A campaign of ideas

Instead of egos and vicious personal attacks.

What a concept.

Noob candidates - and some more knob than noob - could do with a dose of Ken Dryden's approach to campaign speechifying.

As a golfer, I can hit the ball a long way.  The problem is I can’t hit it in the right direction.  And a ball hit - decisively, competently - in the wrong direction is a ball that goes further and further and further into the woods.  History is filled with leaders who have competently, decisively gone in the wrong direction with disastrous results.

Where is Mr. Harper’s “where”?

He doesn’t seem to want to talk about that.  In making this election all about him, he is doing his best to make this election about nothing.  It’s his “Seinfeld campaign.”  But in 2008, how can that be?  This is a time when the cost of carbon economically and environmentally is forcing the world’s countries to re-imagine the future.  To reward the constructive and punish the destructive.  To act.  To change.  To create the hard-won possibilities to compete in the economy ahead.

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Fried Greens at the Whistestops

Green Party supporters are anxiously awaiting leader Elizabeth May's whistlestop election tour of Newfoundland and most of Labrador, where there is no train.

The odd Green voter in western Labrador can wonder if May will somehow get herself to Sept Isles in Quebec and then hop an ore car to Labrador City and Wabush.

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High tech Hijinks

Someone spoofing the Prime Minister's e-mail is serious, but funny, given that the listserv involved had a huge security loophole that should have been identified and plugged.

Thanks heavens national electronic security is in the hands of experts at the Communications Security Establishment rather than the political hacks in the current Prime Minister's Office. At least important stuff is safe.

Ya know, another Conservative first minister had a similar problem a couple of years ago.

Of course that guy had an episode earlier where he claimed someone was hacking his office.

That turned out to be someone trying to access a printer in the Provincial Conservative from another office in the same building.

The police were called.  (Did they know the truth before the police were called?)

The media were called in, too and all sorts of wild and completely unfounded accusations were tossed around.

The whole episode was more farce than anything else but the media dutifully reported the Conservative leader's Get Smart claims of a hacking attempt.

Even at the time, the whole thing looked more like part of a continuous pattern of vicious personal attacks, smears and innuendo than something to bother the police about.

But bothered they were.

The police found nothing...

...not surprisingly at all.

No charges were filed at all.

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The charge of the light brigade

He just doesn't get it, does he?

Walter Noel, that is.

Determined to wear the House of Assembly spending scandal forever and a day.

Here's a clue, Walter:  it isn't a case of guts, even capelin guts.

It's a matter of sheer stupidity to continue to defend an abuse of public funds (along with the rest of your colleagues).

It's incomprehensibly dumb to claim that "spending was all in keeping with regulations, and approved by the highest officials of the House of Assembly"  when it's pretty clear there were no regulations of any consequence and the "highest officials" would have - and very often did - approve just about any expense claim for anything at all.

Walter Noel clearly doesn't get it, some 18 months after the rest of the world found out about the unmitigated mess in the House of Assembly.

And as long as Noel continues to shoot himself between the eyes, that's not the only thing Walter won't get come the middle of October.

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How time flies

The year:  2004

The issue:  Premier Danny Williams legislates public servants back to work and his caucus votes to impose a two year wage freeze on them.

Unknown at the time:  At the same time, members of the House of Assembly gave themselves a bonus payment of $2800 bucks, a fact kept secret until the province's auditor general ripped the lid off.   Danny Williams didn't take the cash but he didn't stop it from going to others, either.

What Danny said about Reg:

“I don't like to use the word liar. But he's misleading and he's wrong and it's dishonest. Now that's as close as we can come."

What then NDP leader Jack Harris said about Danny:

"I’m surprised and dismayed that the Premier would launch such an attack. There is a strong body of opinion that government is exaggerating the nature of the province’s fiscal situation. And it’s pretty clear that the Price Waterhouse Report’s assumptions for the future were extremely negative. There’s also no doubt the Premier used these numbers to frighten the public and try to build support for drastic measures by government...”.

Frighten the public?

Oh dear.

Such nasty words.

How time flies.

