Hebron clock ticks down

Danny Williams and the companies looking to bring the Hebron-Ben Nevis field into production set April 1 as the deadline to achieve an agreement on royalties and local benefits.

There's been dead silence on the talks in the past few weeks. Yes, the Premier met with senior company officials in Toronto and other meetings have taken place, but so far not a word about the negotiations have hit the streets.

In the long run that may be good news.

Almost a year ago, Danny Williams was excited to learn that the companies involved in developing the Hebron-Ben Nevis offshore Newfoundland had reached an operating agreement and would be coming to the province to talk about getting the field in production.

It's useful to go back and look at what Danny wanted when the talks started. He told reporters last April that it was important to "grow" the oil industry in Newfoundland and Labrador. Williams was looking for a favourable royalty regime, secondary processing and improved research and development spending.

In the meantime, Williams recently redefined his "ask", to use the sales term he favours. He indicated the province was looking for better royalties than on other projects, improved local industrial benefits, and an "equity position".

Piling on the demands made many in the local industry nervous, but as Williams told reporters in a scrum last year that he expects detailed, frank negotiations in which the province got a reasonable, fair return. Williams has talked recently about an equity position, but as the companies made clear they weren't prepared to entertain a deal that gave the province a management stake in Hebron.

Williams likes to add on demands in public and talk tough, but his pattern in bargaining has usually been to settle for something much less than his last "ask" all the while claiming total victory.

Chevron and the partners are deadly serious about closing up their Hebron shop if this set of negotiations fails. They can still gain financial benefit from having undeveloped Hebron as part of their portfolio. Once Williams is gone they can look to strike a good deal later in a post-Williams Newfoundland and Labrador.

By contrast, Williams and his administration can't afford to say no to what, by most accounts would be an excellent development deal. He needs a new confirmed win in the wake of the Fishery Products and Abitibi disasters. Williams can't afford to let the local oil industry shrink having committed himself to continued economic growth in the province.

More to the point though, Williams needs the cash that will flow from development heading into the next election, likely his last. Money from Hebron can be used by Newfoundland and Labrador Hydro to help develop Williams' glory piece, Lower Churchill development, as a "go-it-alone' project.

Without Hebron cash, Williams will be forced to take the Ontario and Quebec proposal. That circumstance would demolish the carefully built facade of the resurgent and vibrant Newfoundland and Labrador which thrives under his leadership and which can tackle any project by itself, of course with Danny in charge. The illusive and sometimes illusory Lower Churchill project would become, in Danny's view, the antidote to the supposed failure of the Upper Churchill development if it is built with as little outside help as possible. With that project under his belt and with a clean sweep of the provincial legislature's seats in late 2007, Williams will head off to his next goal. Maybe Ottawa has been singing the same siren call to Williams it has sung to at least one other premier.

Williams' political colleagues need the Hebron production cash to start flowing when one of them heads to the polls in 2011. That will be the time when offshore oil revenues are expected to decline from their current peak. Their internal pressure will be a powerful force behind signing a good deal of the type Chevron and the other companies are already prepared to accept.

That's why Bond Papers expects an announcement very shortly on a Hebron deal. There will be added industrial benefits of some kind and a better financial return for the province. The added cash may be called "equity" but there will be no management control explicit or implicit in that, no matter what the Premier's Office tries to present.

Expect solid local benefits which will ensure the local service and supply sector, represented by NOIA, is happy and continues to grow.

We can also expect a massive signing ceremony in which the deal and its signatories will be lauded as never before.

That's the Danny way.

Step 1: Ask for a trip to the moon and the stars.

Step 2: Add a trip to a distant galaxy.

Step 3: Settle for less.

Step 4: Claim victory.

Step 5: Praise all highly and lavishly.

The atmospherics are irrelevent; what matters is that a good deal gets done.

A deal will be good for the oil companies. It will be good for the local supply sector. The cash revenue will be good for the people of the province.

And Danny and his political colleagues will have a solid political win to use for their own purposes.

No deal is not really a viable option.

Danny's Deal not delivering as promised

Today's new agreement is a giant leap forward on the path of progress. It gives our province 100 percent of our provincial share of offshore revenues, free from equalization [sic] clawback while we are an equalization-receiving province. [Emphasis added]

Premier Danny Williams
Atlantic Accord 2005 signing ceremony
February 14, 2005

The January 2005 offshore revenue deal with the Government of Canada will deliver only half the revenue protection promised by Premier Danny Williams in 2005, according to an assessment of figures released by the Government of Newfoundland and Labrador on Thursday in Budget 2006.

Provincial government figures show that while total oil and gas revenues will be some $927 million in Fiscal Year (FY) 2006, the provincial government will receive offsets of only $329 million.

