22 September 2009

Just bear in mind…

the guy who is trying to explain health care decisions is the same guy who is clued out about a bunch of other things.

He’s also gotten himself in hot water over conflict of interest and briefing books and he even briefly turned up with one of the infamous rings from the House of Assembly scandal.

Last summer, as markets were tanking, then-business minister Paul Oram talked about a booming local economy.  In January, he was talking about bright the future will be but with no talk of any big financial problems at home.  Thankfully, the guy has finally wised up, or so it seems when it comes to the unsound state of the provincial government finances.

All that coupled with the inherent contradictions between what Paul Oram has been saying, what the Premier has said publicly,  and what the record shows might just make this health care crisis bleed all over the local political landscape well into the fall.

That Oram-fuelled health issue is on top of the other problems on both the Northern Peninsula and in central Newfoundland related to forestry that just won’t go away no matter how much money the provincial government has been willing to toss at the two areas.

Of course, now Oram and the talk of unsustainable spending built on oil makes it look like it is money government doesn’t have.

It may ell be one of the most interesting fall seasons in a long while in this province’s politics.

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Public money coming for Rolls-Royce

Paul Oram may be having trouble paying the health care bills but his predecessor, Ross Wiseman, apparently has cash for what appears to be an outright give-away to one of the great international symbols of luxury.

Yes, Ross will hand out taxpayer cash to Rolls-Royce.

“Contribution” is the word the provincial government likes to use when it hands over cash to a private sector company, not as a loan with interest.

Let’s see if that’s what it turns out.

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Unsound financial management, the stunning Oram admission

In Budget 2009, we invested $2.6 billion in health and community services.  This is no doubt a significant amount.  This represents a billion dollar increase in the past five years.  While we would like to do everything and meet every demand, that investment is simply unsustainable.

Paul Oram, Minister of Health and Community Services, September 21, 2009 [video file]

Note the date.

Health minister Paul Oram admitted today that the provincial government’s financial management since 2003 has produced a level of government spending that is - in his words -  “unsustainable.”

That is not just Paul Oram’s word.

His remarks were approved at the highest level.

That word  - unsustainable - is the word that the Premier’s Office chose to describe the financial state of the provincial government.

Until now, the Williams administration has prided itself on exactly the opposite. This is a remarkable admission for the Williams administration, an administration that has prided itself on what it claimed was sound management of the public treasury.

Regular readers of Bond Papers have known it for some time.

The earliest use of the word “unsustainable” in connection with provincial government spending was 2006:

What no one knew was that oil would hit US$70 a barrel and the cash would be pouring in at a rate no one in the province had ever seen before. That allowed Danny Williams to avoid making a whole bunch of good decisions and to crank up spending to unprecedented and, and in light of the economic slowdowns, likely unsustainable, heights.

The word turned up again a few months later in a quick look at the 2007 budget:

The current and forecast spending increases are based on optimistic projections for the price of oil in the medium term. Any downward trend in commodity prices (oil, minerals etc) will quickly make the consistent spending increases since 2003 unsustainable. Fiscal reality in those circumstances - taking less money in than is flowing out - would require program cuts, job losses and/or tax increases to correct.

Take a second and go read that post.  You’ll find the “unsustainable” again:

That level of per capita spending [second only to Alberta] is unsustainable in the long run. As a recent Atlantic Institute for Market Studies assessment concluded:

“If the province fails to reign in its whopping per capita government spending (about $8800/person [in FY 2006]) and super-size me civil service (96 provincial government employees /1000 people) it will quickly erode any gains from increased energy revenues.”

That is exactly the situation Paul Oram described today.

Look through Bond Papers and you will see repeated warnings about the unsustainable growth in government spending since 2004/05. 

This is not an exercise in “I-told-you-so”;  let’s clear that out of the way at the start.

This is about something much more significant.

Point One:  The issues are not new and the implications of the issues aren’t new.

Go back further than 2006.

