In defence of blogs

Who'd-a-thunk it?

The bastion of the mainstream print media in Newfoundland and Labrador leaps to the defence of blogs, specifically the political blogs in the province.

Well, parts of it were more like damning with faint praise.

And those were the parts that tried to discuss blogs generally while really talking about specific types of blogs and not really getting it right anyways.

Ah well, let's save the discussion of blogs and the conventional news media for another post.

For now, let's just note that this editorial - as thankful as bloggers are to see it - was really about an ongoing pissing match between the Telegram and an apparently very frustrated former Telegram reporter who now works cranking out another newspaper from offices on Harbour Drive.

Still, it's fun to read the two offering views on new media. It almost makes for a Sally Field at the Oscars kinda moment.

Well, not exactly.

But you get the idea.

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Newfoundland and the Great War: the beginnings

On August 7, 1914, the Newfoundland cabinet met at Government House in an extraordinary session prompted by the outbreak of war with Germany on August 4.

Britain was at war and while the Dominion of Newfoundland was also at war, the shape and character of its participation was entirely a matter for the Newfoundland government to decide.

An outline defence scheme had been developed in 1907 calling for creation of a local militia based on the local sectarian cadet corps and non-sectarian groups like the Legion of Frontiersmen. The original version of the idea dated from the Boer War, but an earlier Newfoundland government had declined participation in that conflict.

In these warm days of summer, it is hard to imagine that 93 years ago our ancestors were embroiled in what would become known as the First World War.

For Newfoundlanders and Labradorians, Beaumont Hamel - or rather the popular imagining of it - has been seared into many a brain, but little attention is paid either by scholars or by the wider public to Newfoundland and Labrador in the Great War.

Space doesn't permit a detailed discussion here, but it is useful to just look back at some key dates.

Britain issued a general warning to the colonies and Dominions on July 25, ordering that they adopt the precautionary stage of the war plan that each had prepared after 1907. Draft orders in council lay waiting - in Newfoundland, in the floor safe of the Colonial Undersecretary - for everything from the imposition of censorship to rationing. All that needed to be filled in on each order was the date and the name of the enemy country.

In Newfoundland, the government directed a paramilitary group called the Legion of Frontiersmen to guard important government buildings. They took up posts at the Waldegrave Battery on the south side of St. John's harbour, at the telegraph station at Admiralty House in what would become Mount Pearl, and at the main post office on the west end of Water Street in St. John's.

When cabinet met that warm summer's night, they had in their hands letters from the heads of each of the sectarian cadet corps offering their members and former members to form a local volunteer contingent for overseas service. Popular opinion lay solidly behind the raising of a volunteer unit, especially among the St. John's establishment. Volunteers from the sectarian youth groups was actually part of the government's defence scheme, so the decision was relatively simple.

Cabinet decided to offer them, along with volunteers of the local Royal Navy reserve division. The government sent their offer to London through the Governor in a telegram sent on August 8.  They offered the sailors from the Royal Naval Reserve Division the Newfoundland government created in 1902 as their defence force.

In addition,  the government offered to raise 500 volunteers out of the local paramilitary brigades run by the churches. This was consistent with government policy in the 1907 defence scheme.  The government supplied the boys brigades - as they were known in Britain - with obsolete rifles, slings, and bayonets purchased from the British Government.

The British wasted no time accepting the offer of soldiers for the land war, doing so by telegram the next day. They advised that further instructions would follow about the sailors. In the event, the sailors were the first to leave Newfoundland. They formed part of the crew of HMCS Niobe, a vessel many had sailed on before during their annual training cruises after the local reserve division was organized during the Bond administration. As an aside, according to some accounts, Sir Robert hand-picked the men who took part in the first training cruise in 1900, their passage on the railway paid for by the Newfoundland government all the way to St. John's where they embarked on a Royal Naval cruiser of the North American squadron.

There is more to the story of the opening days of the Great War, but for now, that gets us quickly up to a fateful decision. Almost a century later, the details have largely been forgotten, but the Great War proved to have a lasting effect on Newfoundland society.

But that fateful decision, one that led to Gallipoli, Beaumont Hamel and Monchy Le Preux was taken by a cabinet made up entirely of elected Newfoundlanders when they met 93 years ago today.

