NS election: undecideds dominate

Forget what you’ve seen reported.

Take a look at the Corporate Research Associates quarterly poll results since early 2008, adjust them to take out the “percentage of decideds” skew and it’s pretty clear that no political party in Nova Scotia is lighting anyone on fire.

There’s what you get and it really isn’t pretty.

With the exception of the poll taken in the first two weeks of May 2009, “undecided” more Nova Scotians are undecided than are opting for any one of the three major political parties.
 
The New Democrats may wind up on top in next week’s vote, but that’s just the way the electoral system works.  It sure won’t be because there is any massive excitement among Nova Scotians for an orange option.  Blue and Red are in worse shape.

Leadership certainly isn’t a factor.  Sure, CRA asks which leader Nova Scotians prefer and sure the NDP guy comes out on top.

But when asked to rank the issues, leadership comes out as the big issue for a mere five percent of respondents in the poll done in the second half of May.

According to that poll, the top issues are health care funding (37%) and dealing with economic concerns (33%).  The next most frequently mentioned issue  - education funding – comes in at a mere 11%.

That’s interesting because the NDP are pushing Darrel Dexter above all in what has become a fairly typical “Big Giant Head” type of campaign.  But  - stealing an approach from the federal Conservatives - the Nova Scotia New Democrats are making seven key commitments.  The top two are the economy and health care.  Stephen Harper only needed five commitments, incidentally.

Ditto the Liberals, at least as far as making the party leader the centrepiece.  That’s a weird choice given that the guy doesn’t poll all that well in comparison to others and – if CRA is correct – the leader ain’t the vote driver. The Nova Scotia Grits also have seven ideas at the heart of their plan, the second and third of which are health care and the economy.

The Nova Scotia Progressive Conservatives are in trouble.  Google the party and the information that comes back claims the party is led by some guy named Hamm. If the party website can’t get any more up-to-date, then there are issues here that help explain the Tory’s consistently crappy polling and why they are likely to be headed for the opposition benches for a while.

The Progressive Conservatives play down their leader a bit – hint:  it ain’t Hamm -  which is understandable if the polling is right. The party platform has five core areas and the top one is the economy. The second one is also the economy, expressed as “rural development”.  The third and forth are about crime and “defending” Nova Scotia while the fifth is another traditional Nova Scotia economic engine:  the political pork feast of roads and infrastructure.

If you look at all three parties, neither of them is really hammering away at health issues or the economy, at least as far as their news releases are concerned. 

For an outsider watching the election from afar, media coverage wouldn’t suggest the election is a hot topic.  Take a gander at the Chronicle Herald website and find any highlight of election coverage. Try and find it.  CBC has the standard [Insert the name of the jurisdiction here] Votes [Insert Year Here] but the web space is nothing to write home about. those are just two.  The actual on-air coverage from the electronics, plus Connie TV’s Steve Murphy or Global might be different.

Something suggests, though, that the election isn’t turning anybody’s crank in a big way.

That, rather than the idea the New Democrats will be the government, might turn out to be the story next week:  “Nova Scotia had an election and they swapped one minority government for another;  see you again in a year or so.”

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NS election: Undecideds double in two weeks

The number of undecided voters in the Nova Scotia general election doubled in the second half of May compared to first half, according to two polls from Halifax-based Corporate Research Associates.

In a poll taken in early May only 17% of respondents were undecided or weren’t planning to vote.  In the second poll, 33% of respondents were undecided. 

The second poll covered a larger sample (834) than the first poll (627). The first poll was conducted from May 7 to May 16.  The second poll as conducted between May 18 and May 30.  CRA reports the margin of error for both polls as 3.9% for the first poll and 3.4% for the second, 19 times out of 20.

Support for the front running New Democrats dropped from 30.7% to 29.5%.  Liberal support dropped from 25.7% to 18.8% and Progressive Conservative support dropped from 23.2% to 17.4%.

Interpretation of the poll in conventional media relies on dealing only with decided voters. Thus, CBC concludes that “support for the NDP has risen sharply to 44 per cent from 37 per cent” while ignoring the change in undecideds.

There is no indication that Corporate Research Associates probes undecideds in the two polls, completed as part of CRA’s quarterly omnibus polling in Atlantic  Canada.

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Adios, Lisa

Not only did federal natural resources minister Lisa Raitt or one or her staff leave a three inch thick binder of confidential briefing notes at a CTV office, they didn’t try and get it back.

If that isn’t cause for dismissal, then there isn’t much left that is.

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Lessons not learned, Part II: health department may have breached privacy law

Unless they’ve got written consent for the disclosure, the province’s health department violated several sections of the province’s Access to Information and Protection of Privacy Act.

A report by independent consultants on the location of a magnetic resonance imaging (MRI) device includes the home address and telephone number of one of the consultants as well as complete curricula vitae of the three consultants.

The original news release directed interested people to contact the department’s communications director for a copy of the report. The release issued Tuesday contained a link to the complete report, with the attached CVs.

The report was received on February 28 and released on June 2, in violation of a supposed government policy requiring reports to be released within 30 days of being received. 

