Canada v. Nichol and Bouzan is now posted to the CanLii website.
Here's the full text.
Go mad!
07 November 2005
04 November 2005
FPI changes may signal massive problems in fishery
Derrick Rowe's departure from his job as chief executive officer of Fishery Products International may well signal wider problems in the local fishing industry.
There are already the problems in the crab sector and in shrimp, as reported widely during the summer. Add to that the chronic problem noted by provincial fisheries minister Trevor Taylor. Clear-eyed Taylor points to the fact there are simply too many people and too many plants in the province for the volume of fish out there. Add behind all that the growing competitiveness of the fishing industry and the province is set for some heavy changes to an industry that holds the status of being not so much as business as the religion of the place.
One of many things some people in the province refuse to acknowledge is that a company like FPI can actually ship fish to China, process it and bring it back to market in North America for less than it would if the fish were processed in Newfoundland and Labrador.
FPI's financial situation, including an additional $90 million in its debt load as reported by CBC Radio's David Cochrane, may have a spillover effect into the wider market. FPI is not only the major fish company in the province; it also supports smaller processors in a variety of ways.
The fall and winter may well be extremely difficult politically for the provincial government.
Taylor has spoken openly of the overcapacity in the fishery. At the same time, Premier Williams has committed to assisting the community of Harbour Breton cope with the closure by FPI of the community's fishplant. While it is far from conclusive, these contradictory opinions suggest that there are some significant policy differences within government on fisheries issues.
If real, they would only complicate a looming problem in the fishery that needs to be addressed decisively.
There are already the problems in the crab sector and in shrimp, as reported widely during the summer. Add to that the chronic problem noted by provincial fisheries minister Trevor Taylor. Clear-eyed Taylor points to the fact there are simply too many people and too many plants in the province for the volume of fish out there. Add behind all that the growing competitiveness of the fishing industry and the province is set for some heavy changes to an industry that holds the status of being not so much as business as the religion of the place.
One of many things some people in the province refuse to acknowledge is that a company like FPI can actually ship fish to China, process it and bring it back to market in North America for less than it would if the fish were processed in Newfoundland and Labrador.
FPI's financial situation, including an additional $90 million in its debt load as reported by CBC Radio's David Cochrane, may have a spillover effect into the wider market. FPI is not only the major fish company in the province; it also supports smaller processors in a variety of ways.
The fall and winter may well be extremely difficult politically for the provincial government.
Taylor has spoken openly of the overcapacity in the fishery. At the same time, Premier Williams has committed to assisting the community of Harbour Breton cope with the closure by FPI of the community's fishplant. While it is far from conclusive, these contradictory opinions suggest that there are some significant policy differences within government on fisheries issues.
If real, they would only complicate a looming problem in the fishery that needs to be addressed decisively.
FPI's Rowe departs
Derrick Rowe announced today that he will be stepping down as chief executive officer of Fishery Products International (FPI), effective 31 December 2005.
Rowe's departure coincides with announced a net loss in the third quarter 2005 of CDN$5.1 million. This compares with a net profit of CDN $4.9 million for the same period of 2004. Check the news release, linked above, for a detailed discussion of FPI's announcement.
The announcements of both the third quarter loss and Rowe's departure are accompanied by news that FPI will undertake a further review of its so-called primary group operations to reduce costs and increase productivity. The primary group includes FPI's fish harvesting, processing and marketing operations.
The Ocean Cuisine International division matches seafound demand from customers in the foodservice, retail and industrial sectors with suppliers globally. In September, FPI purchased The Seafood Company, a United Kingdom importer, harvester and processor of shellfish and rebranded the company Ocean Cuisine Europe.
In October, FPI deferred a plan to create an income trust using Ocean Cuisine International, attributing the deferral to a review being undertaken by the Government of Canada of income trusts. The plan originated in 2003, however, ongoing discussions with the Williams administration over the subsequent 18 months delayed implementation of the income trust proposal.
Rowe's departure coincides with announced a net loss in the third quarter 2005 of CDN$5.1 million. This compares with a net profit of CDN $4.9 million for the same period of 2004. Check the news release, linked above, for a detailed discussion of FPI's announcement.
The announcements of both the third quarter loss and Rowe's departure are accompanied by news that FPI will undertake a further review of its so-called primary group operations to reduce costs and increase productivity. The primary group includes FPI's fish harvesting, processing and marketing operations.
The Ocean Cuisine International division matches seafound demand from customers in the foodservice, retail and industrial sectors with suppliers globally. In September, FPI purchased The Seafood Company, a United Kingdom importer, harvester and processor of shellfish and rebranded the company Ocean Cuisine Europe.
In October, FPI deferred a plan to create an income trust using Ocean Cuisine International, attributing the deferral to a review being undertaken by the Government of Canada of income trusts. The plan originated in 2003, however, ongoing discussions with the Williams administration over the subsequent 18 months delayed implementation of the income trust proposal.
The future would be dramatically different...
Check this suggestion from Responsible Government League (RGL) that calls for, among other things, dismantling the provincial Department of Innovation, Trade and Rural Development.
By the by, the department is commonly known as In Turd, which just proves once again that people need to think long and hard before they develop an acronym for an organization.
RGL's suggestion is radical and worth considering.
Don't hold your breath though. With no signs of radical changes in government policy in the wake of the last election, it is unlikely such a dramatic move will come now that everyone is settling in on The Hill.
By the by, the department is commonly known as In Turd, which just proves once again that people need to think long and hard before they develop an acronym for an organization.
RGL's suggestion is radical and worth considering.
Don't hold your breath though. With no signs of radical changes in government policy in the wake of the last election, it is unlikely such a dramatic move will come now that everyone is settling in on The Hill.
The federal provincial balance - a snapshot [amended]
In late 2004, I attempted to estimate the federal-provincial revenue balance, taking into account taxation, government to government transfers as well as government to individual transfers (Employment Insurance).
Transfers to persons, by province, was not available and has not been included in this assessment. Note however, that in some recent years, published reports put the amount of Employment Insurance payments made within Newfoundland and Labrador at more than $900 million.
[Amendment: Lo and behold an e-mail arrived shortly after this was posted giving federal transfers to individuals in the province, as well as other calculations. In the table below, I have added in the transfers to individuals only. The table I received included a raft of other payments, although it didn't include actual federal spending on salaries, procurement etc.]
The data that resulted, while estimated, provided a very interesting snapshot for one year for which information was readily available. The results yield a number of interesting observations:
Observation 1. In FY 2002, the federal and provincial governments generated approximately the same level of taxation revenue from Newfoundland and Labrador. Each order of government derives tax revenue and other revenue from economic activity within a province intended to fund programs and services of that order of government.
For the purposes here, consider that the federal taxation revenue is intended to be the contribution of Newfoundlanders and Labradorians toward the operation of all federal programs and services.
Observation 2. From its own-source and transferred federal revenues, the Government of Newfoundland and Labrador received 79% of all government taxation revenue in FY 2002. See Note 2, below.
Observation 3. This assessment does not take into account federal spending in Newfoundland and Labrador for program and service delivery, including Employment Insurance. Therefore, if the value of federal salaries, capital spending, purchase of goods and services and transfers to individuals exceeds $1.057 billion, then it can be reasonably concluded that Newfoundland and Labrador was a net beneficiary of federal-provincial transfers in FY 2002.
In other words, Newfoundland and Labrador, its government and residents, received more from the federal government than it contributed in locally derived taxation income.
Observation 4. This assessment does not include non-domestic taxation, such as NavCanada fees. These have been the source of some controversy. It has been noted elsewhere, such as an assessment prepared for the Government of Newfoundland and Labrador, that these fees do not provide a net profit to the Government of Canada and its agencies.
Observation 5. It would be appropriate to provide a balance of payments assessment for Newfoundland and Labrador to determine a more detailed perspective on the provincial economy. This is beyond the scope of this posting, but would incorporate a more detailed assessment of federal and provincial taxation and transfers, as well as import/export data, debt, debt servicing etc.
New - Observation 6. From Line G, it is clear that Newfoundland and Labrador received from the Government of Canada almost $1.0 billion more in FY 2002 than it contributed in taxation and other similar revenues. More money comes into the province than goes out.
It is important to remember that, as a general approach, half of taxation and other revenues in the province should represent the revenue to operate the provincial government, while the remainder represents the amount that is Newfoundland and Labrador's contribution to operating the federal government.
Newfoundland and Labrador Government Revenues (Estimate) FY 2002
(Source: Dept of Finance, Government of Canada; Dept. of Finance, Govt of Newfoundland and Labrador)
A. Total Federal Revenue (All tax sources):
$ 148, 577, 000, 000
B. Federal Tax Revenue per capita:
$ 4, 951 Note 1
C. Total Federal Tax Revenue, NL:
$2, 584, 352, 686
D. Federal Transfers to Government NL :
$1, 526, 900, 000Note 2
E. Balance:
$ 1, 057, 452, 686 Note 3
F. New - Federal Transfers to Individuals:
$1, 997, 859, 000
G. New - Net (surplus)/deficit:
($940, 406, 314)
H. Total Provincial Revenue (Own-source):
$2, 521, 010, 000
I. Total Fed + Prov Revenues:
$5, 105, 362, 686
J. Total Provincial Expenditure:
$5, 012, 981, 000Note 4
Notes:
1 The federal per capita revenue likely exceeds the actual figure for Newfoundland and Labrador since the figure used here for total revenue was derived on a national basis.
