159 for travel?"
These two Conservative members of parliament live in ridings that are easily accessible by air and car and yet their travel claims look like they were heading from Ottawa to Alert and back again. Every weekend.
Even after we allow that Hearn lives in Renews, about two hours south of the riding he represents, his mileage shouldn't be pushing his travel claims into the low six digits. Since he and benchmate Norm Doyle both know when they need to travel back and forth to the riding, surely they could book some seats far enough in advance to get a discount.
or stay in cheaper hotels.
or stop gnoshing at Hy's.
To bring those figures up to date, here is the report for 2004-05.
Norm Doyle's travel, as covered by the House of Commons - i.e. you and me - was $157, 768. Bear in mind that for some of that period, Norman was on the campaign trail and off the public payroll. Otherwise, his total travel would likely look just like it did the year before when he was obviously doing alot of stormin' around.
Hearn's travel clocked in at $103, 608. Consider that Hearn was off the payroll for a little while in there. Consider too that his riding is now a heckuva lot smaller than it used to be. He can bicycle from one end to the other in a few hours or better still take the bus to all but a few corners of it. (Pssst. That's a facetious comment about the bike and the bus)
But ya still have to wonder what he was doing to rack up that kind of travel costs.
Before anyone tries to wave a wand and turn that into nothing, look at some other expenses.
Jim Abbott, from Kootenay-Interlake, British Columbia came in between the two of these guys. But he's actually farther away from Ottawa than either of our two Connie friends and he represents a largely rural riding.
Alexa MacDougall, the Dipper from Halifax only spent about $71, 500 to visit her riding once in a while.
And what of Pallister, the Connie from the Prairies? He only spent about $73, 500 getting back and forth to a lovely riding in Saskatchewan.
So why the heck are Mr. Hearn and Mr. Doyle so much more expensive?
Using Brian as the Benchmark, Hearn is 41% higher than Brian while Doyle is a whopping 114% above the Connie Guardian of Expense Account virtue.
Dingwall's expenses - updated
While Connies like this local one, this big Mainland one, and this one, have been attacking former Royal Canadian Mint boss David Dingwall over his expense account claims, two reports released today add up to yet another failure of the Connies to garner any sort of credibility.(Left) Former Royal Canadian Mint chief executive officer David Dingwall. Photo: Canadian Press
Turns out what they claimed was wrong - substantively wrong.
The big loser here (after Steve Harper) is a guy named Brian Pallister, much loved over at Reflexive Grit Loathing, who was part of the Dingwall attack pack and whose claims have been shown to be, in a word, false. Take a gander at this little piece of video the Connies were passing around earlier in October but which now looks kind of dumb in light of today's revelations.
Updated - Pallister's argument is now that he wants to complain about the rules not about the specific claims made by Dingwall. This is the kind of moving target approach that just doesn't garner cred either. Every time one of your arguments is shot down by facts, you just claim you never argued that in the first place and then pick up on something.
As CBC reports, "Among the [PriceWaterhouseCoopers] audit's findings:
- The $5,800 allegedly spent on one meal was for a two-day seminar involving 24 mint personnel.
- The money allegedly spent on chewing gum was covered under the allowable $20/day incidental expenses.
- There was no evidence of the alleged $13,000 for one day of travel but two claims for $13, 693.83 for a four-day conference in Phoenix and mint-related meetings in New Brunswick, the UK, Switzerland and Germany.
The audit did find that $2,570.66 was determined to be reimbursable to the mint. In addition, $4,198.35 was deemed recoverable due to a clerical payroll error and car insurance prepayments issued by the mint." [emphasis added]
As reported by the Globe and Mail, a second review, carried out by Peter Dey of Osler, Hoskin & Harcourt LLP, "found that the governance process followed by the Mint with respect to the approval and reimbursement of its CEO's expenses was sufficient to ensure that the Corporation's funds were 'expended in a manner consistent with the Mint's policy.' "
Apparently, there's also no evidence that Dingwall dinged the Mint for a pack of chewing gum.
Conservative leader Stephen Harper is quoted as slamming Dingwall for not using "political judgment" in his travel claims and criticizing the reports since the rules were supposedly made by Dingwall.
Wow.
It really isn't clear what "political judgment" Dingwall is supposed to have lacked since the expenses turn out to be legitimate and were totally misrepresented by Harper and his party. It also isn't clear how Dingwall made up his own rules since the claims policy is set by the board of directors, of which Dingwall used to be just one member.
Perhaps the biggest failing of the Connie attack on Dingwall is that the totals are way off. As the Mint board of directors noted in early October, more than 70% of the figure of almost $750,000 Dingwall critics had claimed were "expenses" was actually salaries.
Then there is the matter of Dingwall's ability to actually spend some cash doing what he got paid to do: bring in new business for the Mint. This contract with Thailand is one example.
I am no fan of David Dingwall, but when someone is attacked and personally vilified without any cause other than rank partisanship, the facts of the matter must be presented.
Incidentally, this sort of political attack may go a long way to explaining why the Conservatives have a hard time making any headway with public support. It is much like the Grewal affair.
Claims are made.
A media feeding frenzy ensues.
Then the bubble bursts, in this case the chewing gum bubble.
The facts emerge at which point everyone realizes that the Conservatives are making unsubstantiated claims.
Credibility takes a huge nosedive.
The Conservatives blame everyone else except themselves and their leader.
26 October 2005
ACI gets government subsidies for Stephenville
The Government of Newfoundland and Labrador today released some details of an agreement with Abitibi Consolidated [ACI] that will see the mill continue in operation for 15 years.
Under the framework agreement, ACI will commit to maintaining the Stephenville mill at current operating levels (194, 000 metrics tonnes of newsprint per year) for a total of 15 years. The company will also install a new boiler at Stephenville by the end of 2006, at an estimated cost of up to $13 million.
The provincial government will $10 million in subsidies to ACI for Stephenville, either directly or through Newfoundland and Labrador Hydro. The subsidies will total $150 million.
ACI's original proposal, as released by the provincial government in July, was for a 30 year subsidy agreement of between $7.0 ands $14.0 million per year, with an estimated total of between $210 and $420 million. The framework agreement represents an intermediate figure between the extremes for half the term of the original proposal. If the new agreement were extended to the full term of the original proposal, the cost would be $300 million, the estimated high cost option for constructing new hydro generating capacity for Stephenville.
The new framework agreement also commits both ACI and the provincial government to work on a long-term solution to the Stephenville mills power cost problem. That likely means that ACI and the province's hydro corporation will negotiate construction of new power generation facilities on ACI's watershed holdings to feed the Stephenville mill.
Missing from the announcement is any reference to ACI's Number Seven machine at Grand Falls-Windsor which was slated to close. Expect to see the machine shut down with ACI's associated fibre holdings being transferred to address the fibre supply problem at Stephenville.
This agreement is one possible version of a solution suggested in the Bond Papers in July. At that time, we identified the problem as power rates, an issue created under the Grimes administration.
As we put it at the time: "[a]ll things considered, it is possible the provincial government is not as angry at Abitibi as it might seem. Abitibi may be pushing back at a government which was already playing hard ball at the negotiating table. Read between the lines of government's news release, add in a few other considerations and you get the sense the provincial government will be putting some new cash into Abitibi through reduced power rates."
Today's announcement is exactly that: The provincial government will provide ACI with power subsidies amounting to $150 million over the life of the current agreement.