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Revised August 2019

Security concerns

Security for the Premier and his family (including the family home) is the responsibility of the Royal Newfoundland Constabulary.

If it isn't currently, it used to be not so very long ago and the police officers assigned to the detail are as professional and capable as any police officers anywhere.

So why exactly is the Premier considering hiring security guards, presumably out of his own pocket, after yet another incident?

We don't need to know the details; details of the Premier's security arrangements are not a matter that should ever be discussed publicly.

However, we should all be concerned about a situation involving the Premier's security which, as the Premier himself notes, is not the first time someone has gained entry to his home.

In any event, no private security firms - if that's what the Premier was driving at - should be involved in providing physical security to the Premier or any other public official. That's why we have the Royal Newfoundland Constabulary and the Royal Canadian Mounted Police VIP details.

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Stunned is as...well... yet again

Queen's Counsel is largely an honorary designation, but it is supposed to indicate that the laweyer wearing silk has a knowledge of the law that is above the norm. After all, the title goes with the consideration, as spelled out in the Queen's Counsel Act, that the recipient is "learned in the law."

So how is it, then that someone who took silk, albeit long after he stopped practising, could not understand the law as it applies to police forces?

That's the effect of his suggestion in July:

I also agree with a suggestion that a reformed RCMP should become a solely federal force and get out of provincial jurisdictions altogether. Our own government here should kiss the RCMP goodbye and extend the Royal Newfoundland Constabulary’s coverage beyond the St. John’s, Corner Brook, Labrador West regions to blanket the entire province.

As a lawyer, albeit a lapsed one, Rowe QC should understand that the criminal law, drug laws and fisheries regulations, for example are exclusively federal jurisdictions under the constitution. The major provincial laws handled by the Royal Canadian Mounted Police relate to the Highway Traffic Act.

Rowe QC is actually not suggesting the change some people - and likely Rowe himself - think he is, beyond the superficial nationalist posturing he's wont to do sometimes.

No. What Rowe QC is actually proposing is that the Royal Newfoundland Constabulary expand across the province to become glorified traffic cops and meter maids. Meanwhile, for criminal offenses like murder, theft, drug trafficking and poaching, the Mounties would handle the cases across the province.

There's a brilliant idea.

As it stands right now, policing jurisdictions are geographical and within the geographic areas, the two highly professional police forces Newfoundlanders and Labradorians call their own, work without any difference between the two.

Rowe - in the guise of supposedly elevating the RNC - is actually proposing their demotion to a second rate service confined largely to catching speeders and litterers. The job of policing the tough stuff would be taken away from the local constabulary - under Rowe's clearly misguided scheme - and handed to the federal police force.

What a disservice to the RCMP, the RNC and the people of Newfoundland and Labrador.

What an insult to the intelligence of his readers who may not be as "learned in the law" as the freshly minted QC.

What an insult to the men and women from this province who serve and who have served at all rank levels of both police forces not just here but across the country.

Too bad, as well, that some people in this province - including Rowe's employer - actually take his bumpf seriously.

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Working the Hill the smart way

Newfoundland and Labrador Hydro has retained Summa Strategies to help with federal funding assistance on the Lower Churchill and on issues related to the development of an East-West national electricity grid.

Makes sense, if you consider that the provincial government has few if any friends in Ottawa these days and Summa is able to help overcome the personality clashes between the Prime Minister and the Premier.

The lead on the file - Tim Powers - is a Newfoundlander and, as much as it might be nice to have the dollars flowing in this province for the contract, the fact is there are very few lobbyists like Summa operating in this province. Of those that are here, not many of those have the kind of entrees in the Langevin Block available to people like Powers. He's a smart, well-connected guy.

Ordinarily someone from the Premier's Office would be able to take on the job. However, when the tone at the top is the hum of peeing on people's Nikes even over a visit to flooded areas, that pretty much makes it mandatory to engage some outside professional help.

That's the job Summa has apparently been hired to do: put the case for federal assistance to the places where the Premier just can't reach any more.

If it gets the job done, then it will be money well spent.

Makes perfect sense.

Just like it makes sense that in the registry filing Powers answered "No" when asked if the client is "funded in whole or in part by any government or government agency."

