Harper's impact on Connie support

To get a sense of how deep the federal Conservative slide has been in the past three months take a look at the chart.

It tracks Progressive Conservative or Conservative party support in Newfoundland and Labrador at each federal general election since Confederation (1949). The last number is the latest CRA poll.

Local Conservatives can thank Stephen Harper for bringing them to the lowest point in their party's history and for doing so with what appears to be the sharpest decline in support for any federal party in Newfoundland and Labrador history.

That takes real political skill.

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A lamentable trend

God bless his heart, but on Friday Bill Rowe - unabashed cheerleader for a series of provincial governments of a certain approach - questioned the idea that the legislation to implement Chief Justice Derek Green's excellent report on legislators' indemnities should proceed through the House of Assembly without delay.

He wondered why this legislation should not be debated and discussed for some considerable period. Rowe recalled the good old days when legislation was tabled early in the session, thereby giving the public and members of the opposition time to review the implications of proposed legislation.

Rowe is generally right of course, but not about this particular bill. Green's report came with its own enabling legislation attached as an appendix. The report itself is as thorough and detailed as any report presented to government has been. The issue has been widely discussed and the various pernicious practices in the legislature over the past decade have been well exposed. The remedy is pretty clear too: Green's legislation would stop legislators from doing the things that most of us would generally consider inappropriate.

The whole thing is cut and dried.

On the other hand, Rowe does not appear to have any trouble with other pieces of legislation sailing through the House with only cursory debate even though they carry serious implications for the province.

• Take for example, changes to the Hydro Corporation Act that, as a consequence of of its provisions hooked electricity rates to activities by the Crown-owned utility not related to electricity generation or distribution. Given first reading (but not distributed) on March 22, 2006. Distributed on May 18, pushed through second reading the same day and given third reading and approved on May 23.
  

• Or a series of changes to the provincial court judges pension act and related legislation. Run through all three stages in a single day last spring.
  

• Or a bill to establish regional health authorities that flew through the House the day before the judges bill, and like the judges bill having been read a first time only a week beforehand.
  

• Or changes to the Fishery Products International Act that actually made it easier to break up the company and sell it off than the legislation originally provided. First reading 18 may, second reading 23 May, committee stage and third reading on May 26.
  

• Or the energy corporation act and the revised hydro corporation bill, introduced in the session. First reading (but not distributed) on May 29 and then pushed through the House on June 4 and 5, along with the Sustainable Development Act.

• Or the bill to repeal the FPI Act that was introduced at the start of the session but only distributed after the deal was announced publicly. That bill will also be pushed through in a few hours of debate in all likelihood.

The trend here is not a new one, nor does it reflect one political party or another or even one individual legislator or another.

It dates back the better part of a decade and reflects, as much as anything else, an attitude that the legislature is an inconvenience or that public disclosure and public debate are undesirable on most pieces of legislation.

There are a great many routine pieces of legislation that come to the legislature and many that can indeed be passes with a minimum of debate. The list above does not contain any of those, since even the changes to the judges pension plan change eligibility for pensions. Those carry financial implications for the public treasury if nothing else.

The FPI and Hydro bills each contain very significant provisions which were missed - in their entirety - by the opposition and were never commented on by the government. In the case of the Hydro bills, the government didn't comment on them until this year when another new piece of legislation was rammed through the House unopposed. Perhaps the basic flaws in the first bill would have been caught if Government wasn't intent on ramming ill-considered changes through and the Opposition was not anxious to go along for the ride. Perhaps the same flaw would not have been continued in the second bill if anyone was focused on the job of being a legislator.

This trend to limit debate - and limit public access to bills before debate even begins - coincides with the steady reduction in the number of sitting days in the legislature. Before 1996, members of the House of Assembly sat in the legislature for three months of the year. They put in long hours in various committees and in debating bills. Most worked very hard for their pay.

These two trends - fewer days and little or no debate - means that the public are being ill-served by what Brian Tobin used to refer to - somewhat ironically it seems - as "the people's House". Fundamentally, the same attitude appears to be taken taken to the fundamental business of the legislature that was taken to administrative business, as Chief Justice Green noted. Lip service is being paid to accountability and transparency, but the reality is that far too often over the past decade, significant measures have slipped through the House of Assembly as if they were covered in API 70 oil from Garden Hill.

It is far too easy to forget that the legislature exists to keep the government accountable to the residents of the province. It is fundamental in our system of democracy that any power sought by any government must be subjected to scrutiny by the elected representatives of the common citizens. That is the essence of responsible government.

There are greater implications to the House of Assembly scandal than how the members handled public cash for the House administration, as grave as that issue is.

The trends over the past decade go to the very heart of how our elected representatives view their role and responsibilities in our must fundamental of democratic institutions.

