Remember, remember...

The fifth of November.

The Reactionaries

Dissident Anglicans in St. John's recently heard what to them will be comforting words from Bishop Don Harvey.

Harvey told the congregation that they are staying true to traditional Anglican faith, while the Anglican Church of Canada is straying by allowing a more liberal interpretation of the Bible to conform with societal pressure on allowing same-sex blessings.

"And when Jesus is asked about marriage, Jesus immediately does what we should be doing and that is quoting scripture," Harvey told the congregation.

"He says, ''Therefore shall a man leave his father and his mother and cleave unto his wife' — not his partner."

Your humble e-scribbler is a direct descendant of Thomas Collett so let's just say it is not in the tradition of this Anglican to accept what a bishop says as being law merely because it comes from a bishop.

So what exactly would this "traditional" Anglican faith be that Harvey speaks of?

In this instance there are at least two problems with Harvey's contention and his action  - in essence - in leaving the Anglican communion.

First, as he ought to be well aware, scripture has been frequently reviewed, examined and interpretations revised in light of many influences over the centuries.

It is disingenuous to suggest that the current debate within the Anglican church in Canada is offering a more liberal view of equal marriage or to cast his view of those and his like-minded Anglicans as "traditional". 

If we were to accept his view, on the face of it, the dissident band will be returning to a set of beliefs many of them may not share. 

Jesus does, as Harvey puts it, what we should be doing. By extension, Harvey is suggesting that we then to return to all the provisions of the Old Testament which - as part of the totality of scripture - forms the basis of modern Christianity. 

These are, one presumes, immutable and cannot be reinvented or reinterpreted to suit what Harvey derides as "permissiveness".  The members of the two new parishes had best check their own closets for theological skeletons on divorce or the ordination of women or a host of other similar topics already addressed and resolved by the church.
.

As a final remark on this point, let us leave the lampooning of such reactionary sentiments to those who have done it best. In a famous episode of the West Wing, president Jeb Bartlet lays waste to the doctrinaire approach as easily as anyone might but with the eloquence of a Hollywood writer.

Second, Harvey and his followers have not embraced "traditional" Anglican values.  Rather they have divorced themselves from the wider community of Anglican faith.
The Anglican communion was formed in dissent and it has maintained itself through the centuries as an inherently Protestant church which emphasized that the foundation of faith is the relationship between each of its members, as individuals, and God.

Sometimes controversial issues arise, whether equal marriage or - a generation ago - the ordination of women.  These contentious issues were handled through thoughtful contemplation and through the attainment of a consensus amongst individual Anglicans irrespective of what collar they wore.

By leading a group of dissidents out of the communion altogether, as he is currently doing, Harvey is doing more than merely helping "traditional" Anglicans   - might "real" be a synonym he'd accept? - stay consistent with their faith.  Rather, he is rejecting the manner in which the Anglican communion has grown and survived.  Surely, that alone must be troubling enough to give these Anglicans pause.

Take that from a man whose ancestor took great issue with the edicts of a bishop a century and a half ago but who never once, as far as anyone knows, ever considered himself to be outside the communion into which he had been baptised.

That decision was made by a bishop.

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Get it?

In the midst of the sheer bullshit about Equalization and "Newfie jokes", and all the miserably wrong reporting on such subjects consider these words:

Whatever happened to "Proud Strong Determined"? What became of "Masters of our own domain"? We are we still assessing our worth or sense of accomplishment by means of a purely relative measure.

nottawa makes a point almost surely guaranteed to go flying past the locals, especially in the jet ski community.

In a province where the economy is tanking this year, the long-predicted Equalization event isn't the measure of success the Premier is making it out to be.

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The 800 megawatt controversy

Former premier Brian Peckford tried to set the record straight today on a controversy over a deal in a the 1970s to bring 800 megawatts of power from hydroelectric power in Labrador to the province.

Peckford appeared in an interview [link to podcast] with CBC St. John's Morning Show host Jeff Gilhooley.

