Exposing the political scientology of "the normal transparent process" of road paving

Road paving in NewfoundlandLabrador allocated on a political basis?

Heavens to Murgatroid, say it ain't so.

But then things get worse when the guy with a blog also has a transcript of the interview.

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Sheena Goodyear casts a critical eye on MUN's new chancellor

[Editor's note:  Editors of the Memorial University student newspaper - The Muse - usually distinguish themselves, if not during their time editing copy then later in life. 

Sheena Goodyear is no exception. She's already worked at the Muse for five years including a stint as editor-in-chief.  She's currently freelancing for the Telegram and the Scope and in August she'll take up job of national bureau chief for Canadian University Press. Sheena will likely have a bright future whether she continues in journalism or switches to another career at some point.

In retooling Bond Papers for a fall makeover, I contacted Sheen and asked her to contribute periodically, as the mood or topic struck her.  The goal for the retooled Bond will be the same as it currently is:  provide an alternative view of issues affecting the province. 

Sheena didn't wait until September. With the appointment of Rick Hillier as chancellor of Memorial - effective July 2 -  Sheena penned the following commentary.]

The praise for Rick Hillier in the media since his appointment as Memorial University’s chancellor has been at best flattering, and at worst downright gushing.

People are commending his heroics, his leadership skills, and his outspokenness. But really they are commending him for being a Newfoundlander who has gained national and international recognition.

He’s the province’s golden boy, and nothing negative dare be uttered against him.

This complete lack of critical analysis, especially from the media, is dangerous, though not uncommon in this province (see: Danny Williams).

The media has failed to remind us that the last chancellor, John Crosbie, was appointed to an apolitical government gig not long after he publicly opposed the government’s plans to grant autonomy to MUN’s Corner Brook campus.

Student reaction in the news has been unsurprisingly minimal. The only person who has come close to questioning Hillier’s appointment is the editor-in-chief of the Muse, Memorial’s student-run newspaper. Even the MUN Students’ Union – who are members of the St. John’s Coalition Against the War – has extended Hillier an open hand.

The soon-to-be former head of the Canadian Forces, and the leader of an incredibly contentious military invasion, is the new symbolic head of the province’s only university, as well as a member of both its decision-making powers, the senate and board of regents. And nobody is batting an eyelash?

People say his reputation will make him a good fundraiser for the university. They say he’s got connections. But nobody is questioning whether or not he’s connected to the types of organizations that we want associated with Memorial University.

This casts a conservative shadow over the university’s public image in a way that hasn’t happened since Inco CEO Scott Hand was awarded an honorary degree. It also distracts the public from the fact that MUN still doesn’t have a president – a far more important position than chancellor.

The mission in Afghanistan is possibly the most controversial issue facing this country right now, and Canadians are both divided and confused by it.

The latest Angus Reid polls show that 62 per cent of Canadians don’t believe the government has effectively explained why our soldiers are there; 54 per cent say the mission should not extend past 2011; and 54 per cent consider it a war, not a peace effort.

Now let’s narrow the lens. The Canadian Forces attracts more recruits from Atlantic Canada than anywhere else in the country. They often launch their recruitment campaigns here for that reason.

It would be completely ignorant not to assume that this is at least partly due to the lack of financial opportunities available to young people on this side of the country. So, the army essentially preys on our disadvantages to fill its ranks.

Meanwhile, young Newfoundlanders (and there aren’t many of those left) are coming home in body bags for a war that two-thirds of the country doesn’t even understand.

All this under the leadership of Rick Hillier. But hey, at least he’ll have those convocations running like clockwork, right?

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Michael Temelini...

clearly knows nothing about local politics, as painfully evident from his stint with David Cochrane this morning.

We all know Tom Rideout's resignation is a story, Michael.  You don't need to spend the first couple of minutes of a short interview trying to convince us it is important to talk about it, even if it's just for a couple of days.

Then after some more useless comments, Cochrane had to throw Temelini a softball, a life ring, a "gimme" with his John Efford clue.

It was done professionally which is credit both to Cochrane's political savvy and his skills as an on air host. 

Well done, David.

But then - almost immediately -  Cochrane had to correct Temelini by noting that the reaction within the Liberal Party to the prospect of John Efford making a political comeback was decidedly "mixed". 

Ok.

If "mixed" is a euphemism for "no way", but that's another issue.

The point here is that Temelini was clearly still clueless when he took the Efford thing and morphed that into a general criticism of the "Liberals" for "seriously thinking" about bringing Efford back.

Efford is thinking of bringing Efford back.  Well, Efford and a few friends and supporters.

Not some monolithic entity called the Liberal Party.

Surely to heavens there is someone out there who CBC can use to comment on local politics other than Michael Temelini.

One prerequisite for commentary and analysis  - other than on Open Line - is that you actually know what is going on.

That's pretty much the most basic one.  If you don't know what's going on, then you really can't do much else if you've been called on to talk about what's going on and why.

In this case, it was appalling to have the host/interviewer clearly better informed about the subject on an order of magnitude that staggers the imagination. 

Think funny, f'rinstance.

Then think Rick Mercer versus your aunt's latest boyfriend with a few beers in him.

And in between jokes he just sits on the couch singing old Culture Club.

Badly.

And playing air drums on his thighs.

That kinda gap.

It's painful, man.

But surely to all that is merciful in the universe, CBC can find someone who can offer some decent comment on local politics.

We'll even take up a collection to buy the beer.

And for those who got through that rant looking for some political clues, here they are:

1. Rideout looking at taking on Scott Simms in the next federal run.  (Mike, boy, the road spat was never the real issue in the Danny/Tommy racket.)
2. John Efford is looking at running in Baie Verte, but then again you knew that already. 

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Warm evening update:  Now that the early morning rant has passed away, let's take a more dispassionate look at the sayings of Professor Temelini, as reported by CBC News online.

Specifically let's take a look at this bit:

"People who don't like Danny Williams or his government are going to say, 'here's proof positive of this trend we're seeing that the premier is difficult to work with.'

"On the other hand, if Rideout did try to squeeze out more money, outside of the normal transparent process, maybe this is a victory for those who are opposed to pork-barrel politics."