Under section 30 of the Act, government must refuse to disclose personal information unless there is written consent. A similar provision is contained in section 39.

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Sectional Update:  The ever eagle-eyed among you noticed that since this document wasn’t released under the access to information bit of the legislation, section 30 doesn’t apply.

Correct.

Section 39 does and that confusion is purely mine in the way the post was quickly written.

The act covers requests for information PLUS privacy protection.  The privacy part containing s. 39 covers what government may do with personal information.  One of the things is not release it without permission.

It all comes out to the same thing.

s.39 of the ATIPPA applies in this case.  Without permission, they weren’t suppose to publish personal information.

Lessons not learned

“They should be shot over there.”

So said Premier Danny Williams when the public reacted angrily to a news release from Eastern Health late on a Friday afternoon that buried the kernel of hard news in the middle of the release.

Turns out senior government officials knew about the whole thing in advance, had a hand in drafting the release and that cabinet ordered the disclosure immediately, despite the objections of officials at Eastern Health.

The documents, released under the province’s open records laws, are available on the cbc.ca/nl website. Interestingly, they appear to have been processed electronically.  This is contrary to standard government practice in some departments which seem to favour using only hard copies as a way of maximising the cost to the applicant.

When asked in the legislature on April 5 (the first sitting day after the Friday news release) when he and officials of his department first learned, health minister Ross Wiseman initially ducked the question, talking instead about research done previously to identify all patients involved in breast cancer testing.

On the second and third questions, Wiseman finally relented, but claimed he had only learned of the matter on April 2, presumably at cabinet:

Yes, I was aware that they were going to be doing that release. The conversation that my office had with Eastern Health was midday on Thursday (April 2, the day cabinet met) , and the understanding and direction was pretty clear: that this information needed to get out immediately. The fact that they were late on Friday afternoon releasing it, I had no control over, Mr. Speaker. That was their call, their decision to release it. I received the notice of the release just moments before it was out. I was out of the Province on government business, meeting with my colleagues in Halifax and with other health regions.

Mr. Speaker, that was their call, but I would agree with the member opposite that getting a release out late Friday afternoon and not having anyone available from the organization to comment on it is not something that I would agree with either.

Wiseman is only referring here to the cabinet directive to release the information, not when his officials first learned of the issue.  The documents obtained by CBC place that time earlier that week. An e-mail from health deputy minister Don Keats shows the minister looking for a briefing on the subject on March 31.

Wiseman’s answers in the House on April 5 also leave the impression that government had no involvement in the matter:

I want to tell the member opposite and the members of the House, Eastern Health write their own press releases. They release their own communiqués. I was aware of the information that they had.  I was aware on Thursday that they were going to be releasing it. My understand was they were going to be releasing it quickly. I then went out of the Province on business, only to find that I got a copy of the release at the same time it was being released to the public.

That also wasn’t strictly accurate since, according to the released documents, cabinet had directed the release immediately without waiting until patients had been contacted directly.

By the following day of questions in the House of Assembly, April 6, Wiseman was acknowledging he had learned of the issue on April 1.

Speaking with reporters on April 5, the Premier condemned Eastern Health for releasing the information in the way they did including not disclosing the information to patients first. That’s the same scrum in which he uttered the infamous comment that “they” should be shot over there.

Justice Margaret Cameron, in a report released last month, found that Eastern Health had erred by not telling the whole truth of what it knew, Williams said. The premier slammed the authority for sending out information late on a Friday and then not making anyone available to talk about it immediately. He said patients deserve full and transparent disclosure.

"This is about people's lives … They have a right to be told," Williams said. "They have a right to be told in a proper manner. There has to be proper disclosure; there has to be someone there to answer questions. It's not something you do at the tail end of a Friday afternoon."

The documents on the cbc.ca/nl website do not appear to represent all the documents related to incident.  Missing are documents or any notes referring to having the issue placed on the cabinet agenda and what, if any communications there would have been between the department and Executive Council, the government’s central co-ordinating agency.

Some of the documents were written days after the event and around the same time Eastern Health’s vice president of communications engaged in a rather bizarre bit of public spinning about the location of information in the news release.  She wasn’t the only one spinning the story.

Coincidentally the week before the Premier said that people should be shot over the incident, courts in Ontario upheld the ruling that such language constituted uttering a threat.

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Williams invents excuse for stalling whistleblower law

In a scrum with reporters last week, Premier Danny Williams said he has instructed government officials to gather evidence on experience with whistleblower legislation because there  is “not much precedent” around the world for whistleblower legislation.

Nothing could be further from the truth.

The United States Congress enacted the false claims act of 1863 to protect the public from unscrupulous manufacturers who substituted sawdust for gunpowder in Union Army contracts during the Civil War. The legislation,  updated in 1986, allowed citizens to file claims against manufacturers and awarded the citizens – effectively whistleblowers – a portion of any subsequent award.

There are 18 other American federal statutes that contain whistleblower protection.

A 2002 statute, enacted in the wake of Enron, extended protection to private sector employees who blow the whistle on wrongdoing.

