If the gag fits

From the Saturday Telegram editorial on the Prime Minister's gag order:

Conspicuously missing in that list of five issues [being emphasized by the Harper administration] are pretty much any local issue that might have influenced votes for Conservative candidates in this province.

To those who trumpeted Loyola Hearn as a fresh approach - and some in the media went so far as to claim Hearn was the only approach - during the last federal election, this news must come as something of a surprise and perhaps a disappointment, as well.

The idea was that, with a new minister and a new government, concerns affecting this province, like custodial management, would take the fore. That hope seems sadly misguided now - but not unexpectedly so.

Reporters dealing with the new fisheries minister - when they can get him to do an interview - say he's different now. Cautious isn't strong enough to describe his approach.

Hearn has already come under fire from those who note that his pre-election belief in the necessity of custodial management - and the uselessness of the Northwest Atlantic Fisheries Organization (NAFO) - has tempered to the point that he now seems to be echoing past ministers of fisheries about reforming NAFO, not scrapping it. It's a disappointing turn of events, to say the least. [Emphasis added]

There are legitimate reasons for a new prime minister to lower the cone of silence over his minister: rookie ministers make rookie mistakes, and you need look no further than last weekend'’s crossed wires over the Conservatives' plan for the Atlantic Accord money and equalization to realize that.

Left: the latest Harper cabinet fashion accessory.

The Telly-torialist makes some solid observations, not the least of which is the bit that comes after the section just quoted above. The Telly points out that by gagging cabinet ministers now and cutting access to the media, the Harper Conservatives are running a strong risk of alienating a group of people they will need later to help spread their own messages.

True enough. But the Telly's advice may be a case of casting pearls.

The Conservatives dislike and distrust the media. Their efforts to control messaging reflect the sort of actions that go with their established attitude. Moreover, they also go with the anal-retentive attitude Stephen Harper displayed as Leader Opp and the one he has shown in spades since taking office: he will not speak to media at all unless the encounter is highly controlled and the interview is a softball affair.

More importantly though, the sort of centralized control the prime minister's office is imposing is doomed to failure. The federal government is simply too big to have every communication vetted by Harper's staff. Having seen gag orders in action, like the one imposed in National Defence in the mid-1990s, I can tell you they simply don't work.

As the Globe notes in its Saturday edition, public relations experts and those with experience of political comms know that gag orders like this simply can't work in the real world.

Patrick Gossage, a former press secretary to prime minister Pierre Trudeau who coaches politicians on media relations, said the new government's strategy is simply unworkable.

"Every PMO in the history of PMOs since Trudeau's PMO at least have made attempts to control the message centrally, usually without success," he said. "We tried to do it for a little while. It didn't work.... They're in a way, dysfunctional, because it makes the team look like it's not a team."

Delays - politically deadly delays - will occur in a business that is time sensitive. In the end, the Harper government will experience more political problems as a direct consequence of the gag order than the order could ever hope to solve.

In the short term, though, the gag order also sends a powerfully negative message about the Harper government. Gagging your own team tells the world that you are not in control, that you are afraid. If Stephen Harper and his ministers can't deal with a few scraggly reporters, how in the name of heavens will they cope with the real challenges every prime minister will face?

There aren't enough carefully stage-managed photo-ops in Afghanistan to undo the image of a shit-baked¹ government.

--------------------------
¹ shit-baked: adj. scared shitless

Honouring things Irish

On this St. Patrick's day, take some time to visit pauldaly.net.

Admire the work of an expatriate Irishmen who had the good sense and good taste to marry a gorgeous woman from Newfoundland and settle his arse in St. John's.

Paul Daly is a photographer of exceptional ability.


He has an eye, as they say, as can be seen from these samples of his work.

Paddy-whacking

It's St. Patrick's Day.

Again.

