Bennett off base on Fishery Products International

Provincial Liberal leader Jim Bennett today called on the government to investigate Fishery Products International Limited (FPI) because:

"One of the provisions of the FPI Act -– the 15 per cent rule -– was that control shouldn't leave this province," said Bennett.

"Clearly control has left this province because certain shareholders have gotten together and ousted the board and replaced the former president."

In a news release, Bennett claimed that restriction that no single shareholder could own more than 15% of the company's publicly traded shares "was supposed to ensure that interests of the company remained in Newfoundland and Labrador, and in the best interests of our people."

Bennett alleges that a group of shareholders may have colluded to weaken FPI. "I want an independent investigation to determine if the new board is trying to dismantle the company so that their interests will be served by eliminating a competitor, while picking up the pieces of a valuable company at a fraction of their value."

There are a couple of problems with Bennett's claims.

First, while it is politically popular to allege that FPI is in financial trouble because of under-handed dealings, there simply is no evidence to support the claim. Problems with the income trust proposal have as much to do with the inordinate delay the provincial government took in approving the proposal than anything else. The other financial difficulties have to do with the state of the international fish business and some admittedly questionable decisions made by FPI management. However, there is no evidence of a plot to destroy the company and sell off its assets as Bennett alleges.

Second, there is nothing in the Fishery Products International Act that links the 15% ownership restriction with control of the company remaining within Newfoundland and Labrador. It is highly doubtful that any stock exchange would accept trade in FPI shares if ownership of those shares was restricted such such that shareholders had to reside within Newfoundland and Labrador.

Look at it this way: if there were only 100 shares, the FPI Act allows that no person can own more than 15 of the shares. It says nothing about the person owning those shares being resident in the province. For Bennett to have his way, there would have to be a further restriction in the FPI Act stating that shareholders not resident in Newfoundland and Labrador constitute less than 49% of the total number of shareholders. Good luck trying to find that provision in the FPI Act.

So with this second foray into the FPI business, Bennett is batting zero for two. His first call for the nationalization of FPI was a nonsense. His second call seems to be based on public rumour and misperception as well as a complete misreading of a simple statute.

But hey, if Bennett has any evidence to back up his outlandish claims, let him put it in public. Otherwise his interpretation about this law is likely to get the same simple dismissal his recent constitutional arguments got.

Equalization cold war heats up

The coming battle between the federal government and the provinces over federal transfers and the battle among the provinces over federal-provincial finances started to heat up over the past couple of weeks.

The heat came from comments by federal intergovernmental affairs minister Michael Chong and federal finance minister Jim Flaherty that the offshore deals since in 2005 have wrecked Equalization, the major federal transfer to provincial governments.

Such is the sensitivity of the issue that last Friday, Flaherty issued a statement, reported in Saturday's Telegram, that

“"[m]edia reports suggest that the government is considering scrapping the offshore agreements reached last year with Nova Scotia and Newfoundland and Labrador....

"“This is both factually incorrect and misleading. During a brief media availability today in Toronto, I made no mention of Nova Scotia or Newfoundland and Labrador by name nor did I use the words oil and gas."”

The Equalization Top-Up

Equalization is a pretty simple concept: in order to make sure that provincial governments have similar levels of revenue with which to provide key services, the federal government transfers some of its revenues to each qualifying provincial government based on a formula.

As the Bond Papers put it in January 2005:

Basically, Equalization is like a wage top-up scheme for provinces. The federal government figures out a national average amount of revenue each province should get per person. Fall below the average and the province gets a cheque from Ottawa. Meet or exceed the average and you get nothing. No province pays into the program; the money comes from federal government revenues. As it stands right now, Alberta and Ontario make more than the national average and get no Equalization. Saskatchewan will join them in the "have" category, as some call it, within the next year. All the other provinces get some amount of Equalization. Quebec gets as much as all the others combined because the money is paid out based on population.

In 1957, when the program started provinces were topped-up to the average of the top three provinces. Alberta received Equalization until 1964, but once its income went above the average it didn't get a penny in Equalization. In 1967, the average was based on all 10 provinces and since 1982 it has been based on five selected.

The January 2005 Deals

The offshore deals signed by the Mulroney administration with both Nova Scotia and Newfoundland and Labrador contained sections that allowed both provinces to collect a special federal transfer based on growth in provincial government revenue from offshore oil and gas development. For a period of 12 years, both provinces could collect a declining payment called an Equalization offset that was designed to protect the provinces from dramatic declines in Equalization as offshore revenues grew.

Several administrations Newfoundland and Labrador sought to amend the offset provisions of the 1985 Atlantic Accord to extend the offset benefits over a greater period of time or, as in the case of the original Williams proposal in January 2004 to effectively hide all oil and gas revenue from Equalization in perpetuity.

Both in the original Accord discussions and for each subsequent federal administration, one of the major concerns was addressing demands from the two Atlantic provinces without undermining the basic principles on which Equalization operated. The solution in 1985 was the declining offsets, which were temporary.

In January 2005, the solution was to link the added offsets to Equalization entitlement: if a province no longer qualified for Equalization, then it also no longer qualified for the added offset. While Equalization can be spent by a provincial government on any public purpose, the Martin-Williams deal indirectly linked continued offsets to improve long-term economic benefits for the province, particularly to debt reduction.

It's about Ontario

At the root of the Chong and Flaherty comments are fundamental misunderstandings about the January 2005 offshore deals that have been prevalent since at least February 2005. In a perverse way, both supporters of the Williams-Martin deal and its detractors have the same fundamental misunderstanding of the deals.

But more importantly, both Chong and Flaherty reflect the sensitivity in Ottawa these days to Ontario's concerns about federal transfer payments to the provinces. Ontario has been campaigning for some time about the unfairness of the current system and Ontario Premier Dalton McGuinty's comments last winter were just part of that.

Flaherty's speech last Thursday was in Whitby, just east of Toronto and he made it a point to remind people that he used to be the Ontario treasurer:

"I acknowledge the spending pressures on the provinces. I was here," said Flaherty, who was Ontario's finance minister under former premier Mike Harris from 2001 to 2002. [Emphasis added]

Ontario concerns still there; plus Quebec and more

In that context, Ontario is no more inclined to accept the Stephen Harper proposal for Equalization changes than there were to accept the January 2005 offshore deals.

After all, both talk about hiding certain types of income from Equalization and serve, after a fashion, as a distortion of how provincial government income is calculated. The Harper proposals - which would remove all non-renewable resource revenues from the Equalization formula -
would see some provinces lose Equalization entitlements while others would benefit greatly.

But fundamentally, the Ontario concern would remain. Simply put, Ontario is concerned that the overall impact of federal transfer programs has created a situation where Ontario is being shortchanged. That's the point that, fundamentally, Flaherty was agreeing with when he sympathized with Ontario's supposed plight.

The Harper proposals adversely affect more provinces than Ontario, however. Any province which does not derive a significant chunk of its revenue from non-renewables would be at a disadvantage under the Harper changes. While some, like Saskatchewan, would benefit greatly, others, including Quebec would see a decline in their transfers.

In the end, it may well be the political costs of introducing the Harper changes that may scuttle them or at least delay their implementation. After all, changes to Equalization require unanimous consent of all provinces. With the Conservative guarantee that no province will be adversely affected by the changes, in order to move forward, Stephen Harper and his finance minister Jim Flaherty might have to put in place offset arrangements for almost half the provinces in the country.

Ultimately, that would make a mockery of the idea of keeping the fundamental Equalization program intact and treating all provinces equitably, while recognizing special circumstances. Those special circumstances were recognized in the offshore deals in 1985 and 2005 but they were limited to two provinces.