Go back to the early to mid 1990s and you will see forecasts that showed the demographics in the province for the time period we are currently in and that mapped out the implications for health care costs.  Some of those same ideas turned up here in several posts throughout 2007 and 2008 that discussed the very serious financial state facing the provincial government.

Point Two:  Fail to plan;  plan to fail.

The current situation is a direct result of a series of short-term decisions made by the current administration since 2003.  The short-term spending decisions took place in every aspect of spending;  health care just happens to be the one place in the budget where the demand for more spending is greatest and where the implications of spending are also proportionately great..

How do we know the decisions have been made on an ad hoc basis?

Well, the indicators are littered throughout the correspondence released today by the provincial government.

For starters, just look at the dates on the e-mails to the regions.  The provincial government only settled on its spending allocations in late February and even then, the decisions were preliminary.  

Since 2003, the budget process has slipped further and further back in time such that crucial decisions – like gross spending – are not made until a few weeks before the end of the fiscal year. The reality of these letters suggests that budget decisions were not made until well into the current fiscal year. 

Throughout the 1990s and into the early part of this century,  the big picture spending decisions were made before Christmas.  By the time late February rolled around, the individual line items had been settled such that there was very little to decide.  In those days, the only adjustments that came after February would be cuts based on any changes to federal spending.

But in a provincial government where cash hasn’t been an issue, there is really no reason why the annual budget process should be so far out of whack that major budget decisions are still not settled four weeks before the end of the fiscal year.

Secondly, notice that the direction from the department to the regions is simply to freeze spending at 2008 levels.  That’s a short-term decision if ever there was one, not the sign of a decision taken within the context of a longer-term plan.

Thirdly, take a look at the list of options offered up by the boards.  In Central, there is a wide and unconnected list.  On  the one hand there are major program shifts.  On the other, there is an inconsequential cancellation of a single position for a few thousand dollars.  In Western, the increased costs forecast include substantial amounts that have to be annualised.  That is, the initial amounts increase over time as with any program spending. 

None of this is a sign of planning either at the regional or provincial level.  Rather it suggests a series of ad hoc decisions being made in response to ad hoc direction from central authorities.  As can be seen particularly in the letter from Western region and Labrador-Grenfell, significant new projects were started in 2007 and 2008 which need to be continued.  Yet, in preparing for 2009, the long-term implications of these projects are called into question by a predicted downturn in the economy.

In truth, this inconsistent management situation matches up with what we have seen from the provincial government across the board.  Capital works projects take inordinately long times to get start.  Significant legislative measures get lost for upwards of two years and more before they are implemented.   All the delays cost money. 

Point Three:  The solution cannot be more of the same.

One of the most obvious implications of analysis done for the Strategic Social Plan approved by cabinet in December 1995 was that government needed to fundamentally change how it delivered some services if it was going to balance the demand with the ability to supply.

Unfortunately, one of the first acts of the Tobin administration in 1996 was to scrap the SSP and replace it with a pale imitation. Gone were the needed reforms.  What has occurred since 2003 has been a continuation of the situation post-1996, with predictable results.  Until now, the Williams administration has steadfastly refused to acknowledge it faced a very serious problem.

But acknowledging that a problem exists is the first step to setting things right.

With all that as the basis, the next few posts will lay out some ideas for producing fundamental changes aimed at providing a financially sound future for the province.

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21 September 2009

The truth is out there…

It just ain’t coming from this Mulder.

labradore notes a curious commentary on Sean Cadigan’s recent history of Newfoundland and Labrador written by someone name Judith MacDonald Guy Mulder from Port Hope, Ontario.  The thing appeared in the weekend Telegram but isn’t online.

Ms. Mulder either did not read or did not understand Cadigan's book.  She mentions several things but does not present anything to rebut Cadigan other than merely to assert that he is just wrong. That is always persuasive.

