Not lovin' Micky D's latest disclosure

As the parent of a child with celiac disease, news that McDonald's restaurants previously failed to disclose the presence of wheat derivatives in the oil used to cook the company french fries has an especially severe implication beyond the obvious one that a company hadn't provided complete product information to consumers.

My daughter's health is involved.

The inaccurate or misleading information provided by McDonald's until now means that my daughter has been unknowingly eating food that may have been causing her health problems. She doesn't eat enough of the fries to give her the severe reaction she had prior to being diagnosed when she was 18 months old. Still, she does eat the fries and any exposure to wheat and its derivatives can trigger a reaction.

"If they're saying there's wheat and dairy derivatives in the oil, as far as anyone with this disease is concerned there's actually wheat in it," said New York resident Jillian Williams, one of more than 2 million Americans with celiac disease, an autoimmune disorder triggered by gluten.

"They should have disclosed that all along," she said. "They should never have been calling them gluten-free."

Ms. Williams is absolutely correct.

To make matters worse, McDonald's Canada hasn't issued a news release - at least on its website - to address this disclosure. Instead, we find out from American sources, linked above, that McDonald's quietly changed the food ingredient labels on its french fries.

You can't even find detailed information on potential food allergens on the Canadian McDonald's site. You will find it on the American site.

As this story spreads, it will be interesting to see if Micky D's winds up with a public relations problem or if the story just slips off the news as quickly as it appeared.

Either way, it's going into my Homer Simpson file as an example of how a company that prides itself on connecting with its consumers, completely missed the boat on this one.

For those in peril

On the night of February 14/15 1982, the semi-submersible drill rig Ocean Ranger sank offshore Newfoundland and Labrador with a loss of 84 crew.

I worked part-time in 1982 paying my way through university. One of my fellow part-timers had a job on the Ranger, working the three-weeks-on/three-weeks-off schedule. As I recall, he as med-evaced with a bad tooth the week before the Ranger sank. His replacement, from the other crew, lost his life.

There are plenty of stories like that, of people being one or two steps removed from someone who died that night. Newfoundland and Labrador is a small place. A tragedy like the Ranger touches just about everyone and even more than two decades later, it is still hard to watch the television reports or listen to the radio clips.

So today, I'll be taking a break from the blog and offering a prayer or two for those who lost their lives 24 years ago.

Eternal Father, strong to save,
Whose arm hath bound the restless wave,
Who biddest the mighty ocean deep
Its own appointed limits keep;
Oh, hear us when we cry to Thee,
For those in peril on the sea.

Cheney jokes

Veep Dick Cheney's skill with a shotgun has spawned some jokes.

1. My favourite one liner so far is the one that hold that it's still safer to go hunting with Dick Cheney than it is to drive with Ted Kennedy. Yeah, I know that one has been around in a dozen versions since the incident hit the news. google "cheney hunting kennedy driving" and see what turns up.

2. For a more sophisticated approach, check nottawa's clever line on Bush and quail/Quayle.

3. The top of all, though, is The Daily Show.

Khaki Tim's in Kandahar

The men and women of Canada's forces overseas apparently are clamouring for a Tim Horton's to be set up where they are.

Like Kandahar, where a large double double means a bus filled with am extra helping of nitrogen fertilizer and some 15 year old doofus anxious to get to Paradise and his virgin quota.

Unfortunately Tim's just isn't overly interested in expanding outside Canada and the United States. [Memo to Tim's headshed: Don't put the newbie out there to freelance your media lines. The kid in the story above obviously has his PR head up his PR arse.]

Well, maybe they are interested, as this story attests.

But hey, this just reminds me of my pet project: a deployable Timmies.

I've been working on the concept for about 10 years. It basically involves a modular concept that will fit on the back of a group of Canadian Forces-style MLVW - basically you can get it in a Herc and you can get it anywhere the CF can go. If you wanna build a free-standing place, then it is adaptable, but either way, the Canadian Forces have to help out with the logistics.

It's doable guys.

You just have to give it a chance.