The day when the popular image of a proud, noble and ancient culture is reduced to the drunken ramblings of Irish-wannabe wankers (including the legions of ex-pats) who take a break from the green pilsner only long enough to torture everyone within earshot with another round of Danny Boy that sounds more like someone beating a cat in a bag with a shillelagh.

It's the day when everyone thinks it's fine to be a paddy.

To put this into terms the locals might appreciate, consider having a day in which every knob on the planet feels obliged to adopt an appalling accent, trace their dubious ancestry to the same couple of first cousins who once settled in Hibb's Hole, and who slobber over all who will listen about the joys of being...a newfie.

Now I am neither Irish nor a wannabe, but it always struck me that, if I were Irish, I would fervently hope that St. Patrick's Day might be something that eventually people might grow tired of.

But they don't.

And perhaps the Irish still in Ireland are smart enough to use St. Patrick's Day as a clever way to lure the rest of the world into the orbit of the Great Celtic Global Conspiracy.

And so to that extent, good on 'em.

For those who want to experience Ireland - the real one - here's a link to the Irish tourism outfit (tourismireland.com), along with samples of their awesome television spots aimed at North Americans.

Forget the green pilsner or lager; try the elixir of life, Guinness.

Tackle a little James Joyce.

Heck, find out about the edgy comedy of the late Dermot Morgan and wonder why Newfoundland and Labrador never produced that kind of in-your-face political satire Dermot cranked out on Scrap Saturday. It's not like we don't have enough fodder right in front of our faces to replicate the CJ/PJ thing.

In other words, celebrate everything genuinely Irish on this, St. Patrick's Day.

Rumpole and the Old Boy Net, Newfoundland and Labrador version

What would Horace think?

No point in being Premier if you can't put your brother and former law partners in silk.

The Queen's Counsel (Q.C.) list was announced today.

Among the lawyers now entitled to wear silk:

* Tommy Williams, the Premier's brother and a partner at O'Dea Earle, proud sponsors of the Rogers Cable program Out of the Fog, which has another strong connection to the Premier;

* Steve Marshall, the Premier's former law partner and the guy who navigated the assault case involving Danny's son through the court of public opinion;

* Glenda Best, another partner at Danny's old chambers;

* Stephanie Newell, a partner at Danny's brother's chambers;

* Tom Fraize, a long-time Conservative operative;

* Brian Murphy, a former law partner of the current Minister of Justice, Tom Marshall; and,

* Valerie Marshall, whose father is Bill Marshall, former Tory cabinet minister under Frank Moores and Brian Peckford, retired justice of the Supreme Court Trials Division and the guy who served on Danny's transition team. He's also the fellow who gave us the term "rack of Confederation".

The other Q.C. is Edward Cardwell, a Crown prosecutor, who has no apparent political connections despite being the namesake of the British secretary of war who abolished the practice of purchasing commissions in the British army (1870).

Under the Queen's Counsel Act, the appointments are made by the Lieutenant Governor in Council - that is, the cabinet - on recommendation of the Minister of Justice. The Minister is required to consult with the Legal Appointments Board, a body appointed by cabinet.

The Q.C. Act does not contain any basis for making the appointments, such as merit or exceptional contribution to the practice of law, noting only that someone is "right" to be appointed as being "learned in the law".

In other jurisdictions, the appellation Queen's Counsel recognizes exceptional merit and contribution to the legal profession. Unfortunately, no one can make a clear determination of the merit of any of the local Q.C. appointments since the news release announcing them contained only the sketchiest of biographies.

In jurisdictions still making Q.C. appointments, the practice has come under review from time to time. Quebec stopped the practice of making such appointments in 1976 and Ontario did likewise in 1985. In Manitoba, Queen's Counsel have been replaced by Senior Counsel, an appointment made entirely by the Law Society of Manitoba. This is similar to the practice now followed in Australia, where in at least one jurisdiction there are clear definitions of the criteria for designation as Senior Counsel.

