NS offshore association weighs into Equalization debate

From the Nova Scotia Business Journal:

While lucrative, the offshore industry still needs the support of the provincial government to advertise the region and to implement the programs and processes that make the industry function. Unless the terms of the 2007 Budget are changed to offset the fiscal loss for the value of its offshore resources, the province’s financial incentive to invest in the industry is compromised, thus threatening the entire industry.

The visit to Halifax from Federal Finance Minister Jim Flaherty last week shows that there is a dialogue taking place between the federal and provincial governments. This should be all that is needed to resolve the matter, as Mr. Flaherty’s own party, energetically led by then Opposition Leader Stephen Harper, had supported the terms of the 2005 New Offshore Agreement. Until the introduction of the 2007 Federal Budget, not a word of the Agreement’s legislation had been changed.

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Rutter lands hobble

Rutter Inc. (TSX: RUT) will be supplying 23 shelters to Persona, Rogers and MTS Allstream as part of the provincial government's controversial fibre-optic deal.

The shelters cost a total of CDN$1.7 million.

For Rutter, this would count as a small piece of work, or in local parlance, a hobble.

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High flight, part deux

First it was Jean-Pierre Blackburn.

Now Transportation minister Lawrence Cannon has been ding-ed for six flights on a government-owned executive jet that cannon didn't list on his expense disclosure statements.

Cannon's press secretary said the trips weren't listed in the proactive disclosure since the travel wasn't paid by Cannon's budget and treasury board guidelines didn't require disclosure under those circumstances.

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Trawlers damage seabed

Total shocker.

cough.

cough.

"Divers have filmed this mud before," said Mr. Pauly, who in 1998 wrote a seminal research paper that coined the term "fishing down the food web" to describe how commercial fishing is depleting the world's oceans.

"What was not known before was that you could see these mud trails from space. I was flabbergasted by it."

Mr. Pauly said Mr. Van Houtan had found the pictures by looking at images shot from a QuickBird satellite, owned by DigitalGlobe.

"He wanted to know what we were seeing in these pictures," said Mr. Pauly.

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Homer Taylor

Two days.

Two news releases from innovation minister Trevor Taylor accusing the opposition of misinforming the people of Newfoundland and Labrador about the $20 million fibreoptic deal Taylor announced last fall on behalf of the provincial government.

Check the first one and the second one both accusing the opposition of selectively releasing information.

What's wrong with this picture?

Disclosure of information on a government project in his department rests entirely with Taylor. If information is being released in bits and pieces, Taylor has the ability to fix that situation pretty quickly. It's just plain silly for a cabinet minister to be on the defensive like this.

And that's really where the problem with this whole mess rests: with Taylor and his boss.

The provincial government has made an absolute mess of the comms on this deal from the outset. Rather than provide simple, straightforward explanations of the deal, Taylor, former finance minister Loyola Sullivan and later the Premier have tried a bunch of different stories about the deal and its details.

At one point, the province was purchasing an equity stake in the consortium. Then it bought a few strands of fibre instead. The various people who've spoken on this deal - either from government or the consortium - can't even agree on the total cost of the project and the level of public money involved.

Now usually with a story like this - where there are allegations of favouring political and personal buddies - a government that trumpets its high standards of accountability would push information forward.

Putting tons of factual information in public kills off speculation and makes it virtually impossible for anyone to make an accusation that will stick.

In fact, over the past couple of days, Taylor has returned to this accountability theme.

Unfortunately for Taylor, everyone knows that, in addition to its fumbled explanations at the front end of the story, the provincial government has delayed and delayed and delayed releasing information about the project. The Premier even stonewalled the Auditor General's investigation which he supposedly supported. Danny Williams insisted up and down that The Law prevented disclosure of cabinet documents to the AG and by jingo, there was no way this Premier would break the law.

Then - under continuous pressure - Williams suddenly caved in, admitting all along that cabinet had the prerogative to decide if cabinet documents could be released. So Williams would give the Auditor the documents he wanted to see. And The Law? Well, it turns out that while the law isn't an ass, Williams previous explanations were at least a donkey.

At one point, Taylor even criticized reporters for covering the story. He even accused the opposition of focusing on the relationship between the Premier and two of the major players in the deal. Well, that's pretty obvious, so obvious in fact, that, as Taylor admitted cabinet rejected the deal twice because the optics were bad.