Recall Harper or RSVP = roflmao

Radio call-in maven Sue has decided that after campaigning vigorously for Stephen Harper she is wrong.

She has started a group to recall the prime minister.

Nice try, Sue, but a recall option doesn't exist in Canadian politics. Even if it did as proposed by the old Reform Party only Harper's own constituents can recall their elected representative.

She calls her new group RSVP, as in Respect the Selections of the Voting Public.

There are a couple of simple observations here:

1. This is an admission Sue was wrong. That isn't news on any level.

2. Sue's mistakes are not cause for a political movement. We've been there, done that and got the t-shirts.

3. Her recall makes no sense because every member of the voting public did get their selection respected. Sue got hers respected in spades. She got the Harper government she worked for, the one she twisted logic and common sense to proselytize for.

Now she can live with her choices.

And her bogus political analysis.

RSVP?

Try roflmao *.
___________________
Update:

What's a political cause without its own website? Not much.

No surprise therefore that RSVP has now got the recall Harper thing set up as a blog of sorts.

You can find it here, but you may also wish to check out the Lower Churchill blog Sue started back in September but apparently hasn't updated much since.

It's attracted a few hits and the title of the first post is Day 1, which presumably was three days ago. Take note of the comments to get a sense of how people are reacting to this effort by someone who only a few short weeks ago was doing her damnedest to get Stephen Harper where he is today.




* roflmao = rolling on the floor, laughing my ass off

Hebron, the premier and getting a deal

While a great many people across the province are cheering on Danny Williams in his latest fight on behalf of this place with someone not from here, it is doubtful the proponents of the Hebron-Ben Nevis development are overly concerned about the premier's latest public claims that any development of the field will have to include a combination of two of the following:

- an oil refinery;
- better royalties for the province; and/or,
- an equity position - read direct involvement by the provincial government - in the field.

Chevron and the other oil companies involved know the premier is fond of making great claims only to accept something remarkably different at the end.

He did it with the federal government over offshore revenues. Williams' starting position was was one thing; he eventually settled for far less than he wanted at the beginning. He also hauled down Canadian flags vowing they wouldn't go up again until a meeting with the prime minister. Then he quickly started talking about putting them back up before that and under other circumstances. When a public opinion poll showed the strength of the public's negative view of his flag stunt, he simply ran the Canadian flags back up the flagpoles at government buildings.

Williams changed positions with Abitibi Consolidated, even going so far as signing a deal that had the province paying the company to keep operating and effectively making no government revenue whatsoever.

The Hebron team also knows that local public reaction never gave the premier a lick of a problem over his shifting pronouncements and positions.

Williams is very good at leaping to the barricades to protect the local Us from the foreign Them. It's an old theme in local politics here, one that stirs the blood of the natives and keeps them distracted from the substance of what's going on. In this instance, Williams is simply making the sort of public statements he likes to make to build up his store of political capital. There is no cost in this to Danny Williams, no cost that is unless he suddenly goes crazy and refuses to sign any deal at all, leaves Hebron in the ground and in the process damages the local offshore supply and service sector.

A man willing to pay a company to take away local resources may be a little crazy from some perspectives. But it is unlikely Danny Williams will go the kind of crazy that would see some political damage being caused over what amounts to the kind of political rhetoric Danny Williams has yet to stand behind. Danny Williams may talk like Brian Peckford, but he doesn't act like him all the time.

As for the specifics of this negotiation, the companies know that two of the premier's three conditions are non-starters. The premier knows it too.

The companies don't want a refinery tacked onto the Hebron project at a sizeable cost to their profits where a refinery isn't necessary to make this project work. The companies know the premier has a private sector group interested in a refinery anyway and that refinery will not depend on Hebron oil for its success.

They also know that deep down, the premier can do the math. Danny Williams understands that a refinery merely delays the point at which Hebron pays off and therefore the province gains higher revenues under the generic royalty regime. Think Terra Nova and White Rose here, not Hibernia.

On the issue of an equity position, the companies simply don't want to have a public sector corporation involved in the day-to-day decisions about running the field. They've told the premier this already. The companies are not anxious to let someone slide into the project who hasn't risked anything or paid a share of the costs to get the project this far.