2 Equalization plus CHST. Gov NL received 79% of all government revenues (Fed Tax Rev + Provincial Own Source) from within Newfoundland and Labrador in FY 2002.
3 Balance represents any amount remaining in federal tax revenue from Newfoundland and Labrador once transfers have been removed.
4 Gov NL total expenditure represents 98% of all government revenues from sources within Newfoundland and Labrador.
Transfers to persons, by province, was not available and has not been included in this assessment. Note however, that in some recent years, published reports put the amount of Employment Insurance payments made within Newfoundland and Labrador at more than $900 million.
[Amendment: Lo and behold an e-mail arrived shortly after this was posted giving federal transfers to individuals in the province, as well as other calculations. In the table below, I have added in the transfers to individuals only. The table I received included a raft of other payments, although it didn't include actual federal spending on salaries, procurement etc.]
The data that resulted, while estimated, provided a very interesting snapshot for one year for which information was readily available. The results yield a number of interesting observations:
Observation 1. In FY 2002, the federal and provincial governments generated approximately the same level of taxation revenue from Newfoundland and Labrador. Each order of government derives tax revenue and other revenue from economic activity within a province intended to fund programs and services of that order of government.
For the purposes here, consider that the federal taxation revenue is intended to be the contribution of Newfoundlanders and Labradorians toward the operation of all federal programs and services.
Observation 2. From its own-source and transferred federal revenues, the Government of Newfoundland and Labrador received 79% of all government taxation revenue in FY 2002. See Note 2, below.
Observation 3. This assessment does not take into account federal spending in Newfoundland and Labrador for program and service delivery, including Employment Insurance. Therefore, if the value of federal salaries, capital spending, purchase of goods and services and transfers to individuals exceeds $1.057 billion, then it can be reasonably concluded that Newfoundland and Labrador was a net beneficiary of federal-provincial transfers in FY 2002.
In other words, Newfoundland and Labrador, its government and residents, received more from the federal government than it contributed in locally derived taxation income.
Observation 4. This assessment does not include non-domestic taxation, such as NavCanada fees. These have been the source of some controversy. It has been noted elsewhere, such as an assessment prepared for the Government of Newfoundland and Labrador, that these fees do not provide a net profit to the Government of Canada and its agencies.
Observation 5. It would be appropriate to provide a balance of payments assessment for Newfoundland and Labrador to determine a more detailed perspective on the provincial economy. This is beyond the scope of this posting, but would incorporate a more detailed assessment of federal and provincial taxation and transfers, as well as import/export data, debt, debt servicing etc.
New - Observation 6. From Line G, it is clear that Newfoundland and Labrador received from the Government of Canada almost $1.0 billion more in FY 2002 than it contributed in taxation and other similar revenues. More money comes into the province than goes out.
It is important to remember that, as a general approach, half of taxation and other revenues in the province should represent the revenue to operate the provincial government, while the remainder represents the amount that is Newfoundland and Labrador's contribution to operating the federal government.
Newfoundland and Labrador Government Revenues (Estimate) FY 2002
(Source: Dept of Finance, Government of Canada; Dept. of Finance, Govt of Newfoundland and Labrador)
A. Total Federal Revenue (All tax sources):
$ 148, 577, 000, 000
B. Federal Tax Revenue per capita:
$ 4, 951 Note 1
C. Total Federal Tax Revenue, NL:
$2, 584, 352, 686
D. Federal Transfers to Government NL :
$1, 526, 900, 000Note 2
E. Balance:
$ 1, 057, 452, 686 Note 3
F. New - Federal Transfers to Individuals:
$1, 997, 859, 000
G. New - Net (surplus)/deficit:
($940, 406, 314)
H. Total Provincial Revenue (Own-source):
$2, 521, 010, 000
I. Total Fed + Prov Revenues:
$5, 105, 362, 686
J. Total Provincial Expenditure:
$5, 012, 981, 000Note 4
Notes:
1 The federal per capita revenue likely exceeds the actual figure for Newfoundland and Labrador since the figure used here for total revenue was derived on a national basis.
2 Equalization plus CHST. Gov NL received 79% of all government revenues (Fed Tax Rev + Provincial Own Source) from within Newfoundland and Labrador in FY 2002.
3 Balance represents any amount remaining in federal tax revenue from Newfoundland and Labrador once transfers have been removed.
4 Gov NL total expenditure represents 98% of all government revenues from sources within Newfoundland and Labrador.
Measuring up - Kiwi-style
Courtesy of an unusual blog, here is a link to a recent installation of artwork in a men's lavatory in New Zealand.
Seems it is a trend in some places to entertain or otherwise distract gentlemen answering nature's call.
This particular installation demonstrates an accurate assessment of male psychology.
Seems it is a trend in some places to entertain or otherwise distract gentlemen answering nature's call.
This particular installation demonstrates an accurate assessment of male psychology.
A trading nation - Newfoundland and Labrador trade with the world
Export Development Canada [EDC] predicts that exports from this province will fall by 5% in 2005 from 2004, with a forecast for further declines through the years beyond.
Energy accounted for 52% of exports in 2004 and is expected to decline by 6.7%. EDC forecasts oil prices to average between US$55 and US$65 per barrel in 2006. The forecast also notes that while high oil prices will continue to benefit the province, a shift in markets from some oil from foreign to domestic Canadian markets will reduce the export value. Domestic exports are obviously not included in the forecast since it is a prediction of non-Canadian export activity, but EDC is careful to note that this is merely an accounting issue, not a signal of any weakening of the provinces oil and gas exports overall. Export of refined crude from Come by Chance is reportedly down 10% over the same period in 2004.
The value of fish exports, which make up the bulk of the provinces agri-foods exports, is expected to fall to 0.2% of exports, down from 22.6% of total exports in 2004.
As EDC notes: "The drop in 2005 is driven mostly by lower prices; however, volumes are slightly lower as well. Crab prices have weakened considerably since 2004. Export volumes will be down this year as well, with a slight reduction in quota and a late start to the year.
In 2006, crab prices are expected to rebound, with volumes also set to increase. Shrimp prices remain low as they have for some time now. The availability of shrimp is good -– shrimp landings were very favourable last year and the stock appears healthy. We expect landings in 2005 and 2006 to be on par with last year'’s performance and our base case scenario has prices holding steady in 2005 and increasing slightly in 2006.
There remains a downside risk in that if prices fall any further some fishers may choose to leave shrimp in the water. After the large drop in exports anticipated for 2005, EDC Economics expects fish and fish products exports to rise 8% in 2006. The Canada-US exchange rate continues to be a key forecast risk since most of the province'’s seafood exports are priced in US dollars." [Paragraphing changed from original]
On forestry, it is worth quoting EDC forecasts in their entirety, especially in light of the recent provincial government subsidy to Abitibi Consolidated.
"Newsprint exports for the first 7 months of 2005 are down 4% over the same period in 2004 even though prices increased 9% during the same time frame. In addition to sluggish sales, newsprint producers face higher energy and input costs. Fibre costs are up, due in part to a 20% harvest reduction in Quebec, which impacts Newfoundland'’s ability to source fibre.
This year [2005] has become a critical year for the industry in Newfoundland as Abitibi, a key industry producer, announced in July that it was closing a mill in Stephenville, effective in October. Abitibi also announced the closure of one 60,000-tonne machine in Grand Falls-Windsor, leaving one machine in operation. Abitibi is planning to take out 500,000 tonnes or 4% of its North American capacity by the end of 2005 in an attempt to push up prices, and half of that value rests in its Stephenville and Grand Falls-Windsor operations.
EDC Economics estimates this could reduce Newfoundland'’s newsprint output by as much as one third. There will be some newsprint reduction taking place in 2005, but most of the volume decrease is expected to happen in 2006. As a result, forestry exports are set to decline by 3% in 2005 followed by a much bigger drop of 18% in 2006." [Paragraphing changed from original. Emphasis added]
Export and import statistics from the Government of Newfoundland and Labrador add some colour and context to the EDC assessment.
The United States was the destination for most local exports, amounting to $2.7 billion in 2004 and includes exports of oil, refined petroleum products, newsprint and fish. That is down from $3.2 billion in 2003 and a peak of $4.1 billion in 2002.
China, Spain, Germany and the United Kingdom round out the top five export destinations. Ireland doesn't make the top 10 list presented by the provincial government.