Newfoundland and Labrador Hydro is funded entirely by the sale of power to the private sector. It isn't funded by the provincial government or any agency of the provincial government.

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On being all wet after a flood

Give a listen first of all to this exercise [ram audio file] in how many times you can say "y'know" in the answer to the first question during an interview.*

Then take a look at four sentences that put the whole thing in perspective.

Ya know?

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* The answer is:

11 in about 42 seconds, with seven of them (64%) occurring within the first 12 seconds. There's a bonus "quite frankly" in there as well as a "right".

For the record, here's the transcript of the opening section:

Well, y’know, I, y’know, any time, y’know, a leader and the leader of the country, y’know, comes in to have a look at things first hand, I, y’know, I’m pleased he’s done that, but, y’know, he’s done it two days after the fact, he never even gave us the courtesy, y’know, and not only me personally, but this is about the people of Newfoundland and Labrador, the courtesy of a phone call over the last 72 hours while all this was happening, to say don’t worry, we’ll be there, and we’ll work with the provincial and the municipal governments to get this done, so, y’know, he comes in on his own, and does it on his own, because, y’know, I and my ministers certainly would have met him at the site, and pointed out to him what we saw when the rivers were raging, quite frankly, right, everything’s pretty well settled down now, and some of the road damage has already been repaired in order to allow, y’know, the transportation links to be back, but anyway, y’know, he does things in his own way, and so be it.

Astraeus cans London flights

Having only started offering the service in May, 2007, Astraeus announced last week it would be cancelling its twice weekly flights from St. John's to London in September.

The provincial government heralded the start of the flights in a news release last February.

"Our government worked closely with the St. John’s International Airport Authority in an aggressive campaign to attract a new supplier for this service and it is obvious today that this effort paid off," said Minister Hickey. "I applaud Astraeus Airlines for joining a growing list of organizations that view our province as a good place to do business. I also appreciate Astraeus’ expression of confidence in Newfoundland and Labrador and welcome them to this unique part of the world. I’m sure this will become a successful relationship."

In the photo, right, transportation minister John Hickey talks with Hugh Parry, managing director of Astraeus Airlines, during a news conference to introduce Astraeus' new year-round trans-atlantic service from St. John's to London, England. [Photo: Government of Newfoundland and Labrador]

Astraeus operates charter flights between Gatwick and Deer Lake to support the nearby Humber Valley Resort. The St. John's portion of the flights was an adjunct to that.

On July 20, The Independent, a newspaper published by the chief executive of Humber Valley's parent company, reported that

"Astraeus...intends to organize press trips for European journalists to travel to Newfoundland as a way to promote the province as a vacation destination. ("St. John’s is a gateway to a region which can truly be described as the great outdoors," [Astraeus' general manager of scheduled operations Richard] Cann says.)

There's no news release on the cancellation on Astraeus' website. In fact, the website still proudly boasts that "[t]hrice weekly scheduled flights to St John's commence on 27 May 2007 providing the only year round link between the UK and Newfoundland." One has to click on the St. John's page to find out the admission that flights end in September.

According to abtn.co.uk, an airline industry website:

The majority shareholder of Flystar – Astraeus is Northern Travel Holding ("Northern Travel"), created by the Icelandic investment groups, Fons (44%), FL Group (34%) and Sund (22%). Northern Travel also are the sole owners of Sterling Airlines, Iceland Express and Hekla Travel, the largest travel agent in Denmark, and own 29.3% of Ticket, the Swedish stock-market quoted travel agent.

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Foote wins Grit nod in federal riding

Judy Foote will carry the Liberal banner in the riding of Random-Burin-St. George's in the next federal election.

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Rideout defends 5K gift of public cash

No surprise.

Deputy premier Tom Rideout thinks it's just fine to hand out gifts of public money to groups in the province from money set aside originally in 1989 to run his district office.

As Jamie Baker reported in Thursday's Telegram, since the rules allowed it, Rideout thinks the whole idea is just tickety-boo.

Some observations:

• According to Baker's story, Rideout gave away almost half his constituency allowance in 2006 to things other that constituency operating expenses like travel and meals.
• The $5,000 donation Rideout handed out in this case is more than double a previous gift using taxpayers' money. Rideout notes he handed the $2500 secret payment in 2004 to Calypso.
• While the gift of public money was made to the Calpyso Foundation on May 11, Hodder indicates the cheque for it was cut sometime before March 31, 2007.
  