The deal is mentioned in a new biography of Frank Moores, premier from 1972 to 1979 in whose administration Brian Peckford served as energy minister.  The book by Janice Wells - author of the Gin and Tonic Gardener books - contends that Peckford scuttled the deal between Moores and Quebec Premier Rene Levesque.  The deal required that the province, which had nationalised the Churchill Falls Labrador Corporation, cease any legal efforts to contest the 1969 Churchill Falls contract in exchange for the power or revenues equal to that much energy.

Wells claims that Peckford was in tears with agitation and threatened to resign taking with him half the cabinet.  She reportedly includes a valuation of the deal by Memorial University economist Wade Locke that the 800 megawatts would have been worth $4.0 billion over time. Wells discussed the supposed deal in an interview with Gilhooley that aired on October 23 [link to podcast] and refers to the episode as a failure on Moores' part.

Since the book isn't generally available in bookstores yet, it is difficult to know what sources Wells relied on for her version of events or if she cites any specific references.  Peckford contends he did not speak with her beyond a single conversation.

There is confirmation of the episode and of the general interpretation offered by Peckford in his interview.  That confirmation comes from Jason Churchill's summary of hydroelectric development in Labrador that he completed for the Vic Young commission.  Churchill writes:

Meanwhile, there were numerous other attempts and near-breakthroughs during Moores’ premiership. In the late 1970s, Quebec Premier Rene Levesque made a special trip to St. John’s to attempt to entice Moores into accepting a deal to start hydroelectric development on the Lower Churchill River. Levesque’s proposal involved a trade-off; Quebec was willing to be generous, in terms of benefits, in exchange for Newfoundland and Labrador relinquishing any future rights to challenge the 1969 Churchill Falls Contract. Meetings appeared on the verge of success as the two Premiers were planning on making a joint announcement. There was, however, a rub. On this occasion Moores’ Minister of Mines and Energy, Brian Peckford, was only informed of the Premier’s plans just previous to the proposed announcement. Peckford
emphatically rejected the idea of giving up in perpetuity any rights to seek redress of the infamous 1969 Contract. His emphatic objections were sufficient to thwart the proposed deal.54

On another occasion, Peckford was engaged in positive negotiations with his Quebec provincial counterpart Guy Joron. Peckford described Joron as being “extremely understanding of [Newfoundland’s] situation”. With the tacit permission of Premier Levesque, Joron had appeared willing to contemplate changes to the 1969 contract as long as it was part of a broader project to develop the Churchill River Basin. However, this idea of linking changes in the Upper Churchill contract to develop the sites on the Lower Churchill River brought strong opposition from Hydro-Quebec officials who thwarted the efforts of the Quebec Cabinet Minister.55

The footnotes for these paragraphs reveal the sources. Note that Churchill interviewed senior public servant Vic Young for his account.  Wells states that a portion of the intense discussions took place in Young's office.

54 Interview Jason Churchill with Brian Peckford, 3 December, 2002. Interview Jason Churchill with Vic Young, 18 December, 2002.

55 Interview Jason Churchill with Brian Peckford, 3 December, 2002.

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Nice cap d'ere buddy

Unless the federal government is drastically changing the Equalization program yet again, entitlements are capped at the level of the lowest non-recipient province.

And might that be Newfoundland and Labrador setting the cap for transfers to provinces like Ontario?

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The real meaning of dignity and self-respect

For the first time since the Government of Canada  created the program in 1957, Newfoundland and Labrador does not qualify for Equalization payments from the federal government.

This is a goal of every administration since 1957, except for the current one which has repeatedly campaigned  to find a way of extending Equalization payments to the provincial government indefinitely.

In 1982, Brian Peckford concluded his provincial election victory speech with words that embodied both the goal and the perceived ignominy of the hand-out: ""I am more convinced than I have any time in the past that Newfoundlanders and Labradorians speak [with] one voice when we all say one day the sun will shine and have-not will be no more."

Less than a decade later and facing economic circumstances not seen in the province since before Confederation, Clyde Wells said he longed for the day when the provincial government didn't receive a dollar of Equalization. In his remarks well pointed to self-respect - genuine self-respect - and to the sort of genuine self-determination that cannot come from the sort of the dependence of the provincial budget on federal transfers:

By doing this, and by having equalization cut this way, we are coming closer to looking after our own needs and we are coming closer to recovering some of the dignity and self-respect you lose when you depend on the federal government for 47 percent of the revenue [in the provincial budget].