Import information may surprise some people. Iraq is the number one source of imports, by dollar, coming to about $1.082 billion in 2004. This is entirely comprised of oil that is refined in the province and exported, primarily to the United States.
Russia, the Republic of Korea, the United States and the united Kingdom round out the top five sources of imports, with Russia accounting for almost half a billion Canadian dollars worth of imported goods and services in 2004.
Overall, Newfoundland and Labrador has a trade surplus with destinations outside Canada. The province imported slightly more than $2.5 billion of goods and services in 2004, compared to total exports of more than $4.5 billion.
Energy accounted for 52% of exports in 2004 and is expected to decline by 6.7%. EDC forecasts oil prices to average between US$55 and US$65 per barrel in 2006. The forecast also notes that while high oil prices will continue to benefit the province, a shift in markets from some oil from foreign to domestic Canadian markets will reduce the export value. Domestic exports are obviously not included in the forecast since it is a prediction of non-Canadian export activity, but EDC is careful to note that this is merely an accounting issue, not a signal of any weakening of the provinces oil and gas exports overall. Export of refined crude from Come by Chance is reportedly down 10% over the same period in 2004.
The value of fish exports, which make up the bulk of the provinces agri-foods exports, is expected to fall to 0.2% of exports, down from 22.6% of total exports in 2004.
As EDC notes: "The drop in 2005 is driven mostly by lower prices; however, volumes are slightly lower as well. Crab prices have weakened considerably since 2004. Export volumes will be down this year as well, with a slight reduction in quota and a late start to the year.
In 2006, crab prices are expected to rebound, with volumes also set to increase. Shrimp prices remain low as they have for some time now. The availability of shrimp is good -– shrimp landings were very favourable last year and the stock appears healthy. We expect landings in 2005 and 2006 to be on par with last year'’s performance and our base case scenario has prices holding steady in 2005 and increasing slightly in 2006.
There remains a downside risk in that if prices fall any further some fishers may choose to leave shrimp in the water. After the large drop in exports anticipated for 2005, EDC Economics expects fish and fish products exports to rise 8% in 2006. The Canada-US exchange rate continues to be a key forecast risk since most of the province'’s seafood exports are priced in US dollars." [Paragraphing changed from original]
On forestry, it is worth quoting EDC forecasts in their entirety, especially in light of the recent provincial government subsidy to Abitibi Consolidated.
"Newsprint exports for the first 7 months of 2005 are down 4% over the same period in 2004 even though prices increased 9% during the same time frame. In addition to sluggish sales, newsprint producers face higher energy and input costs. Fibre costs are up, due in part to a 20% harvest reduction in Quebec, which impacts Newfoundland'’s ability to source fibre.
This year [2005] has become a critical year for the industry in Newfoundland as Abitibi, a key industry producer, announced in July that it was closing a mill in Stephenville, effective in October. Abitibi also announced the closure of one 60,000-tonne machine in Grand Falls-Windsor, leaving one machine in operation. Abitibi is planning to take out 500,000 tonnes or 4% of its North American capacity by the end of 2005 in an attempt to push up prices, and half of that value rests in its Stephenville and Grand Falls-Windsor operations.
EDC Economics estimates this could reduce Newfoundland'’s newsprint output by as much as one third. There will be some newsprint reduction taking place in 2005, but most of the volume decrease is expected to happen in 2006. As a result, forestry exports are set to decline by 3% in 2005 followed by a much bigger drop of 18% in 2006." [Paragraphing changed from original. Emphasis added]
Export and import statistics from the Government of Newfoundland and Labrador add some colour and context to the EDC assessment.
The United States was the destination for most local exports, amounting to $2.7 billion in 2004 and includes exports of oil, refined petroleum products, newsprint and fish. That is down from $3.2 billion in 2003 and a peak of $4.1 billion in 2002.
China, Spain, Germany and the United Kingdom round out the top five export destinations. Ireland doesn't make the top 10 list presented by the provincial government.
Import information may surprise some people. Iraq is the number one source of imports, by dollar, coming to about $1.082 billion in 2004. This is entirely comprised of oil that is refined in the province and exported, primarily to the United States.
Russia, the Republic of Korea, the United States and the united Kingdom round out the top five sources of imports, with Russia accounting for almost half a billion Canadian dollars worth of imported goods and services in 2004.
Overall, Newfoundland and Labrador has a trade surplus with destinations outside Canada. The province imported slightly more than $2.5 billion of goods and services in 2004, compared to total exports of more than $4.5 billion.
A trading nation - Newfoundland and Labrador trade within Canada
Interprovincial trade and Newfoundland and Labrador
Newfoundland and Labrador has always been a trading nation and it remains so after Confederation. The local population is too small to enable the local economy full use of all resources within the province. Therefore our economy, and our prosperity, is built on trade.
Figures from the Government of Quebec (Fiscal Year 2001), bear this out. There may be more recent figures but these are the ones that were most readily available.
Newfoundland and Labrador exported $3, 003.2 million of goods and services to other provinces in Fiscal Year (FY) 2001. The destination of most of those goods was Ontario, which imported $1, 132.5 million of locally produced goods and services. Quebec was next with $646.8 million, followed by New Brunswick with $641.6 million.
The province imported $5, 390.5 million worth of goods and services from the rest of Canada in FY 2001. Newfoundland and Labrador imported $2, 342.4 million in goods and services from Ontario, the largest provincial trading partner. Quebec was next, at $1, 172.4 million, followed by Nova Scotia at $686.2.
Within Canada, Newfoundland and Labrador experienced a trade deficit that year, importing $2, 387.3 more than it exported.
Newfoundland and Labrador has always been a trading nation and it remains so after Confederation. The local population is too small to enable the local economy full use of all resources within the province. Therefore our economy, and our prosperity, is built on trade.
Figures from the Government of Quebec (Fiscal Year 2001), bear this out. There may be more recent figures but these are the ones that were most readily available.
Newfoundland and Labrador exported $3, 003.2 million of goods and services to other provinces in Fiscal Year (FY) 2001. The destination of most of those goods was Ontario, which imported $1, 132.5 million of locally produced goods and services. Quebec was next with $646.8 million, followed by New Brunswick with $641.6 million.
The province imported $5, 390.5 million worth of goods and services from the rest of Canada in FY 2001. Newfoundland and Labrador imported $2, 342.4 million in goods and services from Ontario, the largest provincial trading partner. Quebec was next, at $1, 172.4 million, followed by Nova Scotia at $686.2.
Within Canada, Newfoundland and Labrador experienced a trade deficit that year, importing $2, 387.3 more than it exported.
Behind the Green Curtain - amended - Updated
Sullivan financial statement masks deeper issue
Finance minister Loyola Sullivan today released an update on the province's fiscal position. This was done outside the legislature; no word yet on when the session will begin but guesses are that it won't be much before the end of November.
Sullivan said that a combination of increases in different revenues plus changing the way offshore revenue money is accounted have reduced last spring's budgeted deficit of $492 million and turned it into a modest surplus of about $1.5 million.
Other changes to the financial situation include marginal declines in revenue from gasoline taxes and equally marginal increases in operating budgets due to increased gasoline and heating oil prices.
In the news release and actual statement, government is claiming credit for greatly improved finances on the one hand and warning that a major problem remains in the form of the provincial government's $12.0 billion debt.
What all that means is actually pretty simple. If we add up all the provincial government's assets and liabilities on an annual basis, we wind up $1.5 million to the good.
Look more closely at the financial statement and something else pops up: if all other things stay the same, when Loyola Sullivan checks his bank balance next March, he'll find over $300 million in cash he didn't plan on having at hand.
The forecast accrual deficit - the $492 million figure - was comprised largely of unfunded pension liabilities. In other words, the provincial government forecast that while prudent financial management would see government setting aside over $450 million to cover future expenses from public sector pension plans, it wasn't able to do so.
Therefore, there was a large deficit totaling almost $500 million. Just remember, though, that this is a theoretical deficit annually; no money was borrowed to cover it - government actually planned to borrow only $62 million in new money to pay for day-to-day operations.
Remember as well, that with all the new revenue, government hasn't really put anything toward dealing with the unfunded liabilities beyond the modest amounts already negotiated. Nor has government done anything at all to deal with the $12.0 billion accumulated debt other than use it as a boogey man to frighten people who might ask for extra spending this year.
That is the deeper problem with Loyola Sullivan's financial management over the past three years.
Under the Williams administration, Newfoundlanders and Labradorians have no idea what the government will do with the extra cash. In fact, the way Loyola Sullivan likes to report the numbers, he is actually hiding the true picture, all the while claiming he is not telling the fables of some previous provincial finance ministers. He isn't - that much is true. Sullivan simply tells other fiscal fibs.
When the federal government ends up with massive annual surpluses, it has already told people how that money will be spent. Since the late 1990s, the surpluses that in some years add up to almost the total debt in this province have been spent paying off Ottawa's own debt, increasing spending on programs like health care or a combination of the two.