The documents Taylor is referring to were a series of e-mails released in the House of Assembly by the premier. The Opposition spent some time going through them and found a few examples of public servants questioning the deal. They did so in the course of exercising their professional responsibilities and, to be frank, that's all the opposition has noted: public officials had problems with the deal.

It raises the spectre of the infamous Sprung greenhouse. Some $22 million of public money spent by a previous administration - and here's the key part - over the objection of provincial public servants. The opposition hasn't made that connection but they are almost certainly headed there.

That's what the story looks like today.

And it looks that way because Trevor Taylor and his boss have failed not once, not twice, not thrice, but on every single occasion to do what anyone with half a clue knows they should do: release the information without delay.

Taylor needs to tell the story himself, from start to finish with documentation. Make an overhead slide show. Do that and the story goes away in a heartbeat.

It's not too late to do that.

That is, unless there is some substance to the various criticisms that have cropped up about this deal.

That is, unless the provincial government had good reason to reject this deal, not once but twice, as Taylor himself has acknowledged.

If either of those is true, then the unnamed communications officer's e-mail released this week gave a clue to what government has been trying to do all along, namely spin the story.

Ask any competent public relations professional about spin.

They'll tell you that's what comes out of the back end of a burro.

And so far?

That's what the provincial government's explanations of this Sprung-sized investment have been worth.

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The editorial reaction continues

From the Ottawa Citizen, as reprinted in Regina.

But as with other professional polemicists, Mr. Williams is occasionally the victim of his own hyperbole. Canadians are witnessing one such episode today.

...

If there is merit in Newfoundland's position, then the premier should communicate it properly. Indeed, many people agree with him that revenues from non-renewable resources should not be in the formula. But the politics of insult won't help him or his fellow Newfoundlanders very much.

Outrage plays well with the voters back home, but in Ottawa's Langevin Block, the home of the prime minister's office, it only registers as a rude noise.

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More on the bulls***

As an astute reader and likely future Queen's Counsel pointed out via e-mail, both the 1985 and 2005 offshore agreements contain clauses that say a pretty simple thing.

If any province gets a better deal on resources or payments covered by the agreements, the Newfoundland and Labrador gets it too.

If Ottawa cuts a new deal with Nova Scotia related to its offshore Accords, then odds are pretty good the same deals would apply here.

It's an interesting idea and if it is correct just gives even more evidence as to why the current racket is purely for the cameras. Steve and Danny appearing to fight while each actually helps out the other.

Not a conspiracy but just hysterically funny if either side was trying to do damage to the other and instead wound up being his best friend.

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coughbullshitcough

This story on Equalization contains two ludicrous premises for the price of one.

Newfoundland Premier Danny Williams says negotiations to give Nova Scotia more time to decide whether it should opt into a new equalization formula may be an attempt by Ottawa to pit the two provinces against each other.

First, it assumes that there is some value for the federal Conservatives in "splitting" Nova Scotia and Newfoundland and Labrador over the Equalization ruckus.

They aren't really together to be split, for one thing.

But really, the comment assumes that Newfoundland and Labrador is so important to the current federal administration that they would actually invest time and energy in developing a "split" strategy. (Danny Williams isn't really that important either. No provincial Premier ever is. But I digress)

They don't need a strategy.

The provinces were already following different tracks on this issue...

Which leads us to the second premise, namely that there is something going on here other than a bit of political theatre for the benefit of the people in Newfoundland and Labrador.

Under the status quo, Newfoundland and Labrador will become a "have" province - i.e. make too much money to qualify for Equalization without any caps - somewhere around 2009.

Nova Scotia?

When's Toronto gonna win the Cup again?

So basically, extending the period of choice for Newfoundland and Labrador wouldn't matter a row of beans.

The provincial government knew generally speaking what was going to happen on Equalization about a year ago when it was first reported publicly.

The Premier knew the 100% option was definitely off the table likely before he laced into Steve Harper last October.

He almost certainly knew what was going on (give or take a few details) last December when Loyola Sullivan came back from a finance minister's meeting and had to attend a news scrum with the Premier standing by his side.

What played out from March onwards has been pure political theatre designed to get people in Newfoundland and Labrador agitated about something 99% of Canadians don't understand.