The US federal government has had a whistleblower statute to protect federal employees since 1989. The earliest such law for federal employees was enacted in 1912.

Most American states have protection for employees who disclose unethical or illegal acts by employers.

The United Kingdom has had whistleblower protection since 1998.

Various Australian states and the Australian Capital territory have whistleblower legislation.  The earliest dates from 1988.

The Government of Canada has had a whistleblower protection law since 2005 and in 2006, Manitoba passed a public interest disclosure statute.

Williams promised whistleblower legislation during the last general election, in 2007, saying:

The very first session of the House that we have, that's something we'll have a look at. As a matter of fact, there'd be no reason why we wouldn't get it on.

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Who said that?

What about the principles of accountability of government and the reliability of the budgeting process? Why doesn't government just tell the people the truth? You, the people, have a right to know.

Who said that?

When?

Where?

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Whatever happened to…

1.     The Sustainable Development Act (2007)?

2.  The Safer Communities and Neighbourhoods Act (2007)?

3.  The Court Security Act (2004)?

4.  The Health Research Ethics Authority Act (2006)?

5.  The International Interests in Mobile Aircraft Equipment Act (2006)?

6.  The Architects Act (2008)?

7.  Embalmers and Funeral Directors Act (2008)?

8.  Fire Protection Services Act (2008)?

9.  Promised legislation on midwifery to replace the act repealed last December?

10.  A gas royalty regime promised in the 2007 energy plan?

11.  A new oil royalty regime promised in the 2007 energy plan?

The Provincial Government will also establish a new Generic Offshore Oil Royalty Regime based on principles and structure similar to the Offshore Natural Gas Royalty Regime. In the case of satellite field developments that use existing field infrastructure, adjustments to the regime may be made to reflect the robustness of satellite field economics, including consideration of recoverable reserve size and the potential that costs of existing field infrastructure may have already been recovered.

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Williams afraid of whistleblower law

Forget all the excuses offered by cabinet ministers before about a whistleblower protection law being complex.

The real reason the provincial government hasn’t introduced whistleblower protection legislation as promised by the Premier is because the Premier is worried about what happens afterward.

Danny Williams told reporters on Friday he wants to make sure the law isn’t used by people who have “a personal vendetta against government.”  You’ll find that quote in a Telegram story from the Saturday edition that sadly isn’t on line.

Williams promised whistleblower protection two years ago during the last provincial general election campaign.  He apparently promised it swiftly suggesting it would turn up in the first session of the new legislature. 

In his report on the House of Assembly spending scandal, Chief Justice Derek Green called for whistleblower protection.  Green described such protection as “internal [government] policies designed to encourage internal enforcement of ethical behaviour.” 

Green linked disclosure to public confidence in government and cited federal legislation introduced in the wake of the sponsorship scandal. Green also linked whistleblower protection with open records laws as a means of promoting public confidence in ethically sound government.

Two years after Green’s report and Williams’ promise and three years after the House of Assembly scandal first broke, there’s no whistleblower protection laws.

Williams linked whistleblower protection to access to information laws but not in a positive way.  Williams told reporters that his senior staff are consumed with vetting access to information requests Williams termed “frivolous”.  He said he was concerned that whistleblower protection could “create another situation where we're going to put a stranglehold on government.”

Whistleblower statutes like the one proposed by Bond Papers specifically define the types of incidents covered by the disclosure and provide a mechanism for investigation allegations by an independent third party. 

Under the Bond Papers bill, based on the 2006 Manitoba public interest disclosure law, the legislation would apply “to the following wrongdoings in or relating to the public service:”

(a) an act or omission constituting an offence under an Act of the Legislature or the Parliament of Canada, or a regulation made under an Act;

(b) an act or omission that creates a substantial and specific danger to the life, health or safety of persons, or to the environment, other than a danger that is inherent in the performance of the duties or functions of an employee;

(c) gross mismanagement, including of public funds or a public asset;

(d) knowingly directing or counselling a person to commit a wrongdoing described in clauses (a) to (c)…

There is no room for a personal vendetta.  The acts subject to disclosure are all in the public interest and it’s hard to see how anyone could consider disclosure of such lawbreaking as part of a personal attack by the whistleblower. of course, attacking the motives of the whistleblower is part of the climate frequently used to discourage disclosure in the first place.

The draft law allows for disclosure of wrongdoing to an official designated in each department or to the Citizen’s Representative.  Green used the Manitoba legislation in drafting his report.

Green noted the potential that whistle blowing laws could lead to some risk for politicians.  However, Green said that a thorough and independent investigative process “should, however, screen out unfounded allegations of a vindictive nature.” 

Green also said the public value of restoring confidence in government outweighed such issues:

I do not believe that a concern of this nature is sufficiently strong to overbalance the other benefits of implementing such a policy, particularly the removal of public suspicion that MHAs have something to hide and the bolstering of public confidence in the open and transparent nature of the political system.

Williams disdain for public access to government information isn’t new.

Early in his administration, Williams tried to withhold polling results even though provincial open records law specifically listed them as being subject to disclosure.