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Reg didn't get the memo

Lorraine Michael, provincial New Democratic party leader at her party's 2008 biennial convention:

One of the things that I hear people say, and I hear it over and over…I’ve heard it a number of times actually is ”…now you have to remember that this government is not like Ottawa. Danny [Williams] is not Stephen Harper.” And part of me says “yea, that’s true, they’re [government] not as bad.” But when I look at it, a conservative, is a conservative, is a conservative. And we’ve got to get that message across to the people in this province.

(Applause)

And I wanted to speak a bit, well not a bit as a lot of it is going to be based on that…a conservative is a conservative is a conservative. [Emphasis added]

Apparently, outgoing labour uber-boss  Reg Anstey is of a different opinion, at least as voice of the cabinet minister is reporting:

Meanwhile, the Federation of Labour is standing behind Danny Williams and his ABC campaign. President Reg Anstey says Canada run by Stephen Harper will not be kind to workers, their families, or to this province. He says Harper's agenda has the potential to be very dangerous for Newfoundland and Labrador. He says it will be a good thing if at the end of the day they send a goose egg to Ottawa. He says we've only seen the tip of what the government will look like if it gets a majority.

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Autonomy!

The wisdom from the centre of the universe:

There is nothing to be gained from stoking federal-provincial tensions, particularly at a time when Canada is facing sweeping economic challenges that will require co-operative responses. Yet that is the likely result when provincial leaders decide that their own ponds are not big enough.

Such a definitive answer to a good question the Globe editorial writer might have asked before tapping indignantly on the keyboard.

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Family Feud Surreality Check

"You can't run a government with a one-man show, and that's what Mr. Harper wants to do," [Bob Rae] said. "I don't think that's the way Canadians want their government to operate."

Then there's this comment by columnist Peter Pickersgill about someone else:

The premier is a great campaigner at election time. He's a great man to pick a fight. Just ask the members of the Hebron consortium or Stephen Harper. But I wouldn't accuse him of being a creative thinker or a shaper of innovative policy. That's too bad, because he's running a one-man band.

From the this is now file:

Williams also rehashed past statements Harper made in which the prime minister referred to Canada as being a "northern European welfare state" and spoke of Atlantic Canada's "culture of defeat."

"For hard-working Newfoundlanders and Labradorians ... this stereotypical slur did not sit well with any of us," Williams said.

and the that was then file:

"I think Atlantic Canadians are going to be very pleasantly surprised and pleased with the performance of Mr. Harper," said Williams.

Maybe someone should invoke names to conjure with:

Fact is, Newfoundland and Labrador hasn't had a truly effective minister in Ottawa since John Crosbie.

while conveniently forgetting how the effective fellow dealt with the Equalization issue almost 20 years ago:

"I'm getting a little tired of them trying to have their cake and throwing it up too. They can't do both."

 

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"Reality Check" reality check on Equalization and the Family Feud

The crew that put together's CBC's usually fine "Reality Check" can be forgiven if they missed a few points by a country mile in a summary of the Family Feud.

Forgiveness is easy since the issues involved are complex and  - at least on the provincial side since 2003 - there has never been a clear statement of what was going on.  Regular Bond Papers readers will be familiar with that.  For others, just flip back to the archives for 2005 and the story is laid out there.

Let's see if we can sort through some of the high points here.

With its fragile economy, Newfoundland and Labrador has always depended on money from the federal government. When they struck oil off the coast, the federal government concluded it would not have to continue shelling out as much money to the provincial treasury. N.L.'s oil would save Ottawa money.

Not really.

Newfoundland and Labrador is no different from most provinces in the country, at least as far as Equalization goes.  Since 1957 - when the current Equalization program started - the provincial government has received that particular form of federal transfer.  So have all the others, at various times, except Ontario.  Quebec remains one of the biggest recipients of Equalization cash, if not on a per capita basis than on a total basis. Economic "fragility" has nothing to do with receiving Equalization.

In the dispute over jurisdiction over the offshore, there was never much of a dispute as far as Equalization fundamentally works.

Had Brian Peckford's view prevailed in 1983/1984, Equalization would have worked just as it always has.  As soon as the province's own source revenues went beyond the national average, the Equalization transfers would have stopped.

Period.