The Newfoundland and Labrador Impact

For Newfoundland and Labrador, there is little chance the offshore Equalization deals will be scuttled. No federal administration would repudiate a legitimate agreement between Ottawa and one or more of the provinces. However, all other things considered, no additional offsets will probably flow this year and for the next four or five years under the 2005 agreement since Newfoundland and Labrador will likely no longer qualify for Equalization.

That said, the looming federal-provincial fracas over Equalization could lead to some tense moments and an uncertain future for the province's share of federal transfers, in general.

Missing from the local discussion has been an understanding of what the provincial government is actually seeking. As noted at the Bond Papers a month ago, Danny Williams' proposal for Equalization reform fits with the way Equalization has operated for most of the past 40 years. It would also give full effect to the Atlantic Accord 1985 and its 2005 supplement. That is fundamentally at odds with the position supported by Loyola Sullivan - the Harper plan - which will take some time to negotiate and may never be put in place as currently proposed.

Add those considerations to the statements coming from federal minister Chong and Flaherty and one cannot say for certain how Ottawa proposes to address concerns from all provincial governments about federal transfers to the provinces.

Given Flaherty and Chong's evident distaste for the local offshore deals and their sympathy for Ontario's arguments, it also isn't clear how the new Harper administration will account for deals that have been blamed for destroying the Equalization program.

Danny Williams may well have to fight to keep the deals from being factored in to discussions on the so-called fiscal imbalance that will consider more than just Equalization.

The looming Equalization War, that has been in a sitzkreig stage since the election, is heating up.

Afternoon trench coat radio

As I sit here working this afternoon, I have been growing increasingly uncomfortable as Bill Rowe, host of VOCM's afternoon call-in show Back Talk, displays an inexplicable level of interest in the motivations for men and women to have various parts of their anatomy pierced.

He spent an inordinate amount of time asking one woman about her labia and clitoral piercings - as in where they were and who did them for her - as if that had anything to do with the issue of health and safety related to piercings. When Rowe got to asking about any impact the piercings had on her sex life, I started to wonder if I had stumbled across Trench Coat Radio, with producer Paul Reubens.

This topic is related to the sudden death last week of a young woman in St. John's that was linked in initial reports to an infected body piercing. Subsequent reports highlighted the underground piercing business in St. John's in which people with no particular qualifications or professional standards poke holes in willing clients for discount prices.

The idea of unregulated piercing is a serious public health and public policy issue but Rowe's digressions, including linking the popularity of piercings to CBC's George Stroumboulopoulos are nothing short of whacked, even by Rowe's standards.

By my count, this is the second odd tangent for Rowe, although this one is nowhere near as serious as his comments about an ongoing police investigation some weeks ago. Still, Rowe's outlandish comments, including the ones about some psycho boyfriend forcing his girlfriend to get her bits pierced, suggest that maybe it's time for VOCM management to find a new host for the afternoon show.

Sure Crap Talk is an entertainment show, but surely Steele communications can find someone - like a local George S - who can both entertain and inform.

Rowe seems to be increasingly more than a little out of touch.

FPI, Tom Rideout and the future of the fishery

Fishery Products International (FPI) released a statement today on its plans for operations on the Burin Peninsula.

One of the points made was that cost savings from exporting undersized yellowtail flounder to China for processing effectively subsidized FPI's processing in Newfoundland and Labrador:

A sensible solution must be found for non-commercial fish. An incorrect perception exists that the export of small and medium-sized yellowtail flounder costs sustainable jobs in Newfoundland and Labrador. In FPI's operations, the opposite is actually the case. With catching costs already incurred, exporting raw material that is too small for the Company to process on any commercially viable basis effectively reduces the unit production cost of the fish that is processed in this province. In effect, any means to generate value from non-commercial fish, including shipping it outside Canada for processing, actually reduces the losses of an operation like Marystown. As FPI has informed the other stakeholders, failure to arrive at a reasonable and responsible solution for non-commercial raw material will collapse the economic basis for pursuing this fishery. [Emphasis added]

This sort of economic reality makes one wonder why Tom Rideout said only a few weeks ago that he wouldn't sanction exports of fish for processing elsewhere.

"I'm telling them and I've told them, don't go coming banging on my door for approvals to ship 60 per cent of their groundfish quotas out of this province. It's not on," Rideout said.

"And if that means you crumble, you crumble."

Maybe Tom will have to reconsider his comments. That is, he'll have to reconsider them unless the provincial government is prepared to inject hundreds of millions of dollars into FPI.

Exports to China?

Some details of Fishery Products International's plans to cope with competitiveness and financial issues are leaking out and according to the local fisheries union, those plans include exports to China.

That's a sign of many things, not the least of which is the major challenges that are coming for the local fishing industry.

CBC News has a good summary, here.

Roll up the rim in Kandahar

Canadian soldiers will be able to get Tim Hortons in Afghanistan.

National Defence and Tim's parent company announced Wednesday that the company will be sending one of its portable shops, on a trailer, to the Canadian Forces camp in southwest Afghanistan.

The next step should be to develop a version of this portable restaurant on a standard military vehicle, like the Canadian MLVW or HLVW or the American 5 ton.

Even if it takes several vehicles, they can be easily linked together, as in this Russian configuration for a field printing plant, left.






For the record, here's the complete release, via Canada Newswire:

OAKVILLE, ON, March 8 /CNW/ - Tim Hortons and the Canadian Military are pleased to announce that a Tim Hortons store will open at Kandahar airfield within the next few months.

"We are extremely proud to be able to bring a little taste of home to our troops stationed in Kandahar," said Paul House, Chief Executive Officer and President for Tim Hortons. "Tim Hortons has always supported the Canadian Military and we are honoured to work together to make the opening possible."

Over the next few weeks, Tim Hortons will convert a trailer normally used during restaurant renovations, and deliver it to the Canadian Forces for use in Afghanistan. Once operational, military personnel will be able to purchase select baked goods and beverages, including Tim Hortons' legendary coffee.

The Canadian Forces Personnel Support Agency, the morale and welfare arm of the Canadian Forces, will be responsible for staffing, training and operating the location at the Kandahar airfield.

"I know I speak for all the men and women of the Canadian Forces when I say that I'm delighted to hear this news," said General Rick Hillier, Chief of the Defence Staff. "Opening a Tim Hortons to serve our troops in Afghanistan strengthens an already superb relationship between two great Canadian institutions. I would like to thank Tim Hortons for their endless support of the Canadian Forces over the years."

-30-

Serving those who serve: the Canadian Forces Personnel Support Agency enhances the morale and welfare of the military community, thus contributing to the operational readiness and effectiveness of the Canadian Forces.

For more information on the Canadian Forces, please visit www.forces.gc.ca.

For further information on the Canadian Forces Personnel Support Agency visit www.cfpsa.com.

Tim Hortons is Canada's largest coffee and baked goods chain with over 2,600 locations in Canada and more than 290 locations in the United States.

To learn more about the company, visit www.timhortons.com.

The young Canadian soldier

When you're wounded and left on Afghanistan's plains,
And the women come out to cut up what remains,
Jest roll to your rifle and blow out your brains
An' go to your Gawd like a soldier.

Rudyard Kipling, The young British soldier

In another time, Kipling's cynicism about Afghanistan and soldiers rang true.

A series of deaths and serious injuries in Afghanistan prompted public comments calling for a debate on Canada's military presence in Afghanistan or, in some instances, for the withdrawal of the Canadian soldiers altogether.