That's just half the $648.9 million the province should be receiving.¹

Coupled with the Equalization offsets contained in the Atlantic Accord 1985, Danny Williams' 2005 agreement with former prime minister Paul Martin was supposed to create a new federal transfer payment that would equal 70% of the province's total offshore revenues. This is the amount supposedly clawed back through reductions in Equalization caused by growing oil and gas revenues. The remaining 30% was supposedly shielded from Equalization calculations already.

In the budget speech, provincial finance minister Loyola Sullivan said:

In 2006-07, the province is expecting to generate royalties from oil production of $703 million² and corporate income tax from companies operating in the offshore area of $224 million. This represents direct revenue from offshore oil of $927 million in this year alone. This forecast assumes the average price per barrel of oil will be $US57. Added to this is the benefit accruing to the people of the province from the Atlantic Accord arrangements which will contribute an additional $329 million in 2006-07.

While Danny Williams originally sought a deal that would deliver to the provincial government a federal transfer equal to total provincial oil and gas revenues, the agreement signed in January 2005 contained an important redefinition of the word "revenue" that to date has never been discussed publicly.

The January 2005 agreement defines revenues as being the money collected under the Canada-Newfoundland Atlantic Accord Implementation Act (1987)³. That federal law refers only to royalties collected on behalf of the province.

Even using the more restrictive definition - which has never been publicly acknowledged by the provincial government - the forecast offsets for 2006 are below what they ought to be. Provincial royalties estimated at $663.4 million would give an offset amount of $464.38 million.

That's a difference of $135.38 million more than the budget forecast.

Using Sullivan's royalty figure of $703 million, the offset should be $492.1 million, or $163 million more than Budget 2006 projects.


-------------
Notes

¹ Based on the original Williams proposal to offset total provincial oil and gas revenues. The figure is 70% of the total oil and gas revenues and assumes that the remaining 30% of total revenues is already protected from supposed Equalization clawbacks. Some sources have estimated the clawback to be much higher, amounting to as much as 85%. The 70% clawback is used since it is the one referred to most often by Premier Williams in 2004.

² The Estimates gives this figure as $663.4 million. See for example, Statement IV, p. vii.

³ "2. ...The Government of Canada intends to provide additional offset payments to the province in respect of offshore-related Equalization reductions, effectively allowing it to retain the benefit of 100 per cent of its offshore resource revenues...[Note 1 in original] Defined as revenue received from the Government of Canada under the Canada-Newfoundland Atlantic Accord Implementation Act and Hibernia contractual royalties."

Under the Canada-Newfoundland Atlantic Accord Implementation Act, 1987, the Government of Canada collects royalties from the Newfoundland Offshore Area, which are transferred to the Government of Newfoundland and Labrador under the terms of a memorandum of understanding between the two governments.

The Atlantic Accord (1985) defined the province's revenues much more broadly:

On the basis of the foregoing, Newfoundland shall receive the proceeds of the following revenues from petroleum related activity in the offshore area:
(a) royalties;
(b) a corporate income tax which is the same as the generally prevailing provincial corporate income tax in the province;
(c) a sales tax that is the same as the generally prevailing provincial sales tax in the
province;
(d) any bonus payments;
(e) rentals and licence fees; and
(f) other forms of resource revenue and provincial taxes of general application, consistent with the spirit of this Accord, as may be established from time to time.

The 48 seat budget - updated

Loyola "Rain Man" Sullivan delivered his budget for Fiscal Year 2006 this afternoon, with a 10% increase in government spending and cash poured into just about every existing demand in the province.

Consider this the first of two budgets aimed at winning every seat in the province for Danny Williams in the next election. By October 2007, the entire electorate will be asking "What other choice is there?" except to vote for Danny Williams. Judy Foote, the member for Grand Bank district and former cabinet minister, may rue the day she uttered the same phrase when talking about her motion yesterday calling for an "independent" public inquiry in Fishery Products International.

Total spending is projected to be $5.6 billion. The provincial government's own-source revenues are higher than the entire provincial budgets delivered less than a decade ago.

Biggest cash increase came from oil and gas which generated almost $1.0 billion dollars last year in revenues. Government deliberately low-balled the numbers last year.

Some preliminary highlights and observations:

1. The budget for Danny's own Department of Business has more than doubled going from $1.7 million last year to $3.8 million this year.

Still no word on the main departmental initiative, namely the Young and Cool rebranding initiative.

Question: who got the rebranding contract?

2. $100,000 to design and implement a communication strategy to support the sealing industry.

Question: Who will get that contract and how will it be awarded?

3. Oil and gas royalties in 2005 were more than double last year's budget projections. Last March, Bond Papers noted the budget spin control deployed by government for last year's budget.

This year's budget shows just how much Rain Man spun his numbers last year, especially on oil and gas revenues.