That didn't work out.  Both the Supreme Court of Newfoundland (as it then was called) and in the Supreme Court of Canada, both courts found that jurisdiction over the offshore rested solely with the Government of Canada.  All the royalties went with it.

In the 1985 Atlantic Accord, the Brian Mulroney and Brian Peckford governments worked out a joint management deal.  Under that agreement - the one that is most important for Newfoundland and Labrador - the provincial government sets and collects royalties as if the oil and gas were on land.

And here's the big thing:  the provincial government keeps every single penny.  It always has and always will, as long as the 1985 Accord is in force.

As far as Equalization is concerned, both governments agreed that Equalization would work as it always had.  When a provincial government makes more money on its own than the national average, the Equalization cash stops.

But...they agreed that for a limited period of time, the provincial government would get a special transfer, based on Equalization that would offset the drop in Equalization that came as oil revenues grew.  Not only was the extra cash limited in time, it would also decline such that 12 years after the first oil, there'd be no extra payment.

If the province didn't qualify for Equalization at that point, then that's all there was.  If it still fell under the average, then it would get whatever Equalization it was entitled to under the program at the time.

The CBC reality check leaves a huge gap as far as that goes, making it seem as though the whole thing came down to an argument between Danny Williams and Paul Martin and then Danny and Stephen Harper.

Nothing could be further from the truth, to use an overworked phrase.

During negotiations on the Hibernia project, the provincial government realized the formula wouldn't work out as intended. Rather than leave the provincial government with some extra cash, the 1985 deal would actually function just like there was no offset clause. For every dollar of new cash in from oil, the Equalization system would drop Newfoundland's entitlement by 97 cents, net.

The first efforts to raise this issue - by Clyde Wells and energy minister Rex Gibbons in 1990 - were rebuffed by the Mulroney Conservatives.  They didn't pussy foot around. John Crosbie accused the provincial government of biting the hand that fed it and of wanting to eat its cake and "vomit it up" as well.

It wasn't until the Liberal victory in 1993 that the first efforts were made to address the problem.  Prime Jean Chretien and finance minister Paul Martin amended the Equalization formula to give the provincial government an option of shielding up to 30% of its oil revenue from Equalization calculations.  That option wasn't time limited and for the 12 years in which the 1985 deal allowed for offsets the provincial government could always have the chance to pick the option that gave the most cash.  It only picked the wrong option once.

The Equalization issue remained a cause celebre, especially for those who had been involved in the original negotiations.  It resurfaced in the a 2003 provincial government royal commission study which introduced the idea of a clawback into the vocabulary.  The presentation in the commission reported grossly distorted the reality and the history involved. Some charts that purported to show the financial issues bordered on fraud.

Danny Williams took up the issue in 2004 with the Martin administration and fought a pitched battle - largely in public - over the issue.  He gave a taste of his anti-Ottawa rhetoric in a 2001 speech to Nova Scotia Tories. Little in the way of formal correspondence appears to have been exchanged throughout the early part of 2004.  Up to the fall of 2004 - when detailed discussions started -  the provincial government offered three different versions of what it was looking for.  None matched the final agreement.

The CBC "Reality Check" describes the 2005 agreement this way:

The agreement was that the calculation of equalization payments to Newfoundland and Labrador would not include oil revenue. As the saying goes, oil revenues would not be clawed back. Martin agreed and then-opposition leader Harper also agreed.

Simply put, that's dead wrong.

The 2005 deal provided for another type of transfer to Newfoundland and Labrador from Ottawa on top of the 1985 offset payment.  The Equalization program was not changed in any way. Until the substantive changes to Equalization under Stephen Harper 100% of oil revenues was included to calculate Equalization entitlements.  That's exactly what Danny Williams stated as provincial government policy in January 2006, incidentally.  The Harper changes hid 50% of all non-renewable resource revenues from Equalization (oil and mining) and imposed a cap on total transfers.

As for the revenues being "clawed back", one of the key terms of the 2005 deal is that the whole thing operates based on the Equalization formula that is in place at any given time. Oil revenues are treated like gas taxes, income tax, sales tax, motor vehicle registration and any other type of provincial own-source revenue, just like they have been as long as Equalization has been around.