The announcement also contradicts the Premier's suggestion in September that ACI's divestiture of its PanAsia holdings would allow the company to reinvest in Newfoundland and Labrador. As ACI stated at the time and repeated today, its divestiture will provide $600 million which will be used solely to reduce its current corporate debt load. The divestiture is part of a long term corporate plan to reduce debt and improve its financial position. The investment of $13 million for a new boiler represents a marginal amount and can easily be categorized as routine replacement of equipment. It's a normal capital expenditure or capex as opposed to a dramatic change in the Stephenville operation.
Under the framework agreement, ACI will commit to maintaining the Stephenville mill at current operating levels (194, 000 metrics tonnes of newsprint per year) for a total of 15 years. The company will also install a new boiler at Stephenville by the end of 2006, at an estimated cost of up to $13 million.
The provincial government will $10 million in subsidies to ACI for Stephenville, either directly or through Newfoundland and Labrador Hydro. The subsidies will total $150 million.
ACI's original proposal, as released by the provincial government in July, was for a 30 year subsidy agreement of between $7.0 ands $14.0 million per year, with an estimated total of between $210 and $420 million. The framework agreement represents an intermediate figure between the extremes for half the term of the original proposal. If the new agreement were extended to the full term of the original proposal, the cost would be $300 million, the estimated high cost option for constructing new hydro generating capacity for Stephenville.
The new framework agreement also commits both ACI and the provincial government to work on a long-term solution to the Stephenville mills power cost problem. That likely means that ACI and the province's hydro corporation will negotiate construction of new power generation facilities on ACI's watershed holdings to feed the Stephenville mill.
Missing from the announcement is any reference to ACI's Number Seven machine at Grand Falls-Windsor which was slated to close. Expect to see the machine shut down with ACI's associated fibre holdings being transferred to address the fibre supply problem at Stephenville.
This agreement is one possible version of a solution suggested in the Bond Papers in July. At that time, we identified the problem as power rates, an issue created under the Grimes administration.
As we put it at the time: "[a]ll things considered, it is possible the provincial government is not as angry at Abitibi as it might seem. Abitibi may be pushing back at a government which was already playing hard ball at the negotiating table. Read between the lines of government's news release, add in a few other considerations and you get the sense the provincial government will be putting some new cash into Abitibi through reduced power rates."
Today's announcement is exactly that: The provincial government will provide ACI with power subsidies amounting to $150 million over the life of the current agreement.
The announcement also contradicts the Premier's suggestion in September that ACI's divestiture of its PanAsia holdings would allow the company to reinvest in Newfoundland and Labrador. As ACI stated at the time and repeated today, its divestiture will provide $600 million which will be used solely to reduce its current corporate debt load. The divestiture is part of a long term corporate plan to reduce debt and improve its financial position. The investment of $13 million for a new boiler represents a marginal amount and can easily be categorized as routine replacement of equipment. It's a normal capital expenditure or capex as opposed to a dramatic change in the Stephenville operation.
Stephenville Limbo
Abitibi Consolidated [ACI] announced today that its mill at Stephenville has been idled as opposed to permanently closed. The CBC story linked above also links to the ACI release, carried by Canada Newswire.
The changed status is a result of an offer from the provincial government that ACI regards as holding the potential to change the financial position of the Stephenville mill.
In substance, though, Stephenville is still closed indefinitely and will only be reopened when and if a successful agreement can be reached.
Workers at the mill are now in limbo, at least until some final decision can be made on government's recent offer.
There was no mention today of the status of the Number Seven machine at Grand Falls which was already scheduled to be phased out.
The changed status is a result of an offer from the provincial government that ACI regards as holding the potential to change the financial position of the Stephenville mill.
In substance, though, Stephenville is still closed indefinitely and will only be reopened when and if a successful agreement can be reached.
Workers at the mill are now in limbo, at least until some final decision can be made on government's recent offer.
There was no mention today of the status of the Number Seven machine at Grand Falls which was already scheduled to be phased out.
25 October 2005
Further Ferdin Fooferah and some local connections
A simple google search for Pam Ferdin reveals some really interesting links to accounts of her terrorist activities.
Take this link, for example, to a Los Angeles blog that notes municipal employees in LA will be getting security protection at city expense, thanks to threats from Ferdin's Animal Defence League. Seems a someone set off a smoke grenade in the apartment building of one city animal control director.
One union official had her car firebombed by the nutjobs Ferdin leads. Follow the links back to Ferdin's site, as the link suggests, track the account of the protest and you can see some of the extreme language used by Ferdin and company to describe people they have targeted.
Just remember that Ferdin's husband, Jerry Vlasak views violence and non-violence as merely tactics to achieve the greater end.
Then there's this link to a protest against a research facility to be built at Cambridge University. Note the list of speakers include Vlasak and Ferdin, the latter being described as the head of a primate protection outfit. That would be in addition to heading ADL and at least as of August 2004 of running another group that several years earlier had been involved in beatings of biomedical researchers.
The happy couple started their life of protest at least as early as 1996-97, in this turkey protest in which Vlasak was jailed for mischief and Ferdin was identified as the protest organizer. Ferdin is identified as a trauma nurse - which makes sense if Vlasak is a trauma doctor, but prior to this her work was with a New York company that handled animal control on contract from the Big Apple.
Flip around the web a bit and you can come across Animal Scam, a site dedicated to countering animal rights groups.
This is where the whole story gets rather interesting, at least from a local angle and our ongoing hate-affair with veteran money vacuum Paul Watson.
Despite the fall-out from Peter Gullage's piece on Paul Watson and Jerry Vlasak last winter, it seems Vlasak is still on the board of the Sea Shepherd society. This link rather neatly describes Ferdin and Vlasak's status in the United Kingdom. Her Majesty views them as a threat to public order and likely with cause.
Watson also sits on the Sierra Club board. He tried to take over the Sierra Club board during internal elections but apparently failed. in the meantime he is still there. The Sierra Club of Canada is part of the international Sierra Club organization.
These guys are also linked to People for the Ethical Treatment of Animals, or PETA as it is commonly known. Does anyone at memorial remember some guy named Alka Chanda? This guy used to teach at MUN and is now a researcher at PETA.
PETA has the standard anti- seal hunt website, complete with video and the complete lie that "baby" seals are killed.
Check out the Rebecca Aldworth shown on the ice at the end of the International Fund for Animal Welfare video that PETA uses and you will find this. Apparently she grew up in a community of 340 people somewhere in Newfoundland and is now working with the Humane Society of the United States as Director of Canadian Wildlife Issues. She's someone Paul Watson has described as "the world's most active" anti-sealing protestor.
Rebecca also subscribes to Watson's idea that stopping the seal hunt would actually help with cod recovery. Try this link on for size.
Of course in her former life, as president of the student's union at Concordia, Becky found violence of the type she helped provoke last winter on the ice floes to be just a bit too unpalatable.
I guess Beck changed her mind about violence as she got older.
And realized the money to be made from it.
Of course, the nut factory once known as Sir George Williams U has always been a dodgy place.
She seems to have fit right in, once skating topless on the Rideau Canal to protest against fur as clothing.
Personally, I'd like to know what part of Newfoundland she's from.
Take this link, for example, to a Los Angeles blog that notes municipal employees in LA will be getting security protection at city expense, thanks to threats from Ferdin's Animal Defence League. Seems a someone set off a smoke grenade in the apartment building of one city animal control director.