Predictably, Liberal leader Gerry Reid wants to spend the money on something here and now. He has spoken of running small deficits on a cash basis.
In doing so, Reid plays right into Loyola Sullivan's hands. Sullivan's presentation of the province's finances is designed to hide the extra cash in the bank every year. By calling for deficits, Reid allows Sullivan to simple hold up the debt-on-a-stick, wave it about and frighten people, all the while shaking his head at how the approach Reid proposes is what created the province's financial mess in the first place. Sullivan can and will heap praise on himself for having balanced the provincial books in two years when they predicted it might take eight years.
The balanced-books miracle is entirely made up, of course, at least insofar as Sullivan and Premier Williams claiming credit for it is concerned. The PriceWaterhouseCoopers report two years ago deliberately underestimated the short- and medium-term provincial revenues to make the province's financial problems look far worse than they are. The revenues we have actually seen were predictable, even two years ago and even on a conservative - i.e. prudent - basis.
The source of the added cash is also worth noting. The new money does not come from the January deal with Paul Martin. The added money, both the royalties and the added corporate taxes, come entirely from the Real Atlantic Accord from 1985. The royalty regimes put in place by successive Liberal governments, building on the landmark deal under the Peckford Conservatives is pushing the provincial government well into the black. Taken together, the Real Atlantic Accord will add $302 million to the provincial accounts. On an accrual basis, those figures will total at least $330 million above the numbers in the spring budget. Note that this is almost bang on the offshore revenue projections made previously on the Bond Papers.
In fact, aside from the annual draw-downs allowed under the January deal, the interest income from the federal Equalization-like transfer payment is entirely absent from this little financial up-date. Media reports have quoted provincial officials to the effect that the interest on this money is accumulating at a rate of $5.0 million a month. That works out to about $45 million by the end of the fiscal year and that money, in its entirety is available for the province to spend.
Sullivan makes no mention of it at all.
Both Reid and Sullivan miss the point, however, the latter by obvious design.
The public discussion should be about how to be dispose of that cash in the long-term interest of the province. Loyola Sullivan's statement should have contained an honest presentation of the province's finances and a clear statement of what government will do with the hundreds of millions in extra money it has and will have year after year into the future.
Instead, most Newfoundlanders and Labradorians will be bamboozled by numbers. They will be denied the chance to participate in a substantive public policy debate. In the end, and from the perspective of truth in accounting, it is hard to distinguish Sullivan from some of his immediate predecessors.
If past experience is any guide, though, we can make a reasonable prediction as to what government will do with its added cash. Come January 2006, there will be a spending spree, as there was in January 2005. What is genuinely a significant cash surplus will be spent on one-time projects, some of which may be of dubious long-term value. The penchant of this government for quick cash-fixes has been noted here on previous occasions.
And the long-term debt?
It will remain at $12.0 billion, growing steadily each year, all so that Loyola may have a boogeyman with which to frighten the natives.
Update - TD Waterhouse's senior economist made a number of interesting points, but also a number of errors in his comments on CBC radio this morning.
1. As noted above there has been NO action by the provincial government to date to reduce the debt load. The Grimes administration actually managed to retire some of the province's direct debt - a figure the economist referred to when he spoke of a debt t- GDP ratio of 20%. Total and accrual indebtedness continues to climb and will continue to climb under the Conservatives unless corrective action is taken.
2. The January deal is worth more than $2.0 billion. No way. As long as the provincial economy pushes the province off the Equalization rolls, the provincial government will get nothing from the January deal beyond the $321 million already drawn down. The only way to make the deal worth more than the initial hand-out is if oil prices fall well below the TD predictions, i.e. well below US$35, rebounding to US$50.
Finance minister Loyola Sullivan today released an update on the province's fiscal position. This was done outside the legislature; no word yet on when the session will begin but guesses are that it won't be much before the end of November.
Sullivan said that a combination of increases in different revenues plus changing the way offshore revenue money is accounted have reduced last spring's budgeted deficit of $492 million and turned it into a modest surplus of about $1.5 million.
Other changes to the financial situation include marginal declines in revenue from gasoline taxes and equally marginal increases in operating budgets due to increased gasoline and heating oil prices.
In the news release and actual statement, government is claiming credit for greatly improved finances on the one hand and warning that a major problem remains in the form of the provincial government's $12.0 billion debt.
What all that means is actually pretty simple. If we add up all the provincial government's assets and liabilities on an annual basis, we wind up $1.5 million to the good.
Look more closely at the financial statement and something else pops up: if all other things stay the same, when Loyola Sullivan checks his bank balance next March, he'll find over $300 million in cash he didn't plan on having at hand.
The forecast accrual deficit - the $492 million figure - was comprised largely of unfunded pension liabilities. In other words, the provincial government forecast that while prudent financial management would see government setting aside over $450 million to cover future expenses from public sector pension plans, it wasn't able to do so.
Therefore, there was a large deficit totaling almost $500 million. Just remember, though, that this is a theoretical deficit annually; no money was borrowed to cover it - government actually planned to borrow only $62 million in new money to pay for day-to-day operations.
Remember as well, that with all the new revenue, government hasn't really put anything toward dealing with the unfunded liabilities beyond the modest amounts already negotiated. Nor has government done anything at all to deal with the $12.0 billion accumulated debt other than use it as a boogey man to frighten people who might ask for extra spending this year.
That is the deeper problem with Loyola Sullivan's financial management over the past three years.
Under the Williams administration, Newfoundlanders and Labradorians have no idea what the government will do with the extra cash. In fact, the way Loyola Sullivan likes to report the numbers, he is actually hiding the true picture, all the while claiming he is not telling the fables of some previous provincial finance ministers. He isn't - that much is true. Sullivan simply tells other fiscal fibs.
When the federal government ends up with massive annual surpluses, it has already told people how that money will be spent. Since the late 1990s, the surpluses that in some years add up to almost the total debt in this province have been spent paying off Ottawa's own debt, increasing spending on programs like health care or a combination of the two.
Predictably, Liberal leader Gerry Reid wants to spend the money on something here and now. He has spoken of running small deficits on a cash basis.
In doing so, Reid plays right into Loyola Sullivan's hands. Sullivan's presentation of the province's finances is designed to hide the extra cash in the bank every year. By calling for deficits, Reid allows Sullivan to simple hold up the debt-on-a-stick, wave it about and frighten people, all the while shaking his head at how the approach Reid proposes is what created the province's financial mess in the first place. Sullivan can and will heap praise on himself for having balanced the provincial books in two years when they predicted it might take eight years.
The balanced-books miracle is entirely made up, of course, at least insofar as Sullivan and Premier Williams claiming credit for it is concerned. The PriceWaterhouseCoopers report two years ago deliberately underestimated the short- and medium-term provincial revenues to make the province's financial problems look far worse than they are. The revenues we have actually seen were predictable, even two years ago and even on a conservative - i.e. prudent - basis.
The source of the added cash is also worth noting. The new money does not come from the January deal with Paul Martin. The added money, both the royalties and the added corporate taxes, come entirely from the Real Atlantic Accord from 1985. The royalty regimes put in place by successive Liberal governments, building on the landmark deal under the Peckford Conservatives is pushing the provincial government well into the black. Taken together, the Real Atlantic Accord will add $302 million to the provincial accounts. On an accrual basis, those figures will total at least $330 million above the numbers in the spring budget. Note that this is almost bang on the offshore revenue projections made previously on the Bond Papers.
In fact, aside from the annual draw-downs allowed under the January deal, the interest income from the federal Equalization-like transfer payment is entirely absent from this little financial up-date. Media reports have quoted provincial officials to the effect that the interest on this money is accumulating at a rate of $5.0 million a month. That works out to about $45 million by the end of the fiscal year and that money, in its entirety is available for the province to spend.
Sullivan makes no mention of it at all.
Both Reid and Sullivan miss the point, however, the latter by obvious design.
The public discussion should be about how to be dispose of that cash in the long-term interest of the province. Loyola Sullivan's statement should have contained an honest presentation of the province's finances and a clear statement of what government will do with the hundreds of millions in extra money it has and will have year after year into the future.
Instead, most Newfoundlanders and Labradorians will be bamboozled by numbers. They will be denied the chance to participate in a substantive public policy debate. In the end, and from the perspective of truth in accounting, it is hard to distinguish Sullivan from some of his immediate predecessors.
If past experience is any guide, though, we can make a reasonable prediction as to what government will do with its added cash. Come January 2006, there will be a spending spree, as there was in January 2005. What is genuinely a significant cash surplus will be spent on one-time projects, some of which may be of dubious long-term value. The penchant of this government for quick cash-fixes has been noted here on previous occasions.
And the long-term debt?
It will remain at $12.0 billion, growing steadily each year, all so that Loyola may have a boogeyman with which to frighten the natives.
Update - TD Waterhouse's senior economist made a number of interesting points, but also a number of errors in his comments on CBC radio this morning.