With that said,  her major grievances appear to be that Cadigan :

  1. does not accept the anti-Confederate orthodoxy now in vogue, and,
  2. calls Danny Williams a "tycoon".

On the first of these he ought to be commended.

On the second, it is hard to fathom why she objects to calling Williams a word that means a powerful and wealthy businessman.

Isn't that what he is?

Cadigan’s book is worth taking the time to read if you have an open mind and can understand simple English.  The argument Cadigan offers is not complicated or hard to understand. Cadigan is a professional historian but his writing is, as the saying goes, “accessible” and the themes he weaves are equally easy to grasp. 

This is an exceptional overview of  Newfoundland and Labrador history that deserves to be read by more people.

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19 September 2009

The Return of the Living Brain Dead

Now that zombie movies are back in fashion, this is only fitting.

The only questions is whether this dream job will trump another dream job for the out-of-work editor cum politician. 

Which one would allow more time with the kids?

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Are they hypocrites?

As Rex Murphy put it, one has to have principles first in order to abandon them.

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18 September 2009

Hard to put some black top on that

While the poll goosing machine may have tried to convince the good burghers of Labrador West that they would be seeing pavement before the snow flew, the wise people of the community likely knew far better.

At least this past week, they had the pleasure of listening to transportation minister Trevor Taylor explain why about a month an a half after he and cabinet colleague John “The Shoveller” Hickey  - left, doing his takogo kak puddin’ routine - promised the whole paving thing would be “accelerated”, they would like not be seeing much pavement this year on the Trans-Labrador Highway.

Seems that the contractor on the current tender ran into some problems shipping the equipment up from Sept Isles;  something about too big for the tunnels, so they had to unscrew some bits and dismantle some others.

And if all that wasn’t bad enough, it seems that there was a problem finding enough aggregate – crushed stone to you and moi – to go with the asphalt. 

But that didn’t just shag up the schedule for this year. 

Hoooo, no.

As Trevor told the whole of Labrador via Labrador Morning [mp3 link] that lack of aggregate meant the “accelerated” tender was actually not even out yet.

Trevor insisted though that the direction to the contractor was to do everything possible to get some pavement on the ground this season, even though the daily temperatures in Labrador this time of year hover around the “no go” temp for laying asphalt successfully. 

1205n03pic1 Apparently, Trevor  - on the right there,  looking over some ice control equipment - wants to make the people of Labrador west know that “we are serious” about the project.

Between the shag-ups with the road and the on-again, off-again hospital it will take a lot more than a teaspoon of hardened tar to convince some people that what they just saw the past couple of months from Hickey and Taylor wasn’t open mike night at Yuk-Yuks.

As it turns out though, the road work will not be accelerated, as anyone with half a clue could have told you. It was always planned for next year, planned that is by the people who do the work and know what they are talking about.

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In humour, veritas

It’s always good to keep a sense of humour, even of you have to wear those cruel shoes.

From 2005, Jack Layton sings the party song.

17 September 2009

Blow-out

If the NTV/Telelink poll is correct, Doc O’Keefe will waltz back into the mayor’s job after this month’s municipal election and Ron Ellsworth can start campaigning for the provincial district of St. John’s North.

The poll puts O’Keefe support at 38% with Ron Ellsworth at 17%. Mark Wilson has one percent and 44% are reported as undecided. Bear in mind that Telelink doesn’t distort their numbers by reporting percentage of decideds. Of the 1,030 people they polled, only 17% backed Ellsworth.

Those numbers generally conform to the poll numbers tossed around in rumours since the middle of the summer that supposedly had O’Keefe ahead of Ellsworth by two to one.

Given the past voter turn-outs in St. John’s, you can probably consider that the final results will show that the undecideds actually won’t to vote at all.

In the deputy mayoral race, Shannie Duff leads Keith Coombs 36% to 28%.

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Feds back BC electricity line

The federal government will commit $130 million to help build an electricity line in northern British Columbia.  Total estimated cost of the project is $404 million.