In the end, the Premier will just do what he planned to do once the feds announced exactly what they were going to do in march: flip from one plan to the other to maximize the cash flows.

There's no way the Prem can lose cash. Under every likely scenario, the provincial government continues to make more. It was only just a matter of how much more. look at the 2005 deal. he settled for way less than he started out looking for. In the end - as he admitted himself - it came down to what the cash advance amount was going to be.

He's a smart guy. That's why he places the angles on the cash and plays the public like a violin.

Why else has he all but given up on the 100% option? He knows it's impossible to get.

Why isn't he looking to get the caps removed from the Accords? That's the part that maximizes the cash to the province. Likely because his administration already consented to amending the 1985 deal and therefore doesn't have a leg to stand on.

There really isn't any other explanation for his using the weak "Steve lied" argument instead of taking down the feds with an iron-clad example of perfidy.

In the end, there'll be some extra cash in the provincial treasury and no one will recall the current racket six months after the last polls close.

Playing to the galleries always works in the theatre of Newfoundland politics. That's why so many politicians do it. Danny Williams just does it better than just about any thespian we've elected to the office.

Sadly, though, treating politics like a sordid little melodrama is why the financial ending is always the same.

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Update: The other part of the political theatre here would be any federal official who actually said this:

One source said Ottawa wants to reward Premier Rodney MacDonald for taking a softer line in the dispute.

The federal government knows the same thing the provincial governments know. What the federal government may well be doing is a bit of theatrics of its own to capitalize on popular discomfort with the 2005 offshore deals. The deals are particularly unpopular in some segments of vote-rich Ontario.

That sort of thing may be what SES Research's Nik Nanos meant by a "reverse Williams" in a comment on an earlier Bond Papers' post. In other words, the federal Conservatives may be counting on Danny Williams to polarize the electorate in key segments and earn them some political support for appearing to stand up to the guy who ripped down Canadian flags and now evokes Quebec sovereignist slogans to bolster his cause.

What some commentators seem to miss is that outside Quebec, sovereignist/nationalist posturing doesn't earn a great deal of support among Canadians. Pulling down flags - a tactic ripped from the Parti Quebecois playbook - doesn't actually engender warm feelings in Canadians. It didn't work in 2004/05 for Newfoundland and Labrador. It likely won't work in the future.

But here's the thing: for the current federal administration, playing the margins is how they think of politics. They don't need big numbers; they just need to pick up a few here and there to win. Danny Williams might just wind up being the best friend Steve Harper has.

Recycling news

The Williams administration announced a $200 million waste management strategy today that will be fully implemented by 2020.

The strategy will establish a waste diversion program, establish waste management regions, develop modern standards and technology, maximize economic and employment opportunities, and assist with a public education program.

Bravo.

On April 10, 2002, then-environment minister Kevin Aylward announced a waste management strategy for the province.

The Provincial Waste Management Strategy is premised on five primary actions: increase waste diversion, establish waste management regions, develop modern standards and technology, maximize the economic and employment opportunities associated with waste management, and public education. The ultimate goal is to have full province-wide modern waste management by 2010, with some components of the strategy to be implemented this year.

Nice to see the provincial government is practicing what it preaches by recycling old news.

Now stop and think about this for a second.

This is exactly the same strategy that was announced over five years ago. In those 60-odd months, the implementation of the plan went from nine years to 13 years.

Rather than implement the plan by 2010, the same plan will now be completely implemented a full decade later.

Stay tuned. Next week, the minister of agriculture will be announcing an innovative plan to grow cucumbers in a large plastic-covered warehouse in Mount Pearl.

To return to a serious note, though, one has to wonder why it took three years for this plan to be completely re-announced. If the former crowd had merely shagged around and done nothing with a perfectly good idea, there's no reason why the new guys taking office in 2003 just didn't get on with it.

They could have spent the last three years hammering the old crowd for their laziness and ineptitude.

Instead, we get this bumpf.

Compare the two releases and look at the amount of material that appears to be cut and pasted. Recycled communications staff from the former administration must be happy they can dig into their old files and breathe new life into stuff they got paid for years ago, only to get paid for it yet again.

It really makes you wonder if that cucumber joke might wind up being closer to reality than we'd dare to believe.

Has Tom Rideout been hunting for Greg Stamp?

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Boisclair pulls pin

From the Gazette.

Then there's the Big Oil thing...