Outside the normal transparent process.

Aside from the straw man Temelini builds here,  his second statement begins with an assumption that the process which existed  had Mr. Rideout played by the rules is not only the normal one but that this normal or usual process is "transparent."

He further qualifies his description of "transparent" by implying in the second half of the sentence that whatever Rideout did was "pork-barrel politics" and therefore worthy of scorn."

Now at this point we have to leave aside another rather huge problem with this entire presentation by Professor Temelini, namely that he has swallowed whole the position advanced by one of the parties in the situation without even a hint of inquiry, analysis, scepticism or thought.

And we can leave aside even that 800 pounds gorilla of problem to focus on the transparent process.

A transparent process, as the term implies, is one which can be seen not only by the people involved in it, but also by those on the outside looking in.  A transparent process usually has clearly defined rules which anyone can see and understand.  We might reasonably expect that a transparent process, especially one involving the expenditure of public funds in an area usually given to pork-barreling and other forms of patronage, would use a set of objective, technical criteria to establish merit. 

In other words, when it came time to hand out the road work, the individual cases would be assessed based on the condition of the roads.  The assessments would be done by experts, as opposed to politicians.  And, there'd be no extraneous considerations like what electoral district the road work was done in let alone what political party the member for that district belonged to.

Well, right off the bat Temelini's entire construction falls flat on its face.  In a transparent system, Rideout would not have been able to engage in the bullying he was accused of using.  He could not have employed any pressure.  He could not have coaxed, cajoled or demanded a penny.

A genuinely transparent system would not allow it.

If Rideout tried it, the whole thing would have been seen not just by the few people in the Premier's Office involved in making the decision but by reporters and everyone else.  Until Rideout resigned, no one outside a very small number of people likely could have told you how road work was decided let alone that there had been some fuss with Rideout over the allocation for his district.

So before we even get beyond the start, the whole thing falls apart based on nothing other than the generally agreed upon facts as presented by the Premier and by Mr. Rideout.

You can figure out that the position taken by both of them was a crock merely by examining simple facts and ignoring entirely ones emotional reaction to The Leader. Had Temelini done anything even vaguely approaching that, listening to him early in the morning might have seemed a lot less like an undergraduate lecture by the holder of the Mugabe Chair of Political Science at Harare U.

Some July 1st reading suggestions, and a twist

1.  "Proud to be Canadian".  From 2007, this post pretty much says it.

2.  "Commemoration Day 2006".  A wee bit of history. 

3.  "Newfoundland and the Great War: the beginnings".  A summary of a paper your humble e-scribbler has had in the works for the better part of two decades that covers the origins of Newfoundland's entry into the First World War. There's an article in the latest Newfoundland and Labrador Studies on the same subject, but frankly, having read it, it seems as though the fellow missed pretty much the entire story and fell back on the generally accepted - and wrong - accounts found in the secondary sources. 

4.  This is the 60th anniversary of the great exercise in democracy by which Newfoundland and Labrador threw in its lot with Canada. Don't expect to hear a single mention of this at any time this month, although we'll hear plenty about the 400th anniversary of Quebec City.  There's room in our history for two great national events. The second referendum, in which the ordinary men and women of Newfoundland and Labrador opted for responsible government as part of Canada, took place on July 22, 1948.

5.  As a last twist, and for all the stereotyped crud that you can find about Beaumont Hamel on July 1st, take with you as you leave a couple of songs popular among soldiers of the British Army during the Great War for Civilisation. 

It is almost trite to say that the Great War changed the countries that took part in it. 

For Newfoundland, it was the first national effort that was not sectarian in its organization or management.  It may have started out that way with the rush of volunteers from the paramilitary church brigades, and the townie establishment may have tried to corrupt it into another piece of sectarian trash, but the men who went to the trenches, who flew the stringbags and who sailed on all manner of ships crushed their efforts.

When they returned from the war, the country built them monuments at home and overseas, but the one which stands out is Memorial University.  The legacy of the men and women who served and those who died is in every person who has attended and graduated from that non-sectarian institution of thought and learning.  This would be a very different place had those men not chosen to establish the university as the memorial.

In the meantime, too, forget the stuff about heroics and all that.

Listen to the songs.  Like many, they take a well known church tune and claim ownership of it for the faceless Tommys. 

This version of the first song - Onward Joe Soap's Army -  contains one phrase that pops up in several popular songs during the war:  "the men who really did the job are dead and in their graves."

Simple words tell simple truths.

The second, Fred Karno's Army, is no less jarring.  Karno was a popular music hall comedian of the time and the song reflects the amateurism of the soldiers, at least at the start of their service. This version, from the 1967 film Oh! What a lovely war puts the soldiers' version against the original song in an appropriately unsettling arrangement.

 

Change and Challenge: Chapter Three - Charting the Course

To address the challenges our Province is facing and to prioritize and co-ordinate government policies so that they will increase the level of wealth in the economy, the Government is committed to implementing a strategic economic plan for Newfoundland and Labrador. This plan articulates a new vision for the future, outlines the guiding principles for economic development, and provides a policy framework to support our strategic industries.

A Vision for the Future

The Province of Newfoundland and Labrador is at a turning point in its economic history. To improve our prospects for the future, fundamental changes in attitudes, industrial structure and government policy are required, changes which must be part of a new vision for the Province's economy.

Our economic vision for Newfoundland and Labrador is that of an enterprising, educated, distinctive and prosperous people working together to create a competitive economy based on innovation, creativity, productivity and quality.

A primary role of government in such a society will be to create a positive economic and social climate so that the private sector can respond to opportunities in the global marketplace. To improve our competitiveness, the ideals of productivity, quality, profitability and a passion for excellence must be adopted by government, business, labour and other groups.