In any event, an equity position would have to be purchased at fair market value and with the province assuming a share of the costs and liabilities as well as the potential profit. All things considered, the cost to Danny Williams of the equity position would likely outweigh its cash value and certainly would all but neutralise any value in royalties and local benefits. Put another way, the Hebron equity position may well make the Hibernia deal look like a lottery win by comparison. Expect it to disappear from consideration.

Both the provincial government and the oil companies have set April 1 as the deadline for a deal. If one is to be had, expect it to consist of royalties and local jobs benefits. The refinery and the equity position will likely vanish. The reasons are simple: the costs of either of these to the provincial government is simply too great. Shelving the entire project is the only outcome that potentially damages Danny Williams' political position and he has never stuck blindly to a position which ultimately costs him political capital. Danny Williams is more like Brian Tobin than Brian Peckford.

The premier will claim victory no matter what happens. Many will praise his success, as they have in the past and the last of the major offshore discoveries will move into production. No one will notice that yet again what he demanded as his bottom line and what he accepted as his final position are totally different.

No one will notice, that is, except for the companies with which Danny Williams is negotiating on our behalf.

No seat at int'l table: Harper fails on another promise

Provinces will not be getting seats at international tables, as Stephen Harper promised during the recent campaign.

Wow.

That's a surprise.

Stephen Harper promised something and isn't delivering.

Week 2 of Harper-rama looks like it will be as good as Week 1.

Hearn calls for hand-over of Hibernia shares

So it's an old release, but there's no indication Connie fish minister has changed his position on giving the Government of Newfoundland and Labrador the federal government's shares in the Hibernia project.

That said, let's see how long it takes Minister Hearn to make the same request of his own government he made of its predecessor: "Hearn said that he would be requesting the Prime Minister and his Government to follow through on this initiative."

The Federal Government Should Give Newfoundland and Labrador its 8.5 Percent Hibernia Share says [sic] Conservatives

MOUNT PEARL, September 21, 2004 --– St. John'’s South-Mount Pearl Member of Parliament, Loyola Hearn, and Conservative Natural Resources critic, John Duncan, say that in light of the Government of Canada'’s decision to sell its shares in Petro Canada, the time is right to transfer the Federal Government'’s 8.5 percent share in Hibernia to Newfoundland and Labrador.

"Despite the fact that Finance Minister Ralph Goodale said that there is no link between Petro Canada and the Hibernia share," said Hearn, "if Canada is willing to unload its Petro Canada shares, then it is logical the Hibernia shares should be transferred to this province. As we look at the history of the development of Hibernia and as we are conscious of this province'’s attempt to benefit more from its resources, it is not only logical but right and proper that the 8.5 percent Hibernia share held by the Federal Government should be transferred for the benefit of our Province."

"This would enhance the Prime Minister'’s commitment to assure that provinces are the prime beneficiary from their resources," added Duncan.

Hearn said that he would be requesting the Prime Minister and his Government to follow through on this initiative.

-30-

Two degrees of separation, Newfoundland and Labrador style

Following is some simple background information on the project announced today involving a new company that will explore the feasibility of establishing a 300, 000 barrel per day oil refinery, likely on the site between the existing Come By Chance refinery and the Whiffen Head transshipment facility. The Vitol-owned refinery is currently up for sale.

1. The project will be undertaken by Newfoundland and Labrador Refining, a new company comprising investors Altius Minerals and three United Kingdom investors, Dermot Desmond, Harry Dobson and Stephen Posford.

2. Altius' proposal to finance the Lower Churchill project was included by the province last year in the short list of proposals on that hydroelectric project. As reported in The Telegram, "Altius proposes creating a royalty trust that would acquire a percentage of the revenue generated from the sales of Lower Churchill electricity."

3. Dobson and Posford are major shareholders in a new oil and gas exploration company, Borders and Southern Petroleum, that is looking for oil and gas offshore the Falklands.