Mike Duffy has gone so far as drawing a comparison to the Soviet experience in the central Asian country from 1979 to 1988 as proof that we should think about getting out. The idea is that bigger and more powerful countries have failed before us.

But here's the difference, Mike.

The Soviets invaded Afghanistan over Christmas 1979 with a force that ultimately numbered in the hundreds of thousands. The Soviets invaded after engineering the assassination of the pro-Soviet leader they didn't like in order to replace him with one they did like. A widespread insurgency developed, largely of radical fundamentalists opposed - as Afghans have traditionally opposed - a foreign invader.

For the first five or so years of the Soviet occupation of the country, fatal casualties ran at around three per day in what were, at times, heavy combat operations involving thousands of soldiers. Those numbers are important since they reflect the sort of military calculations that are done to determine how successful an operation is going. A loss of three soldiers per day, most to local disease and accident, is hardly burdensome when the country was deemed important strategically to the Kremlin and the army was able, in return, to show that it was killing dozens if not hundreds of Afghan insurgents in exchange.

Fast forward to the current day. The international presence in Afghanistan came after the American attacks on the major operating bases for the people who slaughtered more than 3,000 Americans in an unprovoked terror attack on the World Trade Centre. There is no insurgency comparable to the one from the 1980s.

Countries like Canada and Germany are not looking to occupy and control Afghanistan for themselves or on behalf of anyone else. This is an operation that directly links our security at home to the efforts to stabilize a country that, until now has been ripe to support fanatics and radicals bent on killing civilians in other parts of the world. Through their killing these fanatics, though small in number, have too often been able to intimidate others or, in the case of places like Afghanistan, subjugate entire countries.

The international presence in the country is limited and has been largely successful in keeping the Taliban and al Queda at bay and at restoring the domestic infrastructure in Afghanistan that was destroyed by 20 years of international and civil war. Afghanistan is on the road to recovery with an Afghan government of some kind.

In short, there is a huge difference between what happened in the 1980s in central Asia and what is happening now.

This past year Canada moved its military contingent to Kandahar province, an area which remains dangerous but where the military presence is likely to be successful in its anti-terror and civil reconstruction missions.

It is in that context that Canadian soldiers have come under attack recently from the handful of fanatics who want their secure base of support back, the Afghans be damned.

Since first deploying troops to Afghanistan in 2002, Canada has suffered nine fatal casualties - nine deaths. That's it. While one death is tragic, nine is hardly cause for national panic, given the larger goal Canadian soldiers are achieving both for Canadians and for Afghans. Don't take my word for it. Ask Canadian men and women who have served there. Let them tell you the story.

Some have questioned the training and equipment of our military, including the current administration just a few short weeks ago.

Well, here are the Afghan facts.

Since deploying to Afghanistan, the Canadian Forces have acquired a series of new vehicles and other equipment that have already proven their value and their effectiveness. Whether we are talking about the G-wagen or the Nyala, Canadians are well-equipped for their task.

The LAV-III, seen recently is a tough, capable piece of kit. The most significant deaths and injuries this week came in a straight-up vehicle crash - not a terror attack - and resulted from the vehicle rolling over. That's always likely to be nasty.

But, when a vehicle was struck by a suicide bomber, the vehicle and most of the passengers were scarcely hurt. Take a look at the picture, right.

Some scuffed paint.

One shredded tire and two that need replacement.

Canadian soldiers in Afghanistan have the best equipment for the tasks they are doing.

They need helicopters, as chief of defence staff General Rick Hillier has proposed.

Rather than debate the mission, let's see Gord O'Connor, the new defence minister, get off his duff and put the order through.

Overall, Canadian soldiers in Afghanistan are doing the mission we need to see done in that country for our own security and for the security of Afghans. We have all shared the sorrow of watching some of men and women coming home in caskets or with serious injuries.

We asked them to take a risk and they did so willingly. Let's not make a mockery of their deaths or injuries by running away well before the job is finished or until we know the job just can't be done.

The concerted efforts of a handful of terrorists - like the one who ambushed Captain Trevor Greene - shouldn't intimidate an entire country.

The young Canadian soldier deserves better than the misinformation on which much of the recent discussion has been based.

The young Canadian soldier deserves our support.

nottawa on the Equalization thing

Of course, I was remiss in not pointing out - until now - that ex-pat Mark Watton blogged Michael Chong's comments on Sunday, under the title "Stephen Harper's political support is 'non-renewable'". I noted earlier today that Chong claims the offshore revenue deals helped break the country's Equalization system.

Mark gives the thing a regional perspective which is worth taking the time to note. From his vantage point in Halifax and based on his experience in politics across the region, Mark's got some useful things to say.

Williams' offshore deal helped break Equalization system

Here's a story by Rob Antle from today's Telly that is being posted here for posterity.

"The equalization formula is a complete mess - it's broken," [federal intergovernmental affairs minister Michael] Chong told the Sun. "And it's a direct result of one-off, ad hoc deals, late- night negotiations, the high stakes poker game that (former prime minister Paul) Martin played in the dying days of his administration, whether that be with the one-off deals with the provinces in the east or with Ontario."

Forgive the chuckling but Newfoundlanders and Labradorians were told at the time and some still insist that Stevie Harper supported the Accord side-deals. Apparently his IGA minister has a different view about the value of those deals; maybe Chong's view is the real Conservative party view. Around here, the Bond Papers took Steve at his word: he would change the Equalization system, not make side deals.

On the second point from this story, Loyola Sullivan's insistance that Equalization offset deals in the Atlantic Accord and the January 05 side deal won't factor into the new discussions is just not sensible. There is no way that the province can have its oil revenues doubly hidden from Equalization.

While Chong claims he can't say how the side-deals will factor in, here's a good guess: they are dead. Deader than dead. The $2.0 billion that Sullivan just dropped on the pension liability is the last of the cash coming from the deals. At least, that's what will happen if Loyola Sullivan - who backs the Harper plan - gets his way.

If Danny Williams gets his way, then the deals will have their full impact plus the province will continue to collect Equalization.

There's a gap between the premier and Sullivan on this issue, but that's not what people here would like to talk about.

------------------------------------

'A complete and utter mess'; Harper minister cites Accord deal among reasons for 'broken' equalization system

by Rob Antle
The Telegram
March 7, 2006
Page A1

Side deals like last year's new Atlantic Accord have resulted in "a complete and utter mess with regard to fiscal arrangements" between Ottawa and the provinces, federal Intergovernmental Affairs Minister Michael Chong says.

Chong made the comments in a weekend interview with the Ottawa bureau of Sun Media.

The story ran in Sun papers in Edmonton, Calgary, Toronto and Ottawa.

"The equalization formula is a complete mess - it's broken," Chong told the Sun. "And it's a direct result of one-off, ad hoc deals, late-night negotiations, the high stakes poker game that (former prime minister Paul) Martin played in the dying days of his administration, whether that be with the one-off deals with the provinces in the east or with Ontario."

Ottawa and the Williams administration reached a new offshore revenue-sharing arrangement last January, after months of hot-and-cold negotiations. The deal included a guaranteed, $2-billion upfront payment.

Nova Scotia reached a similar deal on its offshore resources.

Ontario later got its own separate multibillion-dollar arrangement with the Martin government to address the so-called "fiscal imbalance" between Ottawa and the province.

Chong reiterated to Sun Media the Conservative election pledge to remove non-renewable resources from the complex set of calculations that comprise the equalization program.

The Tories made the commitment to "put back the principle of equity into the equalization formula for all regions of the country," Chong told the Sun.