Now while there should be no doubt that all the new silks in today's announcement
are fine individuals and lawyers, this list draws to attention the extent to which a title which should be an honour may at the very least appear to be tainted by personal and/or political connections to the people making the appointments. It is astonishing that fully seven of the eight appointments have obvious connections to the Premier, the Minister of Justice or the political party to which they belong.

To put this in perspective, the 2004 list contained some individuals like Glen Roebothan, who is the Premier's former law partner. However, out of the 10 lawyers who took silk, there is a much greater diversity in the appointments both in terms of the type of practice represented or even the firms involved.

Similarly, in 2005, while another of the Premier's former law partners took silk, the list is diverse in the firms involved and in the areas of the province from which the Q.C.s come.

Two of the appointments, namely Jerome Kennedy and Randy Piercy are eminent barristers with impressive records in the criminal courts. Few could question the appropriateness of those two appointments, in particular.

It's time to change the practice of appointing Queen's Counsel in Newfoundland and Labrador. Take it out of the hands of the Premier and cabinet and give the responsibility to lawyers themselves and judges, as done in Australia and Manitoba. Then the honour can be the deserved recognition of one's peers.

Publicly recognizing exceptional performance is one mark of a society that encourages the pursuit of excellence.

Sadly, it appears the Q.C. list, like the Order of Newfoundland and Labrador may be headed back to the days when what you got depended on who you knew.

Loyola Regan strikes again

Federal fish minister Loyola Hearn announced today that the total allowable catch for harp seals this year will be the same as it has been for most of the past 13 years.

So far, Mr. Hearn hasn't made a decision that his predecessor Geoff Regan didn't make already for him.

But Hearn is still a newbie and there's time for him to change some federal policies.

Like say the one on NAFO, the international organization that sets fisheries quotas in the northwest Atlantic.

Here's what Loyola had to say a couple of weeks ago when he announced Canada would be developing an new international fisheries management approach. Work on the approach began in 1999.

"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."[Emphasis added]

Now the really freaky thing about that last line on reforming NAFO is not what Minister Hearn told John Ivison of the National Lampoon Post in mid February, shortly after the noob minister was sworn in:

Numerous parliamentary committees have complained over the years that the North Atlantic Fisheries Organization, which is meant to enforce fishing quotas, is toothless and in urgent need of reform. However, Mr. Hearn said it is too late to reform NAFO, and Canada has to take on its responsibilities with the backing of other nations that oppose overfishing. [Emphasis added]

What happened in the matter of a couple of weeks for Hearn to go from claiming NAFO was beyond reform to wanting to reform NAFO?

Maybe that's like custodial management, Hearn's pre-election hobby horse. Hearn has gone from wanting to take control unilaterally of waters outside Canada's 200 mile economic zone to supporting the same policy his predecessor was following.

[h/t to an e-mail correspondent for Hearn's new name. Blarney the Green Dinosaur was getting shopworn.]

Ed Byrne on PetroNewf and the equity position

Atlantic Business Magazine has a great oil and gas supplement in the current issue, including an interview with provincial natural resources minister Ed Byrne.

Check out the Byrne interview at atlanticbusinessmagazine.com, but here are a couple of excerpts.

On PetroNewf, that is having Newfoundland and Labrador Hydro get into oil and gas:

Over the last year and a half we have moved Nnewfoundland and Labrador Hydro and the Department of Natural Resources, particularly the Energy Division, to more of an integrated approach with each other, particularly on the bigger files and the big public policy issues. We'’ve moved Hydro towards an energy corporation that could potentially participate in the oil and gas play, both offshore and onshore.

...

ABM: Are you turning Hydro into an oil company?

MINISTER BYRNE: No, we'’ve talked about Hydro becoming more of an energy corporation that moves beyond what it has traditionally done in building dams and burning oil.

ABM: Like doing seismic work and drilling in the offshore?

MINISTER BYRNE: I'’m not sure that'’s where it'’s going. But certainly if there'’s a legitimate business opportunity that will provide a benefit to the province and revenues to Hydro, and thus to the province, we won'’t turn anything down. But all that is being assessed and we are at the ground floor of that right now.