4. Dobson is chairman of Rambler Minerals and Mining, which created out of a company owned by Altius. In the transaction, Altius retained a 30% interest in the company and a seat on the board of directors for Brian Dalton and John Baker of Altius.

5. Last September, Altius acquired shares in Alba Mineral Resources, a company chaired by Desmond.

End fed jobs leaving Ottawa - latest Connie platform dump

Danny Williams and Andy Wells will be upset to discover that the new federal government wants to stop the practice of shipping federal jobs out of Ottawa to other parts of the country.

The tens of thousands of Newfoundlanders and Labradorians who voted Connie because they were upset about "federal presence" must be even angrier over the words of the new treasury board boss:

Treasury Board President John Baird says one of his top priorities is to stop federal government jobs leaking out of the city to other regions.

Mr. Baird told the Citizen this week that he had "huge concerns" about the Liberal practice of relocating jobs to court favour and win votes. He promised, much to the delight of city politicians and union leaders, to try to reverse the trend and preserve jobs in the region.

"We saw during the campaign Liberal candidates promising to take jobs out. We even saw previous ministers giving thumbs up to that concept. That obviously is a significant concern for me and one that as we go through my early days and briefings, will keep eye to," he said.

Expect much skating from Hearn on this one. Ditto for Hearn's new spinner Ryan Cleary who railed against the evil Liberals and who now has to deal with a treasury board president who just nailed his colours to the masthead. Cleary will be doing a non-stop impersonation of Dorothy all the while repeating: "This doesn't look like Kansas, Toto."

Heck, all the Connies in the province will be busily muttering "There's no place like home" as they try and work around yet another gap between what Newfoundlanders and Labradorians were promised in the election and what their new Connie overlords plan on delivering.

(h/t to nottawa. Fed pres always was a complete crock as an issue, but it is so much fun to point out Connie hypocrisy.)

Flash: Ryan Cleary to spin for Loyola Hearn

Wait for the official announcement.

Some people should never come across to the other side of the street.

I guess that's why he mused a few weeks ago about packing up and leaving the province.

Update: As one wag put it, Cleary's been spinning for Hearn for months anyway so the only difference now will be that the taxpayers will be paying Cleary's salary.

Province shut out of second tier Harper cabinet

Hot on the heels of Norm Doyle's ouster as Connie caucus chair comes word that not a single Connie member of parliament from this province was deemed fit to be parliamentary secretary to a cabinet minister.

Take a close look at this list, ladies and gentlemen.

Notice that backbenchers from places like Ontario get to back up powerful ministers from places like Ontario in already powerful portfolios.

The back-stop for the minister of fish, by contrast comes from British Columbia.

But do we get to have the second level nat res spot, since the minister is from BC? After all, natural resources is important to us we develop oil and gas our oil and gas industry?

The parl sec is from Quebec.

Yep.

As we try and move forward with major hydro-electric developments, Steve Harper decided that neither Norm nor Fabe was good enough and it was a better idea to have some guy in there more likely to represent the best interests of Hydro Quebec.

The backstop to the minister responsible for the Atlantic Canada Opportunities Agency?

Some guy from Alberta.

Basically, the parliamentary secretaries list is where Harper rewarded his old buds from the Reform Party.

In the meantime, Fabian and Norm can cool their jets in the cheap seats.

And we can once again ponder why anyone pays any attention to Sue's flatulent political prognostications.

Norm Doyle fired: democracy in action

Norm Doyle, once Connie caucus chair has been punted from his job in favour of one Rahim Jaffer.

Unlike in other caucuses where the chairman is elected, in Connie-land Il Duce makes the call.

(h/t nottawa)

The old school fish minister

Newfoundlanders and Labradorians heard this evening from the new federal fisheries minister, Loyola Hearn, courtesy of two interviews with local television news.

Among the words of wisdom from Hearn:

1. Moving immediately to take custodial management of the nose and tail of the Grand banks means start having meetings with officials.

Newfoundlanders and Labradorians are likely to find out - as predicted - that Hearn will be following the old school of politics from which he comes and which Bill Rowe, Hearn's' radio call-in show buddy, said in Hearn's defence today: it's easy to say things when you are in Opposition.