One union official had her car firebombed by the nutjobs Ferdin leads. Follow the links back to Ferdin's site, as the link suggests, track the account of the protest and you can see some of the extreme language used by Ferdin and company to describe people they have targeted.
Just remember that Ferdin's husband, Jerry Vlasak views violence and non-violence as merely tactics to achieve the greater end.
Then there's this link to a protest against a research facility to be built at Cambridge University. Note the list of speakers include Vlasak and Ferdin, the latter being described as the head of a primate protection outfit. That would be in addition to heading ADL and at least as of August 2004 of running another group that several years earlier had been involved in beatings of biomedical researchers.
The happy couple started their life of protest at least as early as 1996-97, in this turkey protest in which Vlasak was jailed for mischief and Ferdin was identified as the protest organizer. Ferdin is identified as a trauma nurse - which makes sense if Vlasak is a trauma doctor, but prior to this her work was with a New York company that handled animal control on contract from the Big Apple.
Flip around the web a bit and you can come across Animal Scam, a site dedicated to countering animal rights groups.
This is where the whole story gets rather interesting, at least from a local angle and our ongoing hate-affair with veteran money vacuum Paul Watson.
Despite the fall-out from Peter Gullage's piece on Paul Watson and Jerry Vlasak last winter, it seems Vlasak is still on the board of the Sea Shepherd society. This link rather neatly describes Ferdin and Vlasak's status in the United Kingdom. Her Majesty views them as a threat to public order and likely with cause.
Watson also sits on the Sierra Club board. He tried to take over the Sierra Club board during internal elections but apparently failed. in the meantime he is still there. The Sierra Club of Canada is part of the international Sierra Club organization.
These guys are also linked to People for the Ethical Treatment of Animals, or PETA as it is commonly known. Does anyone at memorial remember some guy named Alka Chanda? This guy used to teach at MUN and is now a researcher at PETA.
PETA has the standard anti- seal hunt website, complete with video and the complete lie that "baby" seals are killed.
Check out the Rebecca Aldworth shown on the ice at the end of the International Fund for Animal Welfare video that PETA uses and you will find this. Apparently she grew up in a community of 340 people somewhere in Newfoundland and is now working with the Humane Society of the United States as Director of Canadian Wildlife Issues. She's someone Paul Watson has described as "the world's most active" anti-sealing protestor.
Rebecca also subscribes to Watson's idea that stopping the seal hunt would actually help with cod recovery. Try this link on for size.
Of course in her former life, as president of the student's union at Concordia, Becky found violence of the type she helped provoke last winter on the ice floes to be just a bit too unpalatable.
I guess Beck changed her mind about violence as she got older.
And realized the money to be made from it.
Of course, the nut factory once known as Sir George Williams U has always been a dodgy place.
She seems to have fit right in, once skating topless on the Rideau Canal to protest against fur as clothing.
Personally, I'd like to know what part of Newfoundland she's from.
Save animals! Kill humans!
Peter Gullage did a great story earlier this year pointing to the links between Paul Watson and a radical animal rights activist, Jerry Vlasak.
Thanks to the Penn and Teller vid, we can link Watson and the Sea Shepherd society to yet another violent individual.
The guy's name is Rod Coronado. He appears in the Penn and Teller thing, mentioning that he remains a member of Paul Watson's outfit.
A simple google search and you turn up this link to a profile of the Sea Shepherd group.
"Several nations including Japan have pressured the United States to declare Sea Shepherd a terrorist organization. Controversial animal rights activist Rod Coronado, who has had numerous legal problems stemming from his activism, got his start in activism with Sea Shepherd, where he participated in one of Sea Shepherd's best-known and most controversial actions, the scuttling of two ships from Iceland's whaling fleet while in port in 1986."
Coronado served 57 months in prison for fire-bombing research offices at Michigan State University. He is currently under indictment for other activities in Oregon.
Charming.
And just to close the loop:
Jerry Vlasak is married to Pam Ferdin, the former child actress.
Thanks to the Penn and Teller vid, we can link Watson and the Sea Shepherd society to yet another violent individual.
The guy's name is Rod Coronado. He appears in the Penn and Teller thing, mentioning that he remains a member of Paul Watson's outfit.
A simple google search and you turn up this link to a profile of the Sea Shepherd group.
"Several nations including Japan have pressured the United States to declare Sea Shepherd a terrorist organization. Controversial animal rights activist Rod Coronado, who has had numerous legal problems stemming from his activism, got his start in activism with Sea Shepherd, where he participated in one of Sea Shepherd's best-known and most controversial actions, the scuttling of two ships from Iceland's whaling fleet while in port in 1986."
Coronado served 57 months in prison for fire-bombing research offices at Michigan State University. He is currently under indictment for other activities in Oregon.
Charming.
And just to close the loop:
Jerry Vlasak is married to Pam Ferdin, the former child actress.
A home for former child stars
Isn't it really strange how out-of-work actors and second- and third-tier "celebrities like Anna Nicole get involved in the animal rights movement?
Maybe they are well intentioned. Maybe, just maybe some of them are looking to expand their audience and hence marketability.
Next spring, they'll be back, in force, speaking out against the cruelties of the seal hunt.
Take a look at this video by Penn & Teller, part of their Showcase program, Bullsh*t!.
Does the Pamelyn Ferdin taking part in the Los Angeles animal control protest look familiar to you?
Turns out she was a child star in 1960s and 1970s.
Yep, she's the cute little girl from one of the worst episodes of the original Star Trek. That's her (left) being comforted by Canada's own Bill Shatner.
The former actress is apparently committed to total animal liberation, which means no pets and no animals in research among other things.
Maybe they are well intentioned. Maybe, just maybe some of them are looking to expand their audience and hence marketability.
Next spring, they'll be back, in force, speaking out against the cruelties of the seal hunt.
Take a look at this video by Penn & Teller, part of their Showcase program, Bullsh*t!.
Does the Pamelyn Ferdin taking part in the Los Angeles animal control protest look familiar to you?
Turns out she was a child star in 1960s and 1970s.Yep, she's the cute little girl from one of the worst episodes of the original Star Trek. That's her (left) being comforted by Canada's own Bill Shatner.
The former actress is apparently committed to total animal liberation, which means no pets and no animals in research among other things.
Scrum = bad news
Premier Danny Williams and natural resources minister Ed Byrne held a scrum in the Confederation Building this morning to call on Abitibi Consolidated [ACI] to decide what the company plans to do about the government's latest offer on Stephenville and Grand Falls-Windsor.
Two things:
1. ACI has made no public comment on anything since talks broke off almost a month ago. The recent re-start of talks has gone by without any comment from the company but lots of "hope" and "optimism" from government. This smells like a case of monkey-tossing.
2. ACI announced on 20 October 2005 that it would hold a news conference tomorrow to...release third quarter results for the company just as it has done for each quarter for the past year or more. And just as the company has done faithfully, that will almost inevitably include a further statement on the company's plans to shut down Stephenville and one machine at Grand Falls-Windsor.
Taken all together, that makes today's comments by the Premier a case of calling for the sun to rise. He knows full well there is an announcement coming.
Here's the part he didn't say: Stephenville will close and Grand Falls-Windsor will lose one of its two machines. The Premier has known it for some time, at least back as far as the time ACI announced the closures.
How do I know? If anything else were going to happen, there would be a giant news conference involving the company and the provincial government.
In a case like this, a scrum means there's bad news coming.