• There is no explanation for the time-lag or why the donation was connected to the auction held in May. As the Pilot reported: "When you factor in a $5,000 donation that MHA for the Lewisporte District Tom Rideout made from his constituency allowance during the auction, the grand total hit the $22,000 mark." [Emphasis added]
• Speaker Harvey Hodder is quoted as saying "Mr. Rideout is in total compliance with the rules as they then existed."
• However, the rules under which Rideout made the gift are still in place and will be in place until October 9, 2007.
• Hodder doesn't explain how the existing rules were met, though, given that in February 2007, [see second story below] news media reported spending in the House of Assembly would be handled on a new basis, or as Hodder said at the time "[t]he old regime changed." Presumably that meant a(n) MHA could only spend a portion of his or her allowance each month. For Rideout, with an allowance of about $41,000, a monthly pro-rated amount would be $3417, considerable less than he spent in that single donation and not including whatever other spending he carried out at the end of the old fiscal year.
• Chief Justice Derek Green was sharply critical of the practice of making donations from public funds and recommended the practice be banned. It will be banned, but only after the election.
• Since the old rules are still in place, it is unclear whether gifts such as the one Rideout made and the practice followed previously of MHAs spending most or all of their yearly allowance in the months prior to an election can continue and is continuing until October 9, 2007. There is no requirement for public disclosure of MHA spending and it is unclear whether the access to information provisions of Chief Justice Green's report will apply retroactively once they come into effect on October 9.
  

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Two Telegram stories follow:

Calypso donation legitimate, Rideout says
Minister defends $5,000 donation to Lewisporte charity

Jamie Baker
The Telegram
Thursday, August 2, 2007, p. A3

Fisheries Minister Tom Rideout insists there was nothing wrong with a large donation he made from his constituency allowance to a charity in his district this past spring.

In March, Rideout, the Tory MHA for Lewisporte, turned over a cheque for $5,000 to the Calypso Foundation, a non-profit organization that provides training and employment support for people with developmental disabilities.

He said the money came from what was left over in his constituency allowance from the 2006-2007 fiscal year, which ended March 31.

"I checked with the House of Assembly staff and asked them if there was any change in the rules for donations at that point in time and there wasn't," Rideout told The Telegram. "I made a contribution out of the constituency allowance to Calypso, which I've done every year for many years, and made it known it was out of my constituency allowance and not out of my pocket."

Although the cheque was cut in March, the donation didn't become public knowledge until after the Calypso Foundation's "fantasy auction"in May. It was reported by the community newspaper in Lewisporte, The Pilot, and Rideout himself referenced it in the House of Assembly May 24.

"I told everybody there, it was their money and I was happy to make the contribution, on their behalf," Rideout said in the House at the time. "I do not think anybody there had any problem with the taxpayers' money being used for that."

House Speaker Harvey Hodder said the cheque from Rideout's constituency account to Calypso was dated March 30, 2007 - just a day before the end of the fiscal year when the remainder of whatever was left in Rideout's allowance would have been wiped from the ledger as the new fiscal year kicked in. While the cheque had to be cut before March 31 to come out of that year's allowance, Hodder explained the actual claim wouldn't have to be filed until some time in April.

"There's always a carry-over," Hodder said. "He would've had to have that money left in his account - there would be no extra money at all, not one nickel."

While MHA donations are often anywhere from $100 to $500, the $5,000 contribution from Rideout actually represented almost a quarter of the entire Calypso fantasy auction earnings, which came in at $22,000.

Hodder said there are no directives in place that limit how much an MHA can donate per charity.

"Mr. Rideout is in total compliance with the rules as they then existed," Hodder said.

In 2006-2007, Rideout had a total allowance of $41,300. According to Hodder, Rideout spent $3,020 on per diem meals, $2,633 on per diem accommodations, $15,300 on travel and $19,016 on "other" - which is where any donations would normally be listed. He left $1,332 untouched.

As for Calypso, Rideout said that's who also got the extra money he was granted the previous year.

"The year before that when we got the additional $2,500 that's where that went, to Calypso as well," Rideout said, indicating no receipt was required. As for the donation made in March "a receipt was required and it was provided and it was made known publicly," he said.