In this election year, perhaps Newfoundlanders and Labradorians should insist on a discussion of how our democracy runs. We should look to alter fundamentally the relationship between voters and those we entrust with the responsibility of looking after the affairs of our province.

Rather than listen to pledges that one side will be "Putting People First" or that another will be "Getting Our Fair Share", we should start from the most basic point: these men and women want to be tenants in our House of Assembly.

The crew that have been there over the past decade, generally speaking, haven't been living up to the terms of their historic lease. The place is run down and needs some serious attention.

As their landlords, let us see how they - individually and collectively - propose to run the place for the next four years. Let's see how they propose to restore the proper functioning of our democratic institutions.

If they merely offer the same approach as we have seen for the past 10 years, then perhaps we need to issue some eviction notices or, in other cases, not lease out the seat in the first place.

Either way, it is time for the landlords to assert their rights.

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Crown Liability Act?

So why exactly has the Government of Newfoundland and Labrador introduced a specific piece of legislation that will prevent any legal action against the Crown in relation to the break-up of Fishery Products International?

The Crown Liability Act, 2007 provides that

"2. (1) An action or proceeding does not lie or shall not be instituted or continued against the Crown or a minister, employee or agent of the Crown based on a cause of action arising from, resulting from or incidental to the disposition of the assets, business and other undertakings of FPI Limited or Fishery Products International Limited.

(2) A cause of action against the Crown or a minister, employee or agent of the Crown arising from, resulting from or incidental to the disposition of the assets, business and other undertakings of FPI Limited or Fishery Products International Limited is extinguished.

and...

3. A person is not entitled to compensation or damages from the Crown or a minister, employee or agent of the Crown arising from, resulting from or incidental to the disposition of the assets, business and other undertakings of FPI Limited or Fishery Products International Limited.

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The Pitcher Plants are in full bloom

labradore makes some observations on comments found at vocm.com.

Yes, it's spring (almost summer), in an election year, and suddenly the orchestrated political comments - known as astroturf, or Pitcher Plants in their local variety - come popping up everywhere.

Chief Justice Derek Green's report may change some of the things Danny Williams inherited from Brian Tobin, but it seems the Premier is still addicted to Tobin's greatest political legacy: the organized support calls to VOCM and the manipulation of its public forum "Question of the Day."

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Shooting one's own foot off

Telegram columnist Brian Jones does a fine job of shooting his own argument out of the water in a column today.

Offal News tears it apart nicely.

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Jim Flaherty: myth monger

Federal finance leprechaun Jim Flaherty is just as much a myth monger on the Altantic Accord (1985) and even the 2005 side deal as his predecessor, John Crosbie.

Flaherty writes in the Chronicle Herald:

Let me be clear, Canada’s New Government is honouring the Atlantic accords fully in its budget.

If this were true, Flaherty would not need to amend the 1985 Accord, in his budget bill, thereby violating section 60 of the 1985 agreement.

Since he is applying a capto the 1985 and 2005 agreements, he is also not honouring either the letter or spirit of either agreement.

For him to claim otherwise is to state something which is incorrect, and in truth, Flaherty ought to know that what he is stating is patently false.

Perhaps he has been listening too much to Crosbie.

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The disingenuous Mr. Crosbie

John Crosbie has waded into the current budget and Equalization row with the federal government.

He builds his claim on the contention that it was the intention of the Government of Canada in 1985 - when he was the Newfoundland and Labrador regional minister - to ensure that under the real Atlantic Accord the Government of Newfoundland and Labrador would receive 100% of oil and gas revenues as well as Equalization in full as if the oil revenues did not exist. He appears to be saying that it was the intention to have this situation continue in perpetuity.

Mr. Crosbie is either:

1. Extremely forgetful;

2. Deliberately misleading the people of Canada and in particular, the people of Newfoundland and Labrador; or,

3. Attempting to blame others for his own failures in 1985.

Either way, the 1985 Atlantic Accord makes no such provision as Mr. Crosbie claims.

Indeed in 1990, Mr. Crosbie himself specifically dismissed the issue - with characteristic sneering condescension - as being a case of the provincial government attempting to bite the hand that fed the province.

Mr. Crosbie's efforts at historic revisionism make Stalinist photo retouchers look like kindergarten finger painters.

Following is an extract from an unpublished follow-on paper to Which is to be master?

Additionally, specific sections of the Mulroney offer, and of the Atlantic Accord, deal with Equalization. It is important to note that these are not included in the section on revenue sharing in either document. Therefore, Equalization was not seen by either parties to the Atlantic Accord as representing a form of revenue to be shared among the parties. The Mulroney letter contains the sentence: “The Current [sic] Equalization provisions will apply.” This clearly established that the Atlantic Accord and any revenues related to offshore oil would be subject to the Equalization program; as such, the provincial government’s Equalization entitlement would normally be reduced by growth in offshore oil revenue.