More recently, government officials successfully stymied a request for e-mails by essentially inventing excuses based on how much information was covered by the request and how much time it would take to process the request.

In another example, requests for specific documents were denied on the grounds that the documents didn’t exist even though government officials acknowledged the records actually did exist.

In that case, Williams went so far as to call personally the reporter making the request to complain about the fact the request had been appealed to the province’s information and privacy commission.

In January 2009,  a survey by the Canadian Newspaper Association showed that the provincial government didn’t fully respond to any of six specific information requests used in the study. A request for information in electronic format (Excel or a similar spreadsheet program), netted a bizarre but increasingly typical response:

The letter from the Transportation and Public Works department in Newfoundland stated that the information “does not exist in electronic form within this department,” even though the record released was a computer printout.

The provincial government is also sitting on information related to a review of inland fisheries policy that has been ongoing for an unknown period.

Even requests for information not handled through access to information laws have run into stone walls.

The natural resources department refused to answer questions about compensation talks with Abitibi over expropriated assets because there were compensation stalks with Abitibi over expropriated assets.

The same department also refused to give any details of the minister’s trip to Ottawa last winter.

As for the claim about how much time is consumed vetting requests, testimony last year at the Cameron inquiry into the breast cancer testing scandal revealed that some of the reasons staff spend so much time on access requests involves vetting public information. 

In one notorious example, the name of a judge presiding over a case which had been reported in the news media was redacted for an access request. The same approach came to light in a report on the provincial prisons service only because government officials mistakenly released a copy of the document electronically with faulty redactions.  None of the information blacked out actually met the disclosure exemptions under the provincial access law, but they were blacked out any way.

If there is a “stranglehold” on government, it seems to be coming from intense and persistent efforts to avoid public disclosure of government information under provincial laws.  Adding whistleblower legislation wouldn’t add to that and the provincial government itself can avoid getting strangled by reducing its self-imposed efforts at secrecy.

Perhaps they should take a cue from Chief Justice Green.  After all, he did say that implementing open records laws and protecting whistleblowers would bring benefits, “particularly the removal of public suspicion that MHAs have something to hide.”

All the foot-dragging and such does make one wonder.

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Update:  The online CBC version of the story with a link to a David Cochrane report.  This is by no means as complete as the Telly story and the interpretation is more than a bit generous to the Premier.  His juicy quotes about access to information, for example,  are clipped in favour of his throw-away line about how important ATIPPA is.

How Icelandic are we, 2009 budget version

According to the Premier the relatively high price of oil at the moment is a good thing, with the prospect that it could wipe out the provincial government’s budget deficit. [Update:  an online story via CBC about the Premier’s comments.]

But could it?

Right at the start, everyone should recall that provincial revenues from oil are a function of the price per barrel of oil and total annual production.  The provincial royalty is a percentage of what you get when you multiply how much oil is sold by how much you get for each barrel.

So let’s look at production.

The provincial 2009 budget low-balls oil production.  It hit 125 million barrels in 2008 and while Dominion Bond Rating Service forecast a 15% drop, the provincial finance department forecasts a 21% drop to only 98.5 million barrels.

In the first month of the fiscal year – April – total oil production was slightly more than 9.1 million barrels.  At that rate, the offshore would produce 109.2 million barrels in 2009.

Compared to April last year, oil production is only down about 10%.  That means that the provincial production forecast could be off by more than twice the actual decline. 109 million barrels would represent a 13% decrease from 2008 – right in line with the DBRS estimate.

Then there’s price.

The budget forecast oil at US$50 a barrel on average.  Currently Brent is trading at about US$65 a barrel.

Sounds great, until you factor in the hidden gem:  the relative value of the Canadian dollar.  When the Canadian dollar is weak the provincial government can pick up a nice little premium by selling in American and then doing the conversion. 

At budget time, the Canadian dollar was worth a lot less.  As a result, that price of US$50 a barrel worked out to be around Canadian$60 to $62.50.

Brent crude is currently trading  at Cdn$71.50.  That’s because the Canadian dollar is trading at almost US$0.90. 

If you do the math on that – using today’s Brent price plus the more likely oil production level  - the whole thing works out to roughly $1.5 billion in oil royalties for the provincial treasury.  The budget forecast was $1.262 billion based on a smaller amount of slightly cheaper oil.

Meanwhile, the cash shortfall is $1.3 billion. Oil revenues would have to double, as they pretty much did last year, in order to wipe out the cash shortfall if the dollar hangs around its current treading level.

Even coming up with an extra $500 million or so on top of the extras already attained would mean you’d have to see the price of oil go higher still and the Canadian dollar slide down as well.

That might happen.

Then again, in the current environment, it doesn’t seem very likely.

We’ve been in this sort of dream land thinking before back in the spring when the budget came down. Back then, we used a higher oil production figure and a much weaker Canadian dollar in order to generate an extra $600 million in cash or thereabouts. 

But an extra $1.3 billion? 

Or even $750 million?