On the equity position in Hebron Premier Danny Williams is apparently making a condition of any development agreement for the last offshore oil field:

ABM: Do you see Hydro taking an equity stake in Hebron?

MINISTER BYRNE: That'’s a public policy position we'’ve laid down that as a province we'’d like to have some equity stake in the emerging oil and gas industry, not unlike what'’s happened in Norway, not unlike what'’s happened in other jurisdictions in the world. Those are some of the things up for discussion right now.

...

From our point of view, equity is important from this perspective: it puts us at the table and helps us develop an intellectual capacity that doesn't necessarily exist within the provincial structure right now. It puts us in the seat as a legitimate bona fide partner in developments. It helps us gain further insight, expertise and knowledge into the oil and gas industry. It has worked successfully as a model in other jurisdictions and there'’s no reason to think it wouldn't here. Other jurisdictions are both equity partners and royalty partners. So while there is some legitimacy in saying that equity is represented by royalty, there are other benefits associated with being an equity partner.

Stephen Harper au Quebec: The heart and cradle of Canada

Policy Options also has the full text of Stephen Harper's December 19 speech in Quebec.

Some excerpts:

Nous ne devons jamais oublier que le Canada a ete fonde a Quebec, par des francophones. Voila pourquoi je dis que le Quebec est le coeur du Canada, et que la langue francaise est un element indeniable de l'’identite de tous les Canadiens, meme si certains d'’entre nous ne le parlons pas aussi bien que nous le devrions.

...

Nous reconnaitrons l'’autonomie des provinces et les responsabilites culturelles et institutionnelles speciales du gouvernement du Quebec. Nous respecterons les competences federales et provinciales telles que definies dans la Constitution canadienne. Et nous elaborerons des mecanismes qui donneront aux provinces un plus grand role dans leurs propres champs de competence sur des questions internationales. Je sais, par exemple, que le gouvernement Charest aimerait un plus grand role pour le Quebec en ce qui concerne ces competences a l'’UNESCO. Selon le modele du Sommet de la francophonie, un nouveau gouvernement conservateur va inviter le Quebec a participer a l'’UNESCO!

Inside the mind of Stephen Harper

Check out the latest issue of Policy Options for a raft of good articles on the last election and other public policy stuff.

Then read the short interview with Prime Minister Stephen Harper.

On federal-provincial relations: The New Incrementalism

It's probably not useful for me to go back and revisit the discussions of 10 or 15 years ago and where we would be vis-a-vis that. I think the most important thing, and something I came to see clearly about three or four years ago after I became leader of the opposition, was that what the country really needed in dealing with federal-provincial matters, the federation in Quebec in particular, was to look forward rather than backward, stop worrying about who was right and wrong in Meech Lake and concern ourselves more with contemporary issues.
...
We'’re trying to make significant changes, but in a way that is step-by-step and achievable, and will actually happen.

On the fiscal imbalance: Let's talk

I doubt I would go the full-fledged route of a Royal Commission. The first thing, hopefully in the very near future I'’m going to be sitting down with the provinces informally, to talk a little bit about their thoughts. We'’ve got a couple of reports pending, we'’ve got an equalization review that was set out by the previous government, and the provinces have their own report on the fiscal imbalance. I think it would be helpful to have some kind of a joint body go off and do some thinking on this before we go out into tough negotiations, but frankly, I'’d probably stop short of a full-fledged Royal Commission unless everyone thought that was a good idea.

On Quebec: A New Option

Je dis depuis longtemps que les Quebecois veulent une option qui n'est pas la separation, qui n'est pas la corruption ou qui n'est pas un parti impuissant ou un parti du status quo et du centrisme. Et je dis aussi depuis longtemps que, - un moment donne, les Quebecois vont se decider a essayer quelque chose de different. Je ne savais pas exactement quand ils allaient se decider, mais evidement je suis tres heureux qu'’ils aient commence pendant la campagne electorale (RIRE). Je crois que notre resultat aurait meme ete meilleur si la campagne avait compte une semaine de plus.