I can't wait to see the day when we don't get a dollar.

Dominion Bond Rating Service recently noted the current provincial government's dependence on federal transfers as an area of concern.

Energy deals from Hibernia (begun under Peckford and completed under Wells) to Terra Nova and White Rose (negotiated under Tobin) and mineral deals like the Voisey's Bay agreement (negotiated under Roger Grimes) - savagely attacked by Danny Williams while in opposition - generated the revenues necessary to propel the province off Equalization.

Economists have forecast since 2003 that Newfoundland and Labrador would cease qualifying for Equalization within five years (i.e. by 2009/2010), based on revenues developed before October 2003 and long before anyone thought US$70 a barrel oil was anything more than the predictions of lunatics and amateurs.

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APEC catches up

Gross Domestic Product in Newfoundland and Labrador will grow just 0.2% in 2008, according to the Atlantic Provinces Economic Council.

Oil production will drop 15% this year.  That's pretty much as expected.

In fact, it's all pretty much as expected, if you've been following Bond Papers and the whistling post.

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Canadian Blog Awards 2008 - Nominations Open!

Nominations for the 2008 Canadian Blog Awards opened November 2 and will close November 22.

Then starts the rounds of voting until the winners are chosen.

So head on over and nominate your favourite blog (there are a raft of categories), favourite blog post or favourite post series.  You can get straight to the nominations page by clicking the banner below.

 

 

 

 

 

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Inflation menace? Not so much.

Yes, with the world economy in a bit of a crisis and central banks and political in the West worried about recession, the inflation hysteria has subsided in most places.

Like Australia:

"The clear deceleration in annual inflation since June signals quite starkly the speed at which the inflation problem of the last few years is unwinding,'' said Joshua Williamson,  a senior strategist at TD Securities in Sydney.

"The depressed domestic economy, especially for consumer demand, together with the sharp fall in commodity prices, suggests we could be in the early stages of a substantial deceleration in price pressure,'' he added.

The biggest decrease in the index came from falling prices for fruit and vegetables, holiday travel and accommodation, and household services, today's report showed. Those declines were partially offset by higher costs for financial services, books and newspapers.

Or Europe:

European inflation edged down in October, data released Friday showed, as a result helping to pave the way for the European Central Bank to deliver another hefty rate cut next week.

Or even the United States:

As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy — the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years.

The word for this is deflation, or declining prices, a term that gives economists chills.

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Staff failure

Republican vice presidential candidate Sarah Palin found herself on the receiving end of a prank phone call. 

Two Montreal comedians posed as French president Nicholas Sarkozy.  They had her going for five minutes before they let her off the hook.  Her office issued a statement admitting she'd been fooled.

Well, actually she wasn't fooled.  Her staff was.  They failed their job of protecting her from this sort of fun. ordinarily staff should have screened the call and confirmed the identity before putting it through.

Yet more evidence Palin and her people aren't ready for the job she's running for.

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The deafening silence

Federal finance leprechaun Jim Flaherty has been signaling the need to cap the Equalization system this year.

"It's a federal program; we will put a limit on the growth of it," Mr. Flaherty said. "This is not something that is discretionary. We must do this, otherwise the integrity of the program will be under attack."

Flaherty says that in the face of a possible federal deficit for the first time in ages (i.e. the last time the Conservatives ran the place), it won't be possible to have a 15% annual increase in the funds allocated to the federal transfer.

Based on government data, federal transfers to other levels of government have surged 57% in the past five years, to $46.1-billion in the most recent fiscal year from $29.3-billion in 2003-04.

"In this time of fiscal uncertainty, we cannot sustain that rate of growth," Mr. Flaherty said this week.

Flaherty is likely to lay out the whole thing for his provincial counterparts at a meeting in Toronto on Monday. 

Newly minted provincial finance minister Jerome Kennedy will be at the meeting.

Okay.

For the past five years, the current Provincial Conservative administration has been hammering away at the need for increasing federal transfer payments to Newfoundland and Labrador.