The northwest transmission line, smaller than anything proposed for the Lower Churchill and significantly less costly, is being touted as a way to open up opportunities for new energy projects in the northern most regions of British Columbia. 

The project is also touted as a way of connected Alaska to the North American grid, via BC.

Funding for the project is coming from the Green Infrastructure Fund.

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The Cruel Shoes, Part Two

So if Michael Ignatieff had a hidden agenda about a coalition government, what is it when the Connies and the Dippers form an entente cordiale to keep Stephen Harper in power?

The shoes are cruel when they are on the other foot, but then again, this is the sort of politics Canadians get when the three major political parties are all beset with a leadership malaise.

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16 September 2009

R.I. contradicts Dunderdale: no legislative problems and state still interested in power from NL

There is no legislative issue preventing the sale of Lower Churchill power to Rhode Island, according to Governor Donald Carcieri’s office.

Cost was identified as an issue in discussions under a 2007 memorandum of understanding between the state and the provincial government,  but the State of Rhode Island remains interested in the possibility of purchasing electrical power.

That’s not even close to what natural resources minister Kathy Dunderdale told the people of Newfoundland and Labrador during the emergency session of the legislature last week:
They found out that they did not have the capacity to negotiate a long-term power purchase agreement with Nalcor on behalf of the Province. Nor were they able, in their Legislature, to do the regulatory changes that were required in order to wheel electricity into the state. Therefore, Mr. Speaker, we learned a lot through that discussion but it was not possible and we have moved on because other customers are in a position to be able to do business with Newfoundland and Labrador.
Nothing had been heard about the MOU from the time it was announced until the questions in the legislature.  Bond Papers labelled it  missing in action.

No double entendres allowed

Evidently one candidate in the St. John’s municipal council election is responsible for stirring a strong response in one voter.

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Sullivan and Michael both wrong about government commitment to anti-scab legislation

New Democratic Party leader Lorraine Michael claimed that Danny Williams committed to introduce a law banning replacement workers during strikes.

Human resources, labour and employment minister Susan Sullivan claims that “[t]he government has never made such a commitment.”

Both are off base.

What actually happened is that cabinet ministers John Hickey and Shawn Skinner both indicated in 2007 that the provincial cabinet was reviewing the issue of labour legislation, including the need for anti-scab laws.

Hickey told CBC:

“Minister Skinner has advised me that inside the department, this whole legislation is under review, [and] I have taken the opportunity to review other legislation across the country … so these are issues that we as a government certainly are looking at dealing with.”

Skinner told the House of Assembly that the province’s labour laws were under review:

… I have indicated that the Labour Relations Agency, through its Strategic Partnership Initiative, is undertaking a review of all of the labour legislation in the Province. That will look at whatever the union representatives on that committee and the employer representatives on that committee wish to bring to the table for discussion. Once that review is complete, we will be in a better position at that time to look at the kinds of things will need to be updated in the legislation.

MS. JONES:  …My question today to the minister is: Are you prepared to move up the agenda on anti-scab legislation and have it brought to the House of Assembly so that we do not have situations like we have at Voisey’s Bay in the future?

MR. SPEAKER: The hon. the Minister of Human Resources, Labour and Employment.

SOME HON. MEMBERS: Hear, hear!

MR. SKINNER: Mr. Speaker, as I have indicated in my earlier remarks, we do have a strategic partnership between our Labour Relations Agency, the unions and the employers representative groups in this Province. We have a process in place that all parties have agreed to follow, and we will be following that process to do a thorough review and to make sure that any and all issues that are important to the people of this Province, be they employers or be they employees, will be reviewed and will be brought forward for consideration by the government.

We have undertaken that commitment, we will fulfil that commitment, and once we know what the results of that are we will decide then what actions can be taken.

Danny Williams might not have made a commitment about anti-scab legislation but two of his cabinet ministers sure did.