That would be pretty hard especially when other commodities like fish and minerals aren’t doing that well either and the forest industry in the province is shrinking faster than the family jewels on a crowd of Scandinavian men running from the sauna into an ice-covered pond.

At the very best, any optimism or pessimism about where the provincial deficit will wind up this year is a wee bit premature.  At the worst, reporting any sort of government speculation about revenues is irresponsible.

After all, these guys sat on a couple of billion in cash they never bothered to mention until this year.  It’s not like the provincial government has a sterling reputation when it comes to disclosing the facts of a matter.

 

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Everything old is new again, fisheries version

From the New York Times, November 2, 1889, quoting a report by the Newfoundland Chamber of Commerce:

The lobster fishery has been expanded and is now a valuable factor in the exports of the colony “but it is much to be feared that indiscriminate fishing is injuring this industry.”

Then later:

A fisheries department has been organized and it has obtained a Superintendent for the work of artificially replenishing the cod stock.

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Newfoundland pre-Confederation trade, a snapshot

As reported by the New York Times, 1889

Exports:

Destination	Amount (US $)
Brazil	1,325,080
Portugal	1,198,392
United Kingdom	607,007
Spain	556,554
Canada	482,497
France	349,732
Untied States	327,925

Imports:

Origin	Amount
United Kingdom	3,265,229
Canada	2,041,044
United States	1,602,138

Interestingly enough, by the late 1940s, the United States had become the major destination of Newfoundland exports while Canada was the chief source of imports along with the United States and the United Kingdom.

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Great Quotes by Rhodes Scholars in Newfoundland (abridged)

1.  Bill Clinton, Mile One Stadium, St. John’s,  28 May 2008

All of us need to think of our citizenship in terms of what we can do in our communities and halfway around the world.

2.  Danny Williams, Mile One Stadium, St. John’s, 07 April 2001:

I say to Newfoundlanders and Labradorians: "Ask not what we can do for our country, because we have done enough. Let's ask our country what they can do for us."

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In search of John C. Doyle

The provincial and federal government’s are trumpeting their efforts to help local companies drum up business in Panama.

Those of us old enough to recall will be amused at yet another connection between the crowd currently running government and the last Premier to hold all but three or four seats in the legislature.

If Danny buys a house at Roaches Line, then all bets are off.

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And some help for Tom as well

In the interests of helping out justice minister Tom Marshall, here’s a link back to a January 2009 in which your humble e-scribbler offered the members of the provincial legislature the entire text of draft whistleblower protection legislation.

We are now two years into the unfulfilled promise of such protection and all government has offered is excuses like ‘Oh it’s complicated.’  Well, legislation is apparently not so complicated that they couldn’t ram through the expropriation bill last December or bring other legislation in the recent sitting that amended legislation from last year that isn’t even implemented yet.

And here’s the kicker:  the draft whistleblower legislation first appeared in Ye Olde Bond E-mail Inbox in April 2008!

Jinkies, as Velma would say.

With this draft legislation, the boys don’t even have to sweat it.  They can just cut and paste the bill and send it offer to work through the system. 

Incidentally, back in January, we were helping out then-justice minister Jerome Kennedy*.  Seems like this is getting to be a trend.

 

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*R’uh R’oh Update:  That would be a mistake.  Jerome and Tom swapped portfolios the previous fall. Jerome was quoted last year giving excuses as to why his department still wasn’t ready with whistleblower legislation, but the minister of justice since 31 October 2008 has been Tom Marshall.

Two thirds of three fifths of f*** all

There’s an old limerick that, among other things, speaks to the ridiculous use some people make of numbers.

Like say, repealing an old piece of legislation that is long spent and then claiming the process that this contributes to government’s project to eliminate red tape.

The spent legislation is an act that gave effect to a series of agreements involved in the sale of Corner Brook Pulp and Paper Limited to Kruger in 1984. It’s an easy read, in plain English, and involving only 10 clauses and a couple of hundred words.

Take, as an example, this clause:

9. (1) Subject to the approval of the Lieutenant-Governor in Council, the Honourable the Minister of Finance on behalf of the Crown is authorized to enter into, execute and deliver agreements amending the agreements referred to in this Act.

Pretty simple stuff.  The finance minister can negotiate changes to the agreements if need be and if approved by cabinet.

There is not a single line in this entire piece of legislation that creates a single useless, unnecessary or irrelevant regulatory burden on business.

Not a one.

To go by the words of the business minister earlier in May, there is not any element of this 1984 statute that would  involve“administrative and regulatory inefficiencies, including excessive regulations, requirements, reporting, processes and paper.”

Nothing.

So why then, would the minister responsible for the Kruger agreements repeal act make this demonstrably ridiculous statement in the legislature:

The repeal of this legislation, Mr. Speaker, will reduce an additional sixty-five regulatory requirements from government’s operations.

By the minister’s own words – a mere few seconds before that claim was made – “[a]ll of these agreements now have expired and because these agreements have expired… this legislation is no longer required and will not impact on Kruger’s operations in any way.”