The Mulroney offer contained a caveat that there should not be a dollar-for-dollar loss of Equalization payments as provincial own-source revenues increased from oil production. As such the Atlantic Accord contains a section to provide a payment to the Government of Newfoundland and Labrador in the form of an Equalization offset. It is clear from the structure of this section of the Accord and of the enabling legislation that the Government of Canada and the Government of Newfoundland and Labrador accepted this offset as a temporary, transitional and declining offset.

The offset mechanism established in the original Atlantic Accord did not provide the level of Equalization protection implied in Mulroney’s letter, although it matched in general outline the declining format he proposed in June 1984. The offset provisions of the Atlantic Accord, as signed in 1985, had the effect of shielding only three cents of every dollar in oil revenue from Equalization.

This was apparent by 1989-90 and was raised publicly by the Wells administration following the signing of the Hibernia agreement. In a speech in Clarenville, Premier Clyde Wells countered arguments that Hibernia was a massive make-work scheme by pointing to the direct and indirect benefits accruing to the Government of Canada. One of those benefits was reduced federal transfer payments to Newfoundland and Labrador. John Crosbie dismissed complaints about reduced transfer payments in this way:

"That’s the whole point to the [Equalization] formula… This is nothing to complain about; this is something to be joyous about. So why would they try to pretend that Newfoundland gains nothing from the royalties? I mean this is absolutely bloody nonsense…".*

The Wells administration had been briefed on this aspect of the Accord prior to the Hibernia signing and a further brief was sent to cabinet in December 1990 ; it is likely the shortcomings of the federal proposal were known in 1985.

In a 1991 assessment conducted for the Institute of Social and Economic Research at Memorial University, economist Wade Locke confirmed that the Accord offset actually shielded as little as 3% of provincial revenues from Equalization. Locke had earlier cautioned against public expectation that Hibernia development would cure the province’s unemployment or debt problems. In an article published in the Newfoundland Quarterly, Locke concluded that "[w]hile it may be true that the sun will shine one day, it does not appear that have not will be no more because of Hibernia." Similar cautionary flags had been raised by Doug House and others, as early as the environmental review of Hibernia in 1983.

Whatever the reasons for Mr. Crosbie's claims about federal (i.e. his intentions) in the 1985 Atlantic Accord, there is no question that what he claims today is simply not true.

His own words condemn him.

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* Philip Lee, “Newfoundland, Ottawa clash over Atlantic Accord royalty provisions”, The Sunday Express (St. John’s), 23 September 2004, p. 14 [continued from page 1 under head: “Almost ‘dollar-for-dollar’ loss will leave province no better off, Gibbons claims”.

Latest shocker: Connies poll numbers drop

Another poll from Corporate Research Associates shows the the federal Tories have dropped nine percent in voter support across the Atlantic region, standing at 30% regionally compared to 39% in CRA's last post.

The Connie satisfaction rating in Newfoundland and Labrador stands at 17%, compared with 47% in February.

Is this really a surprise to anyone?

Regional results have a margin of error of plus or minus 2.5%, 19 times out of 20. The provincial results have an MoE of plus or minus 4.9%.

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The case against Mr. Harper

"A little neglect may breed great mischief"

The Harper administration's move to alter fundamentally two bilateral agreements between the Government of Canada and two provinces is proof of Ben Franklin's age old aphorism on the great consequences bred of the seemingly smallest of actions.

Stephen Harper and his administration are neglecting the commitments not only contained in the agreements involved but the fundamental principles on which those agreements are based.

Two Travelors On the Road to Perdition

John Crosbie has waded into the affair, through private correspondence now provided to the news media, and his memoranda identify the core of the problem. Unfortunately, along the way he engages in an example of historical revisionism which would make Stalinists seem like rank amateurs at the game of altering the public record to state the opposite of what occurred. He also proposes an unduly complex series of possible actions that would, on some level, also strike the fundamental principles underpinning the agreements he helped negotiate.

For his part, Premier Danny Williams has met the Harper affront with entirely appropriate anger and indignation. Sadly, his mercurial temper has led him to run bare headed at the whole matter. In the process, the Premier has set himself on a course that cannot attain its destination.

He has set an impossible policy goal, namely removal of non-renewable resource revenues from the calculation under Equalization of a province's fiscal capacity. The results of such an approach would be to create fundamental inequities in a federal program that ought to be equitable in its treatment of all provinces. As difficult as some may find the O'Brien Equalization formula, cap or no cap, it is at least an honest compromise among contending proposals on Equalization. It's result would be fair.

Mr. Williams has set himself on a political goal - namely defeating Harper at the polls - which is, if not impossible, one which also sets an appalling - if not downright dangerous - precedent. For the first time in recent memory, an administration of one province has set itself on a policy of defeating the administration of another jurisdiction.