Put another way, it's about saying one thing to get elected and doing something else once in the job.

2. On the difficult job of managing fish quotas and tackling the overcapacity in the province's fish processing sector: Hearn believes in spreading the resource to benefit the most people, not employing the number of people the resource can actually sustain.

That's the same philosophy Hearn's been supporting since he first got into politics almost 25 years ago.

It's the philosophy that helped get the province's fish sector into the mess it's already in.

Lot's of people who supported Hearn are going to find out what the Bond Papers has been saying all along.

Risk and reward on the east coast oil and gas frontier

Rob Strong, one of the senior figures in the Newfoundland and Labrador oil industry told CBC Radio that the local oil patch is looking forward to increased exploration offshore Newfoundland this year.

As Strong notes, over 20 years have elapsed since the last major discovery in the Newfoundland offshore and for most of the past 15 years, exploration drilling has dropped to near zero.

Technological advances, high demand for oil and gas and the consequent high world prices for oil, coupled with political instability in some regions have led to a renewed interest in the north Atlantic's oil and gas potential.

A record $670 million was bid for Orphan Basinland plots in 2003 and the drilling program this year is further evidence that international capital is willing to look even in frontier regions. The Basin is located about 370 kilometres northeast of St. John's. The basin may hold as much as eight billion barrels of oil.

With increased exploration and development in other deep water fields, the supply of rigs that can work offshore Newfoundland is tight, as a recent public meeting on the province's upcoming energy plan was told. Nonetheless, the Erik Raude, a semi-submersible shown in the picture at right, and the Rowan Gorilla VI, a jack-up, will both be drilling exploration wells this summer.

East coast Canada is very much a frontier region in the oil and gas business, which is code for high cost and high risk. Technically challenging from an engineering perspective, a well offshore may cost as much as $100 million to drill. Improvements in seismic technology has reduced the risk of producing a duster - a dry well - but the risk remains.

The region also brings with it a political and regulatory issues that add further costs. One recent comparison showed that it may take twice as long for a proponent to get production approval offshore Newfoundland or Nova Scotia as it would in the North Sea or the Gulf of Mexico.

The regulatory issues are not insurmountable. Both the Government of Canada and the Government of Newfoundland and Labrador have expressed an interest in streamlining the regulatory requirements for exploration and have taken preliminary steps to do just that. The Atlantic Canada oil and gas industry has also pressed for regulatory reform that balances the need for environmental and safety protection with the need to drill wells and bring new oil and gas fields into production.

Politically, the oil and gas industry remains a potent symbol of riches, especially in Newfoundland and Labrador, and that is reflected in the premier's rhetoric about jobs, cash and getting a bigger stake for the government in the offshore. That will be the harder hurdle to climb if the Newfoundland and Labrador offshore is to become truly globally competitive.

The provincial government and the consortium behind the Hebron/Ben Nevis development, for example, are currently negotiating local benefits and royalties but there is no guarantee the project will proceed. Premier Danny William has publicly talked of front-loading the project with added costs like construction of a local oil refinery and letting the province's hydro-electric generating company buy an equity stake in the project. As Williams told Canadian Press late last year:

The premier said as owner of the resource, Newfoundland and Labrador is seeking a financial stake in the project unless the companies agree to build a refinery in the province or hand over higher royalties.

"We'd love to take a stake," he said. "By getting a piece of the action, not only do we get a return and some of the profits from the dividends, but at the end of the day we will have assets that are worthwhile."

Both the Hebron consortium and Williams have set April 1, 2006 as the deadline for achieving an agreement on Hebron. That's slightly less than a year after the consortium reached an operating agreement among themselves for the project. Whether or not an agreement is reached with the provincial government may depend in large measure on where the economic tipping point is for developing an oil field in the already high cost offshore frontier.