4. Loyola Sullivan's revenue projections were out of whack yet again. In 2005, Loyola Sullivan projected a deficit of almost $500 million. His actual position at year-end showed a surplus of over $70 million. That's a pretty big shift. But then again, he was off in his first budget as well, by an equally horrendous amount.

If we use the past to guide our projections, expect that this budget will see revenues about $500 million higher than Loyola is allowing. Oil and gas revenues plus the full production impact of Voisey's Bay will be the drivers.

5. Look back at the March archive for the Bond Papers and you'll see Loyola was musing about huge deficits for the foreseeable future and investing the offshore cash in a way other than what he did. They dropped it all into the unfunded pension liabilities.

6. Equalization dropped this year by about $191 million even though oil revenues grew by more than that. At the same time, the combination of the Real Atlantic Accord (1985) and the January 2005 deal produced "offsets" of $329 million.

When Danny Williams claimed "We got it" what he supposedly meant was "we got the original plan" in which the offsets were supposed to equal oil revenues. By my rough calculation, the "offsets" are roughly $142, 800, 000 less than the actual royalties from 2005, much less the total revenues for that year. They 2006 offsets are about 50% of the total royalties projected for FY 2006.

7. While provincial own-source revenues are higher than total government spending a decade ago, the federal transfer portion remains about the same in dollar terms as it has been for some time. The Government of Canada will send Newfoundland and Labrador about $1.6 billion in FY 2006 to help make ends meet.

Spindy unwinds?

CBC's Here and Now reported this evening that the upstart local newspaper The Independent, known affectionately around here as the Spindy, will publish its last number this weekend.

I'll save my obit until there is confirmation, but the Ceeb claimed to have it confirmed from three sources. Presumably neither of the sources had the last name Dobbin or Cleary.

Who is surprised by Loyola and Jerry?

That's Loyola Hearn and Jerry Vlasak.

Vlasak (left), for his part, has repeatedly stated he believes it's just peachy to kill humans if animals are saved in the process. At the Bond Papers, we have discussed Vlasak, his wife - former child actor Pam Ferdin, and their associations with Paul Watson and the animal extremists. Check here, here and here, from last October's archive.

Vlasak told a 2003 animal rights convention:

"I don't think you'’d have to kill -- assassinate -- too many vivisectors," Vlasak said, "before you would see a marked decrease in the amount of vivisection going on. And I think for 5 lives, 10 lives, 15 human lives, we could save a million, 2 million, 10 million non-human lives." When one woman in the audience disagreed, saying that Vlasak's approach was no different from that of abortion-clinic bombers, Vlasak was undeterred. "Absolutely," he countered. "I think they had a great strategy going."

Vlasak's a known quantity.

Also known is (left//Photo: Greg Locke) Loyola Hearn, the federal fish minister, who is known at least if you pay attention to what Hearn says and does as opposed to what you may wish he was saying and doing.

CBC reports "Loyola Hearn said the hunt must be open to public scrutiny."

"He fears that if the federal government doesn't issue observer permits, it will look like seal hunters have something to hide."

Hearn knows full-well that there are grounds for keeping some animal extremists out of the country and for restricting their activities that are not about observing the hunt at all. Vlasak has been barred from some countries; Canada should be added to his personal No-Fly list.

But Hearn's position is hardly surprising for a guy who has toed the pre-existing policy line in Ottawa since taking office. Hearn has a couple of problems, not the least of which is a shortage of qualified staff. Some reports have the bulk of his people coming out of the bowels of his department because others don't want the job or can't pass the sniff test for getting hired.

Ryan Cleary, long Hearn's chief booster in the province, was reported here as having the job earlier. He later said publicly he wasn't offered a job and wouldn't take it if he was offered one. The details will never be known why Cleary isn't getting paid for supporting Hearn, but somehow, it's hard to imagine Cleary siding with the department officials he loathes on a matter like Vlasak and the seal hunt.

Political staff can serve a valuable purpose of giving a minister a perspective different from that of department officials. Hearn isn't getting it, apparently, although around here, we'd argue Hearn as minister is just being the kind of politician he has always been regardless of who is staffing his office.

Either way both Vlasak and Hearn are known quantities acting predictably.

Why are people surprised by their comments?

Greg Locke meet Greg Locke

Anyone who knows the superlative local photographer will know he holds strong convictions and is capable of the odd harangue in favour of his cause.

It must be something about the name.

Harper, cabinet and the constitutional thingy

As Canadian Press reports, Prime Minister Steve Harper considers that cabinet secrecy is a constitutional thing.

"Meetings of cabinet are private. It's a constitutional thing," the prime minister argued at a mid-day availability.

Well, he's right.

To a point.

Cabinet meetings are secret, but to be perfectly accurate, the PM should have said that the contents of cabinet deliberations are secret. In other words, unless you are a member of cabinet or an official or other person specifically permitted by cabinet in the room, no one gets to know who said what to whom about what. That level of secrecy is intended to allow cabinet ministers to discuss the sensitive matters they deal with each day in the most frank way possible.