Were the Premier to carry his campaign beyond a few speeches, he is unlikely to achieve that political goal either, but at the same time he has set a precedent which would justify any administration in Canada, federal or provincial, overtly or covertly conspiring to defeat Mr. Williams or any of his successors. His anti-Harper campaign is potentially as dangerous for the future of the country as the grievance he seeks to redress; while his intentions may be excellent, Mr. Williams might well find in his actions proof of another truism about the road to perdition.

Casey has it right

Of all the politicians discussing Equalization and the various accords, the only one to get it right is Nova Scotia Tory Bill Casey.

He said a Canadian signature on a contract should mean something and if the government can walk away from its commitment, what does the future hold?

“It is our reputation as a country,” he said in the House. “It is important that people around the world know when the government of Canada signs a contract, it is bullet proof, one can depend on it. It is important. It is bullet proof, solid gold.”

No one has said it as cleanly as that. Mr. Crosbie and Mr. Williams are chasing irrelevant side-issues and each does so for his own individual reasons.

Both are missing the issue of greatest importance to the people of the province. That is as unconscionable as it is unfathomable.

Section 60 of the 1985 Atlantic Accord - the real Atlantic Accord - states simply that neither party can amend the enabling legislation unilaterally. Yet that is exactly what Stephen Harper is doing in one consequential amendment in his current budget bill.

If Mr. Harper can change one provision of the Accord and get away with it, what else can he change in that deal? Management? Revenues? He can change anything he wants.

Successive Liberal and Conservative federal government's have honoured the Accord both in letter and spirit since it was signed. (Mr. Crosbie ought to know that his claims are false on this point) Successive federal governments have improved on the original deal to cope with problems. That would include, incidentally, the 2005 subsidiary agreement that delivered - apparently - what Mr. Crosbie could not get himself or - if we look to 1990 - didn't want to give the ingrates in his own province.

In the end, Mr. Crosbie seems to embody his own cheap words about cake and regurgitation. Entirely appropriate, given how many Conservatives seem to be guilty of the same failings they usually have attributed to others.

But all that ignores the very dangerous course Mr. Harper is on, one made no less perilous by the focus of both Mr. Williams and Mr. Crosbie on the irrelevant.

Changing the 1985 Atlantic Accord - the real one - can take away the very basis on which the second one even exists. Changing the original agreement can take away the entire industry, not merely the extra revenue from federal transfers.

And it's not like that thought hasn't been tossed into the public discussion. Conservative Norm Doyle told a VOCM audience yesterday that times changes and so the Accord must change as well. He warned that nothing is permanent, or words to that effect. Under pressure, it would seem that something a little closer to the truth slipped out than anything Doyle has said previously on the offshore.

Fundamentally, the case against Mr. Harper is exactly as Bill Casey has described it.

It remains a mystery why Norm Doyle and Loyola Hearn, cabinet minister's in Newfoundland when the 1985 Accord was reached, would put the whole thing in jeopardy.

Likewise, it remains a mystery why both Danny Williams and John Crosbie have each gone off
on their own tangents, ignoring in the process a simple point with potentially profound consequences.

Bill Casey figured it out.

What's wrong with the rest of them?

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Local case influences SCC decision on Alberta case

The Supreme Court of Canada today overturned the conviction of an Alberta man in a case where the trial judge issued his written decision 11 months after issuing a verbal verdict.

By majority decision, the Supreme Court of Canada ruled:

Although not precluded from announcing a verdict with "reasons to follow", a trial judge in all cases should be mindful of the importance that justice not only be done but also that it appear to be done. Reasons rendered long after a verdict, particularly where it is apparent that they were crafted after the announcement of the verdict, may cause a reasonable person to apprehend that the trial judge engaged in result‑driven reasoning. The necessary link between the verdict and the reasons will not be broken, however, on every occasion where there is a delay in rendering reasons after the announcement of the verdict. Since trial judges benefit from a presumption of integrity, which in turn encompasses the notion of impartiality, the reasons are presumed to reflect the reasoning underlying the decision. Fairness and impartiality must not only be subjectively present but must also be objectively demonstrated to the informed and reasonable observer. While the presumption can be displaced, the onus is on the appellant to present cogent evidence showing that, in all the circumstances, a reasonable person would apprehend that the reasons constitute an after‑the‑fact justification of the verdict rather than an articulation of the reasoning that led to it. Here, the written reasons should not have been considered by the Court of Appeal. While the written reasons do not appear to have been crafted to answer points raised in the appeal, in the particular circumstances of this case, a reasonable person would apprehend that these reasons, delivered more than 11 months after the verdict was rendered, did not reflect the real basis for the convictions. Without this requisite link, the written reasons provide no opportunity for meaningful appellate review of the correctness of the decision. However, the delay in rendering reasons, in and of itself, does not give rise to this apprehension. In this case, it is the combination of several factors that constitutes cogent evidence sufficient to rebut the presumption of integrity and impartiality.

