World Bank warns of impact on poor

Robert Zoellick, head of the World Bank, is warning that the global credit crisis threatens to become a human crisis.

One of the most likely affected will be remittance workers, people from underdeveloped regions and countries who work in more affluent places and ship large portions of their wages home to support families.

Closer to home remittance workers and migrant labourers working in Alberta and elsewhere in Canada - largely responsible for the recent economic boon of regions like Stephenville and the Great Northern Peninsula -  may soon have less money to send back or may be heading home looking for work where work simply doesn't exist.

-srbp-

In the wake of Iceland's fall

From the New York Times, a story on the impact Iceland's economy collapse has had on ordinary Icelanders:

In Kopavogur, a suburb of Reykjavik, Ms. Runolfsdottir, the recently fired secretary, said she had worried for some time that Iceland would collapse under the weight of inflated expectations.

“If you drive through Reykjavik, you see all these new houses, and I’ve been thinking for the longest time, ‘Where are we going to get people to live in all these homes?’” she said.

The real estate firm that used to employ Ms. Runolfsdottir built about 800 houses two years ago, she said; only 40 percent have been sold.

By Icelandic law, Ms. Runolfsdottir and other fired employees have three months before they have to leave their jobs. At the end of that period, she will start drawing unemployment benefits.

Meanwhile, her husband’s modest investment in several now-failed Icelandic banks is worthless. “They were encouraging us to buy shares in their firms until the last minute,” she said.

-srbp-

Long Harbour a go!

As much as Danny Williams and his team tried to bad mouth the Voisey's Bay deal, it will deliver just as it has been delivering millions into the public treasury.

He said there were holes in the deal to drive a truck through. 

Well, the only trucks associated with the deal trucks have been loaded with bags of cash for the Premier to spend.

Vale Inco's 2009 capital expenditure commitments contain the news that, as expected, the company will build a new refinery at Long Harbour:

Pursuant to an agreement with the Government of the Province of Newfoundland and Labrador, we will build a commercial nickel processing facility in Newfoundland and Labrador to produce 50,000 metric tons of finished nickel per year, together with up to 5,000 metric tons of copper and 2,500 metric tons of cobalt, utilizing the ore from the Ovoid mine in our Voisey Bay mining site. The decision about the technology to be employed in this project will be made at the end of this year. The investment is subject to Board approval. [Emphasis added]

No word yet on when the truck will arrive to make the announcement.

Don't be surprised if it happens in November poll goosing season with a joint company/provincial government announcement to boot.

-srbp-

First, we assume a smelter...

that might possibly lead to making stuff to make cans that we can assume a can-opener to use on.

Take a deep breath.

We are now in a world where we are not starting a project by assuming a can-opener.
And really we are not even assuming a can.

Nope.

Now Memorial University economist Wade Locke is going beyond his prediction that the provincial government may post a surplus greater than predicted last spring to say he thinks there'll be a major economic development announcement for Labrador shortly.

Now we are fantasising about a plant to make to stuff to make the cans out of.

Speculation centres on an aluminum smelter and Locke's cheshire cat grin in an interview with CBC sure fueled the idea that some company - possibly Vale Inco - will be making the announcement related to the Lower Churchill.

Take another deep breath and let's look at what we know - as opposed to what is pure speculation.

1. The provincial budget will very likely be in deficit on a cash basis and if things financial keep going south, the $544 million surplus forecast on some other basis would also be tough - if not impossible - to achieve. Let's see how close Locke comes on that prediction before we accept the megaproject one.

2. The only Newfoundland and Labrador project - the ONLY project - in Vale's 2009 capex announcement in mid October was the Long Harbour smelter. There's no mention at all of an aluminum project or anything else vaguely like it for Canada.

3. To make it even more unlikely there's a real smelter project in the works from Vale, the company's capex commitment gives Vale's strategic view:

Vale’s strategy for the aluminum business is focused on the organic growth of upstream assets, through the development of its high quality bauxite reserves and the very efficient low-cost alumina operations.
As recently announced, we will build a new alumina refinery, Companhia de Alumina do Pará (CAP), and expand our Paragominas bauxite mine (Paragomias III), both located in the Brazilian state of Pará.

CAP will be responsible for the implementation and operation of an alumina refinery, located in Barcarena, close to the alumina refinery of our subsidiary Alunorte. CAP will be 80% owned by Vale, and 20% by Hydro Aluminium. [Emphasis added]

The initial production capacity of the refinery will be 1.86 Mtpy of alumina, through two lines of 930,000 tpy each. The new refinery has potential for future capacity expansions up to 7.4 Mtpy.

4. How do you spell massive subsidy? Aluminum smelters need huge amounts of cheap power. Lower Churchill power would not be cheap unless the provincial government agreed to sell the power over the long term at or below production costs.

Quebec uses its considerable generating capacity for power from plants that are already paid off to help subsidize aluminum enterprises in that province.

Critics point out that it would far more beneficial to export the cheap power for profit than subsidize aluminum plants.

It's not like the trend has been to build aluminum plants as far from possible as markets.

5. Even if by some chance a project is announced, it's construction would be tied to the Lower Churchill which itself remains a dodgy proposition. Lack of confirmed long-term sales contracts and the current economic downturn have put that project further in doubt.

6. Even if we are talking about an announcement, it would be for a project that, in the most optimistic scenario wouldn't be built and operating until closer to 2020 than not.

7. It's the November poll goosing season. Put that together with Locke's actual comment quoted by CBC and you have the sort of overblown hype coming from insiders that we've usually seen about the Lower Churchill project since 2003:

"There are significant projects being considered, energy intensive ones for the province that will make the earlier start of the project more viable and it will act more like a loan guarantee for the Lower Churchill that will allow them easier access to capital," he said.

Projects are being considered.

That doesn't mean they are confirmed.

The rest of the comment likely reflects the view inside the Premier's Office on what sorts of financial daisy-chains are necessary to keep the $9.0 billion project alive, at least in the minds of its proponents.

Of course, that doesn't mean that even the Lower Churchill is as likely as Locke claims.

After all, it's not like the Premier has refrained from hyping a dead dog before when it suited his purposes.

-srbp-

Amen to that

Telegram editor Russell Wangersky points out in his column this week that local political campaigns suffer from an obvious lack of new ideas.

It’s been so formulaic that there have even been candidates lamenting the state of the media for failing to do riding profiles of each of the federal ridings.

The only thing more lacklustre than the recent campaigns would be a panel of local reporters discussing the campaign.  Gee, maybe they'll talk about things they knew but didn't tell their audiences, just like they did last time.

-srbp-

GFW mill faces uncertain future

Union members at AbitibiBowater's Grand Falls Windsor paper mill rejected a company restructuring plan.

The company is looking at ways of reducing costs at the mill, built in 1905.

-srbp-

Friday Math

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.

-srbp-

Canary in the oil sands

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.

-srbp-

Uncommunication

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.

-srbp-

Double Denouement

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.

-srbp-

Pip off for the polls!

Apparently, the provincial government is organizing some sort of province-wide celebration of not getting Equalization.

1. What are the odds CRA will be in the field when the party takes place? [Hint: They poll in November and release the results in the first week of December]

2. Surely the Premier, his finance minister and their political staff could better spend their time filling the people of the in on the actual state of provincial government finances what with the current international situation than planning a party.

Funny hat and noisemaker update:

"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.

-srbp-

The Premier's scrum, de-spun

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?

-srbp-

More public cash for private business

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.

-srbp-

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.

-srbp-

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.

-srbp-

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.

-srbp-

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?

-srbp-

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.

-srbp- 

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.

-srbp-