The Hippopotamus Song, Flanders and Swann version

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They can’t re-blackball him

Publisher Craig Westcott’s recent editorial from the Business Post has found its way to a New Brunswick newspaper.

Wonder what the locals will do besides despatch another of the Premier’s fanboys to post a comment on the piece?

It’s not like they can re-blackball Westcott from government interviews.

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I want a hippopotamus for Christmas

The song that is driving people insane.

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Rumpole and the Christmas Honours List

Word coming from the clerks’ room at Iniquity Court has it that on Tuesday next the province’s justice minister will announce recipients of the cabinet’s appointments to the provincial court bench.

There are four slots open, as Bond Papers readers already know. Some of them have been vacant for a year.

Who will make the Honours List?

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Yipppeee! Bring on those higher energy prices

From the New York Times:

In 2009, some 31,000 households in Rhode Island will have their utilities shut off, and the effort to juggle energy bills and mortgages is helping push some homeowners into foreclosure, said Henry Shelton, director of the George Wiley Center, a consumer advocacy group here. (Here, as in many states, utilities may not disconnect the poor in the winter.)

Since 2000, the cost of heating a home with fuel oil has more than doubled and the cost of heating a home with electricity has risen by one third, outpacing many incomes. The recent surge in unemployment has thrown even more people into energy debt.

High energy prices will hamper any recovery in the United States.

Hindering a recovery of the American economy will screw everyone who depends on exports into the Untied States as a staple of their own economy.

Like say Canada generally and Newfoundland and Labrador in particular.

Any fiscal plan built on perpetually high energy prices is inherently flawed and prone to failure.

Catastrophic failure.

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Kremlinology 13: the seat by the door

Used to be Ray Hunter, a backbencher who reportedly had his fair share of differences with the direction some things went.

Now it’s Wade Verge.

Wade’s seat is as far from the Speaker’s chair as one can get on the government side of the legislature and it is right next to a door everyone uses to go in and out.  It is not exactly prime real estate.

It may also be a clue as to who is in favour and who better mind their “P”s and “C”s.

That’s not the only peculiarity in the House of Assembly seating chart.  Usually when the government side has too many to sit on the government side, they tend to stick the lowest seniority fellows over with the Opposition.

Not in the current session.

There’s the last Boy Scout, Steve Kent, marked by the red “1”, accompanied by a whole bunch of other fellows of about the same or more recent vintage. And truth be told that’s where Wade and Harry should be.

But they aren’t.

Instead there are a trio of parliamentary assistants  - designated by the red “3” - who ought to be over closer to their ministers so they could confer on important matters without having to walk all the way around behind the Speaker.  They are pseudo-ministers after all and as such should be over with their fellow assistants. They should be in the seats on the very back of the government side and the crowd up by the Speaker (marked by a red “2”) should be back one tier.

Now that other crowd of red “2”s on the right there are also a bit out of place. The middle tier of that last block down on the right there seem to be a bunch of ministers who don’t hold a high prominence in the cabinet.  proximity to the Premier and the Speaker are huge clues to prominence in the usual way of seating people.

Oddly enough, that would include Ross Wiseman who, while he gets a front bench space due to seniority perhaps, is still only a couple of steps from being out through the centre doors (denoted by the bit of a bracket on the extreme right). His distance from the Premier and the Speaker seems a wee bit odd.

Now all of this might mean nothing at all.

But then again, this whole Kremlinology thing started with Trevor Taylor.

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Hebron Project Timelines

For those interested in this sort of detail, and from the good folks at the Hebron project website, comes this picture of the project timelines:

 

Note that the partners don’t anticipate giving this project the green light until the early part of 2012.

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Significant digits: December 2009

1.  Number of days Tom Rideout was premier:  43.

2.  Number of days the House of Assembly sat in 2009:  43.

3.  Average number of days the House of Assembly has sat each year of the current administration (since 2004): 43.

4.  Number of provincial Conservatives in the House of Assembly:  43

5.  Number of boil water advisories in effect in Newfoundland and Labrador as of June 2009,  the last date the list was updated:   239  (Some communities were affected by more than one boil water order.)