Two things:
1. ACI has made no public comment on anything since talks broke off almost a month ago. The recent re-start of talks has gone by without any comment from the company but lots of "hope" and "optimism" from government. This smells like a case of monkey-tossing.
2. ACI announced on 20 October 2005 that it would hold a news conference tomorrow to...release third quarter results for the company just as it has done for each quarter for the past year or more. And just as the company has done faithfully, that will almost inevitably include a further statement on the company's plans to shut down Stephenville and one machine at Grand Falls-Windsor.
Taken all together, that makes today's comments by the Premier a case of calling for the sun to rise. He knows full well there is an announcement coming.
Here's the part he didn't say: Stephenville will close and Grand Falls-Windsor will lose one of its two machines. The Premier has known it for some time, at least back as far as the time ACI announced the closures.
How do I know? If anything else were going to happen, there would be a giant news conference involving the company and the provincial government.
In a case like this, a scrum means there's bad news coming.
24 October 2005
If it's Ontario, it must be true
Yeah, like the Liberal Party isn't getting ready for an election across the country.
The Hill Times catches up.
The Hill Times catches up.
Paul Martin - from the Press Gallery
"Hey Stevie! Boooga booga!
The writ drops in November."
At the annual Ottawa Press Gallery dinner, Prime Minister Paul Martin mugs for the camera. [via Rick Mercer]
Some of Martin's speech made the radio and it was damned funny. Don't take my word for it. Go check Rick's site.
Ditto for Stevie Harper, who does a wicked Brian Mulroney impression. Then again, Peter MacKay, DDS, did the same schtick in 2003.
While you're over there, check out Rick's posting on his recent trip to Afghanistan. There are some great photos and some pretty funny accounts of events there.
Flag poll
There wasn't much surprise in the results of a poll on the provincial flag, commissioned by the Premier's Office and given by the office to The Independent.
Almost half wanted to keep things just as they are with barely a quarter of respondents supporting the pink, white and green.
The poll was like done by Ryan Research, although, oddly, the story doesn't identify who did the research for the Premier.
What was surprising? That the Premier, who is adamantly fighting any effort to gain public access to eight polls he commissioned from Ryan Research, released this one without any formal request.
No surprise that he released it to the Spindy, since the paper is basically acting as the Premier's unofficial mouthpiece.
Almost half wanted to keep things just as they are with barely a quarter of respondents supporting the pink, white and green.
The poll was like done by Ryan Research, although, oddly, the story doesn't identify who did the research for the Premier.
What was surprising? That the Premier, who is adamantly fighting any effort to gain public access to eight polls he commissioned from Ryan Research, released this one without any formal request.
No surprise that he released it to the Spindy, since the paper is basically acting as the Premier's unofficial mouthpiece.
Spending the future
" [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
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.
Let us deal first with the overall financial situation.
The Premier stated that the "consolidated deficit [this year] could be down in the range $100 [million], $200 [million] range" from the $492 million accrual deficit forecast in March. The Premier proposed to spend at least some of this money on infrastructure, especially in rural Newfoundland and Labrador.
Let us be clear: the $492 million shortfall forecast in March 2005, indeed all the accrual deficits forecast by the provincial government, include significant components that are made up of several unfunded liabilities.
The Premier's comments come from adding into his calculations the huge amount of money coming from the offshore. This year it is reputedly in the range of $400 million beyond what was projected. The provincial government's own figures, used by economist Wade Locke, showed that the province's offshore revenues would be $600 million this year. This was based on oil at about US$15 per barrel lower than current market prices.
His comments about the improved financial situation are also based on growth in the province's economy (gross domestic product or GDP), as well as changes to the structure of the debt that themselves reflect long term efforts by successive administrations since 1989.
On the face of it, the debt to gross-domestic-product [GDP] ratio seems greatly improved. In 1991, for example, the province's total debt was 65% of the provincial GDP. Its accrual debt was approaching 100% of GDP.
In Fiscal Year 2004, by contrast, the total debt was 44% and its accrual debt was about 50% of GDP. This change was entirely due to growth in the provincial economy. Little if any debt was retired in the intervening 13 years; in fact the provincial government and its agencies owed more money in 2004 than in 1991.
One substantive positive change, however was the reduction of debt held in foreign currencies. In 1991, almost half the province's direct debt was held in expensive foreign currencies and much of the debt was held at high interest rates. This greatly increased the amount needed to service the debt, that is, to make the interest payments. By FY 2004, less than 22% of the debt was in foreign currencies and government continued to roll over its high interest debt in lower-rate loans. Such is the improvement that in 2004, the province was paying slightly less to service its debt than it was a decade earlier yet the total debt (not accrual) was actually $2.0 billion more and debt servicing accounted for 13% of total government expenditures compared to 15% in 1994. Looked at another way, in constant dollars, the provincial government is actually spending less on servicing its debt than it was in the early 1990s despite owing almost 40% more.
An increased debt load with what are admittedly transient increases in both the economy and provincial revenues do not make for a windfall. Nor does it support dramatic increases in program spending or capital works.
Consider as well that in his remarks to the Telegram editorial board, Premier Williams spoke of spending the supposed windfall on public infrastructure around the province, especially in rural Newfoundland and Labrador. In 2004, infrastructure cash was supposed to come from a new transfer payment from the Government of Canada designed to offset Equalization losses.
That deal, when it was finally signed, actually did not effectively double offshore revenues, as the Premier had originally sought. Instead, it added a single lump sum payment of $2.0 billion. That money sits collecting interest at a rate of about $5.0 million per month, with no publicly announced plans on what the government plans to do with either the $2.0 billion or any of the $60 million in interest coming from it.
Against this backdrop, one must look at the Premier's comments with some degree of concern. The provincial government still has no coherent plan for tackling the long-term financial issues identified by PriceWaterhouseCoopers. There is no commitment to paying off debt.
The "revitalization" of rural Newfoundland and Labrador, embodied in the Williams administration's Rural Secretariat is merely a slightly revamped version of the ruralist approach of the previous Grimes and Tobin governments. This was simply a collection of short-sighted efforts to avoid dealing with the substantive changes coming to much of Newfoundland Labrador as a result of changes in demographics and in the economy.
One of the last acts of the Wells administration, in December 1995, was to approve release of a discussion paper on a Strategic Social Plan [SSP] for Newfoundland and Labrador. While the incoming Tobin administration scrapped the planned release and ordered copies destroyed, some have survived. The introductory essay describes the looming changes in simple and compelling detail.
Beyond the outmigration resulting from the collapse of the cod fishery and the then-anticipated economic growth from oil and Voisey's Bay (see the conclusions of the 2002 provincial report linked above), rural Newfoundland and Labrador would change dramatically from what it had been. A chronically low birth rate would produce an internal migration from small coastal communities to larger centres. Changes in the fishery would reduce the number of workers there and, if allowed to take its natural course, the fishing industry would dramatically lower the number of people employed while increasing the earnings of those involved. Overall, the workforce would be smaller than the non-working population - the so-called dependent population - for the first time in many decades.
Newfoundland and Labrador is not alone in this respect. Quebec is in much the same situation, as the recent Quebec Lucide manifesto reveals.
At home, we have a curious mixture of action from the provincial government. On the one hand, the provincial government's raw materials sharing plan for the crab industry reflected yet another attempt to forestall changes that demographics and economics would otherwise produce in Newfoundland and Labrador. This echoed the actions of both Brian Tobin and Roger Grimes.