1. As noted above there has been NO action by the provincial government to date to reduce the debt load. The Grimes administration actually managed to retire some of the province's direct debt - a figure the economist referred to when he spoke of a debt t- GDP ratio of 20%. Total and accrual indebtedness continues to climb and will continue to climb under the Conservatives unless corrective action is taken.
2. The January deal is worth more than $2.0 billion. No way. As long as the provincial economy pushes the province off the Equalization rolls, the provincial government will get nothing from the January deal beyond the $321 million already drawn down. The only way to make the deal worth more than the initial hand-out is if oil prices fall well below the TD predictions, i.e. well below US$35, rebounding to US$50.
03 November 2005
Yet another who are you quiz
Since this show first aired, I have been a big fan.
Turns out I match up to the guy who is now a congressman (at least on the show).
Of course, these days I am seldom younger than everyone else. *sigh*.
[via John Gushue, aka Toby Zeigler]
The idealistic speechwriter is well-liked by just about everyone. He's known for his excellent writing, sense of humor, and tendency to be clutzy. Although being younger than the rest of the staff, he's often treated as so, much to his dismay.
:: Which West Wing character are you? ::
Turns out I match up to the guy who is now a congressman (at least on the show).
Of course, these days I am seldom younger than everyone else. *sigh*.
[via John Gushue, aka Toby Zeigler]
The idealistic speechwriter is well-liked by just about everyone. He's known for his excellent writing, sense of humor, and tendency to be clutzy. Although being younger than the rest of the staff, he's often treated as so, much to his dismay.
:: Which West Wing character are you? ::
Chinooks to make come-back?
Sold off to Holland by the Mulroney administration at the same time that the military was organizing a light, heli-mobile brigade, Chinook helicopters may be coming back to the Canadian Forces, according to the Canadian Press.
Other purchases include new transport aircraft and a replacement for the Buffalo search-and-rescue aircraft.
The army needs new heavy helicopters to assist in places like Afghanistan. Contenders for the purchase are said to include the CH-47 Chinook, the CH-53 Sea Stallion and the Sikorsky S-92. Last time I checked, the S-92 wasn't considered in the same class as the other two for sheer lift capacity.
Interoperability with the United States army would favour the Chinook.
The transport aircraft will replace the C-130E Hercules, some of which have been in service since the early 1960s. Most likely candidate to win the competition would be the J-model Herc already in service with the Royal Air Force and the Royal Australian Air Force.
Other purchases include new transport aircraft and a replacement for the Buffalo search-and-rescue aircraft.
The army needs new heavy helicopters to assist in places like Afghanistan. Contenders for the purchase are said to include the CH-47 Chinook, the CH-53 Sea Stallion and the Sikorsky S-92. Last time I checked, the S-92 wasn't considered in the same class as the other two for sheer lift capacity.
Interoperability with the United States army would favour the Chinook.
The transport aircraft will replace the C-130E Hercules, some of which have been in service since the early 1960s. Most likely candidate to win the competition would be the J-model Herc already in service with the Royal Air Force and the Royal Australian Air Force.
02 November 2005
Sheila knew nothing? C'mon.
People sometimes have short memories.
Sheila Copps, disgruntled former Liberal leadership candidate, is intent on contradicting the findings of Justice Gomery in his conclusions about who knew what about the sponsorship scandal and when. Mind you, she has no evidence. She can't even do anything except suggest what might theoretically have happened.
But what about Copps herself, cause after all, Sheila, two can play the silly game she follows in her column.
Let's wander a bit through Sheila's own ministerial appointments.
1993 - 1997. Appointed deputy prime minister to Jean Chretien. For those who may not know, that put her closer to the centre of power and the sponsorship mess (by Sheila's own logic) than Paul Martin ever was.
1996 - 2003 Minister of Canadian Heritage, among other portfolios.
Given Sheila's position in the Chretien administration and her own logic, then Sheila knew all about sponsorship and its irregularities. We know that she was involved in the disastrous 1995 federalist referendum strategy and blew $16 million of taxpayers money on a ludicrous scheme to spread Canadian flags everywhere.
Was that sponsorship money? Nope. Not as far as I know. But it was a monumental waste of public funds.
But the really important question is this: how could the deputy prime minister of Canada - the second most powerful person in the cabinet - not have known about a scheme to defraud Canadians of hundreds of millions of dollars, especially considering the scheme was intimately related to the fight against separatism in which Copps herself was involved?
By the logic Copps herself uses against Paul Martin, then Gomery should have dragged her in the dock along with everyone else.
If the Canadian public are cynical, Sheila, then you ought to know. Your commentaries - and perhaps hypocrisy - fuel their doubts about politicians every time you open your mouth or tap your keyboard.
At least the public can read the Gomery report and understand that he has no ulterior motives in his commentary.
Sheila Copps, disgruntled former Liberal leadership candidate, is intent on contradicting the findings of Justice Gomery in his conclusions about who knew what about the sponsorship scandal and when. Mind you, she has no evidence. She can't even do anything except suggest what might theoretically have happened.
But what about Copps herself, cause after all, Sheila, two can play the silly game she follows in her column.
Let's wander a bit through Sheila's own ministerial appointments.
1993 - 1997. Appointed deputy prime minister to Jean Chretien. For those who may not know, that put her closer to the centre of power and the sponsorship mess (by Sheila's own logic) than Paul Martin ever was.
1996 - 2003 Minister of Canadian Heritage, among other portfolios.
Given Sheila's position in the Chretien administration and her own logic, then Sheila knew all about sponsorship and its irregularities. We know that she was involved in the disastrous 1995 federalist referendum strategy and blew $16 million of taxpayers money on a ludicrous scheme to spread Canadian flags everywhere.
Was that sponsorship money? Nope. Not as far as I know. But it was a monumental waste of public funds.
But the really important question is this: how could the deputy prime minister of Canada - the second most powerful person in the cabinet - not have known about a scheme to defraud Canadians of hundreds of millions of dollars, especially considering the scheme was intimately related to the fight against separatism in which Copps herself was involved?
By the logic Copps herself uses against Paul Martin, then Gomery should have dragged her in the dock along with everyone else.
If the Canadian public are cynical, Sheila, then you ought to know. Your commentaries - and perhaps hypocrisy - fuel their doubts about politicians every time you open your mouth or tap your keyboard.
At least the public can read the Gomery report and understand that he has no ulterior motives in his commentary.
Go read Gomery
As much as there will be a bunch of people running about telling you what Gomery said about the sponsorship scandal, the easiest thing to do is read it for yourself.
Consider this:
"Prior to November 1993 [i.e. under the Mulroney administration] ... the selection and engagement of advertising agencies to assist the government in its advertising activities were openly done on a political basis. ... Advertising and communication agencies having Liberal Party sympathies or connections had little or no chance of getting government business."
"[Then, after the Liberals came to power], what appears to have been a sincere attempt to depoliticize an openly biased procurement policy was subverted almost from the very beginning."
or this:
"Just as it is important to identify persons who failed to fulfill their responsibilities or who might have been guilty of misconduct, it is equally important in this Report to identify persons who, on the basis of the evidence, are innocent of any misconduct or mismanagement. Such persons who, in the publicity surrounding the Commission or elsewhere, might have been accused or suspected of improprieties, are entitled to have any blemishes to their reputations explained or removed."
and this:
"One of the main purposes of a public inquiry is to enable concerned citizens to learn firsthand what occurred when allegations of the improper use of public funds have been made. By following the public hearings they are able to arrive at informed opinions as to who might be held responsible for any errors or mismanagement that might have occurred affecting what the Inquiries Act calls "the good government of Canada." The first role of the Commissioner is to conduct hearings that serve to facilitate the understanding of the public, while ensuring at the same time that the presentation of the evidence is done fairly and dispassionately, to avoid premature or unfounded conclusions from being reached which risk damaging the reputations of persons innocent of any wrongdoing, impropriety or negligence."
What Justice Gomery has accomplished herfulfillsls exactly the mandate he received.
Consider this:
"Prior to November 1993 [i.e. under the Mulroney administration] ... the selection and engagement of advertising agencies to assist the government in its advertising activities were openly done on a political basis. ... Advertising and communication agencies having Liberal Party sympathies or connections had little or no chance of getting government business."
"[Then, after the Liberals came to power], what appears to have been a sincere attempt to depoliticize an openly biased procurement policy was subverted almost from the very beginning."
or this:
"Just as it is important to identify persons who failed to fulfill their responsibilities or who might have been guilty of misconduct, it is equally important in this Report to identify persons who, on the basis of the evidence, are innocent of any misconduct or mismanagement. Such persons who, in the publicity surrounding the Commission or elsewhere, might have been accused or suspected of improprieties, are entitled to have any blemishes to their reputations explained or removed."
and this:
"One of the main purposes of a public inquiry is to enable concerned citizens to learn firsthand what occurred when allegations of the improper use of public funds have been made. By following the public hearings they are able to arrive at informed opinions as to who might be held responsible for any errors or mismanagement that might have occurred affecting what the Inquiries Act calls "the good government of Canada." The first role of the Commissioner is to conduct hearings that serve to facilitate the understanding of the public, while ensuring at the same time that the presentation of the evidence is done fairly and dispassionately, to avoid premature or unfounded conclusions from being reached which risk damaging the reputations of persons innocent of any wrongdoing, impropriety or negligence."