Guiding Principles for Economic Development

To achieve our vision, the strategic economic plan is founded on a set of guiding principles for economic development in Newfoundland and Labrador:

1. The Province must focus on strategic industries. With increasing competition in world markets and limits to growth in primary- resource industries, the Province must target high-value-added activities in which we have, or can develop, a competitive advantage.
2. Our education and training system must adapt to the changing labour market demands for a highly skilled, innovative and adaptable workforce. In an increasingly knowledge-based economy, it is critical that governments, business and labour work together to improve the level and quality of education, training and re-training.
3. Newfoundland and Labrador must be competitive both at home and in world markets. To improve our prospects for economic growth and  development, and to maintain and expand local and export markets, the province must diversify its economic base by producing goods and services that are internationally competitive in price, quality and service.
4. The private sector must be the engine of growth. While it is the role of government to create an economic and social environment that promotes competitiveness, it is the enterprising spirit of the private sector that will stimulate lasting economic growth.
5. Industry must be innovative and technologically progressive to enhance productivity and competitiveness. A competitive advantage can be created by integrating advanced technologies in the workplace with the innovation, skills and creativity of our people.
6. To achieve economic prosperity, there must be a consensus about the need for change and a commitment from governments, business, labour, academia and others to work together in building a competitive economy.
7. Government policies and actions must have a developmental focus where the client comes first. The structure of government must be streamlined, efficient and responsive to public needs and to changes in the economy.
8. The principle of sustainable economic development must be maintained. Our natural resources and environment must be managed to ensure that development can be sustained over the long term.

A Focus on Strategic Opportunities

Opportunities for growth in the resource, manufacturing and services sectors, combined with a supportive government policy framework, can produce the level of economic activity required to reduce economic disparities between this Province and the rest of Canada. To realize our development potential in spite of limited financial resources, we must concentrate our economic development efforts on business opportunities in areas where we have, or can develop, a competitive advantage.

If we build on our strengths, a logical economic focus is our marine environment - our 10,000 kilometres of coastline and all the resources of nearly 1,000,000 square kilometres of continental shelf. By heritage and by aptitude, our people are knowledgeable, hard-working, and enterprising in marine-related industries. In fish harvesting and processing, in marine communications, in cold ocean research and technology, in offshore oil and gas, in marine-related education and training and in marine-related tourism, we have unique advantages that enhance the competitiveness of our economy.

Another major strength is the Province's environment, culture and quality of life. Such factors are becoming more important in determining where entrepreneurs decide to locate, and these attributes need to be promoted to attract new investment, especially in tourism development.

The initiative, inherent skills, resourcefulness and determination of our people, who have survived and progressed here for five centuries, are also important strengths which need to be developed for the benefit of the Province. These attributes can provide the basis for maximizing our competitive advantages as we adapt to the changing global economy and pursue new opportunities for growth. Action is therefore required to implement human resource development initiatives which build on these personal qualities in order to ensure that we are equipped with the necessary knowledge and skills to develop all opportunities which can contribute to economic growth.

To capitalize on these strengths, Government must assume a leadership role in creating an economic and social environment in which the private sector can stimulate real economic growth. To create the right economic climate, Government must ensure that Newfoundland and Labrador industry is equipped with a well-trained, highly motivated and productive workforce which is technologically progressive. Specific initiatives in the areas of education, technology transfer, competitiveness, trade and marketing, and business development are keys to future economic expansion.

Economic Zones and Regions

In addition to implementing the general support policies for economic development identified above, it will also be the role of Government to ensure that each region of the Province is able to participate in and respond to the opportunities which arise. To help ensure this, the Province's five major administrative regions will be sub-divided into 17 economic planning zones (see following map).

This division will provide for better coordination and integration of economic planning and development activities, including the provision of the infrastructure and services that are needed. More specifically, the creation of these economic zones will facilitate or allow:

• the development of economic plans by the people in each zone;
• communities within each economic zone to undertake joint initiatives which will benefit the whole zone;
• Government to strengthen the major centres in each zone to ensure that they have the necessary infrastructure and services to attract new investment and build a strong economic base;
• the economic zones to work more efficiently and effectively with the five regional offices of Enterprise Newfoundland and Labrador (ENL) to ensure that each zone's economic plan is considered in the policy and program directions being pursued by ENL and other government agencies;
• the Province to promote more effectively the economic opportunities and strengths of each zone and region; and
• more regionalization of Government administration.

In addition to these advantages, the concept of economic zones will allow the unique characteristics of each region of Newfoundland and Labrador to be identified and better understood by both residents and non-residents. This is especially true for the Labrador region of our Province. While the vision, guiding principles, and general actions outlined in this document apply also to the Labrador region, it is recognized that the uniqueness of Labrador's geography, demography and ethnic diversity means that the region requires specific attention. Throughout this strategic economic plan there are actions which apply specifically to Labrador.

The Province is committed to a co-ordinated effort to develop fully the strengths of the Labrador region in order to improve employment and income prospects through the pursuit of sustainable economic activities based on viable and realistic opportunities. To accelerate this process, the Province will direct the Labrador regional office of Enterprise Newfoundland and Labrador to facilitate the integration of economic plans for the five economic zones into a regional economic plan for Labrador.

Underlying these economic plans will be the Province's strong commitment to complete the Trans-Labrador Highway through a cooperative effort with the Federal Government, as well as completing appropriate secondary roads and winter trails; to continue to support and facilitate the expansion of Labrador's resource industries, including hydro developments, and of the low-level military-training activities which are so vital to Happy Valley-Goose Bay; to work with aboriginal peoples in Labrador to ensure their input into Government policy decisions that particularly affect them; to support aboriginal peoples in formulating their own economic development strategies; and to continue to work with aboriginal peoples and the Federal Government to accelerate the settlement of land claims and the establishment of agreed levels of self-government.

A Cooperative Approach

The people of Newfoundland and Labrador have indicated that they believe all orders of government have a responsibility to contribute to economic development and that partnership among the federal, provincial and municipal governments is essential to future economic growth. It is counterproductive for one order of government to address economic problems in isolation from the others. There has to be a full, cooperative effort involving all orders of government, as well as the private sector and others with particular interests.

The public recognizes that governments do not have unlimited financial resources and that closer harmonization of programs and policies is thus required to avoid duplication and overlap.

The Government of Newfoundland and Labrador views this strategic economic plan as a foundation on which all orders of government can actively cooperate to build an economy which is productive and competitive and to restore the confidence which is so necessary to allow Newfoundland and Labrador to contribute positively to the economy of our nation.