What the federal Conservatives proposed in 2004 and 2006 as a part of their campaign platform - not just in a letter to Danny Williams - was to let all provinces hide their revenues from oil, gas and other non-renewable resources from the Equalization calculations.  The offer didn't apply just to one province.  Had it been implemented, it would have applied to all. 

That was clear enough until the Harper government produced its budget 18 months ago. What was clear on budget day became a bit murky a few days later when Wade Locke of Memorial University of Newfoundland began to take a hard look at the numbers.

Again, that's pretty much dead wrong.

It became clear shortly after Harper took office in 2006 that the 100% exclusion idea from the 2004 and 2006 campaigns would be abandoned in favour of something else.  There was nothing murky about it at all. So plain was the problem that at least one local newspaper reported on a fracas at the Provincial Conservative convention in October 2006 supposedly involving the Premier's brother and the Conservative party's national president. That's when the Family Feud started.

As for the 2007 budget bills which amended both the 1985 and 2005 agreements between Ottawa and St. John's, there's a serious question as to whether the provincial government actually consented to the amendments as required under the 1985 Atlantic Accord.

The story about Equalization is a long one and the Family Feud - a.k.a the ABC campaign - has a complex history.  There's no shame in missing some points.  It's just so unusual that CBC's "Reality Check" was so widely off base.

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Inconsistencies ?

Brian Crawley, chief of staff, Premier's Office, in testimony at the Cameron Inquiry on the extent to which he involved himself in departmental business:

Mr. Crawley:  At this stage of the game our role would have been very much just to have been advised of it , and I would have treated this issue the same as , you know , 99 percent of the other issues that come forward , you know. It's the department's job to manage it and if there is something there we should be aware of , I would expect to be made aware of it.

Commissioner : So forgive me , but that means no role , doesn't it?

Mr. Crawley: Yeah , no role in the sense of we actually have to do anything.

[Emphasis added]

Then there's this curious extract from the memos, e-mails and other documents that show the extent of government interference in efforts to hire a new president at Memorial University.

Curious because it seems to run contrary to Crawley's assertion that his office doesn't get involved in departmental business, at least not usually.

"I understand Brian C[rawley] will have called you on behalf of the Premier with the details."

That's a reference to the Premier's chief of staff and a call Crawley apparently made to education minister Joan Burke "on behalf of the Premier."

 

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Stalled!

And how long will it take some people to notice the flat lines?

That Family Feud thing is really having an effect on the election campaign.

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Layton to Danny: Anything you want

The first response is in to the latest round of begging letters to Ottawa, to quote Jack Harris, and if Danny William endorses any federal leader this time out, Jack's likely to get the nod. 

Jack Layton said "yes" to pretty much everything Danny Williams asked for.

What a shock.

The first letter begs for cash.

The reply begs for votes.

Anyway, Jack Layton's NDP will campaign to restore air force training in Goose Bay which would be exactly the training Jack Layton campaigned against in 1994 and his party has worked against federally since then.

Layton even lifts a page from the 2006 and 2008 Conservative election platform, promising to create a "territorial defence battalion" - whatever that is - in St. John's.

Jack even agrees to get involved in a thinly disguised request for financial assistance to a troubled private sector land development on the island's west coast.  That would be the "Air Access" bit of the begging letter.

Apparently unregistered lobbyists for private companies don't bother the Orange crew when votes are at stake.

Ethics, schmethics.

Take power out of the hands of lobbyists and ensure all decisions are made in the open by:

• Obligating lobbyists to file annually a declaration of their political work.
• Toughen penalties for violations of the Lobbyists Registration Act.
• Ensuring lobbyists’ fees are disclosed and profit-based contingency fees banned.

Talk about desperate.  The NDP war room must be quickly hiding all those posters railing against corporate welfare bums.

Jack is a bit cute, though.

He complete ignores the Williams demand on Equalization, just giving a short, vague comment. That's okay, Bond Papers readers already found out about the Orange Rod.

Layton praises the equity stake in offshore oil now owned by the province but neglects to mention that an NDP government would busily suck away more cash from the corporation to Ottawa.

