Did Danny consent?

Over at Offal News, Simon Lono has another take on the implications of the federal government's Equalization changes.

Lono makes the point that by changing the Atlantic Accord (1985), the current federal administration has raised troubling questions about any agreement between a provincial and the Government of Canada.

He's right.

But there's a couple of curious things about the Atlantic Accord (1985) Lono did touch on.

Let's add those in right now.

Under s. 64 of the agreement, the province may request that the entire deal be entrenched in the Constitution.

64. The Government of Canada agrees that should the Government of Newfoundland and Labrador achieve the requisite support among the other provinces for the constitutional entrenchment of the Accord that it would introduce a mutually agreeable resolution into Parliament.

No provincial administration has made such a request. Frankly, there's no public indication any provincial government ever tried to secure such entrenchment.

That simply reinforces Lono's content on the importance of the Accord. It isn't just any other piece of legislation that can be amended easily by one or the other party. The Atlantic Accord (1985) is about as close to a constitutional document as you can get and either party would tamper with it at its peril.

Beyond at though, there's another clause that bears on the current issue Lono raises.

60. Except by mutual consent, neither government will introduce amendments to the legislation or regulations implementing the Accord.

That sentence makes it pretty clear that if the federal government is altering the offset provisions of the 1985 agreement, they would need provincial consent to do so.

So did Premier Danny Williams consent?

If the Government of Newfoundland and Labrador agreed to the changes contained in Bill C-52, then the Premier's current public posture is sheer crap. He could not have been misled since the provincial government would have been fully aware of the proposed amendments and would have had to agree to them before they were tabled in the House of Commons.

Assuming - and that's dangerous with this administration given the Hibernia South experience - that they exercised appropriate due diligence, government officials and any external consultants they hired would have assessed the implications of the changes.

Now in his scrum, Williams was clear to accuse the feds of misleading his government, but he focused the bulk of his comments on misleading a private citizen. He spent considerable time accusing the finance department of misleading the public and Wade Locke.

Now if Williams misspoke in saying he had been misled, and instead meant to focus on what happened with the public, then Williams may well have consented to the changes. He just failed to us that. If that's the case then Danny Williams is as guilty of misleading the public as anyone else.

The feds are right in that scenario: Danny is just looking for a headline. He's looking to manufacture a crisis for what many are now speculating is coming: a referendum on separation. His confrontational approach to federal-provincial relations would certainly be consistent with that interpretation. It would also fit if the same guy giving him long-term strategic advice is the same political putz who thought it was a great idea to rip down Canadian flags. Overall, it fits with Williams' record of vicious anti-Ottawa rhetoric.

Now if the feds didn't tell anyone what was going on, then Williams has a legal case to overturn at least one set of changes to C-52. Then Williams is right.

But something says that if he had such an unequivocal case, Williams would be launching a lawsuit pretty freakin' quick. In that context, C-52 is such an incontrovertible breach of such an important agreement that every court in the land would smack Harper and Flaherty between the eyes in unequivocal terms.

All someone has to do is ask the feds and the province.

Oh yes, and ask for any documents demonstrating whichever scenario is correct. Danny Williams told us all the provincial premier's supported his 2005 deal. We still haven't seen any proof of that.

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Two degrees of separation

Fox News brunette Coulter-wannabe, Rachel Marsden.

Check out the links on the left of her bio page.

Yep. Fight the Seal Hunt.

Look up though and find a link to Canada Free Press. CFP is an eclectic collection of commentary from across a wide spectrum.

One of CFP's regular contributors is this guy, from Newfoundland and Labrador. One of his recent columns was this piece on the failure of the seal hunt protestors' restaurant boycott.

There's absolutely no connection between the two of these people except that by some coincidence that has nothing to do with anything but fluke, some Fox News entertainer with anti-seal hunt inclinations winds up promoting to her American audience a Canadian site with at least one writer who has some pretty strong views in another direction.