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Chapter Four (1)

Rideout quits

Tom Rideout has decided to pull pin on a political career that spanned three decades and two political parties.

Remember that you read it here first:  John Efford is working on getting the Liberal nod in an effort to win Baie Verte -Springdale.

Meanwhile, in the Tower, hypocrisy reigns.

Note that this release contains that name of a different "press secretary" for the Premier's Office than the one issued just an hour and a bit before.

And for all that, it still lists a "communications director" for the Premier's Office as a media contact as well.

Two media contacts for one office.

Dubya doesn't need that many.

Gord has a first rate news page which, as you may notice doesn't append the names of all the media handlers to each utterance, either.

[Secret bonus:  notice the "jargon buster" link with lots of jammy background information.   Backgrounders, you see, aren't there just so that the yokels outside the Centre of the Universe can have some nice stuff to cover.]

Even Steve doesn't have a laundry list tacked on the end of  missives from his office. 

Note here, though, that his web page sucks.  There really isn't another word for it.  It just sucks.  Well there is another phrase for it involving a fully grown ursus arctos horribilus and the opposite of suck but this has become a family space so we'll refrain from being quite that blunt.

Steve's web presence is just smelly.

The Canadian PM's site went from looking like the web page of a world leader to the web page  for the guy who runs the discount car dealership on the concession road just outside ButtCrackville Corner, Ontario, with the programming done by his second cousin twice removed on his father's side using a Commodore 64.

I mean - seriously - what leader of a country needs to have his name and title across the web page for his office. 

Is he that insecure?

Anyway, back to the story.

Rideout's gone. 

Again.

Efford's trying to come back.

Again.

Politics in Newfoundland and Labrador these days is like NTV in the summer time:  endless reruns of stuff we watched 30 and 40 years ago.

 

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Commemoration Day 2008: "Harvard Man tells of War"

CAMBRIDGE, Mass., Feb. 20. -- Alonzo John Gallishaw will resume his studies tomorrow at Harvard after five exciting months as a member of the British Army in its unsuccessful attempt to force the Turkish defenses on the Gallipoli Peninsula during the Dardanelles campaign.

John Gallishaw volunteered to serve in the Newfoundland Regiment during the Great War. Sent to Gallipoli with the regiment in Septemeber 1915 he was severely wounded and released from military service.

Gallishaw returned to Harvard University. He resumed his studies and subsequently became a noted author and screenwriter.

He subsequently wrote a war memoir, Trenching at Gallipoli, which was published in October 1916.

Gallishaw also co-authored a small "how to" book aimed at the American Expeditionary Force sent to Europe in 1917.  The man in the ranks was a compendium of useful tips on everything sucha s the proper attitude to military courtesy to advice on tooth cleaning;  Gallishaw recommended using tooth powder in a  tin since with a tube, there was always the likelihood a buddy would sit on your haversack and squirt the toothpaste over your clothing and equipment.

The excerpt above is from a New York Times article on Gallishaw, dated in 1916 after he had been wounded and medically released.

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The value of public relations

Two events, considerably far apart in both space and substance, have given rise to a public discussion across the world about the value of public relations.

Former White House Press Secretary Scott McClellan's recently published memoir and the admission he lied about certain events prompted a scathing commentary by CBS legal analyst Andrew Cohen.

Closer to home, the Cameron Inquiry has shown to all the inner workings of government and one of its major agencies.  Good will come of the examination from the inquiry, however, in the short term, some of the information disclosed during testimony has permitted local commentators - the Telegram's Bob Wakeham is one example - to do nothing more than trot out their old prejudices against public relations.  Wakeham's column is not archived on the Telly website unfortunately.

As far as the local opinions go, we shouldn't lose sight of the fact that the critical views of public relations offered by reporters often are aimed at people who once earned their crust of bread sitting in the same newsroom as the people who now slag them off. 

Back in March, Geoff Meeker started what has become a series of posts on the phenomenon of reporters crossing the street to communications jobs. It's worth considering that point in the larger issue of public relations, ethics and the value of PR.

To put it simply, Cohen's comments are about as cogent and insightful as the simplistic view of lawyers as hacks and ambulance chasers.  His observations don't really deserve much more attention than that.

They got rich attention though, in a blog post by no less a figure than Harold Burson.  Burson is the founder of Burson-Marsteller, one of the leading American public relations firms. He's a senior practitioner by any measure and, as an aside, people should note that, as evident from his blog, he is as current as they come in his thoughts and approach to the craft.

As Burson writes:

Increasingly, news media are in the business of interpretation and commentary, areas once confined to the editorial page. Many if not most newsmen forget that we in public relations are not surrogates of journalists or media. Rather, we are the paid advocates of clients who have a point of view that may be questioned by affected parties. Our interpretation in serving our clients may differ from how a reporter reacts to the same set of facts. But this is nothing new in the world of journalism; editorial writers frequently have differing points of view than those expressed in a publication’s news columns.

Heather Yaxley uses the CBS commentary and some other similar issues to make some observations about the value of PR to society and on whether that value can be measured. She raises questions and does not attempt to answer them, but the questions and their implications are worth pondering whether you are public relations practitioner or somebody else.

We may come back to this issue in a future post, but for the time being there is the start of a discussion if anyone wants to have it.

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Budget 2008: Surplus? What Surplus?

No doubt, you remember the debt clock.

That was the little theatrical device finance minister Tom Marshall used during his trip around the province in what was euphemistically called a pre-budget "consultation".  Of course, it was pretty funny to call it a consultation considering that, as the Premier later admitted, budget decisions were already made or were being made as the finance minister attended the meetings.

The debt clock garnered so much attention it became the media story of the entire affair.  And that, as  Bond Papers noted, was the point of the exercise in the first place.

One would expect that consultations are supposed to be an exercise in soliciting opinions and ideas.  They are supposed to be about receiving messages.

In government practice  not just in this province but across the country, "consultations" have become more about government delivering a message to the people who show up for them and the reporters who get assigned to cover them rather than ministers collecting information.

It's fairly advanced doublespeak.