So Layton stands a good chance of getting Danny's blessing.

Of course, since Williams has already endorsed  - and then shagged over - first the Liberals and then his federal brothers and sisters in the Conservatives, the New Democrats are pretty much the only ones left of the major parties he hasn't introduced to his own shaft.

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Speaking of unrealized potential

The Halifax Chronicle Herald editorialists might want to check the polls before they write editorials.

The Provincial Conservative Family Feud with their federal cousins "has the potential to catch on" outside Newfoundland and Labrador?

Oh.

Heh. Heh.

Potential.

But then there's this sort of stuff:

He doesn’t just want to play the role of petulant premier. So he has widened his focus. Instead of simply hammering away at Newfoundland and Labrador’s concerns – a strategy that has limited appeal beyond the island – Mr. Williams has elevated himself into a de facto leader of the opposition by mounting a concerted attack on Stephen Harper on all fronts.

Evidently, the Herald's editorial crew hasn't been paying attention to anything at all in this province, let alone polls.

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The Jack Harris Legacy

Labrador activist Jan Dymond has supported the NDP in the past, and considered running for the party in this election, but she just started a new job.

Dymond said having someone from outside Labrador run in this election is an insult, and the party should do more to build grassroots support between elections.

Apparently, there's a problem for the New Democrats in Labrador.

Maybe someone should ask former provincial leader Jack Harris - currently running for the part in St. John's East - for some ideas on building the party.

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A study in contrasts

Dalton McGuinty shuffles his cabinet on the eve of the fall sitting of the legislature.

Meanwhile in another province,  the fall sitting of the legislature is off for at least another month and maybe two.

And a cabinet shuffle?  It's in the works according to some sources but with this ABC Family Feud taking up so much time, odds are good it won't happen until after Thanksgiving.

Don't be surprised if the House opening in that easternmost province is put off with the excuse that ministers a chance to get up to speed on their new responsibilities.

Sounds familiar.

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$794 million deficit: the ABCs of provincial government budgeting

If crude oil averages US$87 per barrel through the current fiscal year (ending 31 March 2009) and the government performs exactly as budgeted in every other respect too, the provincial government will wind up with a deficit of more than $794 million this year.

That's right.

Almost eight hundred million dollars in the hole.

It's not a state secret.

Your humble e-scribbler did not have to go through any contortions - mental or otherwise - to figure it out.

The figures are there, in black and white, in the provincial government's current budget.  Hidden in plain sight, you might say.

But no, some of you are saying, the provincial government is forecasting a surplus of a half a billion dollars. The media reported it in April and they've kept saying it so it must be true.

Yes, the did and they have.

But that isn't the official budget of the provincial government approved in the House of Assembly any more than all the talk by politicians about surpluses the past few years was accurate either.

That forecast was done separately by the department of finance and repeated by the finance minister countless times.  It is based - evidently - on the hope that oil would actually spend most of the year well north of US$87. They were hoping on oil revenues being almost double the $1.7 billion used to make up the budget. An extra $1.3 billion would wipe out the forecast deficit and leave another $500 million or so besides.

The recent drop in oil prices below US$100 could throw that hope out the window, coming as it does a little less than half way through the fiscal year.  Oil would have to drop quite a bit further than its current price in the mid nineties to wipe the anticipated surplus out entirely, but don't count on there being too much cash left in the till next April.

There are a couple of reasons for that beyond the drop in revenues compared to the Atlantic City dice roll projections. 

For starters, if revenues are already up by about $800 million or so, government might be able to bring in something close to a balanced budget. Any less than that and something's gotta give to stay in the black.

The other thing is that - contrary to the popular view - government hasn't actually produced a real surplus in three years.  Again, eyes are rolling, but all you have to do to see the truth is look at the government's annual financial statements.

Last year, for example, the government spent every nickel it originally budgeted, every penny of the $1.5 billion surplus and on top of that had to borrow another $88 million just to make ends meet.

Just to make it really plain, that table above is  taken from a Bond Papers post last June that lays the whole thing out in a picture.

This administration, like pretty well all the ones before, likes to spend public cash.  If there isn't enough coming in, hitting up the banks is just as good as money earned in other ways.