There is the Internet in a nutshell.

Brown and browned off

Give credit for the title to CBC television's supperhour news and the banter between the anchors after a segment on Premier Danny Williams' comments on Wednesday about the ongoing racket with Ottawa about Equalization and offsets.

Williams was back in the province today after spending a couple of weeks someplace sunny.

Brown he is, thanks to a tan.

Browned off?

Well, that's a local expression for being annoyed or upset.

In a scrum with reporters on Wednesday, Williams called for finance minister Jim Flaherty to resign. Williams also tore strips off federal fish minister Loyola Hearn - the regional minister for Newfoundland and Labrador - as well as Conservative members of parliament Fabian Manning and Norm Doyle.

One of the consistent problems for anyone trying to figure out the whole issue is what the federal government has actually done. Skim through the initial budget documents and one would have a hard time finding any reference to a cap being applied to both the 1985 Atlantic Accord and to the 2005 offset agreement. What you will find is the following reference to Equalization:

A fiscal capacity cap to ensure that Equalization payments do not unfairly bring a receiving province’s overall fiscal capacity to a level higher than that of any non-receiving province.

Many people in Newfoundland and Labrador - your humble e-scribbler included - took this to mean that the existing offset agreements, both of which are tied to Equalization and are limited in duration, would still operate until such time as Newfoundland and Labrador exceeded the national per capita fiscal capacity as determined by whatever Equalization formula is in effect.

It appears that Memorial University economist Wade Locke worked on the same assumption for his initial analysis, even after extensive discussions with federal officials. Danny Williams certainly appears to have taken that meaning from the federal budget. He told a CBC radio audience on March 26 that the province would likely opt for the O'Brien formula by 2009. That would be consistent with Locke's assessment, made public two weeks after Williams made those comments

It seems as well that federal fisheries minister Loyola Hearn had a similar impression. He assured Newfoundlanders and Labradorians that once they saw the details, their initial fears would be allayed. That was what he said on March 22. As recently as last Friday, he said much the same thing. Hearn is a smart old politician and he is just too smart to fall into the sort of trap that his predecessor John Efford built for himself and then jumped into.

That perspective on the offset agreements changed on Monday with Jim Flaherty's admission that in fact the federal government would be unilaterally applying caps to the agreements. Of course, in the process, Flaherty had to savage a few facts, but that seems to be a common feature of public life these days.

Taken altogether, it's easy to understand Danny Williams' latest anger. He's right, by the way: Flaherty jerked everybody around. The federal finance leprechaun has been too cute by half. Williams hasn't pointed it out - and he likely won't, but the changes to the 1985 Atlantic Accord have far more serious implications than anything else.

That deal is not just a simple piece of legislation to be changed at a whim. It represents the basis on which Newfoundland and Labrador derives all its oil and gas benefits. The federal legislation enables a landmark agreement in federal-provincial relations and the offset benefits - temporary and declining are a part of the package of financial benefits it contains. The Equalization offsets were intended to provide additional cash to Newfoundland and Labrador on a temporary basis to allow for economic infrastructure development that, frankly, hasn't really been possible until recently.

Williams winds up with a few of problems as he looks at the current federal-provincial mess.

Biggest among them is that he simply has absolutely no means of communicating seriously with the federal government. His last potential allies - the three Conservative MPs - are all dirt under his feet. Williams started the whole mess with Harper at least last October in Gander, and as much as he insists he did the right thing, kicking the Prime Minister in the crotch - publicly - isn't designed to win any friends.

And friends are needed in politics. Even if people aren't friends, you at least need them to not be enemies. Politics is about the art of the deal, about maximizing gains inside a realistic set of options. It's not about Mr. Right, to steal a phrase. Sometimes it's about Mr. Right for Now. Perfect isn't ever possible, but there are plenty of really good possibilities short of perfection. you can cut those deals - good, beneficial deals - on a range of issues if your head is screwed on properly.