What we have here is a clue to the entire sham of red tape reduction.  While there are undoubtedly some good measures in the red tape project, the announcement earlier this month of government’s triumph contained both a raft of things that had nothing to do with red tape reduction and a few more elements that are entirely bogus.

Like this Kruger one.

Blatant misrepresentation – i.e. spin or bullshit -  has apparently become such an integral part of government’s political communications that it spills out into relatively simple things like a statement in the House repealing an old statute. There was no need of saying much about, but the minister rambled on for a few seconds and then threw in this little piece of nonsense about red tape reduction.

The bullshit is not without meaning.

If you take a look at these two elements – Kruger and red tape – you see a government which must make things appear to be much larger and more significant than they are.  The evident reason is that someone, somewhere in the bowels of government thinks it is important to make it appear that government is actually up to something productive.  So intense is the need for aggrandisement that even the trivial is co-opted to the cause.

Of course, for those familiar with the Rule of Opposites, such obvious knob polishing only makes one wonder what the bullshit is intended to conceal.

Pile up enough crap and you can hide just about anything. 

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The second most dismal science

If economics is the dismal science, then reporting on economic issues is in contention for the title of second most dismal science.

Take, for instance, stories about oil prices and where they might go.

There’s one from The Star and a new one this sunny Wednesday from cbc.ca.  Both take quotes from different people all of whom suggest oil prices will zoom back up to 2008 levels and beyond in very short order.

You get this kind of stuff from the Star’s reporter, for example:

All of this means that when global demand comes roaring back – as it will in China, India and other emerging economies –and returns to its pre-recession levels in mature economies in North America and Europe, the needed additional supply won't be there to satisfy the resurgent demand except at exorbitant prices.

Lack of exploration will supposedly mean tight supplies at a time of supposedly high demand on top of that and all that will mean stratospherically high prices.  The cbc.ca story is in a similar vein and both take as part of their story the recent jump in oil prices into the US$60 a barrel range for West Texas Intermediate.

But hang on a second.

The most recent spike has been caused by declines in the value of the American dollar which are themselves tied to uncertainty about the future of North American car manufacturers.

Beyond that, it’s a little bit much to take the word of the Saudi oil minister or a guy – T.Boone Pickens – both of whom, it should have been noted,  have a vested interested in seeing oil prices shoot up to $200 a barrel.

The major problem with these two stories is that they disconnect the connected and then reconnect them in a way which is dubious, at best.

Take The Star for example, which blames the drop in exploration on falling oil prices and then adds that “[t]he worldwide credit scarcity didn't help.”

These two things aren’t unrelated. 

Oil prices dropped as the credit market crashed which itself took all the energy out of what was driving heightened American demand.  All of that economic boom stuff business writers were drooling over right up to mid-2008 was fuelled by an artificially inflated supply of  easy credit.  When the cash left, so did all the growth.  Not surprisingly, we’ve seen almost unprecedented drops across the board in the economy around the world.

Demand is not going to come “zooming back”, as The Star claims, when the American economy is still struggling and cash is tight.  If oil does shoot up in price for understandable reasons – security concerns, refining issues etc – then that will only prolong the recession. 

People with only so much cash to spend will be re-thinking their plans if the cost of transportation shoots up again.  It doesn’t matter if the people we are talking about are individuals or companies. Demand isn’t inelastic, as cbc.ca suggests, for plant expansions or cross-country road trips.  That’s pretty much optional, especially if you don’t have the cash.  

The other thing they miss-connect is price and exploration.

The local oil patch is a good indicator of how some of this works.  Exploring offshore Newfoundland and Labrador is costly.  We saw a growth in exploration here in years when oil prices were well below US$60 a barrel and no one in their right mind was forecasting $100 a barrel let alone $150 by 2008 and $200 by 2010-2012.

The Hebron project  - already discovered but very costly to develop - suddenly found life when oil was around US$25 a barrel and, as we’ve noted before, only people about to be pumped full of Thorazine (r)were screaming about paying 10 times that for oil within five or 10 years.

When it comes to exploration, we can take Chevron’s 2009 capital plan as a good indicator as well of how the major oil companies tie this stuff together.  Chevron’s 2009 expenditures announced in January were the same as 2008. 

They aren’t lower.  They are the same. 

In fact, the major oil companies have announced plans to continue their capex programs. The ones slashing are smaller, for the most part.  In the case of the oil sands, companies are lopping off spending on very costly projects which have a consistently low rate of return.  In other words, the projects that cost the most to produce and return relatively less profit are going into mothballs at a time when the cash needed to build the things is tightening.

Makes perfect sense.

And, at the same time, oil companies are continuing to bring new production on stream and are exploring for new conventional oil supplies because they know they can make money at it even at US$50 a barrel or less.

Deep water offshore oil might be a technological stretch today but in a couple of years time, technology will allow that to be produced far more efficiently than oil sands.  After all, what’s down there a few miles below the sea floor is basically the same oil that comes out of wells much closer to the surface.  You just need more pipes to reach the reservoir.