For the past two, the entire Family Feud between the Provincial Conservatives and the their federal cousins centred on an effort to get Equalization payments in addition to oil and gas revenues, even if, under ordinary circumstances, Newfoundland and Labrador wouldn't qualify for the Equalization top-up.  In fact, this idea of getting effectively 200% of oil revenues  (all the cash plus Equalization hand-outs) is the original demand Danny Williams made to Paul Martin. 

That's why it is so bizarre that the provincial government talked about anything but Flaherty's remarks over the past couple of days.

Trivia was the order of the day at the cabinet shuffle and what wasn't trivia was pretty much stock stuff. Take a look at the raw scrum tape - via CBC - and you'll see the lightweight routine.

There's a reference to being fine on the current budget, without understanding that means increasing public debt if the budget targets are met.

There's some slagging of the oil sands and a claim that there won't be any delay on Hebron. No one apparently noticed that the Hebron project hasn't been sanctioned yet.  How exactly can you forecast "no delay" in a project that has no timeline yet?

The ultimate superficial commentary came on the matter of representation.  In Ottawa, there's not a problem since it's like the local cabinet where everyone looks after everything everywhere. Later on, the Premier refers to Susan Sullivan and filling in the hole in the dough, giving proper cabinet representation for a region of the province not previously represented in the Conservative cabinet.  Sarah Palin couldn't have reasoned it anymore consistently, right down to insisting - in a manner of speaking - that a little fellow from up the shore could see Labrador from his house.

But nothing of the substantive issues facing the province, beyond a comment that there might theoretically be some difficulty in forecasting oil prices.

As for the consistent set of demands from the current cabinet for more cash hand-outs from Ottawa and Jim Flaherty's comments, there was nary a peep either from the cabinet or from reporters.

The silence was deafening.

Well, except for the CBC audio picking up messages coming to the Blackberries in the room.

The end result is that one wonders what, exactly will be the policy direction taken by cabinet "on a go forward basis".  Until now, the cabinet has been fairly consistent in its remands for reparations from Ottawa, in its insistence that it can go-it-alone provided Ottawa ponies up the cash. The same ministers sit in place today, with a very minor number of exceptions, as sat in place in October 2003.

Yet, there is an evident change in perspective.

It can't be driven by the prospect of going off the Equalization system.  That was forecast in 2004, even without the subsequent transfer deal with Paul Martin.

There's something else behind it.

You can tell by what isn't being said.

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One man band

Former Australian Prime Minister John Howard liked to go-it-alone on major policy decisions, according to a new documentary on his administration.

Howard adviser Arthur Sinodinos made it clear the office knew how radical a GST was.

According to a colleague, Mr Sinodinos said: "We've taken a boat, we've sailed it down the coast of Africa and we've gone into the jungle and pulled out the meanest, nastiest gorilla we could find, sailed back to Australia and let it loose on the streets."

That same lack of consultation is clear regarding Mr Howard's historic letter of December 19, 1998, to then Indonesian president BJ Habibie telling him Australia was changing its policy and backing for the first time an act of self-determination for East Timor. Says then deputy prime minister Tim Fischer: "Let me tell you something: the most important letter ever written during the Coalition government's period of office, leading to the creation of East Timor, never went to cabinet."

Given current trends, one wonders how much of this approach applies in parliamentary democracies. 

In some instances, it might appear that the first minister is clearly the one directing things. 

In other instances, the first minister's staff appear to have a hand in the ongoing management of government including extremely serious policy issues, sometimes without apparent adult supervision.

There are certainly parallels in the Australian experience to trends Donald Savoie identified in his recent book on the Canadian and British experience.

One-man band's appear popular.

Being popular doesn't mean they are either effect or - from a constitutional perspective - desirable either.

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"par l'argent et par la vote ethnique" - 13 years later

Geez, it's funny how quickly some things slip by.

October 30 marked the 13th anniversary of the 1995 Quebec referendum.

What people seem to remember more than anything else is then-Premier Jacques Parizeau's speech delivered after the results poured in.

He blamed the separatist on two simple things - money and the ethnic vote - and promised that there would be another vote before long: " we won't wait another 15 years."