The secrecy of deliberations is intended to keep cabinet what it is: collectivly responsible for decisions. There is little if any possibility of having the government appear divided on an issue and thereby demolishing public confidence in the core of government.

And, as much as we like to speak popularly of this prime minister or another being responsible for everything, cabinet government has traditionally made the prime minister merely primus inter pares, first among equals. Certain first ministers, like say Danny Williams, can dominate a cabinet and make whatever decisions he pleases. But let Danny slip in the polls. Let his shenanigans cost the government political support and he might find himself faced with a cabinet as unified as the herd of cats Roger Grimes fronted.

An Australian politics website describes it well:

Ministers must be able to speak freely within the cabinet room. They need to be able to discuss issues and political strategy with each other in a frank and uninhibited manner. Discussions would be seriously circumscribed if ministers thought that their comments would be reported outside.

What Steve Harper is talking of is something far less than a constitutional convention.

Once upon a time, only a handful of people would know when cabinet was meeting. These days, though, most jurisdictions not under terrorist threat don't make a secret of time and place in which cabinet regularly meets. Not knowing when cabinet met, much like the secrecy of deliberations, prevented the sovereign from meddling in the affairs of the elected parliament.

In Newfoundland and Labrador, it used to be Thursdays starting at 9:00 AM. These days, I might not be able to tell you when Danny pulls the crowd together to formally record their "Yes" votes, but odds are good that news media know and the information could be readily uncovered even though it has never been a practice here to issue news releases about schedules of meetings and such.

In Ottawa, the practice since before Joe Clark has been for cabinet meetings to be publicized and for news media to be allowed to gather in controlled circumstances and intercept ministers as they leave. There is nothing to stop cabinet from organizing other meetings aside from its regular session and undoubtedly those have occurred repeatedly since Confederation (1867).

The current battle between the prime minister's office (PMO) and the parliamentary press gallery (PPG) is not the most serious fight facing anyone, but it is an unnecessary racket. Stephen Harper makes much of his commitment to accountability. If this were true then he should merely let the established practice continue.

By attempting to exert control over the PPG, and by tightly controlling what ministers may say and when they may speak, the prime minister is demonstrating that he is the antithesis of genuine accountability.

By muzzling cabinet and by attempting to manage the media Harper is himself pushing against some more substantive constitutional provisions and confirming that he looks on his new job just as did some of his predecessors.

Like Jean Chretien.

The prime minister's office in Canada has become too much like the White House over the past three decades, but without the legal counterweights to the first minister's legal ability. Gordon Robertson, formerly the most senior public servant in Canada told the National Post in 2002 that "[o]ur concentration of power is greater than in any other government with a federal cabinet system. With the lack of checks and balances, the prime minister in Canada is perhaps the most unchecked head of government among the democracies."

Robertson made those comments in the waning days of the Chretien administration, while Paul Martin was talking of a democratic deficit and before Harper and his allies, like Loyola Hearn, engineered the merger of the old Alliance party with the Progressive Conservatives. At the time, Harper though t a key to curbing the powers of the prime minister was an elected senate. That promise appears to have slipped from the Prime Minister's list of priorities.

More to the point though, Harper could demonstrate his commitment to reforming parliament, the prime minister's office and to keeping both accountable by his actions. Harper has the power simply to be accountable, rather than talk about it or consider putting it in legislation.

Genuine accountability does not come from an act of the legislature. It comes from the actions of the prime minister.

In the Great cabinet Secrecy Racket, Harper's actions on accountability and change in government speak far more loudly than his words.

It's a shame.

Province pays multi-nationals to keep locals employed

The upshot of this ministerial statement by provincial natural resources minister Ed Byrne is that the Government of Newfoundland and Labrador is willing to pay a large international company so that local workers will keep their jobs.

We have reached a short-term agreement with Corner Brook Pulp and Paper that will see them continue to purchase pulpwood from the Northern Peninsula this year. In exchange, the province has agreed to look within its existing budget to see what can be done to mitigate the costs to the industry of the fire suppression, spray, silviculture and access roads programs.

Byrne explains later in the statement that the Kruger mill in Corner was planning to import wood from the Maritimes which is now on the market as a result of mill closures there. Kruger could get the wood brought by barge across the Gulf of St. Lawrence for less than they could get wood cut on the Great Northern Peninsula and brought to the mill by truck.

But now Ed Byrne will write Kruger a cheque to subsidize its operations so the loggers will get paid and, presumably Kruger will still bring in the wood from the Maritimes.

There are 250 seasonal workers affected by the decision, so it's only fair to ask how much money government is putting into Kruger. When about the same number of jobs came on the block in Stephenville, government was willing to drop upwards of $12 million a year to create a situation where basically we'd have been paying the company to take our resources away and make money on them.