From the Financial Post, another article by Calgary bureau chief Claudia Cattaneo based in part on her recent trip to the province:

Yet what is becoming increasingly obvious is that control of Newfoundland's future is slipping into the hands of Alberta, largely because of Mr. Williams' unrealistic expectations and the market's dispassionate behaviour.

Canada's two top oil-producing economies are developing such a strong symmetry they are becoming either/or situations in a skills-challenged reality, to the point it may take a big downturn in Alberta for Newfoundland to get a shot at benefiting from its offshore riches in the future.

[Paragraphing added for clarity] Three reasons: - Oil is badly needed, but labour and brains to produce it are now needed even more. Newfoundland's people and oil services companies are moving to Alberta in large numbers. The exodus is so large that Newfoundland's business community fears the province no longer has the workforce to build a new project, even if one were announced tomorrow. It also worries it cannot compete with Alberta wages, making any attempt to lure its people back futile.

Cattaneo offers an assessment of the proposed energy plan, based as much as anything else on feedback she got from the local business community and what she is hearing from the oil companies. An equity stake for the provincial government's Hydro corporation, a high level of local investment by oil companies and a super-royalty regime.

She's also comparing the local policy approach to the Alberta one and the contrast is striking:

In addition, the fiscal terms would make Newfoundland uncompetitive with Alberta, where the government has not owned a piece of the oil industry since it sold Alberta Energy Co. (the predecessor of EnCana Corp.) 20 years ago; its royalty rates, while under review, do not escalate with higher commodity prices; and there is no requirement to invest locally, other than a preference by the government to keep as much heavy oil upgrading in the province as possible.

[Paragraphing added for clarity] - Most companies with interests in Newfoundland's offshore now have ambitious oil sands plans. In fact, those plans have escalated since Hebron talks failed, making a return to the East Coast a hard task: ExxonMobil Corp. is a partner in the Kearl Lake project and has taken a larger role in the management of the Syncrude mining consortium; Petro-Canada is priming its Fort Hills project for takeoff in the summer; Chevron Corp. is a partner in the Athabasca Oil Sands Project, which is expanding aggressively; ConocoPhillips has its hands full with a major oilsands partnership with EnCana and interests in two other oilsands projects; Husky Energy Inc. just bought a major refinery in the United States as part of its own oilsands strategy. Even Norsk Hydro, the Norwegian oil company that has been taken over by Statoil ASA, made a big leap in the oilsands two weeks ago when it purchased North American Oil Sands Corp. and now plans to become one of its largest operators.

The energy plan may be released by June. Then again, if past patterns hold, the plan will be pushed off by one or another crisis in government or by another project that is ahead of it in the serial government pipeline.

If Cattaneo's assessment is correct - and local chatter suggests the oil companies have already squawked about the revised royalty regimes - then expect the plan to be pushed off until the fall election.

Then it will become the centrepiece of the Autonomy Campaign. With the controversy it will surely generate, the government Progressive Conservatives will contrast their approach with those they will undoubtedly accuse of caving in to Big Oil and possessing the weakest of weak knees.

The caricature of Hugo Chavez will be readily apparent to those who see it. The Premier will point to his relationship with Husky as evidence he isn't all that bad. maybe he's right, but then again, Husky won't be affected by the energy plan the way other companies - the ones with new projects - would be as they look to invest in offshore oil and gas. Newfoundland and Labrador needs capital to develop the offshore, but that isn't as important as the need for political capital that comes from creating foreign demons that must be fought for the good of the local collective.

All great political theatre.

It just won't matter for the development of a local oil industry.

The energy plan would have then become a tool for politics, not a tool for long-term economic development, just as with virtually every previous administration and every other major economic prospect.

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Another view of The Crusade

From Richard Gwyn in the Toronto Star:

Newfoundland and Labrador Premier Danny Williams has a point in his brawl with Prime Minister Stephen Harper. It's not, though, the one that Williams is making by demanding extra equalization payments for Newfoundland.

Williams is insisting that Harper enact to the last "i" and "t" a promise on equalization payments to Newfoundland he made during the last election.

In fact, Newfoundland is doing fine out of the equalization program as it now stands.

And election promises aren't carved on tablets of stone. Harper, thus, was quite right to break his promise not to tax income trusts.

Instead, the point that Williams is making that touches a nerve has to do with Harper himself.