Williams' other dream, of having a provincial Crown corporation operating in the offshore may depend, ultimately on the province's willingness to undertake the risks private sector companies have been taking for the past 40 years. Talks to gain an equity position on existing projects are rumoured to have run into flat-out opposition and repeated efforts to acquire the federal governments shares in the Hibernia project have similarly met with no support from either the federal Liberals or the Harper Conservatives.

Ultimately, in order to get a direct stake in developing the offshore beyond the government's political and regulatory control, Williams may have to invest in exploration licenses and doing all the grunt work of finding oil and gas in the north Atlantic. That's the tough and costly way, but there may well be no realistic alternative.

With frontier oil and gas, those who take the risks reap the rewards.

Who ya gonna listen to?

There's an old joke Rodney Dangerfield used to tell about one of his first agents, a stereotypical New York cigar-chomper with a seedy office above a delicatessen.

Rodney went to see him and the guy immediately wanted the upstart comic to change his stage name.

"What's in a name?" quipped Dangerfield. "As Shakespeare said, a rose by any other name would smell as sweet."

"Who ya gonna listen to," grunted the agent, from behind a haze of cigar smoke. "Me or your friends?"

Well, there are likely a few people wondering who they should be listening to if they put any faith in Talk Show maven Sue's political analysis.

All during the campaign, from deep inside the Connie campaign bus, Sue called relentlessly to Bill and Randy and anywhere else that had a radio show with a telephone to explain how a Harper government would mean better representation in Ottawa for the areas outside Ontario and Quebec.

To anyone with a clue, her comments were nonsense from the start. A minority government would want to boost its representation in the places where it didn't have seats. In a majority, everyone gets rewarded with the inevitable result that the bulk of the cabinet spots go to the places where the most seats come from.

Like Ontario and Quebec.

Then came the Harper cabinet.

The big portfolios go to people from Ontario. (Compare that to Paul Martin's cabinet, with its key finance portfolios going to westerners.)

The government departments handing out big bucks for public contracts and capital works go to Quebeckers.

Here's the break-out by the numbers:

Ontario: 8
Quebec: 5
Alberta: 4 (including Harper)
B.C.: 4
Everywhere else: 1 each, except PEI which has no cabinet representation.

Fully 48% of the cabinet is from Ontario and Quebec, the provinces that have traditionally dominated federal cabinets. Ontarians and Quebeckers also get the key money portfolios.

Add all of the western provinces together and you get 37% of cabinet - but you have to add them together.

Atlantic Canada? We get 11% of the seats in cabinet.

So when it comes to astute political analysis, the question for Newfoundlanders and Labradorians is a simple one:

Who ya gonna listen to?

Radio call-in shows of course.

But solely for their entertainment value.

If you want to understand what is going on in the world, you'll have to go somewhere else. "Experts" that call Bill and Randy may have the name, but they don't smell anything near as sweet as the ones who really know what they are talking about.

Equalization changes: Williams and Harper/Sullivan compared

Provincial finance minister Loyola Sullivan is claiming that Stephen Harper's proposals for Equalization reform are perfect for this province but his claim suggests that he and premier Danny Williams are once more at odds over the province's finances.

Their last public conflict came in June 2004 during the offshore discussions when Sullivan backed Stephen Harper in preference to the provincial government's position, represented by Danny Williams. That's the same basic problem again, but it certainly isn't clear that Loyola Sullivan, whose love of digits borders on being a pathological condition, is correct in his math.

Given the importance of these issues to the province and in light of the coming federal-provincial negotiations on federal transfers, a frank assessment of the merits of the province's position will be necessary if the general public are to fully appreciate the issues and the implications.

The following calculations are based on the province's mid-year fiscal statement and the current Equalization fiscal capacity determinations, using 2004/05 as a typical year to demonstrate the impacts of the two proposed approaches to Equalization.

Note: These calculations are approximations based on provincial budget estimates and estimates of per capita fiscal capacity. A more detailed analysis would be needed to produce a definitive comparison.

Danny Williams' position

In his letter to the federal party leaders, Danny William proposed a simple approach to the Equalization formula that would increase provincial transfers from Ottawa and give full effect to the Equalization offsets in both the Atlantic Accord (1985) and the January 2005 offshore deal with Paul Martin.