Meanwhile, all parties in the House of Assembly have publicly stated that constituency allowances will not be used to make donations from this point on in keeping with the "spirit and intent" of the recently released Green Report.

The report recommended, among other things, that the practice be discontinued. That recommendation will not become law until after the provincial election in October.

jbaker@thetelegram.com


Departing MHAs spent entire year's allotment

Rob Antle
The Telegram
Friday,February 2, 2007, p. A1

Departing and retiring MHAs may have served half a year in 2003, but they managed to spend most or all of their annual constituency allowances.

House of Assembly Speaker Harvey Hodder said they didn't break the regulations, because there weren't any.

"There were no rules that governed it," Hodder told The Telegram. "The access was not governed. The maximum was out there. It's not that people did it wrong. It's that there were no rules governing it whatsoever."

Hodder said only one departing MHA spent an equal amount of their constituency allowance compared to their time served - roughly 50 per cent of the total for 50 per cent of the year.

The rest of them spent a larger proportion.

"Some people who did not re-run in 2003 - they were only serving in the House for five months and a bit of that year - had actually spent 80 and 90 per cent of their constituency allowances," Hodder noted.

"There were no rules. They didn't do anything wrong - there were no rules governing it."

Hodder said that even MHAs who publicly announced in the spring that they would not run again spent the higher proportion.

The 2003-04 fiscal year began April 1. The election was called in late September, and held Oct. 21. The new government took office in early November. Newly elected MHAs received a constituency allotment pro-rated from the time they took office until the end of the fiscal year.

Hodder said a similar spending phenomenon won't happen in 2007, which also happens to be an election year.

"The old regime changed," he noted.

Auditor General John Noseworthy revealed this week that politicians secretly approved an extra $2,875 constituency payment in 2004. Forty-six of the 48 MHAs accepted the money, which required no receipts for approval.

The twice-delayed Green report on pay for provincial politicians is now set for release in mid-February. It is expected to make recommendations on constituency allowances, among other matters.

rantle@thetelegram.com

NB studying 1000 MW nuke at Lepreau

Atomic Energy of Canada Limited will conduct a study - at its own expense - of installing a second 1,000 megawatt nuclear powered electricity generator at Point Lepreau.

The project would establish new Brunswick as an energy hub of Eastern North America, according to New Brunswick Premier Shawn Graham and would produce 400 long-term jobs.

It appears the power would be for export into the United States.

Meanwhile, Prime Minister Stephen Harper seems to be focussing on New Brunswick as the only province in Atlantic Canada where he might shore up his party's crumbling support in Atlantic Canada.

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(h/t to Dulse and Fog for the Point Lepreau story)

This Danny-Hugo Thing, Part 2

Hugo Chavez hangs out with decrepit dictators like Fidel Castro, right.









Danny Williams gets his picture taken with Miss Universe Canada, left.

Of course, she might have mistaken him for ageing 70s television star Lee Majors in this photo.

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Saskatoon: Gateway to the Orient

From May, 2007, funding in Saskatchewan linked to the Pacific Gateway.

Did geography get altered under Canada's New Government?

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This Danny-Hugo thing

Another reason why Danny isn't Hugo.

Hugo gets internationally respected actors to visit his country, left. [Photo: AP, Howard Yanes]





Danny gets a split screen with the soon-to-be ex-wife of an ex-Beatle, right. [Photo: Charles Leblanc]

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The value of research, yet again

Turns out Iceland isn't such a paradise after all.

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Separated at Birth 5

Updated: 20:45 hrs


UK Prime Minister Gordon Brown, left. [Photo: CTVglobemedia]
















Monty Python alumnus, Terry Jones, right.















Alfred E. Neumann, left.
















George W. Bush, appropriately right.

SOL: The Saturday morning kiddies edition

Updated: see below

Imagine if by some miracle Kevin Heffernan won the St. John's East Tory nomination and then took the easiest of easy seats into the House of Assembly.

His first comment in caucus would likely be: "Danny, Steve's sitting closer to you than I am" or "Danny, tell Hickey to stop teasing me."

Such is the calibre of current politicians that the best this one can find to talk about is signs. Better Heffernan fixed his political sights on City Hall. Down there this sort of childish nonsense is par for the course.