This point got blurred in Williams' roundhouse attack.

He called Harper "untrustworthy," "shameful," "dishonest," and "opportunistic" – all of which had about them the air of attention-gathering substitutes for his last performance when he pulled down the Maple Leaf flag.

That gimmick worked: Then-prime minister Paul Martin promptly gave Williams everything he wanted.

The point remains: What Williams is saying – when he's not shouting – is that Harper doesn't understand his own country.

And about that he's right.

Quite clearly, Canadians already sense this, and the effect of Williams' diatribe will merely sharpen their perception.

Like all columnists, Gwyn gets a certain by if he reinvents some details to make his point. The flag thing for example. Gwyn's perception is his perception but there is no sign the flag flap did anything but undermine Newfoundland and Labrador's position.

Compare what the Premier went looking for and what he settled for and you'll see the point.

Nonetheless, Gwyn offers food for thought.

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The King of Specious Reasoning

Specious.

Specious Reasoning.

Truth is Clyde Wells would never have made such a dubious appointment in the first place.

He understood fully the need for unquestioned impartiality in the position of Chief Electoral Officer.

Then again, his supporters never wandered around poking people in the chest reminding everyone they now lived in Clyde-stan.

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Federal Connie numbers dip

SES says so and they oughta know.

And guess what?

Danny Williams had no impact on federal Conservative support, regardless of what some mainland pundits say.

It's obvious but it needed to be said.

Afghanistan. Much bigger impact.

But hey, what say we put the question to Nik Nanos, the pollster himself?

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Rio Tinto ripe for takeover

Mining giant Rio Tinto may be ripe for a takeover bid according to an analyst for Citigroup.

The de-rating of Rio Tinto for example, has opened up a value arbitrage and is now "well into leveraged buyout territory," according to Citigroup analyst Heath Jansen.

"Rio stands out as a potential acquisition candidate, either by private equity or the incumbent mining companies," he said in a note to clients.

Rio Tinto stock traded down in Australia despite the speculation.

Unidentified analysts have also speculated that ExxonMobil and Royal Dutch Shell may be possible buyers of the Australian mine operator.

Rio Tinto's North American operations includes Iron Ore Company of Canada in Labrador.

ExxonMobil is the largest operator in the Newfoundland and Labrador offshore oil industry.

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Where are they now?

Alex Archila, former head of Chevron Canada has been running Madagascar Oil since July 2006.

Hebron failure fallout?

Probably not. They likely just wanted to "move it, move it."

Madagascar's oil and gas reserves may be larger than those offshore Newfoundland and Labrador.

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Chevron looking to Singapore for possible expansion

Chevron, one of the largest integrated energy companies in the world, may be looking at plans to further expand its business in Singapore.

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India looks to attract "Big Oil"

While some parts of the world are making it harder for oil companies to explore and develop, India is changing its regulatory policy to attract Big Oil and its capital for investment.

"An open acreage policy will be much more attractive to us as we can choose the time of entering India’s exploration sector, and also choose the blocks we want to explore," a senior Shell official said.

Shell, like British Petroleum, Chevron, Exxon, Petrobras and Total, did not bid for exploration blocks in earlier NELP rounds.

The timing, to offer the auction of exploration blocks in India in June or July, does not suit most oil companies as they have already put in their capital expenditure on exploration into other areas across the world, the Shell official said.

"By July, we have already put in our annual planned expenditure for exploration in projects. That is one of the reasons why we are not able to bid in the auction in India," said an official of British Gas, which won one exploration block in NELP VI, in partnership with ONGC.

Government officials say the launch of the OALP is slated to take place soon. "We are working towards offering the open acreage policy together with NELP VII. However, that would involve lot of work as data for areas across the country have to be collected," an official at the Directorate General of Hydrocarbons said.

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CF in Afghanistan to get new mine protected vehicles

The Canadian Forces will be taking delivery of 10 Buffalo and Coyote mine protected vehicles.

The Buffalo is an engineering vehicle equipped with a remotely controlled arm for inspecting and detonating improvised explosives of the type that killed eight Canadian soldiers in separate incidents over the past two months.

What makes news?

Some people's travel, according to vocm.com.

One thing: the Council of the federation met for one day on Monday, not the whole week as vocm.com's story states.

So what was DW doing with the rest of his week in Toronto?

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