Interestingly, the courts cited the case of R v. Sheppard [2002] 1 S.C.R. 869, an SCC decision on a case from Newfoundland and Labrador in which the court decided on how much a judge must state orally or in writing in delivering a verdict.

The trial judge addressed none of the troublesome issues in the case but said only: "Having considered all the testimony in this case and reminding myself of the burden on the Crown and the credibility of witnesses, and how this is to be assessed, I find the defendant guilty as charged." A majority of the Court of Appeal characterized the trial reasons as "boiler plate". The conviction was set aside and a new trial ordered based on the absence of adequate reasons.

Held: The appeal should be dismissed. The trial judge erred in law in failing to provide reasons that were sufficiently intelligible to permit appellate review of the correctness of his decision.

Representing the Crown in that appeal was Harold Porter, then deputy director of public prosecutions and currently the Provincial Court Judge in Grand Bank. Porter's decisions from the bench in Grand Bank have sometime made news for their clear writing and humour.

Porter made the local papers in Ottawa at the time Sheppard was first heard by the SCC. In an exchange with then Madam Justice Louise Arbour, Porter offered the view that a judge must offer some indication of the reasons for a decision. The length of the indication would have to fall somewhere in length between what had been offered by the trial judge in Sheppard and Marcel Proust's A la recherche de temps perdu.

For other Porter cases and their sometimes colourful summary of the evidence and the law, consider:

R.v Kearley, which begins with the lines:

Lobsters, being creatures of the sea, do not routinely migrate ashore en masse to take up habitation in plastic boxes under fishing stages. Therefore, the thirty seven live lobsters and fourteen codfish that the fisheries officers found under Kearley’s shed on January 10, 2004, must have been put there by somebody. By laying the charges, the Crown has alleged that the fish were caught and hidden under the step of Kearley’s shed by the Accused. For the reasons which follow, I have concluded that the Crown has failed to prove the charges beyond a reasonable doubt.

or the other R. v Kearley or R. v. Kearley.

Then there's R. v. Mitchell, an impaired driving case. This one is worth reading for the inadvertent humour in a deplorable circumstance. Police testified that they encountered the accused at approximately 3:00 AM speeding. Porter summarises the events of the case, as presented in evidence.

There are passages like this:

The Accused says that he did not realize until he had parked his car that the police were behind him, and that he had wanted to go into the house to check on his teenaged daughter. He denies that he overshot his driveway, and says that he often parks in the same place as where he left his car that night. He also denies saying the things to the police that they say that he said, although he does admit to having said some "misdemeanour words", which include the phrases "fuck off and leave me alone" and "what the fuck is going on?" He also admits that he might have asked "who ratted me out ? ".

[Police testified they pursued the accused for upwards of three kilometres in the middle of the night as he sped along at 23 kilometres per hour above the posted speed limit.]

Who said being a judge couldn't be fun as well as socially useful?

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The Green Report

You can find Chief Justice Derek Green's report at the provincial government website.

Bond Papers will tackle the report in detail over the next couple of days.

In the meantime, and in light of Bond Papers' previous posts on soft money take a close look at Chapter 10 and recommendation 76.

And when that is done, consider Chapter Three in which Chief Justice Green describes in greater detail the consistent pattern of overspending by the House of Assembly previously revealed by Bond Papers.

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Will Ron recover his credibility?

Offal News' Simon Lono takes a look at a controversy swirling around newbie councillor Ron Ellsworth and his different stories about who sponsored a poll done recently on possible mayoral candidates.

Lono calls Ellsworth an amateur.

That's obvious.

How will any citizen of St. John's trust this overly ambitious fellow, again?

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Stelco sells stake in Wabush to Consolidated Thompson

From the Globe and Mail:

Stelco Inc., which slapped a "For Sale" on its door last week, is selling its stake in the Wabush iron ore mine joint venture for an estimated $163.4-million as part of its efforts to "surface value" for shareholders.

As its annual meeting was getting under way Wednesday morning, the Hamilton, Ont., steel maker, announced it has struck a deal to sell its 44.6 per cent stake in the venture to Consolidated Thompson Mines Ltd. (CLM) of Toronto.

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I am Big Oil

The small-minded will no doubt take the headline as an admission of the scurrilous crap they have been circulating about your humble e-scribbler.

Not sorry to disappoint.

The Canadian Association of Petroleum Producers is running a series of television spots highlighting Newfoundlanders and Labradorians working in the local and gas industry.