But if all you do is set fire to their underwear, the odds of winning people over is slim. When you take to their Stanfield's with a flamethrower, well don't be surprised if they don't invite you over to dinner to meet the kids and the rest of the family. Be surprised if they don't look for a restraining order.

On another level, though, Williams' fundamental argument isn't designed to win converts from among the non-converts. We've said it before. For the federal government and for mainlanders generally, we need to explaining what is in it for them. The Premier hasn't been able to do that, at all.

The weakness of the whole Equalization argument about clawbacks - as fraudulent as it is - takes away the one selling point: we make money; you make money. Instead, them making money becomes a crime. They - the undifferentiated foreign exploiting demons - take what is ours and, according to Williams, by God he will get it back by force if necessary. Any wonder people have tuned out?

Of course, it really doesn't help when your finance minister rejects deficit and debt fighting all the while you are holding out a big debt as one of the big reasons you need federal hand-outs.

Danny Williams lamented recently that mainlanders don't seem to understand how prosperity here benefits there, wherever there is.

Well, the real test of his abilities as a Great Negotiator and a politician will be in how he tackles that challenge.

It's his job to explain the point. He can do it.

The question is will he.

Doing an endless repetition of one of his first interviews - three freakin' years later - just isn't cutting it so far.

Spend 'em if ya got 'em

At a time when the provincial government is screaming that it needs federal handouts to deal with a huge public debt, finance minister Tom Marshall defends fiscally irresponsible budgeting.

The Offal News take.

The North-South connexion

From Walrus magazine, a four-pager on growing economic ties between Canadian provinces and American states.

All three of these transnational political groupings represent a new chapter in North American governance, with both Canada and the blue states bringing powerful assets to the partnership. Canada’s vast energy reserves (including hydro, natural gas, oil from the Alberta tar sands, and, potentially, Newfoundland’s offshore reserves, as well as wind power across the Prairies) provide the kind of energy security that is essential to make transnational political regions semi-autonomous.

-30-

Conoco Canada boss looking at expanded presence

ConocoPhillip's new chief executive officer in Canada is interested in developing the company's Canadian assets.

Of the Newfoundland and Labrador offshore, Kevin Meyers said:

"There are a multitude of options out there [to reduce greenhouse gas emissions]. A lot of them will require technologies to be developed, so we are looking for greenhouse gas policies that are cognizant of this." Newfoundland: The company wants to explore in the Laurentian Basin off Newfoundland, but won't move forward until the province sets fiscal terms for natural gas production, likely in conjunction of Premier Danny Williams' long-awaited energy policy, expected this spring. "Do we want to drill? Yes. It is difficult for us to come forward with any public plans about drilling exploration wells in the Laurentian Basin until we have an understanding of what the fiscal regime is going to be," Mr. Meyers said.

Meyers told the National Post that Canada is an attractive investment prospect since its stable political and fiscal climate offsets many of the challenges of developing oil and gas fields which, as Meyers describes it "can be marginal in nature. They are always in the cutting edge of cost and service or supply, but that stability of fiscal regime helps offset that.

Meyers warned though: "You do worry when government starts to take away that advantage it has."

Like in Newfoundland and Labrador, one wonders.

Meyers should understand the political climate on Canada's Eastern Front. His last post was running Conoco's operations in Russia under Vladimir Putin.

-30-

The future of rural Newfoundland

Craig Westcott's latest commentary for CBC radio [ram file] and Merv Wiseman's reaction. [ram file].

Westcott was his usual bold self. He called for government to stop paying lip service to problems, to stop "conning people" into believing that some bureaucratic plan built on a theatre festival will save things.

He notes that the salvation of rural Newfoundland would be creating a pool of skilled workers. Out of those educated young people will come the source of new ideas or people who can change and adapt more readily than their forebears.