Heffernan and the Tories are not alone. All over the place there are people who want to be "strong voices". In other words, these are people spouting some mindless cliche they heard from soemone else who spouted a mindless cliche.

The only thing these sorts of candidates do is appreciate the good ones when they come along.

Update: Is this Kevin Heffernan the same guy who spoke to CBC during the winter by-elections?

You'll find this bit toward the end of a story from February 8, 2007:

In Ferryland, where a contentious nomination contest left a bitter taste with some PC members, some Tories are openly supporting the Liberal campaign. The same has been happening in Humber Valley, which the Tories had won in 2003.

Kevin Heffernan, a voter in Ferryland district, said some voters may stay home because of disillusionment over the auditor general's investigations.

"I'm after hearing so much stuff and none of it seems to work,"Heffernan told CBC News. "Who would we put in there that would do any better?"

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That didn't take long: flood flap feedback

From the National Post's house blog.

The second paragraph is a stark reminder of why the flag thing was as dumb a political move as anyone can think of.

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SOL Emergency Photo Op Edition: The ersatzkrieg continues

Is Danny Williams pissed because the Prime Minister visited parts of the country devastated by recent flooding or, as this quote suggests, because he didn't co-ordinate a joint trip, that is a trip in which two guys who are supposedly carrying on a blood feud would travel together?

Williams told VOCM radio station in St. John’s that he wasn't notified of the prime minister's visit. "The simple courtesy of at least letting me know that he was coming so suddenly so that something joint could be arranged -- he decided not to do that," Williams said.

It's not like the Prime Minister needs to ask permission to visit any part of Canada and it's not like anyone should be worried about protocol at a time like this. Is it?

So what exactly was the value of calling VOCM, except to get this sort of coverage nationally?

Of course, it is just a phoney war - an ersatzkrieg - in which both sides lob juicy quips at each other from their respective trenches and then cozy up for the joint funding announcements.

Update [1930 hrs]: Perhaps what was up the Premier's nose was the kind of positive coverage a politician can gain - in this case the Prime Minister - from visiting the scene of an emergency and pointing to the financial assistance available.

Like say the CBC news story on Stephen Harper's visit:

"I thought I should come here and see the damage," Harper told reporters. "It's pretty severe in spots, but the town and everybody's on top of getting it fixed."

He told residents to keep their receipts as they prepared to make claims, and said the federal government will assist in the cleanup, which local officials have labelled a disaster.

"As you know, there's a federal program in place for this and a provision for advance payment," said Harper, who toured the community with the area's Conservative MP, Fabian Manning, as well as Loyola Hearn, Newfoundland and Labrador's cabinet representative.

"We just want to be here to assure people, we're here to help."

That's the main reason politicians do these tours, after all: to show up and assure the locals that help is on the way.

Then again, Danny Williams hit the nail on the head when he said pretty much that, as quoted by CBC:

"When people's homes are being washed away, and their lives are being washed away before their very eyes, that's the time that they see their government there to support them."

That's basically what happened.

First, the Premier showed up. Emergency response in these cases is firstly a provincial responsibility

Then a couple of days later, the PM shows up.

And, as Harper told reporters, this time from The Telegram:

Harper told reporters the speed of compensation largely depends on the provincial government.

"The province has to start the work, and then send some of the bills to Ottawa,” Harper said during a brief scrum with reporters.

"There's a provision for advance payment. That can be done fairly quickly if we get the documentation. Sometimes it takes time, because sometimes the documentation doesn’t come. But I hope we'll get on with it quickly."

The real piece of advice the Premier should have taken in this case was to ignore the snub of not being advised Harper was coming to the province and focus on the people whose homes and lives have been "devastated", to use the common word these past few days.

It's Danny Williams' own advice, after all:

"[It] would be nice in situations like this if leaders...can rise above other differences,"

There are a few thousand people in Newfoundland and Labrador right now who likely wish that were true.

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The myths debunked - once again

In a post taking issue with the opinion of two economists at the Universite de Laval, the self-styled Hydroqueen makes some claims. Let's look at a couple of the claims and examine them systematically and in detail.

1. " This ignorant person [ that is, your humble e-scribbler] found some critic to suggest that selling power to industry does little more than provide jobs."