Under the current Equalization system, Newfoundland and Labrador would cease to qualify for Equalization within the next fiscal year and therefore would be entitled to small, declining offsets. The total value of the 2005 agreement for example would likely never exceed the $2.0 billion advanced already.

In his letter to federal party leaders, Williams proposed that Equalization be based on a formula which includes all provincial sources of revenue in calculating per capita fiscal capacity based on a 10 province standard. As a result, Alberta's economic performance would produce a significant cash result for this province. Williams also proposed that debt servicing costs be considered when calculating entitlements.

The most obvious impact of the Williams approach would be to raise the national per capita fiscal capacity above the one currently resulting from the five province standard. In 2004/05, the national standard per capita capacity would have been approximately $6600 (10 prov.) versus $6200 (five prov.) Newfoundland and Labrador's per capita fiscal capacity was $4900.

This would have provided $878, 900, 000 in Equalization based on a population of 517, 000 people.

Since Newfoundland and Labrador would likely remain an Equalization receiving province over the entire 16 years of the offshore deals, the province would receive Equalization offsets for its oil royalties equal to 100% of those revenues. Oil and gas revenues in that period will exceed all other non-renewable revenues.

This would have produced an Equalization offset of approximately $234, 420, 000 in 2004/05, for a total of $1, 113, 320,000.

That does not include the province's non-renewable resource revenues which the provincial government collects and retains in full.

The Harper/Sullivan Approach

The federal Conservative proposal for Equalization would calculate provincial entitlements on a 10 province standard but without using revenues from non-renewable resources.

The most obvious impact of this approach would be to keep the national per capita fiscal standard at or below the current level established using five provinces. Newfoundland and Labrador's fiscal capacity would be reduced by the amount of natural resource revenues, which for the purpose of this example will be estimated at $248, 845, 000 or $481 per capita.

This produces an Equalization entitlement of $920,777, 000. ¹

Since offshore oil and gas revenues are already offset under this model, no further transfers would flow to the province under either the 1985 or 2005 offshore agreements.

Discussion

1. The major advantage of the Williams approach for the 2004/05 sample year is the impact of the offshore Equalization offset agreements. This produces revenue over and above Equalization entitlements since they compare the province's per capita capacity without offshore royalties to its entitlement under the 10 province standard that includes Alberta's natural resource revenues.

2. It should be noted that in 2004/05, mining revenue was slightly more than $14, 000, 000. Since no one has released provincial revenue figures from Voisey's Bay production there is no way, at this point, of determining the longer term impact of the Harper/Sullivan approach compared to the Williams proposal.

3. That said, as provincial offshore revenues increase, the level of additional offset from the 1985 and 2005 accords increase directly for the full 16 years of the 2005 deal. Unless mining royalties were to exceed the considerable sums coming from offshore oil and gas in the next decade, the 1985 and 2005 agreements should deliver their full potential. This should more than make up for any Equalization declines owing to growth in mining royalties under the Williams proposal.

4. Neither the Williams nor the Harper/Sullivan proposal offsets the impact of a major renewable resource revenue development such as construction of the Lower Churchill.

5. The Williams proposal offers the potential for additional revenue from adjustments related to debt servicing costs that are not contained in the Harper/Sullivan approach. These figures are not included here since they are unknown and cannot be calculated. Williams did not make any suggestions as to what weight he expected to be given to debt servicing costs in making the Equalization calculations.

6. Overall, it is incumbent on Loyola Sullivan to make public his own departments calculations of the financial impacts of both the Williams and the Harper/Sullivan models. Sullivan's public pronouncements to date have been vague, bordering on the vacuous.

His references to an "Atlantic Accord forever" smack of some communications director's idea of clever sound bites rather than a substantive appraisal based on disclosed evidence.

Conclusion

The following conclusions can be made:

- The Williams proposal is consistent with the general approach to Equalization taken across the country to date, in that it is formula driven and uses as many sources of revenue as possible to accurately reflect actual provincial fiscal capacity.