What Sullivan needed to explain is not who made a commitment but why it is taking more than two years to complete a review of the province’s labour laws.

Is this another example of something gone missing in action in the bowels of the Confederation Building?

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15 September 2009

Yep, there’s always room for more fire trucks

Fire-truck month is not quite over.

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Pushing buttons: technology and campaigns

While most candidates in the St. John’s municipal election have embraced some form of technology to support their campaign, the level of usage and the sophistication varies widely.

On one end of the spectrum you’ve got Ward Three candidate Bruce Tilley and his Web 0.5 beta site that looks like it was left over from the days when the Internet ran on vacuum tubes.

There’s no one who has fully embraced Web Campaign 2.0, but some are pretty close.

Like Shannie Duff and Simon Lono. Both have the social media add-ons like Twitter and they update them frequently. Both are also using videos through youtube to help spread their views. 

Those are just two;  their are others like Sheilagh O’Leary or Debbie Hanlon who are making maximum use of the facebook space to keep their network of dedicated supporters informed an up-to-date.

Others have got the look down, but the content is lacking, like any of the mayoral contenders or Keith Coombs.

Doc O’Keefe has a really expensive electronic brochure but then again that’s what you get when you hire an advertising agency. It’s all non-threatening designer beige and even the photos of the candidate are retouched packages of pure crud. 

Human beings simply do not look like this.  Borg have healthier skin tones.   There’s a calculated effort here to be inoffensive but the effect is so calculated and so miserably executed that it comes off being offensive and obnoxious.

 Ron Ellsworth’s site looks good, but there are some inconsistencies in the content that mar the overall package.  He has a section called “My approach” and the sub-headings are about “Our” this and that.  There are plenty of these jarring internal contradictions in Ellsworth’s campaign.  Think a plan where the first action item is to develop a plan. Altogether, these suggest Ellsworth hasn’t got his political shit together or his campaign team is so inexperienced or otherwise incapable that they can’t get a bit of focus to the message.

Take Twitter as another example. Ron’s got it, but one suspects he’s got it because someone told him that’s what campaigns need to look good.   But Twitter is the sort of thing that hyper-caffeinated hamster people with crackberries use to keep people notified of the bathroom habits or random firings of the few synapses left in their brains.  Some of them are so wired they are proof  a monkey can sometimes luck out and type a coherent sentence with just their thumbs.

Okay, so that’s a bit of an exaggeration.

But when a guy uses Twitter like a stone tablet in cuneiform – google it, people on your iPhone -  you know that  Ellsworth can talk about engaging people but he has no idea how to actually do it. 

But if you want to get a taste for raw energy and the sort of straight-up presentation the Web 2.0 technology can deliver, check out Lono’s virtual door-to-doors. 

Specifically have a look at the one on community, taxes and services.  It should raise a few hackles but it speaks very loudly and very deliberately to a raft of voters in the west end of St. John’s.  Curb-side recycling is funny but the humour is an entree to a simple message about the need to just get on with better waste management.

The two that are getting the most attention are two you might expect to, though.  Bally Hally speaks directly to an election issue and one that will face the next council.  Lono makes his position clear. Lono’s call for a municipal auditor general seems to have struck a nerve with people too, if the number of visitors is any indication.

There are plenty of ways to use technology in political campaigns. You can see the full spectrum in the St. John’s municipal race.

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Half-million in free money for local business

Called a contribution, $500,000 handed out today to a local offshore supply and service company from the provincial government doesn’t have to be repaid.

The criteria for getting the cash are, in a word, vague.

The promotional material talks about technology transfer and large-scale local enterprises.  The actual eligibility criteria are much less stringent.  The job creation and other benefits to flow from the project are – in the words of the business department – required to be merely “incremental”.

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Way less for way more in Lewisporte

While everyone is talking about the removal of laboratory and x-ray services from Lewisporte, a much larger cut seems to have escaped public attention.