Wiseman is an excellent proponent of the reactionary approach, rooted in the old rural development movement that infiltrated the economic development boards and turned them, in too many cases, from producers of results based on local opportunities to producers of government grant applications for further studies into the magical properties of another blueberry festival or golf course.

Wiseman essentially spouts buzzwords like innovation as if throwing up a few whalebones and calling it a museum actually gets at the core of the issue. He misses entirely the educational and demographic challenges that are already here in many parts of the province.

A clue to his headspace? Wiseman refers to the consequences of Newfoundland dieing, not rural Newfoundland but Newfoundland, as if what was in the mythical idyllic past is all that ever was and ever can be.

His major thrust was that Westcott was being too negative. That's it. Too negative. As if smiling and denying would suffice for anything except convincing people that you were in need of therapy.

There was nothing in Wiseman's comments to deal with the substance of the issue, namely the changes that will come - some inevitably - in the mythical entity Wiseman and Westcott call rural Newfoundland.

At least Westcott did that with his comments on education. Rather than seeking to hang on to as much of what was and is, Westcott talked about the simple foundation for adaptability. He pointed correctly to the value of education in building successful economies - and societies - in a host of places from Iceland to Asia.

Education was a key idea component in development ideas 15 years ago. More scholar for the dollar, as then education minister Phil Warren called it. Education reform in the early 1990s was about giving our young people the tools they need to build their own lives and with that their province and the future.

By the late 1990s though, and continuing today, education decisions were often about keeping schools in communities with fewer an fewer children as a symbol of the community's future. Keeping more and more teachers teaching fewer and fewer children with resource spread around such that the overall quality of education stayed about the same.

More dollar. Less scholar.

And Merv Wiseman? Well, he never really had any concrete, positive actions to show what is going on.

If they are out there and Wiseman had talked about them, he'd have been far more convincing than accusing Westcott of patronizing people.

Patronizing them is what the old rural development crowd do all the time with their talk. And if that's all they have, then Newfoundland and Labrador generally, not just the rural bits, is doomed.

Facts do matter

Except to this man, apparently.

From federal finance minister Jim Flaherty's latest Equalization news release:

To do so [not to alter two federal-provincial agreements unilaterally] would give Newfoundland and Labrador access to Equalization payments above all the other Equalization provinces even though its fiscal capacity is higher than Ontario's and British Columbia's, which receive no Equalization payments.

If Newfoundland and Labrador's own-source fiscal capacity exceeds the national standard for Equalization, then the province doesn't qualify for either Equalization or for Equalization offsets contained in the 2005 agreement between Prime Minister Paul Martin and Premier Danny Williams:

5. If in any fiscal year in the period 2006-07 to 2011-12 the province does not qualify for receipt of an Equalization payment, no additional offset payment in respect of clause 4 will be made for that fiscal year beyond the payment specified in the existing Atlantic Accord.

The federal Equalization formula currently used and the O'Brien formula contained in Flaherty's 2007 budget set the standard used to determine if a province qualifies for Equalization.

That standard in both cases is below the fiscal capacity of Ontario (the lowest non-recipient province) by several hundred dollars per person.

Yes, facts do matter, Jim.

They just don't matter to the current federal administration.

Obviously.

That was then. This is now.

Then, federal foreign affairs minister Peter MacKay said:

"It is important to note that if Nova Scotia opts for the new system, it doesn't have to give up its Accord–in fact, the Accord will be fully respected and continue to provide benefits to Nova Scotia," said Minister MacKay. The Accord provided Nova Scotia with $830 million immediately upon signing.

Then - a mere few days ago - federal fish minister Loyola Hearn told reporters much the same thing:

Hearn insists the Atlantic Accord, which the province and Nova Scotia negotiated with the former Liberal government in 2005, is safe.

"Are we going to get screwed? The answer is no, we're not," Hearn told reporters Friday.

"Are we going to be disadvantaged … by a billion dollars or by a dollar? The answer to that is no, because the government of Canada committed that we would not be disadvantaged."