What Justice Gomery has accomplished herfulfillsls exactly the mandate he received.
Two down, one more to go.
The Dion thing was scarcely on the blog for five minutes when the first e-mail arrived yesterday from one of three people I expected to hear from in short order.
Number two is over at Responsible Government League in which spleen is vented once more at the evils of Canada and the evils of the central government and well, basically proving Dion's point that there is a lamentable tendency to view everything in Canadian politics as a unity issue.
Now I just have one more voice to hear from, like by e-mail to know I have hit the hat-trick.
Number two is over at Responsible Government League in which spleen is vented once more at the evils of Canada and the evils of the central government and well, basically proving Dion's point that there is a lamentable tendency to view everything in Canadian politics as a unity issue.
Now I just have one more voice to hear from, like by e-mail to know I have hit the hat-trick.
01 November 2005
Nothing can justify secession in Canada
At the risk of making yet another lengthy post, I thought I'd post this recent column by Stephane Dion that appeared in the Toronto Star.
There's always a chance it will get lost in cyberspace.
_____
Nothing can justify secession in Canada
Stephane Dion says it is time to stop treating all problems as unity issues
_____
Ten years after the 1995 referendum, 25 years after the 1980 referendum, I know that the resurgence of the secessionist debate in Quebec continues to create its fair share of exasperation across the country.
How is it that this old threat to our unity is back again? Many ask themselves what they can do to help in these circumstances. If I had only one suggestion to offer, it would be the following: We need to be fairer to our country.
I have in mind a particular bad habit that is far too entrenched in Canadian political culture. Too often we over-dramatize the normal disagreements that we have in our democracy, while at the same time trivializing the use of arguments for separatism in the course of these otherwise normal debates.
This is certainly the case in Quebec where the separatist leaders never miss an opportunity to turn any intergovernmental disagreement into an argument for Quebec separation. Those tensions inherent in any federal system are always portrayed as proof that Canada is dysfunctional, unfair and insensitive to Quebec.
But now, how many times have we heard pro-Canada politicians - and not only from Quebec - using the same argument? Oh, they will not say: "I will become a separatist if things do not go my way." But they will be quick to say that separatism will have a stronger case if they don't get their way. The last example that comes to mind is Conservative leader Stephen Harper's recent intervention in the House of Commons when he described the federal initiative to help provincial day-care systems as a potential threat to Canadian unity.
In 10 years in politics - eight as unity minister - I have heard this argument in the strangest situations: from the Pacific salmon to the Atlantic cod. Is there any other country where the ratification of an environmental protocol (Kyoto) has been described as a unity issue?
Recently, we have seen adults claiming the unity of the country is threatened because one of our provinces is becoming too rich! Or because the federal surpluses are too big! Only in Canada, I tell you.
And you have the opposite argument: those politicians who cannot refrain from celebrating a political result that went their way as the proof that "Canada works." Because a different outcome, obviously, would have been the proof that Canada does not work.
And if you show that you do not take these separatist musings seriously, you may be accused of insensitivity. I remember once in Alberta, a journalist asked me if I thought that Albertan separatism was a serious threat. I answered that I had no doubts about the iron-clad commitment of Albertans to their country. The headline the next day was: "Our unity minister doesn't care about Western alienation." I suppose that I should have expressed doubt about Albertans' loyalty to Canada in order to show that I care about this part of my country.
Ah, the Canadian media and their frenzy for anything that can be twisted into a unity problem. Okay, I won't go there this time.
If the Canadian political class continues to portray Canada as a fragile country, a loose union, always close to disintegration at the first difficulty, how can we hope that the separatist debate will end in Quebec?
There will always be some disagreement down the road, some source of frustration that the separatist movement will describe as the "new" proof that Canada does not work. And what will be the counterargument? To find an agreement that proves Canada works - at least until the next disagreement? That is a never-ending cycle.
One of the worst examples that I have seen about how separatism is trivialized occurred during the last federal election when I discovered that some NDP candidates in Quebec were acknowledged separatists. Today, I ask NDP leader Jack Layton to declare that from now on a commitment to Canadian unity is a sine qua non condition to be an NDP candidate. This is the minimal respect a national leader owes to Canada.
In fact, it would be so simple to stop showing such disrespect to Canada. We just have to say that nothing justifies secession in Canada. Nothing in Quebec. Nothing in any other province. And to hold to that, despite the inevitable disagreements that will arise in our lively democracy.
And then, yes, we will show respect for Canada. Believe me, this respect will be contagious.
_____
Stephane Dion is the federal Minister of the Environment.
There's always a chance it will get lost in cyberspace.
_____
Nothing can justify secession in Canada
Stephane Dion says it is time to stop treating all problems as unity issues
_____
Ten years after the 1995 referendum, 25 years after the 1980 referendum, I know that the resurgence of the secessionist debate in Quebec continues to create its fair share of exasperation across the country.
How is it that this old threat to our unity is back again? Many ask themselves what they can do to help in these circumstances. If I had only one suggestion to offer, it would be the following: We need to be fairer to our country.
I have in mind a particular bad habit that is far too entrenched in Canadian political culture. Too often we over-dramatize the normal disagreements that we have in our democracy, while at the same time trivializing the use of arguments for separatism in the course of these otherwise normal debates.
This is certainly the case in Quebec where the separatist leaders never miss an opportunity to turn any intergovernmental disagreement into an argument for Quebec separation. Those tensions inherent in any federal system are always portrayed as proof that Canada is dysfunctional, unfair and insensitive to Quebec.
But now, how many times have we heard pro-Canada politicians - and not only from Quebec - using the same argument? Oh, they will not say: "I will become a separatist if things do not go my way." But they will be quick to say that separatism will have a stronger case if they don't get their way. The last example that comes to mind is Conservative leader Stephen Harper's recent intervention in the House of Commons when he described the federal initiative to help provincial day-care systems as a potential threat to Canadian unity.
In 10 years in politics - eight as unity minister - I have heard this argument in the strangest situations: from the Pacific salmon to the Atlantic cod. Is there any other country where the ratification of an environmental protocol (Kyoto) has been described as a unity issue?
Recently, we have seen adults claiming the unity of the country is threatened because one of our provinces is becoming too rich! Or because the federal surpluses are too big! Only in Canada, I tell you.
And you have the opposite argument: those politicians who cannot refrain from celebrating a political result that went their way as the proof that "Canada works." Because a different outcome, obviously, would have been the proof that Canada does not work.
And if you show that you do not take these separatist musings seriously, you may be accused of insensitivity. I remember once in Alberta, a journalist asked me if I thought that Albertan separatism was a serious threat. I answered that I had no doubts about the iron-clad commitment of Albertans to their country. The headline the next day was: "Our unity minister doesn't care about Western alienation." I suppose that I should have expressed doubt about Albertans' loyalty to Canada in order to show that I care about this part of my country.
Ah, the Canadian media and their frenzy for anything that can be twisted into a unity problem. Okay, I won't go there this time.
If the Canadian political class continues to portray Canada as a fragile country, a loose union, always close to disintegration at the first difficulty, how can we hope that the separatist debate will end in Quebec?
There will always be some disagreement down the road, some source of frustration that the separatist movement will describe as the "new" proof that Canada does not work. And what will be the counterargument? To find an agreement that proves Canada works - at least until the next disagreement? That is a never-ending cycle.
One of the worst examples that I have seen about how separatism is trivialized occurred during the last federal election when I discovered that some NDP candidates in Quebec were acknowledged separatists. Today, I ask NDP leader Jack Layton to declare that from now on a commitment to Canadian unity is a sine qua non condition to be an NDP candidate. This is the minimal respect a national leader owes to Canada.
In fact, it would be so simple to stop showing such disrespect to Canada. We just have to say that nothing justifies secession in Canada. Nothing in Quebec. Nothing in any other province. And to hold to that, despite the inevitable disagreements that will arise in our lively democracy.
And then, yes, we will show respect for Canada. Believe me, this respect will be contagious.
_____
Stephane Dion is the federal Minister of the Environment.
31 October 2005
Le maudit CBC
In a break from watching the two-part CBC special on the 1995 referendum, I decided to check out the program's website.
It's pretty thin in many respects.
Then I came across the bit titled "Tobin takes charge". Scary thought that it is.
But try this little quote on for size:
"From Halifax to Victoria, a huge campaign is organized: thousands of Canadians send postcards to Quebecers with messages of friendship, pleading with them not to give up their country." [Emphasis added]
Was this written by someone whose memory stopped on 31 March 1949?
I trust the rest of the program does not suffer from a similar lack of adequate research.