The video  above is a rather poor copy of the original CBC/Radio Canada broadcast. 

Still, it's worth watching a 65 year old Parizeau giving vent to his frustrations, lashing out and warning of the potential for revenge being wreaked by unnamed forces.  All the more reason, he then says to have the Parti Quebecois there to defend Quebeckers.

Threats of imaginary attacks. Ranting about "us" and "them".  Dividing the world along ethnic lines.  The need for a political force to defend - to stand up for - the province. Such familiar ideas.

For those who can't follow the speech in French, you can find the whole thing with English translation at CBC's digital archive.

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Cabinet stir

Shake-up suggests a substantive change.

This is more like a minor shuffle, a bit of a stir in cabinet as a few people around the table exchanges files, switch nameplates and scrape their chairs a bit on the floor changing places around the table.

It represents some tactical shifts but the cabinet remains remarkably the same despite the dismal performance of some of the ministers.  Some of the most dismal even got promotions.

1.  Biggest Feature:  Moving Jerome Kennedy to finance from justice gives one of the heirs apparent to the Premier's job some experience in dealing with the full spread of government activities.

2. Old news to Bond readers:  At the same time, moving a strong-willed minister into the portfolio at this point should make it clear that the provincial books are going to be tightened or, at the very least, any groups looking for government cash are going to have quite a racket on their hands.

"We are also shifting gears from a prosperous time to a more stringent time, for want of a better word," said Williams, whose government projected a $544-million surplus in the spring budget, based largely on high oil prices.

"It could be a tough period we're going to go through as well," Williams added.

Could be?  More like "count on it".

3.  No surprise: Kathy Dunderdale, fronting for the premier in natural resources adds the title "deputy premier" to her list of responsibilities.  She's been acting in this capacity and the extra title is recognition of her ability to follow instructions or least be less than forthcoming with embarrassing facts.

4.  Still one short:  Susan Sullivan comes in.  Charlene Johnson takes medical leave, with her portfolio now handled by another acting minister, on a go forward basis.

5. A promotion for what, exactly? Intergovernmental affairs should be a senior portfolio, handled by an experienced minister.  The trend at both the federal and provincial levels lately has been to hand the job to second or third stringers.

In this case, it's Dave Denine whose time in municipal affairs was notorious for its embarrassing moments.

6.  Structured to underperform:  Tom Hedderson as new minister of fisheries likely ensures that Derek Butler and anyone else interested in fisheries renewal will be left SOL by the cabinet stir.

7.   Stay the course:  Ross Wiseman and Joan Burke keep their portfolios despite much speculation  - even within Provincial Conservative circles - that they would be given a rest from their burdens.

8.  Back to the sidelines:  Having come back into the limelight through the innovation and fisheries portfolios, Trevor Taylor - once a high flier  - heads off to look after snow removal. No one is going to intimidate Trevor about road work, but then again, political staff in the Premier's Office have that one under control anyway.

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Friday's "Just Askin'"

With nickel prices down and the markets uncertain, would it sensible for VALE INCO to delay start of the smelter at Long Harbour and pay the penalties set out in the development deal with government?

Not cancel.

Just postpone and take the penalties in the short term?

Just thinking out loud on a Friday.

Just askin'.

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The fishery: We are structured to underperform

[Note:  Following is the text of an address delivered by Derek Butler, executive director of the Association of Seafood Producers, October 30, 2008 to the Rotary Club of St. John's.

Butler's theme is both familiar and timely in light of recent decisions by the provincial government in the processing sector.  The audio of Butler's interview with the Fisheries Broadcast on the transfer of two licenses to existing plants can be found at seafoodproducers.org.]

 

 

Thank you, it is very kind of you to invite me to address you today. Good to be here, and again, I appreciate the invitation.

When a baby was killed when an airplane crash in the western USA in 1989 by being ripped out its mother’s arms and dashed up against the bulkhead, a political “solution” was proposed by having a federal law requiring babies to be strapped into their own seats on airplanes....

Well, that sounds eminently reasonable, I think we could all agree on first blush. Much of political rhetoric is based on this kind of illustration. Serious issue: step 1, identify the wrong problem, and be seen to be fixing it.

