1. Brent crude is trading at $58.67 per barrel.
2. The Canadian dollar is worth $1.18 against the American dollar.
It's easier to plan a party and pump out happy face uncommunication than provide an update on the provincial government's finances.
Polling season is just a bonus excuse.
Obviously.
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In tough economic times, migrant labourers are a clue to how bad things are getting.
They are a clue.
Like a canary in the coal mine or in this case, the oil sands.
When those canaries flock back home, that fact is usually not presented as a triumph.
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Public relations involves communicating with people to gain and maintain support.
Communicating: the activity of conveying information.
Information: a collection of facts or data or knowledge about specific events or news.
Seems pretty easy both to understand and to do, but apparently not.
Take this sound bite, for example, from a news conference to answer reporters' questions about the dismissal of the lab director at the Health Sciences Complex in St. John's:
"I implore you, this decision today was made about the future, not about the past."
Now lest you think this is a case of selective editing, I'd suggest you follow the link to the TransCon story on the news conference. Notice how little of it is taken from information - that is hard facts - told by the people sitting at the head of the boardroom table.
Most of it, like most of the news stories on this firing, draws attention to other issues, like evidence at the Cameron Inquiry about the improper and possibly illegal disposal of Crown assets. A piece of important laboratory equipment was handed over to a private individual apparently free of charge. This individual refurbished it and sold it for a tidy profit. What's more, the computer that went with the machine included patient data - it could be as much as every test ever run on the thing - which the Inquiry managed to retrieve.
There may well be other aspects to this that aren't in the public domain, but with just what is already out there, it isn't hard for people to put two and two together and conclude Gulliver's sudden departure is connected to events that came to light at the Cameron Inquiry.
What you have in this case could be called uncommunication.
Think of it as the opposite of communication because uncommunication doesn't involve the conveying of facts, data or knowledge.
Quite the opposite. It's not about conveying information at all. Uncommunication actually leaves the recipient in worse shape - at least with respect to facts, data and knowledge - than if he or she knew nothing at all.
Take another government example of uncommunication: the workplace health and safety commission's computer security failure. You don't have to look hard to see an effort to avoid providing information - facts, data and knowledge - to anyone. There are plenty of words strung together as sentences but, as with the Eastern Health comment above, they are for the most part devoid of any clear meaning.
Or consider the lighter version, namely the tendency of cabinet ministers to repeat cliches and verbal ticks so frequently they get turned around in them. Like, this line from the Premier's scrum on Monday:
...it’s so important for our children, for our youth, to realize that this is a historic day, this is a turning point for them, in their lives, on a go-forward basis.
Yes, even the future is coming on a go forward basis. Perhaps we will move forward on a go forward basis into that future. The Premier's Maserati has three gear positions: Go forward on a go forward basis, go backward on a go forward basis and park on a go forward basis. He likely bought it after doing the due diligence piece, another of his cliches that every cabinet minister recites.
His language is so riddled with verbal ticks and meaningless phrases, it is difficult sometimes to understand if he understands what he is saying.
Let's not forget his "don't quote me on that" bit from the same scrum:
we’re just very proud and honoured and very pleased that in fact right now we can go it alone and excuse me, don’t quote me on that we can go it on our own, from that perspective.
If there is a difference between "we can go it alone" and "we can go it on our own" then it is one only in the Premier's mind. If there is some importance to that phrase then that too remains only in the Premier's mind. We are going it alone on the Lower Churchill supposedly, but are looking for financial backing, financial partners and a loan guarantee from Ottawa.
The phrase means nothing.
This phenomenon is not confined to government circles.
Take, for example, the case of NLRC, the proposed refinery near Come By Chance. At the heart of the company's recent legal travails appears to be uncommunication; that is, according to a statement of claim the company failed to disclose that key financial backers had withdrawn. That issue hasn't be clarified such that a news report on Thursday stated that the company was fine until law suits started.
However, that may not be true. The company may have appeared to be fine. But if the statement of claim proves true, that was only an appearance. Company statements, including the memo obtained by CBC discuss generalities without conveying meaningful information. If the statement of claim is true, there may even have been withholding of information - in other words: uncommunication.
The trend is not universal.
Rutter Technologies announced on Thursday it had won yet another contract to build components for the light armoured vehicle family currently in service in both the Canadian and United States armies. The news release contains all the relevant information you need to know why this is important plus there are a couple of obligatory feel-good statements from key people involved.
Summary: $14.6 million from General Dynamics Land Systems to build electrical systems for the Stryker vehicle over the next 19 months that will increase the Stryker's current carrying capacity. The components will be built by Rutter in St. John's at its facility on Thorburn Road. Rutter will hire an unspecified number of additional people and add another shift at its plant.
Lay that release side by side with one announcing yet another half million dollars of public money in a manufacturing company and you'll see the uncommunication of the government release. The feel-good statements far outweigh the factual stuff, a hall-mark of uncommunication.
As Rutter demonstrates, the trend to uncommunication is not universal.
There is still hope...
on a go-forward basis.
Arrrrrggggghhh.
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1. A creditors' meeting today will determine if NLRC will finally fold, putting an end to the refinery project near Come By Chance.
Relations between NLRC and its largest unpaid creditor, though, have been strained.
BAE Newplan Group, a subsidiary of Montreal-based engineering giant SNC-Lavalin, has filed a statement of claim against NLRC in Newfoundland Supreme Court, alleging that NLRC had been deceptive while describing its financial health.