- The Williams approach is supported by most provincial governments and is likely to gain wider support.

- The Harper/Sullivan approach would see at least four provinces facing significant decreases in Equalization entitlements. As a result, this approach would be more difficult to implement. Changes to Equalization would require unanimous agreement of all provinces.

- The Harper/Sullivan approach is designed to reduce federal government transfers to provinces. Irrespective of the rationales offered, the primary goal of the Harper/Sullivan approach is to lower federal government transfers. Before the election, there had been some discussion that the Harper administration would address the supposed vertical fiscal imbalance by reducing federal taxation and thereby allowing the provinces to increase their own direct revenues by raising taxes.

The Harper/Sullivan Equalization changes give the federal government the ability to do exactly that by reducing federal expenditures or at least reducing the rates of increase to allow the program to function on smaller annual expenditures than might otherwise be the case..


----------------------------
Notes:

¹ [6200-(4900-481) X 517, 000]

So lemme get this straight...

In his first cabinet, Stephen Harper appointed a party insider from Quebec as minister of the chief portfolio for pork and sent the guy to the senate so that he can't be questioned in the Commons.

Hmmm.

Given the number of things that Connies said they wouldn't do that they did on Day One in office, can we take any comfort in that little set of circumstances described above?

And in the rest of cabinet:

1. The guy from Newfoundland got fish.

2. All the big economic portfolios went to Ontarians.

3. Social policy portfolios are filled by women, predominantly.

4. The other portfolio with lots of cash - transportation, infrastructure and communities - is sort of a public works 2. That went to a Quebecker as well.

Lemme get this straight: so much has changed under Stephen Harper.

So much for senate reform...

and a bunch of other things.

David Emerson crossed the floor. That's an interesting way for a Stephen Harper to start a new government given the level of criticism the Liberals drew for Belinda Stronach and for the Grewal nonsense. Given that Emerson went straight into cabinet, one must wonder about the circumstances surrounding his decision.

One thing we should be able to count on: no Liberals will be attacking Emerson for being a whore.

As for Michael Fortier, there is no small level of hypocrisy that Harper chose to appoint a party organizer to the senate in order to get him into cabinet. Again, for a party that campaigned on senate reform, the Fortier case is a good indication of how far political expediency may trump campaign promises in the new Harper administration.

As for Newfoundland and Labrador, Loyola Hearn will have to deliver on his party's supposed to commitment to move immediately to take custodial management of the offshore. That's not what we have concluded here was the Conservative commitment but a bunch of people have defended Hearn and company that custodial management is a top priority.

As for cod stocks, let's see if Hearn moves to implement a commercial cod fishery on the northeast coast, as he mused recently, or if he listens to the science and the common sense and shuts down any talk of a directed cod fishery where the stocks simply can't take the pressure.

In the resources portfolio, there's nothing to suggest the east coast will have a better hearing than it has gotten lately but given that the new minister is a British Columbian, there may be some sympathy for offshore issues. My guess is that the Williams administration is talking such a different language on oil and gas development from the national party, there may be some room for friction and a prospect the local industry may continue to take a back seat to Alberta issues.

Williams to Harper: Gimme your lunch money, dork.

VOCM's version of what Danny Williams said in the genuine Great White North isn't what Canadian press is reporting.

VOCM makes it sound like newbie prime minister Steve Harper has some power over provinces that is holding Danny back from turning Newfoundland and Labrador into some sort of "Lucky Charms"fake-Irish tabby with a 'tude.

After all, we are just magically delicious out here in the mysterious Far East.

Maybe Danny wants to give new meaning to the word "sham-Rock".

Turns out it is just Steve's cash Danny craves.

"The smart approach would be to allow the jurisdiction of the provinces and the territories to have the resources, to have the funds, to have the revenues that they need to plow back into their areas just for development," he said.

And some people thought I was wrong when I said the Prems just wanted Steve to hand over his cash, mucho pronto.

or wrong when I said there was a major Equalization battle coming between Ottawa and the provinces.

Hmmm.

Guess it is time to explain just where PM Steve and Premier Danny disagree.