Or politics often identifies isolated problems to be solved, - not as trade-offs within an over system constrained by inherent limitations of resources, knowledge, etc.

Let’s see what happens with the airplane illustration.

…such a law, requiring parents to purchase an extra seat, would divert a portion of the traffic to cheaper alternative modes of transportation on the ground – most of which have higher mortality rates than airplanes, the result being that over a period of a decade, there would be an estimated saving of one baby’s life in airplane crashes, a loss of nine lives in alternative ground transportation, and an additional cost of $3 billion. [“An impact analysis of requiring child safety seats in air transportation,” Child Restraints Systems on Aircraft, Hearing before the Subcommittee on Aviation of the Committee on Public Works and Transportation, House of Representatives, July 12, 1990, p.215.]

The story illustrates dramatically, even graphically, the consequence of public policy defined on the basis of good intent, emotion.

Most - certainly too much - public policy is based on the intended consequence of that policy. “Save babies lives in fast braking or crashing airplanes.”

But you can only judge a policy by its actual outcomes, not by its intended consequence. The actual consequence is what counts. Sounds redundant, but it needs saying, and repeating.

Again, to quote my favorite economist, Thomas Sowell, “…the purpose of any policy tells you absolutely nothing about what will actually happen under that policy.”

The earlier example of child restraint on airplanes – which comes from his book The Vision of the Anointed: Self-congratulations as a Basis for Social Policy - leads to a new policy with a potential cost of billions, and more sadly, lives.

I am happy to say, after years of study, the FAA decided against the change, given the cost-benefit analysis above.

But that is how we too often approach things: with the intent, and often good motive, but without consideration of consequence, or outcome.

And I use it today, to illustrate a contention I’ve come to possess about how we manage and direct the fishery, in terms of public policy.

A fish plant closes?

Well, let’s save that fish plant. Noble goal, and in some sense, eminently feasible even, certainly for a given period.

A given number of actors – mayors, MHAs, ministers and union leaders, even new plant owners – can bring the forces to bear to save a given plant.

Having spent some time either working in or observing the political process – the world’s best spectator sport – I’ve come to see this as a classical political problem from this side of my career: identify the wrong problem, and then fix it or implement a policy with one intended consequence, and get an altogether different result. Ignore the result, and claim success.

Plant closes? Then let’s save the plant.

But why is the plant closing?

Is there enough resource to sustain it?

Is there a sufficient work force?

Does the plant have a procurement strategy? Is it overburdened with regulation? Does the plant have insufficient margins, squeezed between paying x for raw material, and only getting x-plus back from the market? Does it produce what the market wants, at the price point and in the quality form the market desires or requires?

We don’t often ask these important questions as much as we consider what might be the impacts on that particular plant closing on the local workforce and community.

Instead, we need to go back to the real business options, and there are just two, to maximize the value of the industry, to drive up incomes.

One, we can reduce our costs, and two, we can increase our revenues. Or we can try both.

The FFAW is on to the latter, as if that will solve all of our problems, but in a rather simplistic fashion. Just get more money out of the market. Charge more for the product. Ask for more money from those who buy our seafood.

Well, as I’ve reminded them in collective bargaining on occasion, when they suggest that is the way to tackle our problems, it doesn’t work that way.

GM did not lose $38.7 billion dollars in 2007 simply because some guy on the lot forget to flip up a higher price on the windshield.

They didn’t lose $2 billion in 2006, because someone in accounting forget to add a bigger digit to an invoice.

They lost money for structural reasons, related to tax liabilities, pension funds, labour costs, and a host of issues.

And asking the consumer for more money for those costs is not the solution, because in a free market, something is worth what you are willing to pay for it.

That includes a room in this hotel, an apartment or house for rent, or even something less tangible, like membership in Rotary.

And same for our seafood. It is not worth what we invest into it, the cost of harvesting, or production, or inventory costs, or financing costs. It is worth what the market wants to pay, or more precisely, is willing to pay.

Same thing for every stitch of clothes on your back, and every meal you’ve ever eaten.