Kind of  like delivering a speech and then referring to the oration as an exercise in hearing:   "Joe Smallwood," the history professor noted, "was a masterful listener.  He sometimes listened to an audience for over two hours describing the economic accomplishments of Smallwood's government."

"Smallwood once said that he would single out the dimmest pair of eyes in a crowd.  He would then focus his listening until he saw that the brain behind those eyes understood what Smallwood was listening.  At that point, Smallwood could be sure the whole audience understood what Smallwood was hearing."

In any event, if we took the debt clock and the government pronouncements at face value, dealing with the public debt would be a major feature of government policy.

Take a closer look at the 2008 budget estimates, though, and you'll see a different story.

Right off the bat, the Estimates show a projected increase in total public sector debt in Fiscal Year 2008.

That's right.

An increase.

Not a decrease, which is what you would expect given the peril of public debt supposedly demonstrated by the debt clock.

In fact, that would be the third such increase since 2004.  Take a look at the table below and you can see exactly what the debt load has been and is. The figures come from Appendix III on page 243 of the Estimates link above.



Debt, in this case, is exactly what most of us think about when we speak of debt:  borrowings.

The phrase "total public sector debt" refers to the accumulated borrowings of the provincial government and its agencies.  The whole thing is laid out pretty clearly each year in the Estimates.  It was also discussed in a report from the province's auditor general just before the finance minister introduced the budget in the legislature.

At this point, minds are boggling.  Now if you are so confused at this point you are drooling like a spliffed-out Lab, in the words of Steve Macdonald, just grab your Bond Papers mug and hold it under your chin.

We're not done yet.

There's this idea of a surplus.  Now most of us think of a surplus as being money left over after all the bills are paid.

We've been told that that the surplus in 2007  was over $1.0 billion last year.  This year, the province's finance minister forecast a surplus of over  half a billion this year.

Find those figures in the Estimates.

Go on.

Be brave.

Take a look.

You'll find the answer in Statement I, which is on page iv of the Estimates if you've got a printed copy or page seven of the pdf link.

The real picture of government’s surplus or deficit is found in the estimates in a table called the summary of borrowing requirements.

You can find it usually in the first two or three pages of every budget. That table brings together all government revenue estimates and the spending plans and adds in the debt-related spending to give a total picture of how much money will be left over at the end of the year – a surplus – or how much has to be borrowed – a deficit.

If you go back and take that same statement from each set of Estimates, you'd wind up with a chart like this one:

Now there is a surplus on current and capital account of a slightly more than $1.0 billion for 2007.  Then there's an interesting adjustment. You have to subtract the $305 million in money from the 2005 offshore deal because it was already received.  That money shows up in another spot as revenue, but that's just for the accounting of the cash on the province's books. In order to get the accurate picture of revenues, you have to take that amount away.

Then you are left with about the true picture of  $737 million, which is still a tidy sum.  The only problem is all the financial transactions for the year aren't done. After repaying Equalization overpayments and a federal loan, retiring a bit of debt, putting some cash against the pension liabilities and contributing to sinking funds (to help pay off loans when they come due), the provincial treasury came up $88 million short.

Not a surplus.

A deficit of $88 million.

And if you take your eyes from the right hand side of that page and switch it to the left hand you'll see the estimated financial state for 2008.

Current and capital account will be in deficit by $54 million.  After you take away the advance cash from 2005, the Estimates project a deficit of $414 million.

Not a surplus.

A deficit.

Carry on with all those other projected financial transactions and the provincial budget shows anticipated borrowings of almost $800 million in FY 2008 in order to balance the books.

In order to produce a surplus of the size predicted  - but predicted only in political statements - oil prices would have to continue at double the figure of  $87 a barrel used to come up with the budget.  So far, it looks pretty good for oil to be somewhere over $130 on through the end of this year, but you never know what will happen with oil prices, especially after the American elections in November and the new president is sworn in late in January 2009.

The provincial government might wind up being right. The US Energy Information Agency predicted in early April this year that West Texas Intermediate will average US$101 a barrel in 2008 and about $10 lower in 2009.

If that forecast holds true, the provincial government won’t have to borrow quite as much as projected or it might not have to borrow very much at all.

Now as you finish wiping your chin or reach for another belt of coffee to calm your nevers, don't fret.  The provincial treasury isn't about to run dry next month.

Nor is there anything unusual about a government presenting its finances in the best possible light;  "best" being defined as fitting its own political interests or outlook.  Governments of all political stripes here and elsewhere in Canada have been doing it for decades to one degree or another and in one way or another.   Criticizing them for it is like slagging a dog for barking.

The full picture is usually there in the budget documents.

You just have to look to find it.

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Change and Challenge: Chapter Two - The Challenges

The economy of Newfoundland and Labrador is underdeveloped and economic disparities between our province and other provinces in Canada persist. In addition to these long-standing problems, the Province now faces new challenges as the result of global economic change. Thus, in the 1990s, the need to diversify the economy and to improve productivity and competitiveness has become critical.

A Changing Global Economy

The world economy is constantly changing, driven by profound changes in trade patterns, investment flows and technology. More specifically,

• the liberalization of world trade has contributed to rapid growth in export opportunities for manufactured goods and commercial services and, as a result, to increased international competition;
• the emergence of major multinational trading blocs within the world trading system has resulted in an increase in joint ventures, technology sharing and mergers between firms from different countries;
• in order to promote competitiveness within acceptable international trading guidelines, there has been a shift in national and provincial economic policy from direct government subsidies to government support in the areas of business development services, tax incentives, education and training, technological innovation and diffusion, and the provision of economic infrastructure;
• the technological advances made in transportation and communications have reduced the effective distance between producers and consumers. This wider market for our goods and services is also creating opportunities for the development of new products and services, but it means, of course, that we also face more international competition;
• employment opportunities continue to concentrate in urban centres even though traditional impediments to development, such as domestic market size and distance from export markets are playing a lesser role in determining where firms choose to locate;
• the gradual shift from labour-intensive to knowledge-intensive industries, particularly in developed countries where labour costs are higher, has required firms to invest in both new technologies and human resources to improve their competitiveness; and
• environmental considerations are becoming increasingly integrated into the decision-making processes of governments, industries and individuals.