Until earlier this year, when financing for the project fell through, the NLRC proposal was moving ahead a steady pace. It had gained solid community backing, as well as crucial approval through the environmental assessment process.
That last paragraph could use the words "appeared to be" instead of "was". Several crucial details weren't in the public domain until BAE-Newplan filed suit.
Has anyone determined if the three major European investors are still involved in the project or did they bail sometime in 2007 as some reported earlier?
2. AbitibiBowater posted a big third quarter loss, CBC News reported on Thursday.
The union at the company's operation in Grand Falls-Windsor has until Friday to decide on a restructuring proposal for the mill or face closure.
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"We do plan to mark this momentous occasion," said Elizabeth Matthews, spokesman for Premier Danny Williams. The plans are still in the preliminary stages, but Ms. Matthews says a major celebration will be held.
Following are some observations on comments made during the Premier's scrum on Monday.
1. Two sets of books? In the Monday scrum, the Premier clearly indicates the provincial finance department prepared Equalization estimates of as much as $18 million. The Estimates for Fiscal Year 2008, the projection for Equalization payments are $2.7 million. This is the second year in a row where numbers contained in the spring budget varied wildly from numbers released mid way through the fiscal year.
For example, last year's fiscal update claimed that oil royalties would be $562 million more than projected and would hit $1.6 billion. The budget estimate was for $966.5 million, a difference of $633.5 million.
The fiscal update claimed mineral royalties would be $120 million above estimate to reach a total of $347 million. In fact, the budget estimates held mineral royalties at $270 million.
It is extremely difficult to keep an accurate picture of provincial finances when these sorts of discrepancies occur. This isn't a matter of comparing accrual versus modified cash accounting. This is a case of ministers giving different sets of numbers at different times.
2. "fund up pensions". The Premier listed funding public sector pensions as one thing he was surprised at being able to do. His comments suggested the unfunded pension liability has been dealt with. According to Dominion Bond Rating Service, there is still about $2.0 billion in unfunded pension liabilities. Here's how DBRS put it:
(3) Unfunded pension liabilities remain sizeable, projected at just over $2 billion in 2007-08. The Province has made considerable efforts to reduce these liabilities, largely as a result of the 2005 Atlantic Accord and other special contributions to help improve the funding position of both the teachers’ and public servants’ pension plans. However, declining interest rates and the recent deterioration in equity markets are likely to further add to unfunded liabilities. [Emphasis added]
3. Danny's Accord dies exactly as he knew it would. A reporter asked about the renewal of the Atlantic Accord. Williams answered that the Accord was a separate payment made under a different department than finance and that it would continue.
Either he was confused in the rush or he didn't want to admit the truth, but the Accord the reporter meant was Williams' Accord signed in 2005. His question didn't deal with the obvious point, namely that under the provisions of the deal, being off Equalization in 2009 means the deal dies.
Period.
Meanwhile, the real Atlantic Accord's (1985) offset provisions continue until 2011/2012.
The difference between the two is even more stark. The 1985 deal puts real cash into the treasury every year. The 2005 thing hasn't produced a penny of real cash since the fat advance payment cheque in 2005.
4. "money back into the pot". At one point the Premier refers to the province putting money back into the pot, as in the Equalization pot.
Not exactly.
Equalization comes from the federal government's general revenues, that is from things like taxes. No provincial government pays into a pot and in fact there is no pot in the first place.
5. "Don't quote me on that." labradore picked up on a curious little portion of the scrum where the Premier says:
we’re just very proud and honoured and very pleased that in fact, right now, we can go it alone, and mumble mumble — excuse me, don’t quote me on that, we can go it on our own, from that perspective.
The "mumble mumble" from the labradore transcript is very plain in the video at CBC. The Premier says "Don't quote me on that" meaning don't quote that I said "we can go it alone."
The Premier's been backing off, or appearing to back off, his usual pseudo-separatist rhetoric lately. There's plenty of phrases about the great country in the NewSpeak these days, for example. Even his old habitual verbal tick of calling the country "the federation" - as if to emphasize it is not a country but a loose association of quasi-independent fiefdoms - has all but vanished.
The timing in rhetorical shift is coincidental with the end of the last federal election and the global financial crisis. It's also a rather curious shift in language since there doesn't appear to be any obvious reason for it. Maybe there is polling showing the separatist schtick doesn't play well.
Whatever the cause it is yet another example of the contradictory public policies and public statements. We've seen the same thing recently on the economy and government finance. One minute things are fine, the next minute there's going to be stringency. Some times there are two contradictory messages within the same scrum or interview.
After hammering away at Confederation since 2001,Williams' sudden praise for the country seems about as consistent as Ryan Cleary trying to portray himself during the last days of the federal election campaign as the potential saviour of Confederation.
6. The O'Brien Option. A reporter asked whether the provincial government decided whether to stay with the old Equalization or picked the O'Brien formula with a cap. The Premier said no decision had been made and one did not need to be made until next March. He mentioned last year when the finance minister announced an election decision - which he said wasn't actually a final decision - only to switch to another option later on.
If the provincial government doesn't qualify for Equalization in the current fiscal year, what difference does it make which option it picks?
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Dynamic Air Shelters, a manufacturer located in Grand Bank is poised to get more public money.
That would be on top of public money - $180,000 - in early 2008.
And that was on top of public money - $250,000 worth - in 2007.
Update: And that's in addition to almost $500,000 from ACOA in 2006.
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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.
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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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.54On 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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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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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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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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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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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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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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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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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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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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