Part of what we are seeing in these reports is an echo of the basic problem we noted some time ago.  Forecasts tend to  travel in packs and those packs tend to carry around the same set of assumptions.  When oil was US$35 a barrel, everyone forecast oil at those prices into the future.  As oil prices went up and didn’t come back down, the new forecast norm kept getting reset higher and higher.

All you can really see in The Star and cbc.ca is just a confirmation there are still people out there who – for one reason or another -  are still using the first half of 2008 as their frame of reference without allowing that the arse fell out of it all in the second half of the year. 

Put another way, the “fundamentals” all these people like to talk about were the old fundamentals.  They just haven’t figured out what the new fundamentals are. They have to reset their assumptions for the mid- to long-term.

And when it comes to peak oil and the end of cheap oil and all that stuff, people just have to recall the same sort of thinking from the mid-1970s.  Lots of people forecast the end of the world and super-high oil prices back then and those predictions didn’t come true. 

That’s basically because the world hit the end of $5 oil but the doom-sayers never noticed all the stuff out there that was viable at $10 and $20 or even $50.  In the current context there’s still lots of oil out there viable at those prices. 

We don’t have to go to $100 a barrel simply because the supply is there.  And over on the demand side of the equation?  Well,  let’s just say that the things which drove demand before June 2008 just aren’t there any more.

The global economy still hasn’t found its new “fundamentals” yet, but one thing is a good bet:  they won’t be the same ones we had before the Great Crash of 2008.

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More help for Jerome

Finance minister Jerome Kennedy’s not alone.

He’s not alone on a lot of things, but in this case, we refer to his lack of willingness to read the documents relevant to an issue and to understand the plain English meaning of them.

Jerome’s already been poked a bit both here and at the Telegram over his apparent ignorance of the role of the Clerk of the House of Assembly.

But there’s more ignorance, and that has to do with one of the issues the House of Assembly Management Commission discussed at its May 13 meeting.

They were talking about recreating the financial statements of the legislature for Fiscal Years 1999 and 2000.  The issue is whether or not to pay an outside audit firm to rebuild the House accounts for those two years and then audit them.

Auditor General John Noseworthy believes this work would be for naught since many of the records are missing and there is no guarantee the accounts would be accurate.  He noted in correspondence dating back to 2007 that his reviews would be sufficient to meet the legislative requirement the management commission is looking at in trying to have this work done. There’s an estimate under discussion of hiring an outside audit firm at a cost of over $600,000 to do the work.

Jerome thinks the work ought to be done.

Without going into all the details, he’s right.

The work ought to have been done and it should have been done by the Auditor General under the task assigned to him by cabinet in 2006. The only problem is that it isn’t clear the work was done.

In the summer of 2006, cabinet directed the Auditor General to do two things as a result of the House of Assembly scandal. 

First, he was directed to go back to 1989 to find any other examples of overspending up to 2004.  He did that and apparently found nothing beyond what he’d already reported.  Note that he didn’t look in detail at the two years up to 2006 when the allowances account was overspent by about $1.0 million and the budget estimates presented in the House were known to be wrong.

Second, the Auditor General was directed to conduct “annual audits of the accounts of the House of Assembly from fiscal years 1999/2000 to 2003/2004.”

So where are those audits?

Good question, since they’ve never been made public. In fact, there’s no public sign that component of the order was ever done even though the Auditor General got extra money and staff in order to do the work.

What we got instead was a report that discussed some inappropriate spending from 1989 to 2005. We can say “some” inappropriate spending  since Noseworthy never went into enough detail to determine where all the cash actually went or if people misdirected money even if they didn’t exceed their allowance totals.

For example, Noseworthy never reported at all – apparently never even noticed – how much money was directed to partisan purposes even for a member now known to have funded party work out of his allowances.  There was a glaringly obvious breach of the Elections Act in there but it went unreported until the Ed Byrne trial.

If Noseworthy didn’t do that for one glaring example, then we have to wonder just exactly how much of a look his team of auditors actually gave any of their reports.  But that’s a digression.

The key point to bear in mind is that the Auditor General himself was tasked with producing detailed audits for 1999 up to 2004.  That’s irrespective of whether or not there was an audit by a private firm.

On top of that, there’s no sign Noseworthy and his team ever did the work they were tasked with by cabinet in 2006.

So what exactly is the House of Assembly Management Commission doing arguing about spending public money to recreate what the Auditor General already got paid to do?

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But did he bring any seal products with him?

INTRD minister Shawn Skinner is in Europe this week on a junket promoting the Atlantic Canada gateway to Europeans.

The event is in Antwerp, one of the largest ports in Europe.

So in light of the government’s preference for the poll goosing potential of bashing seals over the larger trade interests of the province, one must ask:

1. Why is Skinner on this trip organized by the Government of Canada?
2. Does the Premier know?, and,
3. Did Shawn bring any seal products with him to promote on the trip?

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The strange case of Harvey Hodder

Anyone who has been following the spending scandals in the Mother of Parliaments and in the Bow-Wow parliament cannot help but be struck by the contrasts.

For starters, voters in the United Kingdom actually know where the money went and who spent it.  In Newfoundland and Labrador, voters have no idea where the bulk of the money went even three years later.