"I can't tell you exactly how that's going to happen or what form it's going to take. The prime minister's going to be taking the lead on this file."

Offshore oil is a non-renewable resource. That Conservative campaign promise would effectively enshrine the key principle of the Accord indefinitely. The Accord expires in 2012, with the possibility of renewal until 2020.

No one knows how the $2-billion upfront prepayment for enhanced Accord benefits would play into any such changes.

Last month, officials with the federal Department of Finance declined to answer such questions, calling them "hypothetical."

'That was the deal'

The Williams administration has insisted that the $2 billion should not be a factor at all.

"That was a deal, it was an up-front payment with no strings attached, as a minimum payment," Finance Minister Loyola Sullivan told The Telegram in late January.

"We can only go forward, we can't go back in the annals of history and do adjustments to the past."

The Newfoundland and Labrador government has since announced that it plans to dump the majority of the $2 billion into unfunded pension liabilities for teachers.

That will reduce the province's debt to $10 billion, and free up about $150 million in interest charges every year.

The province has welcomed the proposed Conservative changes to equalization, saying they will likely benefit the local treasury.

Though it may lack the cachet of other issues, equalization is of vital importance to the province.

The program is aimed at ensuring all provinces can provide a similar, baseline level of services.

Newfoundland and Labrador received $861 million in equalization from Ottawa this year, according to the province's 2005-06 mid-year fiscal update.

That's in addition to hundreds of millions in offshore royalties and new Accord benefits.

The provincial budget totals about $4.3 billion.

The federal Conservatives have pledged that no province will be "adversely affected from changes to the equalization formula," but have not provided any details.

Officials in the Privy Council Office, which oversees intergovernmental affairs, did not return The Telegram's calls Monday.

rantle@thetelegram.com

The numbers aren't there

The latest Corporate Research Associates (CRA) poll puts Danny Williams well ahead of the Liberals.

Progressive Conservative party support is at 69% compared to 17% for the Liberals. Leader support is equally dramatic: 71% for Danny; 12% for newly minted and part-time Liberal leader Jim Bennett.

There's an unusually high 4.9% margin of error which, effectively means that some of the new numbers here are within the range of variation from the last CRA quarterly poll in December.

That said, the numbers highlight the challenge facing Jim Bennett. He has to get himself on the radar screen, fix the Liberal Party's bank balance, find candidates, develop policy and get a campaign ready to go for September 2007. If he can't do all that himself, he'll need to light a fire under caucus and get some people started on the stuff that one guy can't do by himself.

Right now, the numbers aren't there to back Bennett's brave claims that he will be able to unseat Danny in 2007. Heck, the numbers aren't even there that would lead me to believe the Liberals will win the same number of seats they currently have.

Waiting for Hebron

By April 1, the local oil and gas industry will know whether or not the last major discovery offshore Newfoundland and Labrador will be headed for production or parked, yet again.

That's the deadline set by the companies and the Government of Newfoundland and Labrador to reach agreement on provincial benefits.

The offshore supply and service sector in Newfoundland and Labrador is likely nervous about the outcome even if there is little public comment from individual companies or from its industry association, NOIA. The sector is nervous because in the absence of a Hebron development agreement, the local industry will continue to shrink. The White Rose project is completed and the two rigs forecast to do exploration drilling in the Orphan Basin this summer won't replace the work from development of Hebron.

Shelving Hebron will also cost the Government of Newfoundland and Labrador as well. Economist Wade Locke correctly pointed out the implications in a recent radio interview with CBC:

Well, what you want to be careful of is in the next five years there will be substantial revenue from the oil and gas sector. And unless we have new fields developed after five years we'll see a substantial decline in production offshore. ...

But I think the point the point would make that yes there is a substantial amount of money coming to the provincial as a result of the enhanced royalties and corporate income tax available to the government because of the additional revenue from oil. However, if there'’s no new fields developed after White Rose, we know that by the time 2011 comes around for example, which is 5 years from now, depending what happens with Hibernia of course, we could be at one third or one half the current level of production we currently have. ...

Locke's projections are based on the provincial government's own figures and take into account the possibility that the two major fields, Hibernia and Terra Nova are close to exhausting proven¹ reserves. In all likelihood, accounting for probable reserves and possible reserves, there is considerable life in Hibernia² and Terra Nova, however by most reasonable estimates, in the years immediately after 2011, offshore oil production will drop significantly from peak levels.

Premier Danny Williams' recent comments about seeking an equity position for the provincial government in Hebron and of having the Hebron development include construction of a new oil refinery in the province haven't calmed the local concern that Hebron development might not proceed. Hebron is already an expensive project to develop with its heavy oil and fractured field. Recent high oil prices make Hebron viable under the existing provincial government royalty regime and with the companies already proposing a small gravity based structure to extract the oil. Only three years ago, the provincial govvernment considered lowering the royalty regime, largely as a result of the relatively low oil prices and the overall costliness of the project. Tacking on new costs - ones not crucial to development of the field itself - could put Hebron back into mothballs.

As noted here previously, Williams is likely just pushing a bargaining position that asks for considerably more than his real bottom line. His previous public stances in negotiations with the federal government on offshore revenues and with companies like Abitibi on Stephenville demonstrate the Premier's apparent penchant for talking tough and settling for considerably less than originally sought.

This cautious optimism is also bolstered by the current development proposal, at least as far as it is known publicly. The Hebron proponents have already met the Premier's initial demands for more local benefits with the commitment to a gravity-based structure. The Premier noted several weeks ago that the proponent's most recent offer to government included improved government royalties, likely as a result of retreating from their initial position that they needed royalty concessions. The Premier likes to keep upping the "ask" as he calls it, but at some point, he has shown that he knows when there is no point in further "asks".

Over 25 years after the Hibernia discovery, the Newfoundland and Labrador offshore remains a frontier region. Drilling costs are high - as much as $75-$100 million per well drilled - and only four major fields have been discovered. Exploration tailed off after 1990 and despite some efforts by the provincial government, it was only surging international oil prices that have prompted renewed interest in the high risk/high cost frontier and its still considerable potential both for oil discoveries and for production of offshore gas.

No Hebron wouldn't help overcome the lack of oil and gas infrastructure in the region -such as having rigs readily available - that would mark the tipping point from frontier - and sporadic activity - to a thriving energy-producing region. Local companies have suffered through the start/stop, boom/bust nature of offshore development since the Hibernia agreement was signed in 1990. Many have shifted to doing work in other parts of the world, but the preference in the local industry has typically been a steady local book of business that serves as a base from which to build.

Part of marking that transition away from being an oil and gas frontier would be renewed effort by both the provincial and federal governments to reducing the costs of exploration. Much has been done, including reducing the project approval process to internationally competitive 12 moths. Other work needs to be done. Some ideas, both technical and environmental requirements and taxation on exploration, could enhance the attractiveness of Newfoundland and Labrador to international oil companies.

As it stands right now, smaller fields than the local offshore are attracting the sort of attention that could and should be coming here. Platts reported on Friday, for example, that "Shell, ExxonMobil and ChevronTexaco, will bid for a license to extract oil and gas offshore the Black Sea....[The] Ukraine's explored reserves of natural gas are estimated at about 1 trillion cu[ubic] m[etres], while undiscovered reserves could be as high as 5 trillion cu[bic] m[etres] of gas."