That’s the economics and business reality of the world, and has been some time.

And let’s not have any of that foolishness that it doesn’t work. We are richer than 98% of the rest of the population of the earth. We are healthy, well-fed, satisfied beyond belief materially.

On the real indicators that matter: caloric intake, infant mortality, maternal deaths, life expectancy, access to potable water, literacy, you name it, democracy and free markets deliver.

All this to underscore that the fishery is a business, and just like much else of what we do to make a dollar, it should be structured so as to perform in that context; we can’t just ask the market to pay for our problems.

I am new to the fishery. I worked in, as the introduction noted, a completely different field, literally and geographically. This job is my first career employment in Newfoundland, which I started in 2004 when my wife and I moved home, like so many do, or want to.

I joke I am one of the few people who has come home to work in the fishery.

But work is a stretch. That’s not to say people in my business, in processing or harvesting, don’t work hard when they work.

But we have million dollar boats, and two million dollar boats, and multi-million dollar fish plants that all work for months, if not mere weeks.

That’s underutilization, or to look at it another way, overcapitalization, monies unavailable for investment in retirement funds, tourism, small business, education or training. It’s the opportunity cost of our structure.

If any airplane flew a mere 10 trips a year, and spent the rest of the time on the ground, we’d recognize we had a problem.

If Sobey’s was open just a few months a year, we’d laugh at their chances of making a go of it.

If hotel said our rooms are only for rent April 15 through end of Sept, and we have people sitting on the lawn waiting to get in in July, who might gladly take a room in October, but we close then, all our staff are on income support, we hope they’re around again in the summer when we open, cuz we stay closed for the winter, even though people are coming, we’d rather squeeze all our business into a few months…

What would we call it? …well, we’d call it the fishery.

Because we’ve done just that. And for too long it has been good enough. FAO and the World Bank have just released a report a few weeks ago called The Sunken Billions, addressing this same problem the world over. Some $50 billion, at a conservative estimate, representing the value of the fishery gone missing from the wrong structures and overcapacity.

Our problem is we have chosen to dissipate the wealth, with our structural inefficiencies, among as many participants as possible, to ensure we keep as many people working, spread it around, save this and that town, save this and that fish plant.

Well ask yourself: is it working?

Are our young people staying around because things are so good?

Towns repopulating because the fishery is such an opportunity?

The world beating a path to our products, or are we out selling a commodity?

We not asked too much of the fishery, for too long, and now we reap what we have sown: a social programme that has said $8000 or $10000 each is enough – and now our young people are gone, and soon, an entirely new demographic will follow: people of my parents generation, who want to see the grandchildren grow up… but have to go to Alberta and other places to do it.

My contention is the fishery of today is the fruit of 30 years of social engineering, of policy intent, with unfortunate consequences. And we lost one fishery that way already.

Alberta’s boom ‘today’ is one factor in people leaving the fishery, but so is 30 years of “this” is what the fishery will be, and not “this.”

We’re not living on the entrepreneurial merits of the fishery. We’re living off the natural abundance and wealth of our location, groundfish in its day, pelagics, and shellfish today.

Despite ourselves, almost, we have made something of it.

We open the fishery, squeeze in all the product like we’re drinking through a fire hose, and pray to the heavens the market can choke it down just as fast so we don’t have to finance it over extended periods and the currency doesn’t move against us while we are waiting.

The economist Michael Gardner addressed a recent gathering of industry at the coldwater shrimp conference in St. John’s, which brought together industry players from across Canada, the US, Europe and elsewhere, to address challenges in our shrimp industry.

And he said something very stark, very true. “We are structured to underperform.”

We have a billion dollar fishery, in terms of the production value of our fishery again last year. It was never more than half that in the past, but has hit the number or surpassed it several times in recent years.

We have a wealthy industry, or rather, an industry with potential for great wealth.

But as Gardner said, we are “structured to underperform.”

We have too much processing capacity.

We have too much harvesting capacity.

All designed and encouraged by different governments and organizations and vested interests to ensure the money was spread around.