At some point, I'll take a closer look at these videos from the standpoint of message and impact, but for now, here they are:

The Globe on bridge building

Newfoundlanders and Labradorians are surely agog with the attention paid by the Globe and Mail to the province's offshore oil and gas industry.

First the story on Tuesday that contained little in the way of new information and missed a great deal of other stuff. There's a Bond commentary with a link to the first Globe story.

Now on Wednesday a piece focusing on Hydro chief executive Ed Martin and his supposed role of building bridges between the major oil companies and the provincial government.

The Globe parses the core issue reasonably well: there are two different perspectives with two contending objectives.

The role attributed to Martin is difficult to confirm. Certainly, he is an experienced oil and gas industry executive and he can certainly understand how the industry operates. How much he is able to do in building any bridges between the two perspectives is less clear. As NOIA's outgoing president Ted Howell put it in the Globe piece:

"He knows how the companies evaluate projects, and he brings that to the table with government. But ultimately, it is going to be the Premier's call in terms of what he feels is the appropriate deal for the people of Newfoundland and Labrador."

The main problem in building the bridge may well be determining how wide is the span that needs to be built. The Globe story gets it monumentally wrong.

Industry officials warn that, if the province insists on making unrealistic demands, the international oil companies will simply not explore or develop in the waters off Newfoundland. In a nutshell, the message is: Five per cent of nothing equals nothing.

The equity position demand is more like 10%, not five. The government has stated - and as the Globe reported on Tuesday - that the equity demand in the forthcoming energy plan will be more than 5%.

More importantly, though, there appears to be a fundamental disagreement between industry and government over what shape the equity takes. That point is found only in the last paragraph of the story: the oil companies would expect that a state-owned enterprise would farm in, that is, buy in and take the risks everyone else takes.

That's essentially what occurs in some other places, like Norway, where the government's oil and gas company Statoil operates in the private sector like all the other companies in the business. Statoil, now merged with Norsk Hydro, has been able to expand its operations outside Norway and works globally with private sector companies and other state-owned oil and gas enterprises.

The alternative - the one that appears to be government's intention - is to add the equity position onto government's royalty regime. That's where the problem starts and it is at the core of why the Hebron deal failed.

As Bond Papers has noted previously, one of the major philosophical divides between the parties on Hebron centred on Ed Martin's conflicting roles as the chief tax and benefits negotiator for the province on the one hand and then his position as a potential business partner on the other.

The two interests are fundamentally incompatible, to some minds. As an operator, the concern would be about controlling costs and maximizing profitability. As the government's agent, the goal would be to maximize local benefits through royalties, jobs and - as in government's original Hebron demand - expensive capital projects that may not be required except to meet the political demand.

The Globe missed that entirely, except for what can read into the comments from Ed Martin:

"So from a strategic perspective the province is crystal clear: Premier Williams wants to make sure he gets this right in terms of how these developments occur for the benefit of the province. And for that, you need a seat at the table."

The Globe also missed the obvious: for all the talk about a seat at the table and the strategic importance of oil and gas, the provincial government still hasn't figured out exactly what role Martin's new energy company will fill or how that so-called seat at the table will be acquired.

Ask Ed Martin or Danny Williams whether the energy company will acquire licenses and operate like any other oil business and you'll likely hear the reply that that option hasn't been ruled out.

Ask about farming in - that is, buying the equity stake - and you'll hear that government intends to pay for its share. There has not been any indication of how it intends to pay for the share. Buying in occurs all the time. It's a straight-up business transaction and it needn't be limited formally to five percent, 10% or any specific level.

It's just plain odd that government would insist on any specific amount in every project. On that level, government's demand looks like the sort of stuff one gets from developing countries where oil and gas is a political issue, a nationalist issue. It isn't about how the state-owned oil and gas company can get into the industry, make cash and then return the benefit of that cash to the owner in just the same way that a private sector company returns profit to its shareholders.

One way follows the Norwegian approach. The other way is the Venezuelan one.

Resolving that confusion would likely do more to re-start the Hebron talks than any supposed back channel discussions between Ed Martin and his former colleagues at Petro-Canada.

Maybe the answer will be in the energy plan.

Then again, as the energy plan becomes more of a political document than a business one, maybe it won't.

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Apropos of a diversion

When a government delegation travels abroad, it will surely spend money.

But when an opposition party raises a question on travel spending, it should do some homework to get the goods.

Like say in the 1980s.

Collecting information requests on travel and discovering cabinet ministers billing visits to German strip clubs.

The recent kerfuffle about the ground transportation costs for a provincial government excursion to Ireland wound up falling flat as the government simply released the invoice covering the van and the limos.

What appeared to be $24,000 turns out to be about $10,000. The amount may seem large but under the circumstances it isn't really excessive.