The proposed redevelopment of the chronic care centre at North haven Manor was supposed to include acute care facilities as well.  The original budgeted cost was $20 million.

When people started to complain about the lab and x-ray business, the initial government response from no less a personage than the local member of the legislature was that people should be mindful of the $30 million health centre that was coming to town.

Now a 50% cost over-run sounded bad enough, the more accurate version of the whole story is found in the local newspaper – the Lewisporte Packet – from August 12.

Turns out that the original concept had ballooned in cost to $42 million.  Not so much as a single shovel had been soiled by local mud and the thing had jumped 110% in cost.  The provincial government’s response was to hack out most if not all of the acute care facilities, bringing the cost down to the low 30s.

"The one-roof health facility project was estimated to be around $20 million. It escalated to be about $40 million, in fact over $40 million," Mr. Oram explained. "As a government we had to look at where our priorities lie and we had to prioritize based on the identified needs.

"The project is still going to be - from our estimates - around $30 million for North Haven Manor and some other components as well. There's no way to keep it under $30 million to do what we want to do there and to meet the needs that we see as being in the Lewisporte area - this is the amount of money we are going to have to spend to do it."

The slash to laboratory and x-ray facilities was on top of that $12 million cut.

If all that weren’t bad enough,  the story is already widening.

Health minister Paul Oram is taking it in the head for the way the information on the x-ray and lab changes was released in the first place, let alone the way the new information flopped out last Friday.

The letters released last Friday have given risen to concerns in other communities that cuts are coming there as well. But even in trying to allay concerns, the health minister just made matters worse:  all health regions were asked to identify cuts, according to Oram

Now what he said is absolutely true but in the context, he is only adding gasoline to his own backside.  In his initial bluster, Oram stated clearly that further changes – always read as cuts – are coming.

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Related:  “Much less for may more for St. Anthony

Reaping the wind

A little over a year after the contract was awarded, Technip and StatoilHydro have launched the first floating wind turbine offshore Norway.

The turbine has a reported capacity of 2.3 megawatts in its location 10 kilometres out to sea.

26FebWind468StatoilHydro is also involved in a project to install wind generators offshore the United Kingdom.

The 315 megawatt project is expected to be in service by 2011.

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The joy of accountability

Here’s a picture of a government being held accountable for its actions.

tablingofdocuments At left is a picture of  the parliamentary secretary to the government house leader in the House of Commons tabling responses to questions on the order paper put there by the opposition Liberals before the House rose for its summer break.

It could be subtitled: “How I spent my summer vacation.”

There are a few things to notice here.

First of all, there are thousands of pages of documents made public in response to questions asked by members of the national legislature.

It’s part of what they get paid to do, asking questions and it’s part of what the government gets paid to do:  answer them.

Second of all, in Ottawa they still use the time-honoured tradition of questions on the order paper.  These are inquiries into government decisions or policies that are posed in order to elicit as full and complete a response as possible.  They are done free of charge, unlike ATIPs which carry costs.

In the 1980s, the Peckford crew kept the House closed so much they essentially forced the opposition to use freedom of information laws to get what they should have obtained for free in the House.

In the Tobin era, the members of the whole House came to the conclusion they should do away with order paper questions for most things.  All in the House were more comfortable with that situation and evidently some of them needed more time to file expense claims. 

That tradition continues such that the opposition in Newfoundland and Labrador doesn’t get to use the order paper as it is supposed to be used, they get fewer sitting days in the legislature to pose the questions they might pose in the first place, and then to make it worse, they have to submit access to information requests and pay for them out of the budget which the government deliberately  keeps tight.

Talk about setting up a system that restricts the flow of information and thereby hampers accountability.  Let’s not even get into the issue of how the government answers  – or to be correct  - tires desperately not to answer simple questions, regardless of who is posing them.

But don’t worry about that.

Just look at the mound of information the government had to cough up.

Would that governments that talked a good game on accountability could actually deliver  in proportion to their self-congratulatory rhetoric.

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