Then there is the matter of Mr. Speaker.  In London, Speaker Michael Martin has been forced from office.  In St. John’s Harvey Hodder – who took office two years before the scandal broke - stayed in place and has even been called as a witness in one of the criminal trials under way coming out of the scandal.

Hodder is a curious figure, even as speakers in the Bow-Wow parliament go.  He did not prove himself particularly adept at keeping control of the House when it was in session.  He never strayed far from partisan politics, even in his supposedly non-partisan role as Speaker. Things got so bad at one point that the opposition had to try and embarrass the old fellow out of the chair.

His curious behaviour once the scandal broke, showing up at the hospital bedside of the guy at the centre of the scandal and apparently deferring repeatedly to direction from the Premier’s Office, prompted a post here that called for his resignation.  That’s just one of the many unfortunate moments in this mess when Hodder had the chance to do one thing but elected to do something else.

Even as he finally retired, Hodder couldn’t resist offering up a few self-serving explanations for his own spending habits.

All that makes it very odd that Hodder turned up as a witness in a court case but even the odd took a bizarre twist as Hodder’s comments appear to contradict many of the things already known about the scandal and his role.

For example, Hodder told the court  funder oath that

… he wanted to look at the books that former legislature finance director Bill Murray, who also faces fraud charges, was keeping.

Hodder testified his request met with resistance, and Murray did not want to share his records.

Hodder said he was later reassured by the former clerk of the house, John Noel, that everything was fine, and Hodder should concern himself with other things.

Leave aside for a moment the obviously lackadaisical leadership style Hodder displayed by allowing his subordinate to refuse a direct request.  Consider instead that when the scandal broke Hodder had a completely different explanation for his apparent inaction despite his own claims that he had misgivings about the House accounts:

"Early on, I expressed misgiving about some of the financial management practices," said Harvey Hodder, who became Speaker after the Progressives Conservatives took office in 2003.

But he said he was initially satisfied when a private accounting firm found nothing untoward in the legislature's spending and didn't flag what turned out to be nearly $3 million lavished on trinkets, gold rings and other baubles over the past seven years.

Was Hodder reassured by the Clerk or by an audit?  There’s a big difference in the implications flowing from the two stories. The one continuous thread, though, is that Hodder was aware of problems but found some reason to go back to his office and not bother to exercise the control which he held by virtue of his office as Speaker.

He turned a blind eye.

And then once the scandal had been exposed, Hodder set about to blame others, first his predecessor and the members of the House executive committee in 2000 and then Hodder’s subordinate:

"That could only happen where one person is responsible for controlling the information," Hodder said.

One person wasn’t responsible, of course.  He was allowed to function as he did by Hodder and others who have never been called to account for their inaction.

Hodder made some other curious claims under oath.  Like this one about his knowledge of the system:

Hodder testified that MHAs were keenly interested in issues surrounding constituency allowances, poring over spending breakdowns and the limits published just after their annual release.

If this meant the breakdowns for each member then he should have noticed something much earlier than anyone else.  But even if Hodder got fudged records, there is no mistaking the accounts maintained by the province’s comptroller general and published each year as the Public Accounts.

If Hodder indeed had such a “keen” interest then he would have noticed that in 2004 and 2005, the budget laid in front of the House of Assembly falsely reported that the members’ accounts were bang on budget when the Public Accounts showed them to be out of whack by about a half million each year.

Bond Papers noted this in August and December 2006 and the accounting was confirmed by the Green report on the spending scandal. neither the province’s auditor general nor anyone else has explained the overages in those two years as well as the discrepancy between the budget figures and the Public Accounts. The auditor general made no reference to these discrepancies in his annual reports for those years.

Then there’s another claim about the diligence with which Hodder kept his own track of his own spending:

Hodder testified he kept copies of every receipt, claim form, payment stub and other supporting documentation during his long career in provincial politics.

The auditor general’s report on constituency allowance spending by all members after 1989 showed that Hodder:

• double billed the legislature (albeit for $129)
• made donations of public money totalling over $30,000, and
• made alcohol only purchases out of his constituency allowance totaling over $1,100.

None of this was permitted under even the lax rules that applied during the scandal period.  If Hodder kept as close a track of his spending as he said under oath, then he knew about his own inappropriate spending. When the report was released, incidentally, he attributed the alcohol purchase to a mistake in accounting.  He also is in a position to identify specifically all the donations he made during his term in the legislature.

Now Hodder wasn’t the worst when it came to using public money for gifts to unnamed individuals and groups, but it is a bit rich for him to pass judgment on others when his own record is far from stellar.  While Hodder may not have known of criminal activity, he certainly was aware of the sordid practice of using the constituency allowances as what amounted to a slush fund.  He did nothing about it, by his own admission.

Did nothing, at all and yet Hodder found no shame in making this sanctimonious statement as he left politics:

"It is regrettable that there are hungry children in this province, in my former constituency, who could've benefited from some of that money."

That’s not all that is regrettable about the House of Assembly between 1996 and 2007, as the strange case of former Speaker Harvey Hodder shows.

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