So how much cash is involved here?

But more importantly, one must wonder why a couple of hundred part-time workers on the west coast got swift action on their grievance when on the south coast the people of Harbour Breton are in the second year of waiting for Danny Williams to do anything substantive for them.

And, more to the point, Fishery Products International on the Burin peninsula are waiting for the province to come up with an older-worker-adjustment program, commonly known as early retirement.

When can the people of the Burin peninsula expect the same speedy commitment of provincial cash to help them out?

Offal news

Back from the frozen North, Simon Lono takes a look at FPI in his first major posting over at Offal News.

It's worth checking out.

The problem is not FPI - FPI is reacting to changing world conditions. The current noise and smoke coming from Rideout and others mask the fact that government has fallen into a vicious cycle of short-sighted crisis management and populist damage control instead of realistic appraisals and sensible solutions. If they have a plan, it is well hidden.

Ouch.

Control freaking

Canadian Press is reporting on the growing controversy in Ottawa over prime Minister Stephen Harper's ongoing efforts to restrict media access to cabinet ministers.

Yesterday's broohaha focused on Harper's office having security guards to keep reporters from horning in on a photo op. The bigger issue is Harper's plan to move reporters away from the cabinet room and likely hold secret cabinet meetings.

Harper's communications director, Sandra Buckler, gave the official response to media comments on the issue: "I don't think the average Canadian cares [about media access] as long as they know their government is being well run."

Ahem.

That may well be true.

Unfortunately, Canadians will have a harder time finding out how well run the government is if the reporters who would carry that message are cheesed off by the prime minister's efforts to piss off all but the most blatantly Conservative reporter on the Hill.

Look at the number of stories today that highlight the unimpressive nature of the upcoming Throne Speech. The damn thing hasn't even been delivered yet, but Sandra's sterling efforts at pissing people off are reaping a predictable reward.

If you stop and think about it though, this administration, less than 100 days in office, has not implemented any great policy initiatives. It hasn't really been demonstrating how well things are run.

Nope.

And that might be the clue as to why the biggest thing on Sandra Buckler's agenda - aside from vetting thousands of e-mails, letters to the editor and other ministerial communications - is to shag around with news media access.

If Harper and company were actually doing something news-worthy, Sandra wouldn't have to worry about message control. Sure the guys have only been in office a few weeks but, come on, they must have something they could be doing rather than frigging with deciding who can and cannot ask Steve a few questions.

Bill Clinton's team of amateurs tried this sort of access control and it failed miserably.

Other world leaders have tried it too.

It some places the Harper/Buckler approach works...

Places like Khazakstan.

Or Zimbabwe.

This is hardly the model we should be emulating.

On time or on target

but seldom both at the same time.

An old joke at the expense of gunners everywhere but likely not an accurate description of the crew manning this 155 mm howitzer from A Battery, 1 Royal Canadian Horse Artillery. (Photo: Louie Palu/The Globe and Mail)

The M777 howitzer is brand new, being fielded this year by the Canadian army, the United States Army and the United States Marine Corps.

At less than 10, 000 pounds, the M777 is light in weight but packs all the punch of a 155 mm system. At Charge 8, the M777 has a range of 24.7 kilometres; it rocket-assisted rounds can reach ranges up to 30 kilometres.

Some Canadian critics of the army and its performance claim the Canadian military lacks modern, capable equipment.

The critics need to update their information.

SEALs fight back

The war on terror took a bizarre turn today as United States Navy SEALs launched a counterattack against men and women who are reportedly clubbing their brethren in the Gulf of St. Lawrence.

At left, two members of a SEAL detachment are seen skiing cross-country to intercept the fishermen, described by one Pentagon source as "terrorists".

The once clandestine SEALs have been reported for some time walking openly in the streets of some eastern Canadian communities (right).

Fishermen complain that fish stocks are being decimated by the SEALS, who patrol river mouths and eat salmon and other species as the fish head up river to spawn.

Backupable Tom: floundering fish minister likely to be gutted, head on

Fisheries minister Backupable Tom Rideout (left) issued a news release Friday in which he continues to point out that Fishery Products International (FPI) didn't have permission from either Rideout or his predecessor to ship fish outside the province for processing.

Ok.

Just for a moment let's assume that's true.

That means that Trevor Taylor, Rideout's predecessor, is either incompetent or he's a liar. Taylor told reporters repeatedly that he gave FPI permission to ship fish in 2004 and 2005.

Ditto Rideout.

Until relatively recently he told reporters - and hence everyone else - that FPI had permission to ship fish. And that's part of the problem with Rideout's latest crusade against nothing. Until be stuck a funny hat on his head and mounted the back of a truck, Rideout was insisting FPI had permission to send undersized fish outside the province for processing.