At the same time, Premier Williams comments to the Telegram echo the Strategic Economic Plan [SEP] and the real Strategic Social Plan of the Wells administration. His description of regional hubs and a focus on local strengths as a means of diversifying local economies around the province are lifted almost word for word from the SEP and comments by Clyde Wells.
What appears to be missing from the Williams administration is a clear-eyed vision of the province's challenges and of its solutions. Both the Wells SEP and SSP had such a vision, derived not from the Premier's Office or Clyde Wells' own predilections but from intensive discussion among the province's own people. That the development vision survives today as core economic development policies from the Williams' administration is testament to its fundamental strength.
Before the Premier starts spending any of the windfalls he has coming this year and over the next five years or so, he might want to actually produce an integrated economic and social plan. The many promises of plans contained in the last Throne Speech, indeed all the promises of plan that have been made since October 2003, do not add up to very much of anything at all.
The clock is indeed ticking and before we spend the future of the province and its people, the Premier and his administration might be well advised to climb up and tree, see what the future may bring and set the province on the course.
A little straight talk often times goes a long further than singing one's praises to earn both proper recognition for the good job done already and continued support for the journey ahead.
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.
Let us deal first with the overall financial situation.
The Premier stated that the "consolidated deficit [this year] could be down in the range $100 [million], $200 [million] range" from the $492 million accrual deficit forecast in March. The Premier proposed to spend at least some of this money on infrastructure, especially in rural Newfoundland and Labrador.
Let us be clear: the $492 million shortfall forecast in March 2005, indeed all the accrual deficits forecast by the provincial government, include significant components that are made up of several unfunded liabilities.
The Premier's comments come from adding into his calculations the huge amount of money coming from the offshore. This year it is reputedly in the range of $400 million beyond what was projected. The provincial government's own figures, used by economist Wade Locke, showed that the province's offshore revenues would be $600 million this year. This was based on oil at about US$15 per barrel lower than current market prices.
His comments about the improved financial situation are also based on growth in the province's economy (gross domestic product or GDP), as well as changes to the structure of the debt that themselves reflect long term efforts by successive administrations since 1989.
On the face of it, the debt to gross-domestic-product [GDP] ratio seems greatly improved. In 1991, for example, the province's total debt was 65% of the provincial GDP. Its accrual debt was approaching 100% of GDP.
In Fiscal Year 2004, by contrast, the total debt was 44% and its accrual debt was about 50% of GDP. This change was entirely due to growth in the provincial economy. Little if any debt was retired in the intervening 13 years; in fact the provincial government and its agencies owed more money in 2004 than in 1991.
One substantive positive change, however was the reduction of debt held in foreign currencies. In 1991, almost half the province's direct debt was held in expensive foreign currencies and much of the debt was held at high interest rates. This greatly increased the amount needed to service the debt, that is, to make the interest payments. By FY 2004, less than 22% of the debt was in foreign currencies and government continued to roll over its high interest debt in lower-rate loans. Such is the improvement that in 2004, the province was paying slightly less to service its debt than it was a decade earlier yet the total debt (not accrual) was actually $2.0 billion more and debt servicing accounted for 13% of total government expenditures compared to 15% in 1994. Looked at another way, in constant dollars, the provincial government is actually spending less on servicing its debt than it was in the early 1990s despite owing almost 40% more.
An increased debt load with what are admittedly transient increases in both the economy and provincial revenues do not make for a windfall. Nor does it support dramatic increases in program spending or capital works.
Consider as well that in his remarks to the Telegram editorial board, Premier Williams spoke of spending the supposed windfall on public infrastructure around the province, especially in rural Newfoundland and Labrador. In 2004, infrastructure cash was supposed to come from a new transfer payment from the Government of Canada designed to offset Equalization losses.
That deal, when it was finally signed, actually did not effectively double offshore revenues, as the Premier had originally sought. Instead, it added a single lump sum payment of $2.0 billion. That money sits collecting interest at a rate of about $5.0 million per month, with no publicly announced plans on what the government plans to do with either the $2.0 billion or any of the $60 million in interest coming from it.
Against this backdrop, one must look at the Premier's comments with some degree of concern. The provincial government still has no coherent plan for tackling the long-term financial issues identified by PriceWaterhouseCoopers. There is no commitment to paying off debt.
The "revitalization" of rural Newfoundland and Labrador, embodied in the Williams administration's Rural Secretariat is merely a slightly revamped version of the ruralist approach of the previous Grimes and Tobin governments. This was simply a collection of short-sighted efforts to avoid dealing with the substantive changes coming to much of Newfoundland Labrador as a result of changes in demographics and in the economy.
One of the last acts of the Wells administration, in December 1995, was to approve release of a discussion paper on a Strategic Social Plan [SSP] for Newfoundland and Labrador. While the incoming Tobin administration scrapped the planned release and ordered copies destroyed, some have survived. The introductory essay describes the looming changes in simple and compelling detail.
Beyond the outmigration resulting from the collapse of the cod fishery and the then-anticipated economic growth from oil and Voisey's Bay (see the conclusions of the 2002 provincial report linked above), rural Newfoundland and Labrador would change dramatically from what it had been. A chronically low birth rate would produce an internal migration from small coastal communities to larger centres. Changes in the fishery would reduce the number of workers there and, if allowed to take its natural course, the fishing industry would dramatically lower the number of people employed while increasing the earnings of those involved. Overall, the workforce would be smaller than the non-working population - the so-called dependent population - for the first time in many decades.
Newfoundland and Labrador is not alone in this respect. Quebec is in much the same situation, as the recent Quebec Lucide manifesto reveals.
At home, we have a curious mixture of action from the provincial government. On the one hand, the provincial government's raw materials sharing plan for the crab industry reflected yet another attempt to forestall changes that demographics and economics would otherwise produce in Newfoundland and Labrador. This echoed the actions of both Brian Tobin and Roger Grimes.
At the same time, Premier Williams comments to the Telegram echo the Strategic Economic Plan [SEP] and the real Strategic Social Plan of the Wells administration. His description of regional hubs and a focus on local strengths as a means of diversifying local economies around the province are lifted almost word for word from the SEP and comments by Clyde Wells.
What appears to be missing from the Williams administration is a clear-eyed vision of the province's challenges and of its solutions. Both the Wells SEP and SSP had such a vision, derived not from the Premier's Office or Clyde Wells' own predilections but from intensive discussion among the province's own people. That the development vision survives today as core economic development policies from the Williams' administration is testament to its fundamental strength.
Before the Premier starts spending any of the windfalls he has coming this year and over the next five years or so, he might want to actually produce an integrated economic and social plan. The many promises of plans contained in the last Throne Speech, indeed all the promises of plan that have been made since October 2003, do not add up to very much of anything at all.
The clock is indeed ticking and before we spend the future of the province and its people, the Premier and his administration might be well advised to climb up and tree, see what the future may bring and set the province on the course.
A little straight talk often times goes a long further than singing one's praises to earn both proper recognition for the good job done already and continued support for the journey ahead.
23 October 2005
Reprint: Outside the box - Time
Here's a reprint of a column originally published in The Independent, January 2004.
It seems appropriate to reprint it now, especially considering that the Premier's comments on his second anniversary in office refer to how much they are still working on.
At the time the column appeared, the view inside the administration was that they would do things at their own pace.
That's certainly been true, but the fundamental point of the column - about the need to get moving quickly - seems to be more relevant with each passing date.