Then, Prime Minister Stephen Harper told the House of Commons:

"The Premier of Newfoundland and Labrador asked repeatedly that this government reject the recommendation of the O'Brien commission that would have put a cap on the equalization benefits of the Atlantic accord," Harper said to the House.

"The Atlantic Accord is preserved in this budget and is preserved due to the good work of the minister of fisheries and oceans and of course other members of our Newfoundland and Labrador caucus. Promise made and promise kept."

Now, finance minister Jim Flaherty admits that his budget caps Equalization offset payments in both the 1985 Atlantic Accord and a supplementary deal in 2005:

The province will also have the right to opt permanently into the new, improved, Canada-wide Equalization system. This choice provides the province with flexibility for the future and improves Newfoundland and Labrador's chance of qualifying for an extension beyond the existing system. If the province chooses the new Equalization system, it is only fair that the whole package would apply, including the fiscal capacity cap, to ensure fairness. In this case, it would not be just to other provinces if only Newfoundland and Labrador is allowed to double-dip or cherry-pick only those parts of the new Equalization program that will benefit the province.

To do so would give Newfoundland and Labrador access to Equalization payments above all the other Equalization provinces even though its fiscal capacity is higher than Ontario's and British Columbia's, which receive no Equalization payments. [Emphasis added]

To apply the cap, the Government of Canada is unilaterally amending both the 1985 Atlantic Accord signed by Prime Minister Brian Mulroney and Premier Brian Peckford and the 2005 deal between Prime Minister Paul Martin and Premier Danny Williams.

Forget a broken election promise.

Harper and his cabinet can't even stick to the same commitment over the course of four weeks.

To see the full impact of this latest revelation, compare Wade Locke's original analysis and the one based on capping what they said wasn't capped.

If the provincial government had waited until the evidence was amassed, the impact of this Conservative perfidy would hav been plain for all to see.

-30-

Connies write off three NL ridings

A news release like this one virtually guarantees the seven seats in Newfoundland and Labrador will represented by someone other than a Conservative after the next federal election.

It confirms that federal government will be altering the 1985 and 2005 offshore agreements if and when the Newfoundland and Labrador government adopts the new Equalization program, something they never mentioned until caught at it last week.

How many times have the federal Conservatives said there were or would be no caps on the Atlantic Accord?

Surprise.

It isn't a cap.

It's a hood.

Around Bond Papers, we've been callin' 'em Connies for a couple of years.

Seems they are Connies.

Trying to con people into giving them votes.

Danny Williams must be especially rotted, seeing as he threw his lot in with these guys, even though it was painfully obvious at the time what the result would be.

Danny Williams even attributed things to Harper that Harper never even said, all in an effort to get Harper a few seats.

Wow.

That's gotta hurt.

-30-

Update: Among the others like Danny Williams smarting at the latest Harper political shaft must be the local talk show maven who sometimes calls herself Hydroqueen.

She spent a lot of time shilling for Steve Harper and his local candidates during the last federal election.

She even invented bizarre political theories to bolster her argument. Hydroqueen was wrong in the theory and, as it turns out, in the practice as well.

Maybe we need to start a special Homer Simpson gallery of people who backed Harper in 2005, lambasted any Liberal in sight on a purely partisan basis, and who today are feeling just a wee bit used.

Update Update: Yet another person who fell for the Connie job. Well, "fell" doesn't accurately describe someone who actually reworked reality in an effort to back his cause, but let's be generous.

NL town suffers second major landslide

The first was last fall.

The second was this past weekend and it continues on Monday.

Odd that only last month, the provincial government stopped paying assistance to people thrown out of their homes by the last emergency. The province also refused any financial assistance to people who could not return to their homes because of safety concerns.

Lucky for them, their houses have now fallen into the ocean.

Jack Byrne, the provincial municipal affairs minister, is now talking about getting the feds to compensate the homeowners.