Rideout hasn't disputed, either, that FPI has said that shipping the undersized fish outside the province actually saved FPI money that was used to subsidize it's expensive processing operations in the province.

Rideout also hasn't told anyone what would have happened to the undersize fish if it hadn't been shipped outside the province.

So basically Rideout is launching an attack...on himself and his own administration.

Smooth.

Real Smooth.

Sorta reminds one of this picture from the 1989 campaign (right) in which Rideout appears to be holding up a pistol.

Look closely, though, at which way the barrel appears to be pointing.

But through it all, no matter how many releases Rideout issues, he just can't duck the substantive questions about the FPI issue and about his less-than-sterling performance:

1. The most-obvious one: If what he is now saying is true, why did Rideout and his predecessor lie repeatedly about FPI's shipments of fish outside the province.

2. The next-most-obvious one: Why is Rideout hammering at this issue of whether or not FPI had permission to export undersize fish instead of dealing with the real problem - people are running out of Employment Insurance benefits and Rideout and his boss need to get an early retirement package in place for FPI workers?

3. The maybe-not-so-obvious-but-still-relevant one: What would have happened to the fish if Taylor hadn't approved its export? [Clue: It wouldn't be processed in the province, except by worms.]

4. The not-really-obvious-but-still-good one: Was there any kind of industry group - either organized by Rideout's department or existing with the full knowledge of his department - looking at the issue of how to process undersize fish profitably?

For the other questions, go back and read the posts here and here, at the Bond Papers.

Around here, we understand that some of these questions have been tossed at Rideout but he and his comms director have been ducking them.

Here's a little free advice for Backupable Tom and his comms director: a funny hat and reissuing the same release over again don't constitute a strategy.

Try following Tom's own wise words: Be the truth.

Bonus advice: Everyone can see that the export thing is a diversion. Once the real story hits in a couple of weeks time, the only difference between Backupable Tom and the small yellowtail flounder is that Tom will be filleted in the province...free of charge...and served up on the nightly news again and again and again.

Oh yeah.

One more thing.

Rest assured that the media will have permission - Danny's permission - to gut Rideout and serve him up head-on.

That's backupable.

Another "beggar" will soon come forward

Andrew Coyne picked up on an aspect of the looming clash between Ottawa and the provinces over the fiscal imbalance and wrote about it on Friday, saying the federal Connies' love affair with the provinces may soon be at an end.

Three provinces just turned in budgets so fat with cash the local treasurer had a hard time spending it all.

On Thursday next - that's March 30 - add Newfoundland and Labrador to the pile.

So lush is the harvest of the offshore that Danny Williams will poke his finance minister Loyola "Rain Man" Sullivan and bring down the largest budget in Newfoundland and Labrador history. An interim supply bill current before the House seeks approval of $1.5 billion in spending.

But that's just for one fiscal quarter.

As outgoing provincial New Democrat boss Jack Harris said during the debate on Tuesday, that means were are likely to see a full budget in excess of $6.0 billion dollars.

Every nickel will be spent and there will be a budget balance if not a lovely little surplus.

The budget for the current fiscal year will likely be in a hefty surplus as well...that is, if Danny and the rain man haven't followed their usual practice and engaged in a flurry of last-minute and sometimes unreported spending to make the budget look less rosey..

Meanwhile, Danny Williams will be the first premier at the trough lining up for his share of federal largesse, all the while claiming he is broke.

But Newfoundland and Labrador is on the verge of phenomenal wealth thanks - solely (?) - to his phantasmagorically splendiferously solid gold leadership style.

Williams' amazing financial picture is due entirely to offshore oil and gas prices.

He can claim no credit for that.

Unless he delivers a Hebron deal next week as well, to meet the deadline he and the Hebron partners imposed on themselves.

Did she clear her remarks with Steve first?

On Thursday, federal environment minister Rona Ambrose had this to say about dumping raw sewerage into Canadian harbours:

Environment Minister Rona Ambrose says municipalities that dump raw sewage in the ocean are placing public health at risk.

Interviewed by telephone yesterday from Mexico City, where she is attending the World Water Forum, Ms. Ambrose said 19 Canadian municipalities continue to dump raw sewage into the sea.

They include Halifax, St. John's, Saint John, and Victoria.

She acknowledged that the federal government has limited ability to intervene since water falls under provincial jurisdiction, but suggested that something needs to be done.

On Friday - the day after Rona's comments - her boss flew to New Brunswick to dole out millions in federal pork. and prop up a faltering local Conservative premier.

Included in the cash Steve threw from the door of his Challenger jet?

$3.0 million to help Saint John stop polluting the harbour.

_______________________

h/t to Mark over at nottawa.

Wanna understand Canadians in Afghanistan?

Read Christie Blatchford in Saturday's Grope and Flail.