The post is based on the work of the two respected economists whose work has, in one case, spanned about 15 years of commentary on the aluminum and electricity industries in Quebec. There was no finding involved, except perhaps in conducting the same sort of google search any competent researcher can do.

The post actually makes the point that Quebec's aluminum industry costs the provincial economy cash. In the most recent smelter deals, for example, the aluminum company will drop $2.0 billion into the projects and the provincial government (with Hydro-Quebec) will subsidize the projects to the tune of $2.7 billion in lost revenue compared to shipping the same electrical power out of the province to consumers who will pay cost plus a profit margin.

It's about selling power at or below cost versus selling for a profit.

Their argument is simple.

Odd that Hydroqueen can't see the simple logic or repeat the argument accurately.

2. "I know why the individual makes such idiotic statements nevertheless more ridiculous concepts have stuck here before - SPRUNG."

This sentence borders on the incomprehensible. Is she speaking of your humble e-scribbler or of the economist Bernard when she claims knowledge of motivations?

If she's saying Sprung was a good idea then we can all understand why she continues to advocate ideas that make no economic sense.

Sprung was - somewhat facetiously - a plan to spend $1.50 of public money to sell cumbers at 50 cents each. That adds up to a loss of a dollar a cuke and goes a long way to explaining why the project collapsed not long after it started.

3. "The profits of Hydro-Quebec at about 3 billion dollars a year - almost a third of which are from our power."

Profit is the money left after all expenses are paid. Revenue is total amount of income an organization has from all sources.

Those are pretty simple concepts and the words have specific meanings.

Let's take a look at the HQ annual report for 2005, for example, to see if that figure of a profit of $3.0 billion is correct. Let's take 2005 for starters since that allows us to compare directly to the Newfoundland and Labrador Hydro latest annual report available online.

In 2005, Hydro Quebec had total revenue from its generating operations of $6.2 billion and a net income - a profit - of $1.873 billion.

Incidentally, Hydro Quebec has four components and revenue is generated in each. Since we are talking about sales from power generation, let's focus on that aspect for this bit.

If one takes a look at the 2006 HQ annual report there is indeed a larger net income - $2.1 billion - and total revenues of about $6.2 billion.

Even if we look at the total Hydro Quebec position, including all its operations and overseas investments, one cannot find the figure $3.0 billion or anything reasonably close to it in any of the financial statements that discuss revenues.

For example, in 2006, the company's operations - of all types - generated a net income of more than $5.0 billion; but it must be appreciated, as the financial statements clearly show, that a good chunk of the income for HQ outside its generating capacity comes from various overseas operations and investments.

So where does this idea come from that HQ generated a "profit" of $3.0 billion and that one third of that figure, i.e. about $1.0 billion came from "our power", i.e. Churchill Falls?

This remains a mystery.

Whenever she has been asked to provide the figures, the self-styled researcher has refused to provide the information.

In the meantime, there are other examples from Bond Papers discussing the Iceland model.

• Iceland shows us how it's done.
• The Iceland Model.
• Advocating give-aways.
• The value of research.
• Retilling the much ploughed patch.
• Iceland's miracle: the other side.
• All trout live in trees.
• Icelandic outmigration.

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Avoiding other people's mistakes

There's a compelling point in the middle of this 1991 article from the Montreal Gazette: "... Hydro-Quebec is losing in a big way by selling its electricity so cheaply to big companies rather than exporting it for a much higher price."

The economics of hydro-electricity and industrial development haven't changed in the past 30 years even if the price per kilowatt hour fluctuates. The consistent policy of successive governments in Newfoundland and Labrador - including the current administration's plans to develop power for export makes sense.

The province has a commodity others need. As long as the prices are good, the provincial energy utility can develop and sell power to other places far more profitably than if it tried the Quebec approach or the Icelandic approach of providing massive subsidies to establish industry solely for the purpose of creating jobs.

As economist Jean-Thomas Bernard calculated, the Quebec government would lose about $300 million per year over 20 years as a result of its aluminum smelter policy. Bernard and Gerard Belanger, his colleague at l'Universite de Laval, repeated the same analysis of agreements for aluminum smelters signed in 2007 by the Quebec government. They concluded that in exchange for a $2.0 billion investment and 740 jobs, the Quebec government will forego $2.7 billion over the course of 35 years.