This is not a business model that can endure. We can struggle. We’ll make a go of it. If anyone can, it’s a Newfoundlander …

The earlier example of airplane safety and child restraints illustrates the stark reality of every public policy choice we face. Every public policy is a trade off. There are consequences to every action.

And the intended consequences don’t count for much.

Someone once said "Some people embrace change, some choose to fight it. The ones who embrace and adapt, win." – Unknown

Or perhaps Henry Ford captured it bet when he said if you had asked the people what they wanted, they would have said a faster horse.

We in Newfoundland and Labrador must change our approach to the fishery, fundamentally, philosophically, from 30,000 feet.

Otherwise, we risk another reality, captured by the following words:

"If you dislike change, you're going to dislike irrelevance even more." Eric Shinseki

We need change, and it needs to start with the full acknowledgement that the fishery is a business, for the sake of harvesters in it, who are losing crew now to better opportunities in Alberta and elsewhere, plant workers for whom 10 or 15 weeks work is not enough.

We have built the industry on a deck of cards. We have marginalized incomes, tried to save fish plant after fish plant, increased harvesting capacity, and what do we have at the end of the day? Mediocrity as an industry. And every intervention leads to the Hayekian conundrum: once a government does intervene, the logic of intervention forces them to keep at it, to fix the last intervention. Can any government resist that (and after what damage is done?) so that instead we might make the industry a more sustainable economic engine and contributor to Newfoundland & Labrador?

Industry – harvesters and processors – both know that we must adapt to face the new realities of a more competitive China, higher fuel prices and the stronger dollar – and the latter two have turned around of late, but only as symptoms of a bigger problem we have not yet fully appreciated.

Instead, we have gone about things as of old, and expected a different result. That's, as the saying goes, the definition of insanity.

That challenge includes requiring a fresh look at the price setting mechanisms in the industry, unique in the world (Joey Smallwood's last piece of legislation in 1972). We have a collective bargaining structure for what is essentially a business to business relationship.

Are there bright spots out there?

Yes, some new policy to address new plant licences. Light on the harvesting side, with rationalization, combining.

And the resource remains strong, more good news.

And the industry is tackling new challenges like eco-labelling with the Marine Stewardship Council certification for our northern shrimp, showing our coldwater shrimp comes from a sustainable, well-managed fishery. We are Canada’s first fishery - and the world’s largest shrimp fishery - so certified, and consumers have the right to that assurance. It will be a proud legacy of my time in the industry.

But the same can't be said for the economic viability of the industry itself, in either harvesting or processing. It may be that the challenges of industry renewal are truly intractable political problems. Fair enough, but if it's confession time, no one is on their knees - except in terms of the economics.

Remember that baby in the airplane crash. You can save that one, but in exchange for how many more, and at what cost? And is that the goal of public policy? To save one part of the business, and sacrifice so many others parts.

I have to think, we can do better. I hope you do too.

Thank you for listening.

-srbp-

Happy Hallowe'en!

CHC wins US DOD contract in Afghanistan?

It looks like Canadian Helicopters Limited (TSX: CHL.UN) will provide helicopter support to American forces in Afghanistan, according to David Pugliese.

The company is advertising for commercial helicopter pilots able to fly the company's Bell 212 on general support missions, that is, tasks that don't involve combat flying.  Qualifications are:

Bell 212 endorsement & experience; Current mountain experience; Current slinging & vertical reference experience; Instrument experience considered an asset; Eligible for international travel; Candidates must be bondable; Screening for a ‘secret’ level security pass required; Good communication skills and a positive attitude required; Ability to work within a group environment.

-srbp-

A conservative tell

Every time a conservative attacks a political opponent, you know you've got the right person for the job.

When they call him or her "negative" or "unhelpful" you know they fear that person.

It's true in Canada.

It's true in the United States.

-srbp-

Is Iceland too small to be a country?

Good question.

But no matter how you answer it, the Icelandic crisis is producing some interesting results:  Sterling Airlines is filing for bankruptcy.  It's part of of Northern Travel Group which also includes Astraeus Airlines.

Astraeus, the company that became embroiled in the St.John's-Gatwick fiasco a couple of years ago, is now out of the charter flight service and instead leases its aircraft to other companies.

-srbp-