I have a friend who, in regarding the modern urban male, frequently wonders: "How is it they got to be the hunters and gatherers?"

In the lads of the 1-3, in all the Patricias, I found the answer, or an answer anyway: Men weren't always quite the way they are now.

Left to their own devices, largely untouched by the most effete of modern cultural conventions and contemptuous of those few that veer near, and trained to a razor's edge, this lot are by turns ruthlessly and broadly so competent (from making a decent meal out of the good-for-five-years "individual meal packs," or IMPs, to keeping their primitive quarters at Gombad as pristine as a mud hut can be, to clambering over hill and dale and ultimately to soldiering), shockingly cheerful and patient, generous to one another, funny, outrageously tender and, given the times, so patriotic as to appear almost quaint.

This is the sort of stuff you get when reporters live with their subjects. It is straight-up - it describes the people I know from my short time in the military and long time around the Canadian Forces.

or get this:

That was my first brush with the regard, widespread among the dozens of Canadians I talked to, for both Afghan soldiers and civilians. Only once did I hear a soldier make a disparaging remark (young and stupid, he referred to the undernourished locals as "the skinnies").

Honest stories, honestly told.

Makes the rhetoric of the "peace" movement sound as hollow when used on Afghanistan and the Canadian men and women working there today as it was tinny 20 years ago when Soviet soldiers were napalming those Afghan villages where today people want nothing more grandiose than cooking oil.

And the "peace" movement never batted an eyelid.

Plan Eh! for FPI

Deputy Premier Tom Rideout today met with senior officials of Resoh Corp on possible alternative industrial uses for Fishery Products International (FPI) fishplants scheduled to be closed as part of the company's efforts to deal with its financial problems.

Plan Eh! would see Resoh convert at least two former FPI plants to recycling beer bottles.

Bob McKenzie (left, with chief executive officer Doug Mckenzie) is Chief financial officer for Resoh. Meeting with reporters after the Rideout meeting, McKenzie said: "Gooday, eh. Like, Newfoundlanders drink a lot of beer, eh. So, like we thought this would be a good place for a new plant."

Following a television, music and movie career in Canada and the United States, the McKenzie brothers created Resoh as a way of giving back to communities across Canada. "We also have a company that puts mice into the bottles, eh, so like if you have mice or shrews, we could even do secondary processing," said Doug McKenzie.

Rideout, who is provincial fisheries minister and a former premier of Newfoundland and Labrador, said he will be taking the proposal to his cabinet colleagues for further discussion.

Friday chuckle: more talks on Fishery Products?

Left: Fisheries minister Tom Rideout and senior officials of the provincial fisheries department arrive for meetings on the future of Fishery Products International.






Later that afternoon, Rideout addressed news media on the results of the meeting. (Right)

Rideout and Williams knew FPI plan in December

Provincial fisheries minister Tom Rideout and Premier Danny Williams were fully briefed on the seriousness of Fishery Product's International's (FPI) situation, and - at the very least - the outline of how the company intended to proceed to right its financial ship, as early as mid-December last year.

That information is contained in a news release issued today by FPI in response to comments by Rideout that the company was facing charges for exporting fish to China for processing.

FPI formally briefed the Province of Newfoundland and Labrador on the magnitude of the challenges in the groundfish sector and their impact on the future operations on December 13, 2005.

That's the first time anyone has acknowledged the provincial government received what appears to be a full briefing in mid-December on FPI's plans to deal with the fish company's financial troubles.

The story coming from Rideout to date has been different.

In January, 2006, The Independent reported in an unattributed comment that "FPI met with the province in mid December when the company informed Fisheries Minister Tom Rideout and Premier Danny Williams the company's internal review wouldn't be complete by the end of the year, a deadline the company itself had imposed."

Rideout himself told CBC that he would like to know what the company was proposing. A January 6, 2006 CBC news report contains the following statement:

Fisheries Minister Tom Rideout met with FPI officials last month. He said he would also like to know what the company plans to do.

"In terms of final decisions, we have not be apprised of any final decisions at this point in time," Rideout said.

Danny Williams letter to the three federal party leaders during last winter's federal election also suggest the provincial government had a good idea of what FPI was planning.

William's very first question focused on the need to be proactive in dealing problems in the fishing industry:

Significant changes are facing our fishing industry, such as resource declines, exchange rate pressures and increasing global competition.There is an urgent need for the Provincial and Federal Governments [sic] to take a proactive and cooperative approach to assist the industry and individuals in facing these challenges and capturing new opportunities. The alternative - waiting for a crisis to develop and reacting to it - is unacceptable. [Emphasis added]

This is strikingly similar to the content of a news release issued by FPI in early November 2005 in which the company announced the departure of Derrick Rowe from the chief executive officer's job and the establishment of an internal operational review.