Still, the whole thing seems to warrant a limerick: a silly rendition of the issue that occupied so much of the Premier's attention and that of the opposition at a time when other matters should have been foremost on their minds.

So, for the nonsense of taxi rentals when the hydro bill and the energy bill quietly slip through the House, here's a little nonsense rhyme:

While on a wee trip to the Isle
to develop the Irish biz file,
they couldn't ride burros
so for five thousand Euros
the Taoiseach and his pals rode in style.

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Apropos of nothing in particular

According to Healy Willan, there are three kinds of limericks:

- Limericks for women and children;

- Limericks for the clergy; and,

- Limericks.

Limericks have always been a favourite of your humble e-scribbler. They allow for a certain verbal ingenuity to fit a humorous and ribald comment within a confining structure. Fitting the most meaning into the smallest space is a challenge.

If memory serves, Craig Welsh once wrote a column in the old Express lambasting the city council for appointing a poet laureate. He received an e-scribbled original limerick on the subject and true to his name never bothered to reply.

All of this is merely an introduction to a simple limerick that serves to point the uselessness of some people's use of figures to support an argument. It's funny too, and for those of gentle disposition, definitely in Willan's third category of the five-lined poem.

There once was a young man named Paul,
Who had a hexagonal ball.
The sum of its weight,
plus his penis, times eight,
was two thirds of three fifths of fuck all.

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Has anyone seen Rossy Barbour?

If the Cal-cu-tron over at labradore is right, Danny Williams' Progressive Conservatives will take all but three seats in the fall general election.

That projection is based on the latest CRA poll results.

As an aside, does CRA poll results actually qualify as news any more? The numbers have been roughly the same for so long, it hardly seems to be new information to say that they are the same as they have been for over a year.

Anyway...

labradore wonders about the state of the current opposition and likens the whole thing to the 1966 general election. Joe Smallwood's Liberals swept all but three seats and interestingly enough, the 1966 election marked the entry to provincial politics of both Clyde Wells and John Crosbie.

Do you still think it's smart politics not to be vocal and unrelenting in your criticism of, and opposition to, Danny Williams?

Strong opposition parties are not necessarily a feature of Newfoundland and Labrador politics and the post-1966 House of Assembly might well be a good thing to look at.

The Tories at the time weren't renowned for opposing the Premier and on the Churchill Falls project, the whole thing received unanimous support of the legislature. Now times change and perspectives change.

Even people who sat at the cabinet table in the late 1960s will scarcely acknowledge today what they backed at the time.

Eh, Bill?

The pattern in local politics seems to be the emergence of a caudillo around whom virtually all rally. Smallwood. Peckford. Tobin. Williams.

In between are leaders of a different character and style.

The strong opposition suggested by labradore supposes that the members of the opposition are capable of developing or want to develop a position which is different from what the majority appears to want. This isn't a specific comment about one party or another or even the individuals involved.

Rather it is to point out that all too often the opposition members are inclined to present the sort of comment heard yesterday in the House of Assembly. The discussion was on the new energy and hydro corporation bills. The opposition parties were looking for a background briefing from the government side on what was contained in the bills. Even if a facetious comment, this line gives a clue to the fundamental problem:

"I learn a lot better if I have someone to basically point it out."

The opposition parties apparently cannot figure out what a bill means without help from the people drafting it.

Have they no staff at all?

Have they no telephones capable of reaching the assorted experts across the province who could give an analysis of the bill, gratis or for a modest sum? Do the names Bill Wells or Vic Young mean anything to anyone?

We can only expect that whatever the opposition parties manage to come up with, it will be whatever the government briefing slips them. What an amazing position for any government: to be capable of directing not only ones own members but to direct the opposition as well.

The tableau presented is breathtaking in its implications.

labradore may well be right.

If Danny Williams doesn't take every seat, he may well take all but three. For most of us pondering yesterday's events in the House, though, we may well wonder what difference that fall election would make.

The opposition today may well go the way of their predecessors from 1966.

And what difference would that make? After all, some 41 years later, some people can't even remember that they sat in cabinet at the time. Does anyone remember - or even care - who the Tory Three were?

[WJM you are out of this little trivia quiz]

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NOIA conference: building a strong, competitive industry

NOIA's 2007 annual conference is titled East coast Canada oil and gas: building a strong, competitive industry.

Look at the speaker line-up. There are heavy-weight presenters on every major topic currently under discussion from land tenure issues (fallow field) to technological developments and harsh environments.

Nothing like starting off with a bang.

Premier Danny Williams is scheduled to deliver opening remarks on Day 1 - June 19. He'll be followed by the usual update on the past year and existing developments.

The luncheon speaker is federal energy minister Gary Lunn.

The closing keynote is former Alberta premier Ralph Klein.

It would be hard to build a stronger, potentially controversial program.