Goodale calls Harper move "betrayal" of NL and NS

From Canadian Press.

"The worst betrayal of all was the barefaced failure to tell the truth on the issue of equalization and the Atlantic accord," he told Liberal MP Geoff Regan's nomination meeting.

Vote early. Vote often

Angus Reid's on-line survey.

Sign up.

Get to vote on questions like "Is Andy Wells doing a good job as mayor?".

Watch the results currently answering that question in the negative, 55% to 45%.

Mario Dumont: a constitutional fantasyland

From ctv.ca:

Quebec's new Opposition leader says he's ready to begin major talks that would facilitate the signing of the 1982 Canadian Constitution.

Is Quebec now in some sort of constitutional limbo?

M. Dumont peddles the same old fantasies that others have tried before. It would seem his version of something he calls autonomism is just the same old stuff we have heard before the Parti Quebecois and others.

Perhaps we should call it automatonism since that is what the federal government would likely be reduced to, a mindless follower of the dictates of one or all the provincial premiers.

And purely for local automatonists, a flashback to Morningside and a 38 minute discussion during the last effort to foist on the country the mythology of Quebec being outside the constitution.

The change Locke found

In Wade Locke's original analysis, he used the assumption that Equalization offsets provided for in the 2005 offshore revenue agreement and enabled by the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act, S.C. 2005, c. 30, c. 85, would continue as originally intended.

Under that Act as it currently stands, the additional offset is calculated based on the difference between what the provincial government received in Equalization under the formula in use at the time.

The Equalization changes contained in the 2007 budget gave the Government of Newfoundland and Labrador an option of which Equalization formula would apply.

However, s.84 of the budget implementation Act (C-52) makes a significant change to the 2005 implementation Act by imposing a definition of the Equalization system in use at the time to mean the O'Brien formula.

84. The definition “fiscal equalization payment” in section 18 of the Act is replaced by
the following:

“fiscal equalization payment” means (a) for the purposes of section 22, the fiscal equalization payment that would be received by the Province for a fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act; and,

(b) for the purposes of sections 24 to 26, the fiscal equalization payment that would be received by the Province for a fiscal year under Part I of the Federal-Provincial Fiscal Arrangements Act if the Province’s total per capita fiscal capacity were the amount determined by the formula

A + B + (C / F)

where

A, B, C and F have the same meaning as in the definition "total per capita fiscal capacity" in subsection 3.5(1) of that Act.

As a result, even in a year in which the province used the existing Equalization system (100% of resource revenues included), the additional offsets would be reduced since the O'Brien formula already offsets half of resource revenues.

Additionally, the use of the O'Brien formula, which includes a cap on payments, the proposed changes in the budget implementation legislation would change the meaning of s. 22 of the 2005 implementation Act. Under the current meaning of that legislation, no additional offset payment would be received if the provincial government did not receive an Equalization payment.

In the operation of the Equalization system and the offsets agreements as currently in effect, no payment would be paid if the province did not qualify for Equalization. However, under the O'Brien formula, the province may qualify for Equalization, but receive no payment in years where a combination of all revenues (own source plus Equalization plus Equalization offsets) exceeds the per capita fiscal capacity of the lowest non-recipient province.

Given the amendments contained in Bill C-52, Newfoundland and Labrador would actually receive no offsets at all in any year where its Equalization payment were reduced to zero as a result of the O'Brien cap.

There is no obvious reason for making this change. If the federal government wanted to give effect to both the 2005 agreement and the 2007 budget - allowing for choices - Bill C-52 would necessitate only modest changes, if any, to the implementation acts for 1985 Atlantic Accord and the 2005 agreement.