Significant factors with respect to the availability of the natural resource, the stability of the U.S. dollar, Pound Sterling and Euro, the rising cost of fuel and the impact of low cost producers on the world marketplace, on an individual basis and in combination, have negatively impacted the Primary Group's business and will continue to negatively impact this business for the rest of the year. [Emphasis added]

Questions have already been raised about Rideout and his management of the fisheries department by the minister's own comments a few days ago that FPI was to be charged with illegally shipping fish outside the province.

Now there are other questions from the same incident and FPI's news release:

1. If the provincial government knew of FPI's problems and plans in December, why has it taken over four months for the issue to come to a head in public yet with no solution in sight?

2. Has the provincial government made any efforts to achieve a deal with the new Harper administration about either the early retirement option proposed by Danny Williams last November or the retraining option floated by Stephen Harper in his reply to Williams?

3. Why did FPI wait so long to announce its plans publicly when it appears the provincial government had working knowledge of the FPI plans in late 2005?

4. Why did Tom Rideout launch an audit of FPI fish exports in February- even though his office ought to have the information readily available and even though the provincial government was fully aware of both the problems FPI was facing and, presumably the necessity of shipping at least some of its products overseas for processing?

5. Why did Rideout announce at a union-organized rally that FPI had broken the law and would be charged over its fish exports?

6. Does the Williams administration actually have a plan to deal with FPI other than to threaten the company in public with charges about its export practices or with raising the spectre of further legislating restrictions on the company's ability to operate as a private sector company?

Left: Without a beard and moustache, fisheries minister Tom Rideout didn't stand a chance in the garden gnome look-alike contest. [Photo: CBC]

FPI responds to Rideout's allegations - the news release

ST. JOHN'S, March 23 /CNW/ - FPI Limited ("FPI" or "the Company") today responded to remarks by the Hon. Tom Rideout, provincial Minister of Fisheries and Aquaculture ("the Minister").

The extraordinary and inflammatory statements, which were made by the Minister on Tuesday during his participation in a demonstration in front of the Company's head office, included the offensive allegation that FPI had deliberately contravened the Fish Inspection Act by exporting unprocessed fish. This is not true.

FPI states emphatically that its exports of non-commercial fish were carried out properly and in a manner completely consistent with the past practices of the Department of Fisheries and Aquaculture ("the Department") and the directives of its senior staff. Department officials were consulted specifically and repeatedly on this practice. Furthermore, any insinuation that the Company concealed or attempted to conceal any shipments is completely false. In addition to the consultation with Department officials, every pound of fish in every shipment was approved for export, duly documented, signed and sealed by the Canadian Food Inspection Agency (CFIA).

Also on Tuesday, the Minister further alleged in a news release that FPI has been less than cooperative with the second phase of the provincial government's independent accounting review. This is simply wrong. FPI has cooperated fully throughout the process, and will continue to do so.

FPI formally briefed the Province of Newfoundland and Labrador on the magnitude of the challenges in the groundfish sector and their impact on the future operations on December 13, 2005. Since that time, related discussions have been held with both the Province and the Fish, Food and Allied Workers union (FFAW/CAW). The goal of these discussions has been to arrive at a solution, with the participation of all stakeholders, that can re-establish economic viability in FPI's Burin peninsula operations while minimizing negative impacts on the workforce. FPI reiterates that it cannot and will not deliberately run operations that create losses averaging approximately $1 million per month.

Seemingly lost in the recent focus on public spectacle have been the objective facts of the current situation and the importance of a rational approach to external challenges that will not be diminished by being ignored.

It is simply not productive to attempt to vilify a company for dealing realistically and responsibly with a soaring Canadian dollar, high production costs, cheap foreign competition and inadequate raw material supply. These facts are real, they apply throughout the industry, and they must be addressed head on. FPI has been and remains prepared to show leadership to meet these challenges in its business. The goal cannot be achieved without constructive
government and union participation. The Company calls on the other stakeholders to refocus their energies on more constructive efforts on behalf of those who will be most dramatically affected if economic viability cannot be restored to operations on the Burin peninsula.

-30-

About FPI: FPI Limited is a Newfoundland and Labrador-based seafood company engaged in harvesting, processing, global sourcing, and marketing a wide selection of high quality seafood products.

FPI's core business is its Primary Group, which holds substantial rights to access a variety of quotas in Eastern Canada and operates its own fleet and processing plants. These plants are supplied by FPI's own vessels and from other harvesters.

Ocean Cuisine International, an operating division of FPI Limited, is headquartered in Danvers, Massachusetts and services foodservice, retail, and industrial customers throughout North America. Ocean Cuisine International is a leading source for seafood throughout North America, with solid processing and global seafood sourcing operations. It markets a wide range of finfish and shellfish products.

FPI Limited trades on the Toronto Stock Exchange under the symbol FPL.