Time
by Ed Hollett
A new government has a very small amount of time in which to lay the groundwork for its term of office. It has about six months to show things are different and about a year to start showing signs of results. In fact, they really have about 100 days to make a mark, and when it comes to things like re-organizing the departments and getting political and public service staff changes made, they have even less than that.
The reasons are pretty simple: The outside world wants to figure out what government they really elected. For the government itself, they need to sort out the basics so they can cope with the onslaught of demands that come with the force of a three inch fire hose. Put another way, the new government has a short time to take control of the public agenda. That'’s the only way they can filter the workload down to a manageable level, let alone do the things they want to do. Without control of the political agenda, they become followers rather than leaders.
The Williams government is remarkable because it looks like a party that is at the end of its life in power rather than the beginning. It doesn'’t have control of the political agenda. Even something as simple as the long-awaited appointment of Doug House was announced and interpreted by CBC television rather than the Premier'’s Office. Add that to the obvious confusion in the Premier'’s messages, his testiness in answering media questions, and the lack of any meaningful signs of a change, let alone "“The Plan"”. The Stunnel, the Premier'’s hobbyhorse, is the sort of ludicrous mega-project that seems more worthy of Brian Peckford in his last days than a newly- elected Premier with the well-deserved reputation of being a level-headed leader.
We don'’t have to go back too far in time to see a government that didn'’t have control of the political agenda. The Tobin government, described by one of Tobin'’s closest advisors as having "“no idea what we are doing"”, lost control of the agenda from the start. Tobin plummeted in the polls his first year in office, and for the rest of his sojourn, the province was treated to an endless string of half-assed decisions, many of them made up by the Premier in the back seat of his chauffeur-driven car.
The best example of a government that didn'’t control the agenda is the Grimes administration. For a whole bunch of reasons, Roger Grimes never seemed to find his mark, let alone make it. The most glaring display of Grimes'’ weakness was in contract negotiations with public sector unions. The unions defined the problem and the solution: more people and more money. Government never even got into the discussion. Grimes was beaten in a fair fight, but cost was never considered.
What was really lost over the past seven years, though wasn'’t control. It was opportunity. A raft of things begun in the early 90s, from economic development to government reform, came to a screeching halt in 1996. The Williams party got wide support last October in large part because they were promoting a vision that cuts across party lines.
The Premier and the cabinet he leads are as good as any cabinet we have had. They are intelligent, capable and well-intentioned. People want to see their vision put to practice. They want Danny to succeed.
If the new government thinks the water is flowing through the hose at high speed now, get ready. The unions will likely launch their public campaign in the days and weeks ahead. The last time they faced a government that was disjointed and disorganized, the unions cleaned up.
A new government has a very short period in which to make its mark.
The clock is ticking.
It seems appropriate to reprint it now, especially considering that the Premier's comments on his second anniversary in office refer to how much they are still working on.
At the time the column appeared, the view inside the administration was that they would do things at their own pace.
That's certainly been true, but the fundamental point of the column - about the need to get moving quickly - seems to be more relevant with each passing date.
Time
by Ed Hollett
A new government has a very small amount of time in which to lay the groundwork for its term of office. It has about six months to show things are different and about a year to start showing signs of results. In fact, they really have about 100 days to make a mark, and when it comes to things like re-organizing the departments and getting political and public service staff changes made, they have even less than that.
The reasons are pretty simple: The outside world wants to figure out what government they really elected. For the government itself, they need to sort out the basics so they can cope with the onslaught of demands that come with the force of a three inch fire hose. Put another way, the new government has a short time to take control of the public agenda. That'’s the only way they can filter the workload down to a manageable level, let alone do the things they want to do. Without control of the political agenda, they become followers rather than leaders.
The Williams government is remarkable because it looks like a party that is at the end of its life in power rather than the beginning. It doesn'’t have control of the political agenda. Even something as simple as the long-awaited appointment of Doug House was announced and interpreted by CBC television rather than the Premier'’s Office. Add that to the obvious confusion in the Premier'’s messages, his testiness in answering media questions, and the lack of any meaningful signs of a change, let alone "“The Plan"”. The Stunnel, the Premier'’s hobbyhorse, is the sort of ludicrous mega-project that seems more worthy of Brian Peckford in his last days than a newly- elected Premier with the well-deserved reputation of being a level-headed leader.
We don'’t have to go back too far in time to see a government that didn'’t have control of the political agenda. The Tobin government, described by one of Tobin'’s closest advisors as having "“no idea what we are doing"”, lost control of the agenda from the start. Tobin plummeted in the polls his first year in office, and for the rest of his sojourn, the province was treated to an endless string of half-assed decisions, many of them made up by the Premier in the back seat of his chauffeur-driven car.
The best example of a government that didn'’t control the agenda is the Grimes administration. For a whole bunch of reasons, Roger Grimes never seemed to find his mark, let alone make it. The most glaring display of Grimes'’ weakness was in contract negotiations with public sector unions. The unions defined the problem and the solution: more people and more money. Government never even got into the discussion. Grimes was beaten in a fair fight, but cost was never considered.
What was really lost over the past seven years, though wasn'’t control. It was opportunity. A raft of things begun in the early 90s, from economic development to government reform, came to a screeching halt in 1996. The Williams party got wide support last October in large part because they were promoting a vision that cuts across party lines.
The Premier and the cabinet he leads are as good as any cabinet we have had. They are intelligent, capable and well-intentioned. People want to see their vision put to practice. They want Danny to succeed.
If the new government thinks the water is flowing through the hose at high speed now, get ready. The unions will likely launch their public campaign in the days and weeks ahead. The last time they faced a government that was disjointed and disorganized, the unions cleaned up.
A new government has a very short period in which to make its mark.
The clock is ticking.
21 October 2005
PetroNewf corporate logo
A nice picture of a one year old Newfoundland dog, the only creature it is politically correcte to refer to as a Newf.I think it's an appropriate symbol of our new oil ands gas company.
If nothing else, it's just a nice picture.
Hydro not bled white or dry or anything else - amended
Premier Danny Williams loves hyperbole.
That is exaggeration, usually for effect, but typically for its own sake.
You've heard it before: "The debt and deficit was the worst in the history of mankind on the planet. I performed a miracle [almost a verbatim quote] and magically reduced it in less than a year to a manageable size. David had nothing on me. I slay giants in my spare time."
That sort of stuff.
Looks funny when you write it down. It's amazing the number of people though that will listen to that stuff and bob their heads up and down in agreement that surely this Messiah is the true one. [Unlike all the other ones we've bobbed our heads for. The last hyperbole freak was Tobin, before that it was Peckford and before that Smallwood, the Superfreak of hyperbole freaks.]
Anyway, in an interview with David Cochrane on CBC Radio this morning, Premier Danny Williams proudly announced that government is going to stop taking dividends fromNewfoundland and Labrador Hydro PetroNewf to balance the provincial books.
This is good. It's a simple announcement.
The reason? Well, for one thing the oil money flowing so heavily means that the province doesn't need the Hydro cash desperately like it did say 12 years ago. For another thing, the Premier wants to leave all of PetroNewf's money with PetroNewf so it can do things like buy an equity stake in the offshore.
He said something to the effect that PetroNewf was being bled dry and its debt run up by government taking out cash which, of course, sent the patented Spin-o-meter into the redline.
Ok. There are two separate issues here.