On Canada-United States relations:

My difficulty with the previous government was not simply that they had fights with the United States, but their fights with the United States did nothing to advance Canadian interests.

On the Afghan commitment:

It is a very dangerous mission. But it is a commitment that Canada has made, a commitment to play a significant role for some time in Afghanistan. I think quite frankly, my sense is that the allied participation in Afghanistan is paying dividends, that we are making progress.

More seal crap

This article from the Toronto Star is by Rebecca Aldworth, who lived in Newfoundland and now works for the HSUS.

Her piece is appropriately titled "A betrayal of the facts".

For example, she subscribes to a goofball theory that by not killing seals, we can promote cod recovery. It's an interesting concept given that seals are a high level predator in the ocean food chain and prey, among other things on the cod and the stuff that cod would prey on...if there were lots of cod. In the article linked here, Aldworth refers to seals preying on creatures that prey on cod. Sadly, the link doesn't actually say anything about that.

What it does do is discuss the merits and demerits of the argument for a seal cull and its impact on cod populations.

Too bad no one is talking about culling seals to save cod anymore. The reason? The ocean ecosystem is to complex to make such a facile claim that culling cod will allow seals to recover. At the same time, there isn't much reason to believe Aldworth's claim that not killing seals would let cod recover. Cod, it would seem, are actually red herring in this whole fish and cod mess.

In The Star, Aldworth makes a big deal about the fact that 99% of seals killed offshore eastern Canada each year are:

"just two months of age or less. Over the past five years, the majority of the seals killed have been younger than 1 month old. At the time of slaughter, many of these pups had yet to eat their first solid meal or take their first swim - hardly "adult" seals by anyone's standards."

Ok.

But here's some relevant information, Bec didn't see fit to tell the readers of her article:

Newborn pups are about 85 cm long, weigh about 11 kg and are yellowish in colour. In about 3 days, the fur turns to a fluffy white from which the pups derive the name "whitecoats". Young harp seals rank among the fastest growing and most precocious of young mammals. They are nursed for about 12 days and then abandoned by their mothers. During this period they more than triple their weight on milk which contains up to 45% fat (compared to 4% for cow's milk). When weaned, pups weigh an average of 35 kg. More than half of this weight is fat in the form of blubber.

Yep.

You read that correctly. Pups are weaned after a mere 12 days and then left by their mothers to fend for themselves. When the sealers reach the ice floes, the seals are in a transitional phase maturing into independent adult seals - they definitely aren't pups anymore, and that's what made Aldworth's little stunt with the McCartney's fundamentally misleading.

But forgetting all that, my favourite part of Becky's article was the bit where she mentioned Sir Paulie McCartney's license buy-back scheme.

An interesting concept.

Except that the buy-back would have to be federally funded.

Apparently Sir Paul must have been a little short on cash the week he was in Prince Edward island - thinking he was in Newfoundland.

Otherwise, wouldn't Sir Paulie's great big idea have more credibility if Paul took some of his spare change and endowed a fund, managed by a reputable Canadian agency to support just such a buy-back concept?

The problem with that idea?

Putting in place a workable, fully-funded scheme and ending the seal hunt isn't really what the annual March Madness is about for groups like HSUS.

Nope.

It's about raising cash for their own coffers.

It's actually more lucrative for Aldworth and HSUS to orchestrate a boycott they claim is taking hundreds of millions from the fishermen they want to quit sealing, and run expensive radio spots on local radio pressuring Newfoundlanders and Labradorians rather than create a fund that would give fishermen a credible financial alternative to the activity HSUS opposes.

Aside from a few facts Aldworth neglected to include, the real betrayal in her article is not about facts.

It's a betrayal of integrity.

h/t to Mike and Dean's Cross border rant

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.