To put that in perspective, proven gas reserves offshore Newfoundland and Labrador are more than 9.0 trillion cubic feet with more than 2.0 trillion cubic feet available for development off Labrador alone. The local reserves may be smaller than those in the Ukraine, but there is potential for more. The reserves that exist can be put into production supplying the North American market where demand is strong but supply is limited in the short-term.

As a last part of that transition away from a frontier region, a successful Hebron agreement would signal a local political climate that actually welcomes foreign capital to develop local resources. If, for some reason, the Premier's escalating rhetoric on Hebron hardens into government's bottom line, investors will look elsewhere where costs may be high but the risks and rewards are greater.

In that context, a successful development agreement for Hebron would mean much more for Newfoundland and Labrador than the demands Premier Williams has made publicly.

There's every reason to believe Premier Williams understands the medium- and long-term implications of not having a Hebron agreement.

But in the days and weeks remaining until the self-imposed deadline for a deal, that doesn't stop many interested in the local oil and gas industry from wondering if they are looking at the beginning of exciting new times or the continued underdevelopment of the offshore oil and gas industry.

______________
1. Proven reserves are those confirmed to be in place based on production, delineation and geological surveys. Proven and probable are a combination of those established and those most likely to exist. Prove, probable and possible reserves includes potential reserves that must be confirmed by further delineation of fields.

2. Approximately 300 million barrels of oil have been identified at South Hibernia. While the provincial government has publicly discussed the prospect this field would be considered a new project requiring separate development agreement, in all likelihood, Hibernia South will be developed under the existing Hibernia agreement, with wells being tied back by pipeline to the existing Hibernia gravity based structure.

Hearn confirms custodial management dead as Connie policy

Canadian fish minister Loyola Hearn announced Friday that Canada would be working with other states "to oversee, in co-operation with the United Kingdom, the development of a model regional fisheries management organization (RFMO) within one year."

Now let's get this clear, people.

Hearn spent the better part of the last year campaigning for Canada immediately and unilaterally to take control of the waters on the Nose and Tail of the Grand Banks. He repeatedly lambasted his Liberal predecessor for doing nothing. to fight the evil foreigners who are fishing unregulated just beyond the grasp of Canadian officials. Hearn has been joined in his crusade by news media, ordinary blokes on the street and the odd character like Gus Etchegary who must be trying to salve a guilty conscious these days by criticising other people for the sort of stuff his old company used to do: overfish.

Anyway, this regional fisheries management organization idea comes out of an initiative begun in 2003, when Geoff Regan was the fish minister and Loyola was warming a seat over by Stephen Harper in the Opposition. In fact, the whole high seas task force that led to this announcement began when Loyola was still back in Newfoundland battling Brian Tobin.

Canada's contribution will be to oversee, in co-operation with the United Kingdom, the development of a model regional fisheries management organization (RFMO) within one year. While the name of the project may not mean a lot to the average Canadian, ultimately it's about cracking down on illegal fishing, ensuring offenders are caught and dealt with severely.

The model RFMO will clearly outline what sanctions would be taken against offending vessels and a consistent approach regarding inspections. These and other standards will provide the criteria on which the performance of RFMOs, including the Northwest Atlantic Fisheries Organization (NAFO), can be independently reviewed.

"Arriving at this model with a member state of the European Union provides the opportunity for the international community to show its commitment to results;" stated Minister Hearn. "I hope it will lead to an acceleration of the NAFO reforms we're already seeking."

While the High Seas Task Force is separate from NAFO and other RFMOs, its work places international pressure on these organizations to seriously improve the way they manage and protect the world's fish stocks. Because the timeline for the development of the RFMO model is one year, Task Force officials will be able to bring the model forward to their member RFMOs within a short time-frame.

"I'm pleased that Canada has played a pivotal role in the High Seas Task Force to put an end to overfishing in international waters. All involved ministers clearly believe the time for action is now. I fully agree with this view," added Minister Hearn.

The funky thing here is that while Hearn is talking, what he is talking about is stuff that he either had no hand in or criticised as being ineffective and a waste of time when he was on the Opposition benches.

In the greater scheme of things, we should actually be cheering Hearn on. After all, he has abandoned the unworkable ideas he tossed around before he got genuine responsibility. Now he talks sense and isn't for doing insane things like sending out Canadian warships to fire at Spanish, Portugese and other fishing boats.

There are some people who think little of the consequences for cavalier action on the high seas, but those people seem about as ill-informed as someone who thinks they are in Newfoundland when in fact they are just south of the Magdalens. Proponents of custodial management as a viable international solution to foreign overfishing are on about the same ground as seal hunt protesters. While their motives may be good, their facts are askew and it is doubtful that their real motive is the same as the apparent one.

But I digress.

There should be no doubt now that Loyola Hearn has abandoned custodial management as the centerpiece of his fisheries policy. Heck it isn't even a part of his fisheries policy now that he is the federal fish czar.

He's decided the sensible way to go is to pursue the policies he used to criticise. Hearn's conversion is the important thing; a confession of previous errors is unnecessary.

Would though that others can't see the sham of custodial management for what it is.

McCartney and Williams: weekend update

The old hit counter is smokin' like it hasn't done since the last days of the last federal election and it is all due to:

seals.

The Larry King Live thing seems to have prompted some people to head for google searches and they wind up here and at a bunch of other blogs.

For some people, the whole question of Danny doing the show in the first place is quickly becoming something of yet another litmus test for racial purity - true Newfoundlanders...and Labradorians... are with Danny on this one against the Twin Towers of Evil.

There's another crowd who simply worship Danny Williams and all that he has done in the same way people still keep a picture of one of the Joe S's from the last century on their walls hoping one or the other will make a comeback.

Yes, the people who pee green,white and pink and/or love Danny-boy think this is a marvelous idea and are reveling in each point of fact or logic he scored over the McCartneys. They thought so before now; they still think so.

There is still a sizeable body of opinion out there, though, including many on the street in Newfoundland and Labrador who consider the whole affair a waste of time, at best. A set-up, on a Friday night when the audience isn't likely to be at peak, discussing the seal hunt with a semi-conscious ex-Beatle and his latest wife. I'd be thinking of checking in the air in my tires if a hit with Larry under those conditions was the only alternative.

I am with this latter crowd.

But don't take it from me. Just take a look at the eloquence of our own Rex Murphy from Saturday's Globe. The inescapable conclusion from Rex's column is that Danny would have been better off - by any measure - simply ignoring these latest anti-seal harvester.

But what he [Paul McCartney] knows about the Newfoundland seal hunt would fit in a gnat's armpit and what the rest of us should care about how he feels bout it would gladden an even more rank receptacle. He's just one more in the endless file of soap-star intellects, preening starlets, sitcom revenants, small-screen action heroes and full-bore Hollywood poseurs who, over the years, have given an ounce of their time to drop by the ice-floes, park in front of a whitecoat, do the caring press conference and go back to whatever it was they were doing when they were not saving seals. [Emphasis added]

It's quite a list. Brigitte Bardot, Pierce Brosnan, Richard Dean Anderson, Yvette Mimieux, Sean Penn (pre-Baghdad tourism), Loretta Swit and, to bring matters up to date, ubertart Paris Hilton are just a petty fraction of the names that have found the seal hunt their cause du jour. Ms. Hilton, who in my view has caused the world more pain than four centuries of the seal harvest, gave the full power of her T-short to the crusade against the hunt when she sported this slogan at the Sundance Film Festival: "Club sandwiches, not seals."

If Paul McCartney and Paris Hilton are on the same page it must be a picture book...

Last summer for a day, it was Make Poverty History. Sir Paul headlined the London concert with Bono for that monstrous hypocrisy.