It's pretty thin in many respects.
Then I came across the bit titled "Tobin takes charge". Scary thought that it is.
But try this little quote on for size:
"From Halifax to Victoria, a huge campaign is organized: thousands of Canadians send postcards to Quebecers with messages of friendship, pleading with them not to give up their country." [Emphasis added]
Was this written by someone whose memory stopped on 31 March 1949?
I trust the rest of the program does not suffer from a similar lack of adequate research.
Up the dose, Sheila
When it looked like the Gomery Commission was going to skewer the Martin Liberals, Sheila Copps and her associates danced with glee on the grave that had yet to be dug.
Now that it looks like Gomery won't follow the course Sheila et al. would have preferred, she is seeking to sink the thing with rumour, speculation and innuendo.
The Sun, of course, is that bastion of journalism that tried to paint a bull's eye on people like Rick Mercer by outing their morale-boosting trip to Canadian soldiers in Afghanistan.
Sheila, of course, is the bitter Liberal leadership candidate who got creamed by Paul Martin in the leadership run and then capped it off by self-immolating with a bad tactical decision during a nomination fight in her own riding.
The former deputy prime minister during the near-debacle referendum a decade ago and the one who came up with the Print Millions of Flags to Save Canada nonsense is now attacking Paul Martin with a degree of hatred that would make Brian Pallister look like a wuss.
Somehow Sheila seems to think that a well-respected judge with no known partisan affiliations and a process that included Brian Mulroney's former chief of staff as one of the inquiry's lead counsel will now do something other than tell the truth.
Give it a rest, Sheila.
Or up the dose on the meds.
Looks like Rick Mercer made a good call, albeit for other reasons.
Now that it looks like Gomery won't follow the course Sheila et al. would have preferred, she is seeking to sink the thing with rumour, speculation and innuendo.
The Sun, of course, is that bastion of journalism that tried to paint a bull's eye on people like Rick Mercer by outing their morale-boosting trip to Canadian soldiers in Afghanistan.
Sheila, of course, is the bitter Liberal leadership candidate who got creamed by Paul Martin in the leadership run and then capped it off by self-immolating with a bad tactical decision during a nomination fight in her own riding.
The former deputy prime minister during the near-debacle referendum a decade ago and the one who came up with the Print Millions of Flags to Save Canada nonsense is now attacking Paul Martin with a degree of hatred that would make Brian Pallister look like a wuss.
Somehow Sheila seems to think that a well-respected judge with no known partisan affiliations and a process that included Brian Mulroney's former chief of staff as one of the inquiry's lead counsel will now do something other than tell the truth.
Give it a rest, Sheila.
Or up the dose on the meds.
Looks like Rick Mercer made a good call, albeit for other reasons.
SQFT egale square head
In the Canadian Forces, Secteur du Quebec de la Force Terrestre, the Army's Quebec region is known by its acronym SQFT, sometimes pronounced square foot.
Here, in French, is a brief story on results of as recent CROP survey of Francophone recruits being trained at the Canadian Forces Base, Valcartier .
It reveals a group of recruits prone to disobedience, who are less tolerant of immigrants and less supportive of sexual equality than their Anglophone counterparts.
Seems that in Quebec, SQFT actually stands for square head.
Here, in French, is a brief story on results of as recent CROP survey of Francophone recruits being trained at the Canadian Forces Base, Valcartier .
It reveals a group of recruits prone to disobedience, who are less tolerant of immigrants and less supportive of sexual equality than their Anglophone counterparts.
Seems that in Quebec, SQFT actually stands for square head.
30 October 2005
The Constitutional Fish - the decision
On Friday, October 28, 2005 Rick Bouzan and George Nichol were found guilty of breaching federal fisheries regulations during the 2004 recreational fishery.
The decision by Provincial Court Judge Harold Porter was covered by news media, although both the Telegram and Independent versions didn't accurately reflect the decision. Both included comments by the lawyer for Bouzan and Nichol and comments by the defendants that the decision was based, in part, on the fact that Newfoundland and Labrador was a colony at the time of Confederation.
Here is a summary of the decision rendered by the court, taken from the written decision. An online version will be available from the Canadian Legal Information Institute, CanLII.
The decision can be broken into two parts. First there is the offense itself, which was a breach of federal fisheries regulations requiring that fish caught had to be taken on being landed. The purpose of the regulation, while not mentioned in the decision, appears to be aimed at preventing highgrading. This is the practice of catching many more fish than allowed (in this case 15) and the keeping only the best ones.
Both the prosecution and the defence filed an agreed statement of facts. Here it is in part:
The decision by Provincial Court Judge Harold Porter was covered by news media, although both the Telegram and Independent versions didn't accurately reflect the decision. Both included comments by the lawyer for Bouzan and Nichol and comments by the defendants that the decision was based, in part, on the fact that Newfoundland and Labrador was a colony at the time of Confederation.
Here is a summary of the decision rendered by the court, taken from the written decision. An online version will be available from the Canadian Legal Information Institute, CanLII.
The decision can be broken into two parts. First there is the offense itself, which was a breach of federal fisheries regulations requiring that fish caught had to be taken on being landed. The purpose of the regulation, while not mentioned in the decision, appears to be aimed at preventing highgrading. This is the practice of catching many more fish than allowed (in this case 15) and the keeping only the best ones.
Both the prosecution and the defence filed an agreed statement of facts. Here it is in part:
"As the Officers were coming alongside [the defendants' boat] they told both gentlemen not to bother tagging any more fish. Officer Walsh who was at the front of the patrol boat observed Mr. Nicholls tag approximately 3 to 4 codfish while the other man, Mr. Bouzan, had not tagged any fish as he had just found his tags and had them placed on the seat of the boat next to him.
Once alongside Officers Walsh and Ward told the men they would be conducting an inspection of their vessel. Officer Walsh obtained both men's Department of Fisheries and Oceans 3Ps recreational cod licenses and began filling out an inspection form. Officer Ward next asked the men to hand over their catch so that he could inspect it.
The men handed over a fish pan full of cod with one redfish in it as well to Officer Ward who then inspected the catch aboard the patrol vessel. Twelve cod fish were found tagged with tag # 012259 belonging to Mr. Nicholl and 17 cod fish were not tagged. No cod were tagged from Mr. Bouzan's license which was tag # 010857. Fifteen of the cod had been gutted prior to tagging and appeared to the officers to have been caught for some time.
Officer Ward asked the men when they had come out fishing and both men said they had been out "most of the day." No fish entrails were present aboard the vessel or floating in the water next to the boat. The men said they were just going to stop fishing and head to port. Both officers told both men they could return to port and that they would follow them in.
After arriving at a wharf in Little Bay East, Newfoundland both officers separated the tagged cod from the untagged ones and then headed over to where both men landed and returned the tagged cod and their fish pan to them. At that time both officers identified themselves to both men with their badges and identification cards.
Officer Walsh told both men that an investigation had been initiated. At approximately 1510 hours both men were read the standard caution by Officer Walsh and rights to council [sic] were extended. Both men said they understood all parts and did not want to contact duty council [sic] at that time.
Officer Walsh told both men that they may be charged with failing to tag cod immediately after catching the cod. Officer Walsh told both men that their untagged cod was seized and that their unused cod tags would be seized as part of the investigation. Both men supplied Officer Walsh with their tags at that time. All fifteen of Mr. Bouzan's recreational cod tags were seized and three unused tags were seized from Mr. Nichol's license.
After caution Mr. Bouzan said, "I didn't read my license. It's my own fault, I should have read the fine print." Mr. Bouzan said this after the officers told both men that all cod caught must be tagged immediately after catching the cod while recreational cod fishing. Both men were told by the Officers that they would be in touch with them at a later date. Both officers then left the area and continued their patrol.
The seized fish were stored at the DFO Warehouse in Marystown and the unused tags were stored at the DFO Office in Marystown. It was a condition of both mens''’ license that any cod caught must "‘be tagged immediately after it is caught in the following manner: A non- used tag, issued with this license and valid for the NAFO division being fished, must be affixed through the gill and mouth of each Atlantic Cod. The tag must be properly sealed such that the tag cannot be re-opened or removed."’ Each license had 15 tags issued with it."”
That's pretty straightforward and, on that basis, the men were found guilty. The court was asked to consider a constitutional challenge to the jurisdiction of the Government of Canada over fisheries within three miles of the low water mark around Newfoundland and Labrador. The first question posed was as follows:
"Does the government of Canada have the jurisdiction to regulate the catching of groundfish, including cod, within three miles of the coast of Newfoundland and Labrador going from headland to headland?"
On this matter, Judge Porter concluded based on case law before and after 1949 as well as the Terms of Union that the Government of Canada has exclusive jurisdiction over fisheries matters in and around Newfoundland and Labrador. The court was asked to consider a second question, namely:
"If the government of Canada has the jurisdiction to regulate the catching of groundfish, including cod, within three miles of the coast of Newfoundland and Labrador going from headland to headland, does that jurisdiction include the right to regulate the catching of groundfish, including cod, for personal consumption?"