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Energy plan as political plan

Looking at the Globe and Mail story on the Newfoundland and Labrador energy plan, it gets easy to see just how out of touch the Globe is with what's going on outside some very narrow confines.

There isn't anything in the story that qualifies as news.

For example, the provincial government has been saying for some time what local politicos have been figuring, namely that the energy plan will be a key part of the Williams administration's nationalist platform for the fall general election.

The energy plan isn't about economic development any more. It's about politics.

That's the news in the piece, but the Globe seems to have missed it.

The energy plan will be framed as a battle between Newfoundland and Labrador and Big Oil. It will be about hanging tough and looking for what is "reasonable."

Dunderdale merely repeated to the Globe what Danny Williams has already said: Big Oil better come back to the table because once the energy plan is released, the oil companies will have to pay a lot more than they would have a couple of years ago.

It's talking smack and talking tough for domestic political consumption.

But as both Williams and Dunderdale both know already, the oil industry is taking the view expressed by Paul Barnes local manager for the petroleum producers association in the Globe piece. Equity is fine if the provincial government wants to farm in and shoulder the costs - a la Statoil and Norsk Hydro - but anything else is likely to discourage outside investment.

Predictable positions on both sides. It really doesn't matter which one is right. The energy plan is now pure politics. Pure talk.

Take, for example, the Globe referring to the tough document that will demand "at least" a 5% equity position in all future oil and gas projects in the province. By some comparisons, five percent is actually pretty small, and that's likely why the number is being tossed out there: it sounds innocuous.

But, the Globe needs to do its homework.

The real number is likely to be 10%. Word from the oil patch and other places has it that the draft natural gas royalty regime has already been handed back to the provincial government with the polite advice that the government's plans would scare away investment. That's because the 10% equity position would come on top of the considerable share of cash flows the provincial government already receives.

The chart at right shows relative shares of cash flows for the local offshore, as presented by MUN economist Wade Locke in a public presentation last fall.

All things considered, it gets fairly obvious that the Great Battle Against the Foreign Demons of 2007 isn't really the same battle of 25 years ago.

What we are talking about today are fairly fine shifts of cash that look tiny. However, those fine adjustments of cash may tip the very sensitive investment balance against exploration investment in the local oil patch for some period of time.

If the equity demand will be applied to every new development, as the Globe reports, then we may also see impacts on existing significant discoveries. Hebron is already off the table until sometime in the next decade. Hibernia South: ditto.

Small developments like Norsk Hydro's West Bonne Bay would also be affected, especially if the results of Norsk Hydro's exploration program on the field shows oil reserves are much larger than current estimates.

Even White Rose would fall under that sort of requirement. Husky Energy has been working hard to cultivate a strong, positive relationship with the Premier. However, if White Rose turns out to be larger than currently estimated, that is, if there is an opportunity for the province to get more, then that relationship could change dramatically.

Delaying those developments aren't really important as the energy plan morphs into a political document. The government's real issues are bigger and look ahead over longer time spans.

The new energy corporation is likely to become the focus of export energy developments, some of which are tied to oil and gas. It wouldn't be surprising, given the corporation's mandate, to see it take control of the Lower Churchill project which may be generating power before the middle of the next decade. Part of that project will likely be the construction of the transmission infrastructure - sub-sea cabling - that would carry electricity to markets in the United States.

The new energy corp might well be the license holder at the end of the bid for Labrador parcels next year. With some exploration work - potentially carried on by the energy corporation on its own - the natural gas available from the Gudrid, North Bjarni and Bjarni fields could double in size. That gas, as much as eight trillion cubic feet (8 tcf) including the three existing significant discoveries, could be brought ashore and used to generate electricity in a new facility on the coast of Labrador. The power would be sold down the Lower Churchill lines to markets in the United States.

None of that would really be affected by the equity issue.

That bit on the energy corporation is speculative, of course, but it certainly fits with public statements by provincial officials. It also fits the Premier's concern about shipping natural gas directly to market without some form of added local value.

All of these plays or possible plays are well in the future, of course. In the short- to medium- term, the provincial government knows that it will have significant cash flows from existing oil production. There's no risk in the rhetoric. There may not be an economic gain either, even in the longer run, but the energy plan is increasing something other than economic development.

There really isn't any risk for the provincial government in using part of the energy plan for political purposes. Whatever consequences come will come so far in the future as to be irrelevant to any of the politicians currently making decisions or likely to make decisions on these issues over the next decade.

But to give credit where credit is due, the provincial government's posturing on oil and gas - with all the distortions and misrepresentations about revenues to date and who makes what - is a masterful example of framing a discussion in a way that can't be counteracted simply by anyone, political or industrial.

It will produce the political effect desired in October.

As a political plan, the energy document is already working its magic.

As an economic plan?

Well, that remains to be seen.

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