Multimillionaries protesting poverty, while keeping their bloated fortunes is a dissonance that may peal through eternity.

As for Sir Paul and the seal hunt - who cares? The before, Larry King had on Roseanne Barr. Larry, Paul, Roseanne - it's all so... yesterday.

Our own bit of Disneyland - revised

Here's a transcript of the great farcical encounter between Danny Williams and the McCartneys on Larry King Live.

Why farcical?

Well, for one thing, Larry King pronounced the name of the province Williams is from as New Finland instead of a word that rhymes with "understand".

Well, for another thing the McCartneys claim they just came over looking for information and didn't have a plan to come and dictate to people what to do.

Then they proceeded to spout detailed Humane Society of the United States propaganda, mentioned websites and proceeded to tell people the seal hunt needed to be stopped.
Heather McCartney was especially aggressive despite her evident ignorance. She seemed confused for example about who Williams was and who he represented. Heather was so well briefed she managed to get in a shot about the cod moratorium and accused Williams of overfishing the banks.

It was farcical because for the first 30 minutes of the hour-long show, Paul and Heather got to say anything they wanted as a voice over for endless clips of seals being clubbed. Anything Danny Williams had to say afterward was irrelevant. Those who hadn't tuned out were already committed on the issue.

Most of all though, it was farcical because the ignorant and uninformed McCartneys were arguing with Williams who, while he had facts, was set up to be on the defensive. As much as he tried to get out of the box in which he was set, he just couldn't do it.

It was farcical because at one point Larry King's only series of interjections was to ask why we didn't just shoot seals instead of clubbing them. I was waiting for Larry to mention Dick Cheney but it didn't happen.

Farcical? Yeah. Farcical because Paul McCartney had no idea where on the planet he was. He was sitting in Charlottetown, believing he was in St. John's. That's like being in Edinburgh and saying you were in London.

And if that all wasn't bad enough, the whole confrontation is farcical because Williams' entire premise for tackling Heather and Paulie gives them way more credibility than they deserve - Canadian Press churns out a day-after story on the wire with a head "Seal hunt supporters worry about Beatle star power" as if an aging Beatle who looks slightly stoned and his OTL wife actually can have an impact beyond the one Danny has already granted them.

Two things come out of all this ultimately:

1. Rex Murphy had the smartest comments on this whole thing yesterday with John Furlong on the Fisheries Broadcast. He said something to the effect that the March Madness was just that - madness - populated by people like Paris Hilton: people with no work and too much money criticizing people with too much work and not enough money.

The McCartneys are no different.

Better to ignore them and let them go away.

As Rex said at one point, Paul and Heather were fighting poverty last year. Well, it should have been obvious to the pair that they could have best helped the cause by taking about $500 million of their considerable net worth and handed it to someone who didn't have cash, full-stop.

Instead we get treated to the kind of sanctimonious lectures we got last night.

Too bad Danny neither gets good advice nor takes it.

2. Given that Danny seems so hopped up on this his latest crusade in defence of the downtrodden, don't be surprised to see Danny launch into even more pro-seal hunt work in the near future. He might have to put some cash behind though, but since Danny isn't playing with his own cash, then he won't be squeemish about spending. Danny got just a bit too interested in the seal hunt this time around to make this look like a passing fancy and as Danny's publicist Liz Matthews said to news media, Danny spent time last year pumping out his own propaganda.

Like I said, too bad Danny-boy doesn't get or heed good advice. It would save us all some cash and collective embarrassment for having Williams on a show arguing with people who don't deserve the attention. For Larry King, though, they just fit the pattern. Again, as Rex so astutely pointed out, the previous night's guest was the intellectual giant Rosanne Barr.

All of which leads me to believe that Noel O'Dea's latest television tourism ad - while brilliant in execution and concept - may well be dead wrong.

I'd say this place - Newfoundland and Labrador - is rapidly becoming about as close to Disneyland as one could get without sitting in Mickey's lap.

Did anyone in Danny's Office check the LKL or Paulie/Heather background?

We've already noted that the initial Danny Williams news release looking to "debate" the seal hunt with Paul McCartney displayed an appalling ignorance of the seal hunt issue and Sir Paulie's personal views.

Let's hope someone in Danny's Office ordered some insight, or at least took a second to do some google searches.

If they did, staffers in administration that seems to have a chronic problem with Internet search engines would have found:

- an excellent transcript of one of Heather Mills McCartney's appearances on Larry King Live.

Find it here at animalsvoice.com, under the title "Dogs and cats abused for their fur". It's worth reading to see exactly how the argument is framed.

Scroll down that page a bit and you'll find an editorial from last January's National Lampoon Post condemning the seal hunt and the image of the seal hunters as victims. This one is especially valuable since Danny is likely to take the line that the hunters are the victims. What else would a guy who made his living representing real and purported victims manage to do with this story?

Fore-warned is fore-armed.

But then again, if Danny and his staffers had their heads up they would have seen tonight's devastating hip check over the boards coming before they charged into the corner looking desperately for a puck.

An appropriately dismissive response...from the mainlanders

As the Bond Papers told you last night and as The Telegram confirms (see below) on this snowy Friday, Danny Williams will be a guest on Larry King Live this evening for a short appearance, with the main guest for the full hour being Paul McCartney and King's sometime guest-host, none other than McCartney's wife, Heather.

Friday's show

Sir Paul McCartney and his wife speak out against something they call shocking, brutal and horrifying. What has them so upset? Tune in at 9 p.m. ET.

That's a pretty objective set-up and maybe set-up is the right word for this whole thing.

The Telegram also notes the scornful attitude editorial writers across the country have taken to the aging Beatle and his crusade. That's an appropriate response, given that Sir Paulie and his associates will quietly slip back to their homes after a few days of media frenzy and get on with the rest of their business.

Too bad the locals haven't learned the same measured approach.

But that's about the limit of what I'd say is an appropriate way of dealing with this whole show that is designed more than anything else to enrich the organizations protesting the seal hunt.

Here's the full Telly report, reprinted here since I can't link you directly to it and it will be gone from the Internet in about five days.

____________________

Live on tape
By Barb Sweet and Jamie Baker, The Telegram
and The Canadian Press


Paul McCartney and his wife Heather pose with a seal pup on the ice floes off Iles-de-la-Madeleine in the Gulf of St. Lawrence Thursday as part of a protest against Canada'’s annual seal hunt. (Photo: Canadian Press)

Premier Danny Williams will get to chat with rock legend and animal rights activist Sir Paul McCartney about the seal hunt after all -— only it won'’t be in a boardroom.

It will be on international television.

Williams and the ex-Beatle have been invited to participate in a discussion with Larry King on his popular CNN talk show, Larry King Live.

The premier'’s office confirmed Thursday evening that the plan is for the two to appear on the show via satellite; the piece is tentatively scheduled to air tonight between 10:30 p.m. and 11:30 p.m. Newfoundland time.

"“The premier is excited to have the opportunity to put the Newfoundland and Labrador perspective on this story,"” the premier'’s spokeswoman, Elizabeth Matthews, told The Telegram.

"“All the premier has ever asked for is an opportunity to educate people about our perspective -— this is the opportunity."”

Sir Paul, currently in Canada protesting the seal hunt, had originally been slated to appear on the show, according to CNN.com, but the producers called looking for a representative from the Canadian government to participate as well.

After finding out nobody from the Department of Fisheries and Oceans was available, they apparently contacted the premier'’s office Thursday.

"“They know Premier Williams has been very active in terms of comments he has made (on the hunt) this year and last year,"” Matthews said. "“He sent out a fair bit of information to international media last year in terms of the seal hunt, so they knew he was quite passionate about the issue."”