Judge Porter found that the federal jurisdiction over fisheries matters and that this jurisdiction includes fisheries within three miles of Canadian land as well as offshore islands. He rejects the notion of a three mile limit as having any grounds since the provincial government exercises jurisdiction for bird and land animal conservation over islands which are more than three miles from shore.
As well, he found that established case law held that a provincial government has jurisdiction over matters within its legislative competence within its boundaries. Since the Terms of Union do not include fisheries matters within the jurisdiction of the Province of Newfoundland and Labrador, the issue of where the provincial boundary exists isn't relevant in this matter. As to the issue of using fish for personal consumption, it is worthwhile to quote the decision in its entirety:
[73] The third part of the second question narrows the focus to not just fishing for cod, but to fishing for cod "“for personal consumption"”. In this regard, say the Defendants, they are in the same situation as the Powleys were. The Powleys were Metis in Ontario who said that they had a right to take moose, withoulicensece, for personal consumption: see Powley [2003] 2S.C.R. 207.
[74] Contrary to the Metis in Ontario, there are no indigenous aboriginal communities on the island of Newfoundland: see Drew [2003] N.J. 177. Even if there were, there is no suggestion that the Defendants claim membership in such a community.
[75] As a matter of Crown honour, say the defendants, the federal government must have a referendum among the residents of this Province before they can find the jurisdiction to regulate the taking of fish for personal consumption.
[76] This position is untenable: there was a referendum prior to Newfoundland entering Confederation. On entry into Confederation, Newfoundland assumed the same position as if Confederation had been achieved in 1867. As earlier discussed, this included recognition of exclusive jurisdiction over the fishery in the Federal Crown. There is no reason to distinguish between fishing for trade, barter, or personal consumption.
At no point in the decision did Judge Porter make any reference to the notion that Newfoundland and Labrador was a colony at the time of Confederation. Since I wasn't in court, I cannot say for certain he made no mention of this issue in his remarks.
But let's be clear: there is nothing about this issue at all in the written decision.
Judge Porter's decision is based on both the agreed upon statement of facts presented by both parties in court with respect to the offence. On the constitutional issues, Porter relied on case law, the Terms of Union and a variety of statutes and proclamations dating back to the 18th century.
Nichol and Bouzan were fined $100 each for having untagged cod in the possession. in news reports, Bouzan has indicated the case has cost the two defendents $11, 000 so far. They intend to appeal the conviction.
It will be interesting to see what happens when and if the matter gets to the Supreme Court of Newfoundland and Labrador, Court of Appeal. I'd wager the thing will never get to thSuprememe Court of Canada.
The whole thing is black letter law.
Once alongside Officers Walsh and Ward told the men they would be conducting an inspection of their vessel. Officer Walsh obtained both men's Department of Fisheries and Oceans 3Ps recreational cod licenses and began filling out an inspection form. Officer Ward next asked the men to hand over their catch so that he could inspect it.
The men handed over a fish pan full of cod with one redfish in it as well to Officer Ward who then inspected the catch aboard the patrol vessel. Twelve cod fish were found tagged with tag # 012259 belonging to Mr. Nicholl and 17 cod fish were not tagged. No cod were tagged from Mr. Bouzan's license which was tag # 010857. Fifteen of the cod had been gutted prior to tagging and appeared to the officers to have been caught for some time.
Officer Ward asked the men when they had come out fishing and both men said they had been out "most of the day." No fish entrails were present aboard the vessel or floating in the water next to the boat. The men said they were just going to stop fishing and head to port. Both officers told both men they could return to port and that they would follow them in.
After arriving at a wharf in Little Bay East, Newfoundland both officers separated the tagged cod from the untagged ones and then headed over to where both men landed and returned the tagged cod and their fish pan to them. At that time both officers identified themselves to both men with their badges and identification cards.
Officer Walsh told both men that an investigation had been initiated. At approximately 1510 hours both men were read the standard caution by Officer Walsh and rights to council [sic] were extended. Both men said they understood all parts and did not want to contact duty council [sic] at that time.
Officer Walsh told both men that they may be charged with failing to tag cod immediately after catching the cod. Officer Walsh told both men that their untagged cod was seized and that their unused cod tags would be seized as part of the investigation. Both men supplied Officer Walsh with their tags at that time. All fifteen of Mr. Bouzan's recreational cod tags were seized and three unused tags were seized from Mr. Nichol's license.
After caution Mr. Bouzan said, "I didn't read my license. It's my own fault, I should have read the fine print." Mr. Bouzan said this after the officers told both men that all cod caught must be tagged immediately after catching the cod while recreational cod fishing. Both men were told by the Officers that they would be in touch with them at a later date. Both officers then left the area and continued their patrol.
The seized fish were stored at the DFO Warehouse in Marystown and the unused tags were stored at the DFO Office in Marystown. It was a condition of both mens''’ license that any cod caught must "‘be tagged immediately after it is caught in the following manner: A non- used tag, issued with this license and valid for the NAFO division being fished, must be affixed through the gill and mouth of each Atlantic Cod. The tag must be properly sealed such that the tag cannot be re-opened or removed."’ Each license had 15 tags issued with it."”
That's pretty straightforward and, on that basis, the men were found guilty. The court was asked to consider a constitutional challenge to the jurisdiction of the Government of Canada over fisheries within three miles of the low water mark around Newfoundland and Labrador. The first question posed was as follows:
"Does the government of Canada have the jurisdiction to regulate the catching of groundfish, including cod, within three miles of the coast of Newfoundland and Labrador going from headland to headland?"
On this matter, Judge Porter concluded based on case law before and after 1949 as well as the Terms of Union that the Government of Canada has exclusive jurisdiction over fisheries matters in and around Newfoundland and Labrador. The court was asked to consider a second question, namely:
"If the government of Canada has the jurisdiction to regulate the catching of groundfish, including cod, within three miles of the coast of Newfoundland and Labrador going from headland to headland, does that jurisdiction include the right to regulate the catching of groundfish, including cod, for personal consumption?"
Judge Porter found that the federal jurisdiction over fisheries matters and that this jurisdiction includes fisheries within three miles of Canadian land as well as offshore islands. He rejects the notion of a three mile limit as having any grounds since the provincial government exercises jurisdiction for bird and land animal conservation over islands which are more than three miles from shore.
As well, he found that established case law held that a provincial government has jurisdiction over matters within its legislative competence within its boundaries. Since the Terms of Union do not include fisheries matters within the jurisdiction of the Province of Newfoundland and Labrador, the issue of where the provincial boundary exists isn't relevant in this matter. As to the issue of using fish for personal consumption, it is worthwhile to quote the decision in its entirety:
[73] The third part of the second question narrows the focus to not just fishing for cod, but to fishing for cod "“for personal consumption"”. In this regard, say the Defendants, they are in the same situation as the Powleys were. The Powleys were Metis in Ontario who said that they had a right to take moose, withoulicensece, for personal consumption: see Powley [2003] 2S.C.R. 207.
[74] Contrary to the Metis in Ontario, there are no indigenous aboriginal communities on the island of Newfoundland: see Drew [2003] N.J. 177. Even if there were, there is no suggestion that the Defendants claim membership in such a community.
[75] As a matter of Crown honour, say the defendants, the federal government must have a referendum among the residents of this Province before they can find the jurisdiction to regulate the taking of fish for personal consumption.
[76] This position is untenable: there was a referendum prior to Newfoundland entering Confederation. On entry into Confederation, Newfoundland assumed the same position as if Confederation had been achieved in 1867. As earlier discussed, this included recognition of exclusive jurisdiction over the fishery in the Federal Crown. There is no reason to distinguish between fishing for trade, barter, or personal consumption.
At no point in the decision did Judge Porter make any reference to the notion that Newfoundland and Labrador was a colony at the time of Confederation. Since I wasn't in court, I cannot say for certain he made no mention of this issue in his remarks.
But let's be clear: there is nothing about this issue at all in the written decision.
Judge Porter's decision is based on both the agreed upon statement of facts presented by both parties in court with respect to the offence. On the constitutional issues, Porter relied on case law, the Terms of Union and a variety of statutes and proclamations dating back to the 18th century.
Nichol and Bouzan were fined $100 each for having untagged cod in the possession. in news reports, Bouzan has indicated the case has cost the two defendents $11, 000 so far. They intend to appeal the conviction.
It will be interesting to see what happens when and if the matter gets to the Supreme Court of Newfoundland and Labrador, Court of Appeal. I'd wager the thing will never get to thSuprememe Court of Canada.
The whole thing is black letter law.
Sunday morning, 8:00 AM, Quality Time
I once suggested a variation on this Bloom County panel as a billboard ad. The client didn't take it, but hey not every idea passes client-muster.
After all these years, I still find it both funny and fitting at the same time.
Piece and quiet, a cup of hot coffee and something decent to read.
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