6.  Total number of boil water advisories in the province as of April 1, 2008:  228.

7.  Total number of communities affected by boil water advisories in the province as of June 2009:  174.

8.  Total number of communities in Newfoundland and Labrador: 593. (Yes, that means 29% of communities had at least one boil water advisory in place in June 2009.)

9.  Longest time under boil water advisory: 20 years 11 months (Branch, 01 Jan 1989.)

10.  Total number of days in which someone made reference to boil water advisories or drinking water quality in the House of Assembly since 01 January 2008:  2.

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Hitchhiker’s Update:

Purely coincidental: Hydro-Quebec/NB Power version

Some of these things are linked.  Some may be purely coincidental.

1.  Hydro-Quebec plans to buy NB Power including the Point LePreau nuclear generating plant.  October 29.

2. Ontario Senator Lowell Murray thinks it’s time for the federal government to get interested in the Hydro-Quebec/NB Power thingy. December 15.

3.  Ontario considering sale of hydro-electric generation, transmission and distribution assets. December 16.

4.  Government of Canada announcements plans to sell off the Candu reactor division of Atomic Energy of Canada Limited.  December 17.

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“Everything else is advertising.”

Sometimes, things that don’t appear to be connected things scream out to be connected.

Take, for example, a piece last weekend in the Globe on one of the legends in the newspaper business.  Harry Evans was in Toronto flogging his memoir, My paper chase. He thinks that news is whatever anyone tries to suppress.  “Everything else is advertising, ” he contends.

On the same weekend, a Telegram editorial revealed that the local daily tried to get government polling results this past August but came up with six blacked-out pages. Proprietary information don’t you know and there was just no way the government could release stuff that belongs to a third party and still comply with the province’s access to information act.

News is what The Man wants to suppress, sez Harry.

Not in this case.

That story of the blacked out bits  - the suppressed bits - never made it to the news pages. The Telly did run a story last September based on a few pages of numbers that the government did happily send out but the full-on research report story doesn’t seem to have made it to the news section.

And the story that did appear took such a high-level picture it missed some of the details within the numbers they did have.  It wound up telling you – in the very first two sentences -  that:

Residents of the province are split on their satisfaction with the government's handling of health care, according to recent polling commissioned by the Williams administration.

Satisfaction levels in other areas, however, remain high.

This is hardly news for anyone who has been reading the CRA polls as if they actually had something to say that didn’t exaggerate the actual results they got. The rest of the story didn’t add anything else.

Now this way of handling the suppression of polling information is rather odd. The questions being asked would potentially be very controversial stuff. After all they were questions like:

• Do you think Newfoundland and Labrador has benefited since joining Canada in 1949?
• Do you know anybody who's left the province to work in Alberta in the past six months?
• Do you consider yourself foremost a Newfoundlander, a Canadian, or something else?

and according to the Telly-torial:

Other questions touched on topics such as the phasing out of pesticide use and the image of the commercial seal hunt.

All pretty obviously related to public policy and all pretty obviously no the stuff covered by section 27:  “trade secrets of a third party, or … commercial, financial, labour relations, scientific or technical information of a third party…”.  Yet that was the basis on which the provincial government kept the information secret.

So at the end of it all we wind up with information being suppressed and the story about the suppression winding up as an editorial. And the bit on polling that did wind up on the news page was little more than the usual advertising copy that polling results have become in this province’s news media. Sometimes the ad copy comes with third-party endorsements from people supposedly with absolutely no connection to the subject of the story either.

Not so long ago, such blatant suppression of information that legitimately belongs in the public domain using a trumped-up excuse would have prompted a much sterner response and not one confined to the editorial page.

Things have changed, though, as Harry noted and as pretty well everyone dealing with news media can tell you. The change is not glacial, either, well at least not the way glaciers used to melt in the days before Al Gore.  Rather the transformation of newsrooms is as easily seen as the curious drop in online viewers highlighted by a couple of earlier posts.