These world-wide economic changes will intensify over the next decade as new technologies and increasing competition force existing industries to restructure and new industries to develop. These changes mean that Newfoundland and Labrador will have to strengthen and build on existing comparative advantages in our resource industries and also target strategic opportunities in new growth industries. If we ignore the realities of a changing global environment, local firms will inevitably find themselves unable to compete at home or abroad.

The Province's Economic Structure and Performance

There are significant differences in economic structure and performance between Newfoundland and Labrador and the rest of Canada, though during the last two decades, our economy has generally mirrored the direction - but not the magnitude - of Canada's economic growth.

Newfoundland and Labrador's economy is very "open", which means that it is strongly influenced by the level of economic activity elsewhere, largely because of our reliance on resource-based exports. As shown in Chart 1, the goods-producing sector (including the resource industries) accounted for 29% of the Province's gross domestic product (GDP) in 1990, while the services sector accounted for 71% of GDP.

Because Newfoundland and Labrador's goods production is concentrated largely in primary-resource industries, the Province's economy has pronounced seasonality in output and employment, low value-added production and a narrow export base from which to generate new economic wealth. These weaknesses produce persistently high unemployment and low per capita incomes (Chart 2). 

The amount of personal income available is a major determinant of economic activity and of the Province's living standards. The amount of tax revenue which is available to Government for expenditure on areas such as education, health and transportation infrastructure, for example, is also influenced by both the level and distribution of personal income. It is therefore important to understand the relative importance of the components of personal income, specifically labour, business and investment income, unemployment insurance (UI) benefits and other types of transfer income (Chart 3). 

Transfer payments to individuals, such as UI benefits, social assistance, family allowances, pensions and old age security payments, represent the second largest component of personal income in the Province. Some elements of transfer income, such as family allowances and old age security payments, are based on demographic and social factors, while others, such as UI payments, are related to employment (and especially part-year or seasonal employment) and the general level of economic activity in the Province. However, this over-dependence on government transfers is no longer acceptable to most people nor can it be sustained by governments.

The challenge now facing governments, business, labour and other groups is to make sure that this dependence is replaced by productive employment and more appropriate social programs. For the Provincial Government, in particular, this means using its financial resources more efficiently and effectively.

Chart 4 shows that for the fiscal year 1992-93, total gross capital and current account expenditures are expected to reach $3.5 billion. At present, only 8.7% of that amount, approximately $300 million, is directly targeted for the resource or economic sector. On the other hand, the social sector is expected to consume 65.4% of the budget - about $2.3 billion. Because some traditional social-sector areas, such as education, are directly linked to economic performance, the challenge the Provincial Government faces, now and in the future, is to ensure that economic development considerations influence expenditure decisions.

While there are many opportunities which can contribute to economic growth, they must be pursued within a framework which is realistic and attainable. Too often, when setting goals for economic growth in the Province, achieving the Canadian average has been adopted as a medium-term target.

This, however, is probably unrealistic: over the medium term (5-10 years) - depending on the Canadian rate of growth -the Provincial GDP would have to grow between 4.4% and 12.3% a year to reach the Canadian average (Table 1).

A more realistic target may be for the Province to attain equality with the Maritime Provinces. The levels of economic growth necessary to reach the Maritime average are shown in Table 2. 

The Importance of Productivity and Competitiveness

In the expanding global economy, international competitiveness has become the most important single factor affecting economic growth or decline. Many of the Province's prospects for economic development, therefore, hinge on our willingness, determination and commitment to work together to build a more productive, diversified and efficient economy. One of the greatest challenges is to become more competitive while simultaneously improving the living standards, employment opportunities and real incomes of our people.

Newfoundland and Labrador's productivity performance, in particular, will be a key determinant of our ability to compete, but between 1975 and 1989, the Province experienced one of the lowest productivity growth rates in Canada. As a result, the difference in productivity between this province and the rest of Canada has increased and our economic problems have been compounded. The factors contributing to this disparity include differences in industrial structure, increasing seasonality in the employment of labour and capital, a small, widely dispersed population, lower levels of educational attainment, inadequate investment in capital for technological change, and a lack of cooperation among governments, business and labour. If this trend in productivity is not reversed it will have profound negative implications for our competitiveness, our economic growth and our overall standard of living.

To change this pattern, both old and new businesses in the Province will have to use modern production methods, invest in new technologies, provide adequate training and re-training, and produce higher value-added goods and services. We will all have to be adaptable to a changing work environment and be committed to life-long learning. And governments will have to become more efficient in providing quality public services and ensuring that their policies, programs and actions create an environment that supports real economic growth and diversification.

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Chapter Three - Charting the Course

Professor of Creative Writing

labradore suitably skewers Patrick O'Flaherty's latest column which - for reasons known only to O'Flaherty  - tries to cast the democratic referendum  on responsible government in 1948 in entirely ethic and sectarian terms.

O'Flaherty is a fiction writer, it should be noted, not a historian so some of his comments in the column  -  like the stuff about resources - can be put to an inherent tendency to make things up.

For those who can't figure it out, labradore's  title for the post translates as "money and the ethnic vote."

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Refinery economics not subprime crisis affected NLRC plans

NLRC's plans to build a 300,000 barrel per day refinery in Placentia Bay to serve the North American and European markets ran into financial difficulties apparently due to changing refinery economics, not the shortage of capital or other reasons originally offered by NLRC's director Brian Dalton.

In an interview on June 18, NLRC director Brian Dalton spoke to The Independent.

For some reason, the Indy held the interview with Dalton until this week, even though they had it before press time last week. The interview, on page seven of the June 27 issue gives a completely different perspective on NLRC's problems although the Indy story doesn't reflect the importance of what they had. The NLRC story is inside the paper; a front page story quotes the Premier on his recent efforts in Qatar to save the NLRC project and to promote other local energy projects. The front page focuses on trivial issues rather than on the more serious economic ones.

Neither story is available on line, as of June 27.

"Most refiners in North America have not made money in six months," Dalton says, [in The Independent]...

And that would be about right.