Meanwhile, the subject of the seal hunt -— and Newfoundland in general -— doesn'’t often enjoy good press on the mainland media'’s editorial pages, but McCartney'’s trip to the ice floes has ticked off at least a couple of Canadian scribes.

Who could forget, for example, 2005:— the year of the cheap shots, in which Globe and Mail Columnist Margaret Wente attacked the province for its efforts to get its financial due from the Atlantic Accord, a battle it won to the tune of $2 billion.

"“I like Newfoundlanders. I really do. But their sense of victimhood is unmatched,"” Wente wrote." “And their flag protest isn'’t winning them much sympathy on this side of the Gulf of St. Lawrence. In fact, the sensation on this side is of a deep and painful bite to the hand that feeds. (Premier Danny) Williams reminds me of a deadbeat brother-in-law who'’s hit you up for money a few times too often. He'’s been sleeping on your couch for years, and now he'’s got the nerve to complain that it'’s too lumpy."”

Then there was Toronto Sun Columnist Bill Lankhof, who took a few shots when writing about this province'’s golden boys of curling - — a team that went on to win Olympic gold.

"“It'’s the biggest thing to happen in The Land Cod Forgot since the invention of the pogey cheque - Newfoundland'’s native son Brad Gushue will represent Canada in curling at the 2006 Olympics in Turin," ” he wrote.

But McCartney'’s plan to champion the anti-seal-hunt crowd, and his desire to touch a real live seal pup, has stirred the passions of some mainland media in favour of the province'’s stance on the contentious hunt.

John Gleeson, editor of The Winnipeg Sun, was driven to write about the seal hunt by McCartney'’s excursion.

He'’s got no connection to Newfoundland, nor the Maritimes, other than having spent a year in Halifax. Gleeson is from Vancouver, where he has written about the fishery.

"“It looked pretty silly and childish to me, the whole thing,"” Gleeson said in a telephone interview from his Winnipeg office when asked about the McCartneys'’ trip to the ice floes.

He called the idea of the former Beatle wanting to touch a seal pup farcical.

His column made the point that there are far more serious issues in the Earth'’s oceans to be worried about.

"“There is plenty of butchery going on in the name of harvesting the seas -— the international fishing fleet is strip-mining the ocean floor in a short-sighted grasp for quick profit,"” Gleeson'’s column stated.

The draining of future resources should take precedence over a photo-op with a cute seal pup, Gleeson said Thursday.

He said McCartney is merely demonstrating the "“shallowness"” that'’s typified his career.

By early Thursday Winnipeg time, Gleeson had already received dozens of e-mails, about half in support of the seal hunt.

But some diehard fans took issue with his criticism of the Beatles.

One Torontonian suggested to Gleeson that McCartney should just go underwater in his yellow submarine.

Meanwhile, in a short editorial Thursday, the Globe and Mail editorial page slammed the former mop-top.

"“Spring is coming, and so is the tradition in which animal-rights protesters attempt to slaughter the livelihoods of Newfoundlanders and others who make part of their living from the seal hunt,"” the editorial stated.

It noted that the fact it'’s illegal to kill seal pups has been ignored by animal rights activists.

"“Until Canada and the rest of the world decide to stop butchering and eating other animals, it'’s a bit rich to focus on the seal hunt. … By all means, Sir Paul, enjoy the trip and then go home."”

McCartney and his wife, Heather, travelled by small plane to get a close-up look at newborn harp seals sprawled on an ice pan about 20 kilometres northwest of the Iles de la Madeleine in the Gulf of St. Lawrence Thursday as part of their high-profile protest against the hunt.

They were accompanied by scores of photographers and reporters taken to the ice by three helicopters.

The couple is calling on Prime Minister Stephen Harper to end the hunt, which they described as a heartbreaking slaughter.

The federal Fisheries Department has insisted Canadians support Ottawa'’s policies, citing a February 2005 Ipsos-Reid survey that concluded 60 per cent of those surveyed were in favour of a "“responsible hunt."”

Thursday'’s protest was organized by the Humane Society of the United States and the British-based group, Respect for Animals.

On Wednesday, the former Beatle spent about 90 minutes at St. John'’s International Airport en route to P.E.I.

bsweet@thetelegram.com
jbaker@thetelegram.com

March Madness hits Larry King Live

Friday, March 3rd will go down in history as the night Danny Williams went all the way to New York (either in person or via satellite isn't clear at time of writing) to appear on Larry King Live to meet Sir Paul McCartney and talk about the annual seal hunt.

Apparently, Danny didn't agree with the Bond assessment that participating in clubbing Canadian sealers was a bad idea.

According to some reports, Larry wanted a federal government representative on air. The Prime Minister's Office, or Loyola's handlers, made a smart political decision and referred the King booker on with the words "Dial +1-709-729-3570. Ask for Danny."

This is all just part of what local author Ray Guy dubbed March Madness, the annual influx of celebrities decrying eastern Canadians as barbarians that has been a fund-raising staple for animal rights groups since the 1970s.

In order to get ready for the Big Show, try checking some of these links:

1. First of all, CBC has a great archive feature from the fifth estate that documents fairly well how the International Fund for Animal Welfare skillfully thwarted Frank Moore's pro-seal hunt news conferences in London and Washington, all the while bringing in millions of dollars to IFAW's coffers.

2. Then for good measure, try out this account by Ray Guy of a 1999 sally by John Efford; imagine Efford and Williams of one mind on any issue. Now admittedly Efford's views are extreme and the real value of Guy's piece is the foreshadowing of Efford's later self-destruction over the offshore, but take a look at the whole piece and you can see a decent account of the long struggle for seal hunt cash.

3. Once you've digested that stuff, let's take a walk into the Bond archives. During last year's March Madness, the Bond Papers managed to get a couple of swipes in.

- This one was aimed at Paul Watson and Richard Dean Anderson.

- My personal favourite was the silicone comment in this one about Anna Nicole Smith deciding not to come to protest the hunt for fear of being shot.

- The ones that got the most hits, aside from the Paul Watson thing, turned out to be a series on former child stars and their current preoccupation with animal rights groups. There's one on Pam Ferdin and her hubby, and then this one that includes some background on a woman from Newfoundland and Labrador now intimately involved in the anti-seal hunt crowd.

4. Finally, for those who still think Danny's Crusade is a good idea, go armed with the knowledge that he will be facing a host who is already good chums with the other guests on the show, namely Paulie McCartney and his wife Heather. She was a guest host for CNN's coverage of the Chuck and Camilla wedding and she's guest-hosted the show before and appeared as a guest as well at various times. Paul's been on a few times as well.

About the only positive thing I can say is that Danny's international television debut will give new meaning to the term March Madness.

Too bad he didn't look for some air time with Larry to boost the campaign against foreign overfishing.

Then again that would involve thinking outside the box or learning from experience.

Talk is easy when it isn't your money

Fisheries commissar Tom Rideout had a stern warning for financially troubled Fishery Products International (FPI) as the company works to sort out its difficulties and return to profitability.

"I'm telling them and I've told them, don't go coming banging on my door for approvals to ship 60 per cent of their groundfish quotas out of this province. It's not on," Rideout said.

"And if that means you crumble, you crumble."

Commissar Rideout didn't give any suggestion of what might happen if FPI goes bankrupt in such a scenario. Here's a hint: the last time Rideout was the fisheries commissar, FPI and a bunch of other companies were bailed out with public money.