One is the debt increase at PetroNewf. That was caused by PetroNewf building a bunch of new hydro generation projects.
The second was the issue of taking dividends - drawing from PetroNewf's annual net profit - to balance the books.
Here's what that looks like.
According to its 2004 annual statement, PetroNewf has in the bank doing nothing about $350 million labeled "retained earnings". Another for it is accumulated net profit - the money left after all the bills are paid. It is down slightly from the early 1990s when the retained earnings were over $500 million.
The thing is that back in the days when it was Hydro, PetroNewf made money just about every year. The government started taking a dividend in the midst of the truly worst financial crisis since the collapse of Responsible Government when they needed it. Until Tobin arrived, that money was always the current years earnings which meant that the little nest egg of retained earnings was never harmed.
Brian Tobin and later Roger Grimes started dipping deeper into the pot. If you check the 2001 PetroNewf annual financial statement, the retained earnings are where they were a decade earlier - over $500 million. There has been a decline in this surplus cash on hand since then, but even after the Grimes draw-downs, and paying off Brian Tobin's $57 million Lower Churchill slush fund, PetroNewf has hardly been bled even to a shade of cream, let alone white.
With that bit of prime ministerial exaggeration out of the way, maybe we can take a look see what it would cost to purchase an equity stake in the offshore.
That is exaggeration, usually for effect, but typically for its own sake.
You've heard it before: "The debt and deficit was the worst in the history of mankind on the planet. I performed a miracle [almost a verbatim quote] and magically reduced it in less than a year to a manageable size. David had nothing on me. I slay giants in my spare time."
That sort of stuff.
Looks funny when you write it down. It's amazing the number of people though that will listen to that stuff and bob their heads up and down in agreement that surely this Messiah is the true one. [Unlike all the other ones we've bobbed our heads for. The last hyperbole freak was Tobin, before that it was Peckford and before that Smallwood, the Superfreak of hyperbole freaks.]
Anyway, in an interview with David Cochrane on CBC Radio this morning, Premier Danny Williams proudly announced that government is going to stop taking dividends from
This is good. It's a simple announcement.
The reason? Well, for one thing the oil money flowing so heavily means that the province doesn't need the Hydro cash desperately like it did say 12 years ago. For another thing, the Premier wants to leave all of PetroNewf's money with PetroNewf so it can do things like buy an equity stake in the offshore.
He said something to the effect that PetroNewf was being bled dry and its debt run up by government taking out cash which, of course, sent the patented Spin-o-meter into the redline.
Ok. There are two separate issues here.
One is the debt increase at PetroNewf. That was caused by PetroNewf building a bunch of new hydro generation projects.
The second was the issue of taking dividends - drawing from PetroNewf's annual net profit - to balance the books.
Here's what that looks like.
According to its 2004 annual statement, PetroNewf has in the bank doing nothing about $350 million labeled "retained earnings". Another for it is accumulated net profit - the money left after all the bills are paid. It is down slightly from the early 1990s when the retained earnings were over $500 million.
The thing is that back in the days when it was Hydro, PetroNewf made money just about every year. The government started taking a dividend in the midst of the truly worst financial crisis since the collapse of Responsible Government when they needed it. Until Tobin arrived, that money was always the current years earnings which meant that the little nest egg of retained earnings was never harmed.
Brian Tobin and later Roger Grimes started dipping deeper into the pot. If you check the 2001 PetroNewf annual financial statement, the retained earnings are where they were a decade earlier - over $500 million. There has been a decline in this surplus cash on hand since then, but even after the Grimes draw-downs, and paying off Brian Tobin's $57 million Lower Churchill slush fund, PetroNewf has hardly been bled even to a shade of cream, let alone white.
With that bit of prime ministerial exaggeration out of the way, maybe we can take a look see what it would cost to purchase an equity stake in the offshore.
The future of Hebron and gas development offshore Newfoundland and Labrador
Having worked at NOIA for a short period, I decided to take a second look at the conference next week focusing on future offshore developments. It's sold out, so don't bother trying to get tickets.
No doubt people have been buying up luncheon tickets to hear PetroNewf chief executive officer Ed Martin explain how a Crown corporation with absolutely no experience in oil and gas is somehow going to muscle its way into the oil and gas business.
The real value of this conference is the working sessions [see agenda] and anyone with tickets is going to get a real earful of solid information.
The morning sessions focus on heavy oil and the Hebron project. It promises to be a heavily technical discussion.
The provincial government and the companies are still trying to figure out a benefits deal, so the project is not ready for sanction, that is, it isn't ready to go to the offshore board for approval. Premier Williams appears to be trying to saddle Hebron with a host of "local benefits" that aren't needed to bring the field on stream, which will drive up the cost of development and in the process might well reduce the revenue stream to the provincial government - much like the Peckford-era Hibernia deal.
At some point - maybe in four years time when Danny Williams is out of office - the companies can cut a deal with the provincial government and the project will finally start. Major international companies like Chevron make long-range plans, and as the Kazakhstan projects demonstrate, they are quite prepared to work diligently over a long period of time for the right moment to develop the right oil field. Having spent 20 years waiting to bring Hebron on stream, the consortium can hardly be deterred by the prospect of waiting for a few more years just like INCO waited for Brian Tobin to get bored.
In the meantime, Martin and Williams will try and build PetroNewf into something that will either compete with local private enterprise or, more likely, just muscle local companies into a subordinate position in the oil patch.
(Left) TengizChevroil logo
For anyone who thinks that Hebron is a big play for Chevron and the other partners, think of this. Since the late 1990s, Chevron has been heavily involved in developing oil reserves in the former Soviet Union. In 2001, they opened a new pipeline to take gas from the Caspian Sea to market. The Tengiz field, for example contains an estimated six to nine billion barrels of oil.
Compare that to the 700 hundred million in Hebron, most of which is heavy oil that is costly to produce especially in the harsh North Atlantic environment.
The afternoon sessions on potential gas development promise to be more interesting, especially in light of the Premier's comments to The Telegram about not wanting to see gas stuffed into a "God damn boat" and floated down the coast, presumably to markets where people could actually buy the gas.
The Premier's comments are odd, since there is a very small potential market, if any at all, for natural gas within the province.
In 1998 and 2001, NOIA conducted a two-part study into potential gas development. You can find Phase One report, or scoping study, here and the Phase Two report, which examined critical issues, here.
The market analysis carried out in 2001 by ICT Consulting predicted continued strong growth in American natural gas markets and that has held true. Likewise, the assessment that there is a limited local market for these products has also remained true.
(Right) One of the Premier's despised "God damn" but locally-owned compressed natural gas ships could earn the province millions in added revenue through the private sector.
Technological changes, including exploration of new shipping technologies with local business ties, open up new ways of exploiting the estimated eight trillion cubic feet of natural gas offshore Newfoundland and Labrador.
Given that these studies are about five to eight years old, it might be timely to have another look at the potential to develop gas reserves. Changes in price, for example may make it more attractive to begin development of something less than the total available reserves, with production commencing around 2010 or slightly afterward. The one thing that isn't likely to change is the small local demand for natural gas.
No doubt people have been buying up luncheon tickets to hear PetroNewf chief executive officer Ed Martin explain how a Crown corporation with absolutely no experience in oil and gas is somehow going to muscle its way into the oil and gas business.
The real value of this conference is the working sessions [see agenda] and anyone with tickets is going to get a real earful of solid information.