In a Canadian Press story that appeared across Canada the same day Dalton gave that interview, MJ Ervin analyst Cathy Hay said that in May 2008, North American refiners were seeing margins of around 10 cents per litre, compared with 28 cents per litre in May 2007. That's also about five to 10 cents below the margins expected during the peak summer months.

A company would "have to take a hard look at the numbers and figure what's going to happen next year. Is this a trend? If it is, your economics may no longer work," said one industry observer who asked to remain anonymous.

Late last week, some media reports were attributing NLRC's financial problems to the subprime crunch in the United States. According to CBC News, Dalton said the refinery project ran into troubles "due to the deterioration of global capital markets."

In March, Dalton gave similar reasons to Bloomberg:

"Effectively, the debt markets are closed at the moment,'' Dalton said. "It's not a pricing issue, it's just a general availability issue.'' The start of construction "depends very much on when the markets open. We're not going to start it unless we know we can finish it, that's for sure."

None of that matches Dalton's comments on tight refining margins, although tight margins would give investors pause before embarking on a $5.0 billion greenfield project aimed at the North American and European markets.

North American markets are likely shrinking owing to changing American consumer demand, even if only in the short term according to the Canadian Press story.

New refining capacity plus the increased use of alternative fuels like ethanol may also narrow global refining margins according to one Wood Mackenzie analyst. Allan Gelder told Bloomberg in April 2008 that he expects tighter margins through 2012.

European refineries are also experiencing tighter margins. That situation isn't likely to change in the short term.

While demand may be continuing in Asia and other parts of the globe, it's difficult to see the logic behind approaching Middle Eastern and Asian investors for the capital to build a refinery on the opposite side of the world from where the refined oil products would be marketed.

ARAMCO is continuing with its plans to invest in new refineries but those are not planned for Europe or North America. One project, in the Red Sea, would be strategically positioned to supply portions of Europe as well as growing markets in the Middle East, Africa and Asia. Another project, cracking Saudi heavy crude, would refine 400,000 barrels per day. It is planned for Saudi Arabia.

Other companies are investing in expansions to existing refineries in Europe, such as one at Wilton, UK.

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Update: The Indy front page story is now online but the story with real information in it - the one with Brian Dalton held - for some bizarre reason from the week before - is only in the print edition.

Free speech wins: SCC backs Mair in defamation case

In British Columbia, they have real talk radio hosts.

They used to have Rafe Mair but he's been replaced by others who have the trademark ability to really lay it on the line and tell you exactly what they think.

None of this Crap Talk  in the afternoons for British Columbians. Mair is a former cabinet minister who actually recalls what he did while in politics

And Mair surely wouldn't have been entertaining a plum government job offer on the sly from the guy who went on to become premier, all the while staying on the air through a provincial election and for a long while after. Isn't there some CRTC regulation against that kind of conflict of interest?

Nope.

Mair speaks truth to power, as he sees it.

One such episode landed him in court in 1999 facing a defamation charge from someone who wanted to keep books out of public libraries which depicted gay couples favourably.  Mair tossed around words like Hitler, the Klan and skinheads.

Mair won the first case, lost the appeal but today walked away from the Supreme Court of Canada with a unanimous verdict in his favour. The decision is also a victory for free speech, since the justices established more clear rules about what constitutes fair comment.

No one should be afraid to voice their opinion.  No one should consider the threat of a defamation suit - the bullying tactics of the weak and cowardly - as reason to reconsider speaking frankly about any issue which is of public concern.

By the way, someone should ask John Hickey and Danny Williams what happened to the law suit against Roger Grimes over words which Danny Williams uttered but Roger Grimes didn't.

And as a last note, it is painfully obvious that since the provincial government stopped organizing callers for talk radio shows, the audience for two of the three daily shows has dwindled.  So bad is it that two of the shows are now taking a summer hiatus.  Crap Talk with Bill Rowe took its crap off the air today.

A couple of months of the Top 50 elevator music hits should be enough to restore the sanity of anyone who wound up listening to the former ambassador to Hy's blather on.

It should be time, as well, for the crowd who program NewCap to see if they could cut a deal with Mair to host a show in this province from the Wet Coast. 

Imagine Rafe and Danny locking horns in the afternoon over a plan to pay women public cash to crank out children in order to save The Race.

Geez, now there's something you could actually charge admission to hear.

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Fraser Institute survey ranks SK ahead of AL

Saskatchewan is now the preferred Canadian jurisdiction for oil exploration and development, according to the Fraser Institute's Global Petroleum Survey 2008.

The Global Petroleum Survey 2008, ranked Saskatchewan as the sixth most favourable jurisdiction out of 81 in terms of having low barriers to upstream oil and gas investment. Alberta was ranked 29th while British Columbia ranked 19th. Saskatchewan is the only Canadian province ranked among the top 10 jurisdictions.

And Newfoundland and Labrador?

Here are two quotes from exploration and development officials surveyed:

“We are bothered by political uncertainty, regulatory uncertainty, and business concerns regarding
government involvement and royalties.”

“The government needs to make a long-term commitment to create and enforce a stable business
structure.”

The funny thing with this survey is that if you take a look at the responses to specific questions on things like financial regimes and political stability, Newfoundland and Labrador gets positive numbers in every category.  The existing situation is either no deterrent to investment or a mild deterrent to investment. In security, this province ranks alongside Saskatchewan, British Columbia and Nova Scotia as providing a secure environment that is a stimulus to investment.  Newfoundland and Labrador ranked higher than Wyoming on security in this survey.

So if all that is the case, why isn't there more exploration investment?

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10 Euros to cross the Atlantic

It's hard to know which is worse.

RyanAir's chief executive officer making an entirely inappropriate comment at a Dusseldorf newser announcing the airline's trans-Atlantic service,  Bob LeDrew's title for his post on the newser, or the fact no one seemed astonished at the idea of getting across the Atlantic for a mere 10 Euros.

The discount airline is top of the list in passenger complaints, according to a report in the Irish Times. The whole issue has prompted a raft of Internet traffic which some are claiming is a brilliant marketing ploy by RyanAir. Looks more like a case of the marketing crew at Ryan having to scramble to defuse a bone-headed comment.