Talk is easy, Comrade Commissar, when the money you toss about isn't your own.

Here we go again...

As if it isn't bad enough that the annual international sealer slaughter is attracting Paul McCartney this year, we now have Premier Danny Williams wanting to sit down and have a chat with the aging Beatle about the seal hunt.

Just like countless premiers before him, Williams seems to think he can achieve a positive result from talking to a guy who is so opposed to the use of animals by humans that he doesn't even like having them as pets.

This quote shows just how little the Prem and his advisors understand about McCartney and his personal agenda:

"I urge everyone, including Sir Paul McCartney, to question the motives of such individuals and to consider the irony of these protest organizations ignoring the plight of our depleted groundfish stocks due to foreign overfishing. Surely this is an ecological disaster worthy of their attention. These organizations do not pay the same attention to the methods used by slaughterhouses and what happens behind those doors. They are silent about the force-feeding of ducks and geese to produce enlarged livers for use as foie gras. Yet they continually assault the seal fishery, which is one of the best managed harvests of wild animals in the world."

See, Danny, if you get Sir Paul in a room, he'll explain to you why you need to stop fishing - not manage it better. He'll explain the amount of work he's done to end the foie gras industry and close slaughterhouses.

You see, Sir Paul is a vegan, which is only one step away from being a fruitarian. This guy not only doesn't eat meat of any kind, he also gives a pass to cheese and milk.

So you gotta ask yourself in what universe will it bring anyone any good to sit and have a chat with Sir Paul on an issue where his mind is so closed it has seized up?

Maybe the universe of Danny's scrapbook.

Maybe the universe where some premiers of Newfoundland and Labrador think they always have to be seen to be fighting for Newfoundland and Labrador even when the fight will likely undermine efforts to rebrand the province by increasing the international media coverage of the meeting.

That's the coverage where Danny gets branded as the youngest and uncoolest premier of the old and uncool place where they bash cute little animals over the head with a club and skin them alive. I know that isn't what goes on exactly, but we are talking about the pre-written script for this annual event and Danny ain't gonna re-write the copy from what is now a more lucrative money-generator than the seal hunt ever was.

Of course, that assumes that Sir Paul is willing to meet with Danny.
______________________________________

Update:

Listening to the Fisheries Broadcast on CBC Radio this evening, it starts to get a little clearer what universe chatting with Sir Paul makes sense.

It's the same world inhabitted by John Efford and sealer Mark Small who give the time-honoured arguments. It's more humane to bash seals than to engage in fox hunts. People depend on the fishery for their living. There are plenty of seals. Small even went so far as to believe that once presented with the facts, Sir paul could become a champion of our seal industry.

In other words, this is the same universe inhabited by Our Danny, the place where they don't pay any attention at all.

Guys:

1. McCartney's mind is closed.

2. He doesn't believe there is any valid use for animals by humans. None. Not a one.

3. When you try to engage him in any way you play into his hands and the hands of the people he is raising money for.

Let it rest.

Ooops.

Too late.

The moths are already circling the flame-thrower of Sir Paul's celebrity.

The Brand State: If you have to tell them...

In this news release from the provincial government on a future Council of the Federation meeting, notice two things.

First, notice that the province will "shine". This is the sort of verbal flatulence that doesn't really mean anything to anyone, especially anyone passingly familiar with a meeting of Canada's premiers.

Second, and more importantly, notice the quote from Premier Danny Williams:

"I have every confidence that we will shine and demonstrate why we are indeed Canada‚’s youngest and coolest province, as we welcome hundreds of delegates from across the country." [Emphasis added]

You'll be hearing much more of that phrase - youngest and cooolest province - as Danny moves ahead with his plans to "rebrand" the province. There's a considerable amount of cash tied up in this and, as near as can be determined, the work is being done by the same advertising guys who now have the tourism account.

But here's the thing.

There's a general rule about these sorts of claims when they are so blatantly worked into every written and spoken phrase uttered by anyone connected to the contract:

They aren't persuasive.

You see, things that most people would recognize as "world-class", for example, never have to be described as "world-class". Those that do lay claim to such a crapola title, are really saying "We are posers."

Who would describe the Mona Lisa as a "world-class" artwork or The Louvre as a "world-class" museum?

Not the French, that's for sure.

Or anyone else with half a clue.

The thing about being truly cool is never having to say you are.

Danny and his advertisers are following a trend begun almost a decade ago with Tony Blair's Cool Britannia campaign. The hip New Labour prime minister of Britain wanted to extend his work in changing the perception of the Labour Party with changing perceptions of the whole country he was elected to lead. The campaign collapsed in short order, with howls of derision from those who found the approach a bit too pretentious and smarmy.

Countries like Jamaica, though, have successfully branded the country and overcome negative attitudes toward developing countries based on perceptions of economic and social backwardness.

Jamaica could count on a solid foundation of positive images - of creativity and "coolness" - built not only by Bob Marley but also by the international business community. As the Jamaica Gleaner reports, since 1988, investment by American companies in the Caribbean country have risen by 200% largely "because the country is politically stable, and because of its physical beauty, the warmth and friendliness of its people, its strategic geographical location, and its preferential trade agreements with the US."

The ultimate goal of state branding is to boost economic activity - tourism, trade, and investment - in a highly competitive international environment.

That's where the real challenge lies for anyone want to rebrand Newfoundland and Labrador.

On the tourism front, things are possible and the similarities between New Zealand and Newfoundland and Labrador are striking. New Zealand successfully turned its geographic isolation from a negative to a positive, emphasizing that the country was at the edge of the world.

Sound familiar?

The New Zealanders have managed to create a positive brand for their country, without slagging a corporate brand in the process.

The "edge" concept is one New Zealanders have used successfully beyond tourism alone. There's even a website linking to all things Kiwi, including linking New Zealanders who have left their home seeking success in other parts of the world.

In business though, the potential for success is mixed and that's largely due to local attitudes.

Political statements on development projects from Voisey's Bay and Brian Tobin's "not one teaspoon" comment to Danny Williams' more recent dealings with Abitibi and the Hebron partners could create a reputation for this province as being decidedly unfriendly to investment. The rhetoric plays well at home - both Tobin and Williams enjoyed local popularity - but holding out foreign investors as potential skinflints or carpetbaggers doesn't do much to encourage them to bring their capital to a place that needs sizeable capital injections to develop its resources like offshore oil and gas.

In the fishery, the potential to develop a locally-based industry using local expertise and either local - or more likely - outside capital investment is hamstrung by political and social attitudes that look on the fishery as a social program or a local birthright rather than a business that is truly global and must be competitive.

Those attitudes, manifest in much of recent public dialogue under both Roger Grimes' and Danny Williams' administrations could go a long way to undermining whatever brand Williams and his advertising agency try to create. As Peter van Hamm writes, "[l]ike branded products, branded states depend on trust and customer satisfaction."

Whether we are talking about the United Kingdom, Jamaica, New Zealand, South Africa or Ireland - all "brand states" - the advertising and other claims built around the brand are based in something substantive. While advertising can open new opportunities by reshaping the image, making the new brand a success depends more than anything else on reputation and experience. The claims made in the advertising or the branding campaign must be matched by performance or the whole thing falls apart.

So, if Newfoundland and Labrador is truly the coolest and youngest province in Canada, we won't have to tell people. They'll see it in what occurs.  They'll know it from first hand experience or from people who've had the positive experience themselves.

If you have to tell someone you are "cool" or "hip" or "new" or "world-class", then odds are good you aren't any of those things.

And the experienced global brand consumer knows that already.

-srbp-