The experience of other provinces should give us pause.

Drawing our water and giving it away
Hydro-Quebec losing big by selling cheap electricity to aluminum patch: critics

Bertrand Marotte
The Gazette
Montreal, Que.
Apr 27, 1991.
Page B.4


They didn't come for the view. The Japanese, European and U.S. interests that decided to set up or expand aluminum operations along the St. Lawrence River valley in Quebec were lured with cheaply priced electricity, courtesy of utility giant Hydro-Quebec.

Today, giant smelters sprout from Trois Rivieres to the Lower North Shore in a concentration known as Aluminum Valley.

It may not have the same high-tech, high-dollar mystique as its silicon counterpart in California, but the aluminum patch is a keystone of Premier Robert Bourassa's economic strategy.

This veritable boom in Quebec's aluminum production is closely linked to plans for a series of giant new hydro-electric developments in the northwestern part of the province - including the controversial $12.6-billion Great Whale project.

Contracts are secret

Aluminum smelters devour electricity like no other industry - up to 30 per cent of their production costs - and Hydro-Quebec offers them a guaranteed supply, often over a 20- to 25-year span.

The smelters buy the electricity at a price that is tied to the roller-coaster price of aluminum on the spot market.

Hydro-Quebec, in other words, offers a "risk-sharing" program to the aluminum companies, as well as to other high-energy users that make primary products, like hydrogen and magnesium, said spokesman Richard Aubry.

But no one is allowed to know how much Hydro-Quebec receives for the cut-rate electricity it supplies to 13 outfits, including the four new aluminum smelting operations along the St. Lawrence.

Recent revelations in the national assembly and at a televised news conference broadcast from the United States have shed light on some of the prices, but the contracts remain secret. Hydro-Quebec, the provincial government and the companies involved have all been blocking attempts to make that information public.

Critics, including the Cree Indians whose land will be flooded once again if Great Whale and other projects go ahead, say one of the reasons Hydro-Quebec needs the new projects is to make up for the revenues lost through contracts that are far too generous for big energy users.

Net loss to Quebec

Jean-Thomas Bernard, economics professor at Laval University and an expert on the economics of hydro-electricity, says such a criticism would be hard to prove.

But Bernard agrees Hydro-Quebec is losing in a big way by selling its electricity so cheaply to big companies rather than exporting it for a much higher price.

It is believed the aluminum companies and others with special commercial contracts pay less than 2.6 cents per kilowatt-hour, compared to more than 6 cents per kilowatt-hour that is charged on export contracts to the United States.

Hydro-Quebec insists the income from the special commercial contracts averages about the same as amounts earned from the higher rates it charges its regular industrial customers - about 3.5 cents per kilowatt-hour.

Quebecers in no way subsidize those contracts, Aubry said.

Bernard, however, estimates that the new aluminum plants will result in a net loss to Quebec of about $300 million per year, over 20 years.

And because aluminum smelters employ so few people, Bernard said that Bourassa's job-creation argument is also shaky.

Each new job created in aluminum smelting will represent a hidden government subsidy of $150,000, Bernard figures.

There are also the environmental costs.

Ingots shipped elsewhere for manufacturing

Aluminum smelting is one of the most polluting industrial activities, and although the new generation of plants are cleaner, they are far from being totally non-polluting, said environmentalist Daniel Green of the Montreal group Societe pour Vaincre la Pollution.

Quebec gets little in the area of advanced manufacturing from the cut-rate sales.

Once the primary processing is done, the aluminum ingots are shipped from the province, where they are transformed into a host of different products.

There was hope for at least one important new aluminum manufacturing plant in Quebec, but that has been killed.

Reynolds Metals Co. of Richmond, Va., which owns Canadian Reynolds Metals Co. of Baie Comeau, reneged on a promise to build a $50- million plant near Montreal that would have produced 750,000 aluminum wheels a year, opting instead for the already rich industrial heartland of southern Ontario.

Says one aluminum analyst: "Quebec is really competing with places like Venezuela and Brazil, which also offer cheap hydro, and cheap oil.

"We are still hewers of wood and drawers of water, but why not?"

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