Anyway here's the video of the news conference and here a tip of the bowler to Bob who posted this originally.

No word yet on whether the provincial government is in negotiations to bring RyanAir's unique customer service concept to this side of the ocean. One can only imagine what that news conference would involve.

Forget-me-not

 

The official flower for Commemoration Day (July 1st).

 

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NLRC gets 30 days to sort out financials

NLRC has 30 days to sort out its financial affairs, a Supreme Court judge decided yesterday in St. John's.

NLRC sought court protection from its creditors last week, after SNC Lavalin sought payment of over $20 million it claims it's owed by the company proposing a second refinery for the Come by Chance area. SNC Lavalin subsidiary BAE NewPlan told the court payment on the company's design and engineering work stopped six months ago.

SNC Lavalin agreed to the reprieve but offered no public comment on its reasons.

Notice in the scrum [ram audio file] that managing director Brian Dalton uses  a couple of meaningless phrases to skip over the issue of the provincial government's role in funding his project.  No reporters probed the issue further.

There's also an interesting version of the recent corporate history. According to Dalton, the US market "closed very suddenly" earlier this year and as a consequence NLRC shifted direction elsewhere for investors. 

SNC Lavalin is a major contractor on the Lower Churchill development project.  Altius' proposal for an equity stake in the Lower Churchill project is reportedly still active.

The NLRC financial problems have had a dramatic impact on Altius, which owns almost 40% of the refinery venture.  Its stock plummeted last week on news of the bankruptcy proceedings but rebounded slightly with word of the stay. The NLRC - Altius connection figured prominently in many of the news stories running on the Tuesday court decision.

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Electricity prices to leap in NL on July 1

Electricity rates in the province will take a jump on July 1 as a result of a decision of the Public Utilities Board on Tuesday.

The average increase will be 5.9%, according to the PUB official statement.

No word yet on a benefit dinner to help the average consumer pay the increases.

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Fiscal bandwidth hog: the disproportionate growth of Knuckles 2

Strange as it might seem, the disproportionate growth of the Executive Council budget as a share of overall government spending is attributable to the Office of the Chief Information Officer.

The Executive Council went from 0.8% of the annual capital and current account budget to 1.6% in the space of two years, 2004 to 2006. It climbed up again in 2007 and 2008.

OCIO - or NLCS v. 2 - is the controller of all computer resources and personnel within government. Over 200 employees, mostly in St. John's, and a budget which is twice that of the entity to which it nominally belongs. Big Brother, it seems, is a fiscal bandwidth hog like few others.

To be fair, ICIO's budget includes the budgets that used to be distributed around various government departments; it's not surprising it is a huge cash sucker.

But to be even more fair, like all bureaucracies, OCIO will continue to accumulate staff and budget allocations using every advantage that comes from being the information controller for all government working directly for the most central of central agencies.

The cash levels and the staff allocations are - after all - the only performance indicators any bureaucracy worthy of the name actually understands.

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The disproportionate growth of central agencies

Going through Change and Challenge and working up the slides to accompany it prompted your humble e-scribbler to do a little comparison with the current day situation.

For example, there's a chart in Chapter Three (still in the works because of the slides) which shows each department as a percentage of overall capital and current account spending in the provincial budget.

A quick flip to the current budget showed the same break down of information. Make some minor adjustments for changes in some departments over the past 16 years and - vie-oh-la - there is a chart.

Bear in mind that in 1992, the provincial government's total budget was $3.5 billion. This year the combined capital and current account budget is over $6.5 billion.

For those who don't want to click and see a larger version, the chart shows figures - from left to right for - Education, Health, Justice, Social Services, Consolidated Fund Services (debt management), Executive Council, Finance, House of Assembly, Works, Services and Transportation, Development, Environment and Labour, Fisheries and Natural Resources.

Right away, you can see some fairly obvious things. Education takes up a relatively smaller portion of the budget today than it did 16 years ago. Health, on the other hand is obviously a larger share. Development - which from the current budget includes Business, INTRD and Tourism has dropped as a share of the budget. Natural Resources - mines and energy, forestry and agriculture has a larger share of the budget today than it did 16 years ago. CFS is significantly lower today as a share of the budget than it used to be.

Let's put some values on those numbers. CFS took up 15.3% of the 1992 budget; today it's 8.3%. health has gone from 25% of the budget to 36.2%. Development spending is half what is used to be, as a percentage of total budget spending. Fisheries is about one third what it used to be.

Take a look, though, at the two in the middle: Executive Council and Finance, the latter including Treasury Board. Those two are so-called central agencies. They co-ordinate or oversee the others.

Executive Council has gone from taking up one half of one percent of the 1992 budget to 1.8% today. Finance has gone from 1.5% to 4.0%. The growth in those two agencies dwarfs the relative growth of the others.

At this point, there's no way of determining what this means. It just becomes an interesting artifact; something to provoke further examination.

If the provincial government were following trends supposedly taking place elsewhere, such as in Saskatchewan by one account, one might expect to see something other than a trebling of spending on the Executive Council. Allowing line departments and deputy ministers to manage departments, co-ordinate with other departments on related issues and resolve inter-departmental disputes among themselves would require additional resources than what was available 16 years ago.

By the way, at this point you can pretty much rule out annual inflation as the cause of the growth here. Normal inflation wouldn't account for the change as a percentage over overall spending. Esecially in a situation where the budget has doubled, you'd pretty much have to increase spending on that particular agency to drive the share from 0.5% to 1.8% in 16 years. As a test, consider that the House of Assembly today has more statutory offices reporting to it directly than it did 16 years and yet its share of the budget is virtually the same.

On the face of it, the disproportionate growth of central agencies demonstrated by the table above does conform to Donald Savoie's description of government trends in his most recent book Court government and the collapse of accountability. Savoie contends, among other things, that since the 1970s the size of and influence of central agencies has grown. There are several reasons for the growth including increased centralization of decisionmaking in the first minister's office and the related cabinet office.

Leaving aside Savoie's provocative title, there seems to be some confirmation of his argument. The other point of view, from former Saskatchewan Premier Alan Blakeney (link above), doesn't match with what the table here appears to suggest.

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