National Poetry month

A few suggestions:

1. The Poems of Ewan McTeagle.

2. Wilfred Owen

3. Celia, Celia, by Adrian Mitchell:

When I am sad and weary
When I think all hope has gone
When I walk along High Holborn
I think of you with nothing on

4. Healy Willan, Canadian composer, organist and devoted limerick afficionado:

There once was a man from East Sheen
Whose musical ear was not keen.
He said, "It is odd,
But I cannot tell 'God
Save the Weasel' from 'Pop! Goes the Queen'"

Soldiering on

An unidentified soldier salutes the remains of two comrades as they are loaded on Canadian Forces aircraft bringing them back to Canada.

The soldier is from an unspecified community in Conception Bay, Newfoundland.

Evolution's bitch

Scientists have discovered similarities between Tyrannosaurus Rex DNA and that of a modern chicken.

From world-dominating predator to a lunch meat for kids all in a few million years.

T. Rex: Darwin's bitch.

Darwin's other bitches?

Guys who fancy themselves the next Mike Holmes just because they saw it on television.

Upping rates better than less for longer

A panel reviewing parental and maternity benefits is recommending that the claim period be extended.

How about just changing the amount paid instead?

Currently parental and maternity benefits under the Employment Insurance program are pegged at the same rate as EI, that is 55% of previous salary.

The panel also recommended changing the rates. Good for them.

That's a simple initiative most parents would readily accept, even if the benefit period remained limited to one year.

Premature gasket-blowing

From Tom Marshall, minister of finance:

The Honourable Tom Marshall, Minister of Finance and President of Treasury Board, today confirmed that the federal government has misled the Provincial Government and the people of Newfoundland and Labrador regarding the true implications of the new equalization program as outlined in its 2007 Budget.

However, as Simon Lono points out at Offal News, there is something odd about Marshall's release in that it provides no provincial government calculations. Indeed, the provincial government has thus far provided not a shred of information or analysis to back its original contentions on Equalization. Ditto for the federal government, represented in this case by federal fish minister Loyola Hearn.

As Offal puts it:

You would think the Hearn would release numbers of his own to defend the federal position. He does not. Instead he's reduced to a weak claim that no province will be harmed.

But does he actually have any real idea whether the province will be harmed? Apparently not.

As for Marshall, he's definitely on the warpath now. And you can expect the Premier to be leading the barbarians at the federal gate as soon as he gets home.

But didn't Marshall already know that Locke's numbers were off in the first place?

Apparently not.

Wade Locke's latest analysis is interesting for two reasons.

First, it suggests that there is an interpretation of eligibility for Equalization offsets which is different from the one used in his original presentation. More will follow on that in a separate post.

Specifically, Locke quotes this section of an e-mail from an unnamed senior federal finance official:

In effect, NL would be eligible to receive Equalization and offsets as long as long its own-source per capita fiscal capacity (including non-resource yields and 100% of resource revenues) is not equal to or greater than the own-source per capita fiscal capacity of the non-receiving province with the lowest per capita fiscal capacity. [Italics in original]

On the face of it, this section does not contradict what appears to be the intention of the 2005 offshore deal or the 2007 federal budget as announced.

What Locke has done here is identified a potential issue. It is far from proven conclusively. As well, the provincial government appears to have blown a gasket before conducting its own review. Tom Marshall stated in a number of interviews that his officials were still seeking clarification on the issue, he had endeavoured to have the issue clarified with his federal counterpart and that provincial justice officials were reviewing the federal legislation. In one interview it appeared that Marshall was entirely unaware of this issue until Locke brought it to his attention sometime before Locke's news release today.

The one thing that can be concluded from this entire episode over the past 24 hours is that federal-provincial relations are at an all time low state. Marshall's inflammatory news release, done with the full approval of the Premier presumably, will not help resolve this matter successfully.

Claiming to be misled is one thing, if you have evidence and can prove it. Flaming the federal government - or anyone, for that matter - without substantive evidence is grossly unprofessional.

Dr. Locke has provided an invaluable public service with his analysis. Would that the politicians acted with the same professionalism he has displayed.