The morning sessions focus on heavy oil and the Hebron project. It promises to be a heavily technical discussion.
The provincial government and the companies are still trying to figure out a benefits deal, so the project is not ready for sanction, that is, it isn't ready to go to the offshore board for approval. Premier Williams appears to be trying to saddle Hebron with a host of "local benefits" that aren't needed to bring the field on stream, which will drive up the cost of development and in the process might well reduce the revenue stream to the provincial government - much like the Peckford-era Hibernia deal.
At some point - maybe in four years time when Danny Williams is out of office - the companies can cut a deal with the provincial government and the project will finally start. Major international companies like Chevron make long-range plans, and as the Kazakhstan projects demonstrate, they are quite prepared to work diligently over a long period of time for the right moment to develop the right oil field. Having spent 20 years waiting to bring Hebron on stream, the consortium can hardly be deterred by the prospect of waiting for a few more years just like INCO waited for Brian Tobin to get bored.
In the meantime, Martin and Williams will try and build PetroNewf into something that will either compete with local private enterprise or, more likely, just muscle local companies into a subordinate position in the oil patch.
(Left) TengizChevroil logoFor anyone who thinks that Hebron is a big play for Chevron and the other partners, think of this. Since the late 1990s, Chevron has been heavily involved in developing oil reserves in the former Soviet Union. In 2001, they opened a new pipeline to take gas from the Caspian Sea to market. The Tengiz field, for example contains an estimated six to nine billion barrels of oil.
Compare that to the 700 hundred million in Hebron, most of which is heavy oil that is costly to produce especially in the harsh North Atlantic environment.
The afternoon sessions on potential gas development promise to be more interesting, especially in light of the Premier's comments to The Telegram about not wanting to see gas stuffed into a "God damn boat" and floated down the coast, presumably to markets where people could actually buy the gas.
The Premier's comments are odd, since there is a very small potential market, if any at all, for natural gas within the province.
In 1998 and 2001, NOIA conducted a two-part study into potential gas development. You can find Phase One report, or scoping study, here and the Phase Two report, which examined critical issues, here.
The market analysis carried out in 2001 by ICT Consulting predicted continued strong growth in American natural gas markets and that has held true. Likewise, the assessment that there is a limited local market for these products has also remained true.
(Right) One of the Premier's despised "God damn" but locally-owned compressed natural gas ships could earn the province millions in added revenue through the private sector.Technological changes, including exploration of new shipping technologies with local business ties, open up new ways of exploiting the estimated eight trillion cubic feet of natural gas offshore Newfoundland and Labrador.
Given that these studies are about five to eight years old, it might be timely to have another look at the potential to develop gas reserves. Changes in price, for example may make it more attractive to begin development of something less than the total available reserves, with production commencing around 2010 or slightly afterward. The one thing that isn't likely to change is the small local demand for natural gas.
20 October 2005
Lucid Lucien
While the story got some coverage, Lucien Bouchard's news conference the other day didn't get quite enough.
So here is a link to the English version of the manifesto he released on behalf of a group of Quebec intellectuals on the challenges faced by Quebec in the coming decades and some possible solutions.
The French name of the document, pour un Quebec lucide, seems much more compelling than the English version: For a clear-eyed vision of Quebec.
I'd agree with Paul Wells on the most striking statement in the document, albeit for different reasons. Irrespective of Wells' point, I just thought the comment equally applicable to Newfoundland and Labrador in the past 18 months; just change the provincial origin of the "consensus".
I'll give you the Wellsian translation of the original French:
"The first condition of liberty is the ability to question the status quo without being hauled before the inquisition tribunal of the Quebec consensus."
On that note, stand by for some further comment on this manifesto in the days ahead.
Orrin Hatch - honorary hoser
Check out this post, in which United States Senator Orrin Hatch (Republican, Utah) claims that Canada will surpass Saudi Arabia as the world's largest oil storehouse.
Then check the text of Hatch's speech, from his senatorial website and find out exactly what he actually said:
"We should take note that our major oil companies, including Chevron and ExxonMobil, are beginning to state publicly that we may be reaching peak oil. And with the economic growth in India and Asia and other regions, it looks like weÂ’ll have high oil prices into the foreseeable future.
This is a new scenario for the world, and it forces us to shift our focus to our unconventional resources. Shell Oil Company has, for years, been preparing for such a shift. Its successful activities in Alberta with oil sands and their investment in new technologies to produce oil from oil shale are a testimony to ShellÂ’s recognition that unconventional oil is in our future.
Those who doubt that unconventional fuels are economically viable probably are suffering from a neck ailment that keeps them from looking north.
The 800-pound gorilla is sitting just above Montana, and let'’s face it, it'’s hard to miss.
Alberta is now second only to Saudi Arabia in proven oil reserves and ninth in the world in annual oil production. This is owing mostly to their successful development of oil sands. In Alberta, you have dozens of major oil companies, using a variety of technologies and recovery methods, going after very different types of oil sands resources, and in almost every case doing so for less than $20 a barrel, including during their very tough winters. It is a gigantic success story, and it began with Alberta'’s government deciding to promote the development of this resource and not giving up.
Anyone watching what is happening up north will recognize that, before long, Canada will inevitably overtake Saudi Arabia as the world'’s oil giant. And Alberta clearly has its sights on increased annual production to match its growing reserve. Already at about a million barrels a day, Alberta'’s production is expected to double in the next five or six years."
Notice that the gentlemen Senator did not mention offshore eastern Canada in the speech.
Maybe he has just been lobbied hard about Alberta. Maybe Hatch just knows about Alberta because his own state also has large oil sands reserves.
It is still interesting to see Canada noticed in this way by an influential senator.
Then check the text of Hatch's speech, from his senatorial website and find out exactly what he actually said:
"We should take note that our major oil companies, including Chevron and ExxonMobil, are beginning to state publicly that we may be reaching peak oil. And with the economic growth in India and Asia and other regions, it looks like weÂ’ll have high oil prices into the foreseeable future.
This is a new scenario for the world, and it forces us to shift our focus to our unconventional resources. Shell Oil Company has, for years, been preparing for such a shift. Its successful activities in Alberta with oil sands and their investment in new technologies to produce oil from oil shale are a testimony to ShellÂ’s recognition that unconventional oil is in our future.
Those who doubt that unconventional fuels are economically viable probably are suffering from a neck ailment that keeps them from looking north.
The 800-pound gorilla is sitting just above Montana, and let'’s face it, it'’s hard to miss.
Alberta is now second only to Saudi Arabia in proven oil reserves and ninth in the world in annual oil production. This is owing mostly to their successful development of oil sands. In Alberta, you have dozens of major oil companies, using a variety of technologies and recovery methods, going after very different types of oil sands resources, and in almost every case doing so for less than $20 a barrel, including during their very tough winters. It is a gigantic success story, and it began with Alberta'’s government deciding to promote the development of this resource and not giving up.
Anyone watching what is happening up north will recognize that, before long, Canada will inevitably overtake Saudi Arabia as the world'’s oil giant. And Alberta clearly has its sights on increased annual production to match its growing reserve. Already at about a million barrels a day, Alberta'’s production is expected to double in the next five or six years."
Notice that the gentlemen Senator did not mention offshore eastern Canada in the speech.
Maybe he has just been lobbied hard about Alberta. Maybe Hatch just knows about Alberta because his own state also has large oil sands reserves.
It is still interesting to see Canada noticed in this way by an influential senator.
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