As the Auditor General pointed out in his report earlier this year, the provincial government has consistently boosted public spending based on the mountains of oil cash flowing.

They've  built the province's spending on some pretty shaky ground, namely highly volatile commodity prices.

At the same time, very little attention has been paid to paying down the large amount of debt - the accumulated deficits - that now runs upwards of $8.5 billion and is expected to climb higher this year.

That's the table at right, with the figures taken from the finance department's budget document, The Estimates.

For those of you whose mind has not just boggled into the "off" position, this has some pretty significant implications for what is going on in the province.

The province's finance minister told reporters today that salary expectations from groups like the nurses are based on high oil prices.

No, they aren't. 

High public expectations for new spending and public sector union salary demands are based on the government hype about its own financial plans and its own cash flows.  The people of the province believed all the stuff about surpluses and happy days finally being here. They believed because that is what they were told by politicians.

People have even been lulled into believing that the Hebron project - all $28 supposed billion of it  - is coming right along any day now. 

The reality is starkly different.

Oil revenues will decline over the next decade because of dwindling production and prices that are returning to something approaching the norm.  The three existing fields will be well on the way to shutting down by the time Hebron gets into production.

Rather than adding to current cash flows - as most people likely believe - Hebron will simply take up some of the slack from that dwindling production.  If construction starts on Hebron in 2012, the cash from its oil won't hit provincial coffers until about a decade from now.

The reality is that the next decade is going to be considerably more difficult than people imagined;  difficult that is for the provincial government.  They have made a rod to beat their own backs by creating a climate of expectations that simply can't be met with likely revenues.  At the same time - through the energy corporation and the equity stakes - they've committed to a steady stream of new government borrowing over and above what it may cost to sustain the existing spending levels after the oil money drops off.

There's nothing overly complicated about the whole business.  The information is readily available to anyone who cares to look.

Understanding what is going on today and what looks very likely to happen?

Well, that's as easy as A-B-C.

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Goose to get Hornets?

Goose Bay might soon be home to an unspecified number of CF-18 Hornets, according to David Pugliese.

Lots of anger there as you can see, although I don’t know how shocked they could be since I’ve reporting since April 2007 that the recommendation from CANSOFCOM is that JTF2 should move to Trenton.

So will anything ever be done about Goose Bay? I’m told a plan might be in the works to station a small number of CF-18s at the base for Northern sovereignty patrols. That would have a double impact in the sense it would show the Conservative government is acting on its commitments to defend Arctic sovereignty while at the same time doing something for Goose Bay.

It probably doesn’t make military sense but it would indeed be “win win” for the Conservatives and get people off the government’s back on the Goose Bay issue. No word, however, on when this might happen and whether it will even get beyond the planning stages (who knows what the bean counters are going to say on the cost of this proposal).

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The CBC makeover

First Denise Donlon.

Second, Mansbridge is sidelined in favour of J.D Roberts.

What's that?

Never heard of J.D. Roberts?

That's because he went south of the border, lost the mullet and had a total makeover.

Now they call him John Roberts.

And since Mercer and Murphy are getting kinda stale, Denise can vastly improve the national news. Citytv is about to drop its highly opinionated sock.

He'd likely sign on to a new gig in exchange for a regular tumble in the dryer. 

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Sure ABC isn't partisan

A faithful pitcher plant called one of the radio call in shows today continuing the My ABC claim. 

That is, the whole Danny Williams ABC Family Feud is not partisan and not all about Danny Williams.  It's a movement for the people by the people.

There you have it.

But if that's the case and ABC is not a partisan thing, then someone needs to explain why the registered agent for the "campaign" is the president of the Provincial Conservative party and the address listed for it with Elections Canada is the address for the Provincial Conservative party's treasurer and the domain is registered by the Provincial Conservative party with the party's executive director listed as the contact?

Truth is, ABC isn't run by nor is it about the Government of Newfoundland and Labrador.

Heck, truth is it can't even claim to be speaking on behalf of the people of Newfoundland and Labrador.

Truth is ABC isn't anything but (Provincial) Conservative.

-srbp-

The ABC campaign we can all support

anythingbutconservative.com.

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