The pressures in newsrooms are well known.

Other stuff that adds to the pressure may not be so well known or sufficiently appreciated for what they are and what they do: the nasty  - and often-time orchestrated – comments, short public attention spans and memories, The Attitude about advertising and what it buys, and even editors who publicly criticise the milquetoast reporting of today as too aggressive.  All add up such that it becomes much much harder for the crowd in the newsroom to do what Harry did and what many of the reporters and editors might like to do.

This is not a local phenomenon alone. It is also something that isn’t confined to one single outlet and it certainly isn’t affected by corporate ownership.  The problem  applies as equally to news outlets owned by large corporations as it did to a locally-owned vanity publishing enterprise that died twice. So-called independent media, that is stuff that isn’t corporately owned, also brings its own problem of rather strong ideological biases.

This is not a post which reaches a logical or orderly conclusion.  Frankly, your humble e-scribbler can only note the phenomenon just as with the curious drop.

But there is no mistaking the connections among a bunch of things you might not think were actually related.

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Public execution delayed for Speaker’s Christmas Party

Under Standing Order 9 of the House of Assembly, it’s pretty simple:

9. If at 5:30 o’clock in the afternoon except on Wednesday, the business of the House is not concluded, the Speaker shall leave the Chair until 7 o’clock. At the hour of 5 o’clock on Wednesday afternoon the Speaker
adjourns the House without question put. (1951 SO 7 R&S 1999)

Deputy speaker Tom Osborne decided to toss the rulebook in the corner this afternoon during debate on a resolution to fire child and youth advocate Darlene Neville.

The business of the House was not concluded at 5:30 pm.

There was no prior motion to extend the sitting or vary the rules.

Osborne simply interrupted the speaker who had the floor and put the whole show off until Monday.

The reason?

The Speaker’s Annual Christmas party – right, not exactly as illustrated -  was scheduled to start at 5:30.

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Harvest Energy sold

Harvest Energy Trust announced today that the trust has been sold to Korea National Oil Company (KNOC).

Included in the sale is the oil refinery located at Come by Chance, Newfoundland.

Until this sale, KNOC operated only one other project in Canada, the BlackGold oilsands operation acquired in 2006.

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Hebron cuts: Dunderdale blunders; will NALCOR alone foot bill for replacement work?

In the House of Assembly on Wednesday, natural resources minister Kathy Dunderdale confirmed what Bond Papers told you about on December 11:

There are no provisions of the final benefits agreement signed in August 2008 that cover a work cancellation and mandate that it has to be replaced by work of equal value or the cash equivalent.

Nothing could be further from the truth

Dunderdale issued a highly misleading news release on December 11 that claimed “any such issues were contemplated in the Benefits Agreement and the replacement value of the work was captured and protected."

As you learned here last week, nothing could be further from the truth.

Dunderdale told the legislature on Wednesday (December 16) that the agreement contained a provision on amendments and another on dispute resolution. There was no dispute, according to Dunderdale, as the parties came together and achieved an agreement.

Well that’s not the same as having “the replacement value of the work”  already “captured and protected”.  That’s not  “copper-fastened”, either as Dunderdale also claimed. That’s people getting together and hammering out a new deal which could include provisions among the partners as to who will foot the bill for what amounts to a political decision – the replacement benefits – rather than a purely commercial one.

. And as for that section on amendments, here it is in its entirety:

12.3 Amendment.

No amendment to this Agreement is effective unless made in writing and signed by authorized representatives of all Parties

Nor is the new deal an actual, finalised agreement.  As Dunderdale told the House of Assembly, there is an agreement in principle that must now be translated into a legal document.  There’s still lots of room for further changes, in other words in a project not due to be sanctioned until 2012.

Abandon Ship!

By the end of the questioning, Dunderdale became so rattled that she abandoned her false claim last week that the benefits were secured within the agreement:

Mr. Speaker, the parties came together, we did not even need to use mechanisms provided in the Hebron Benefits Agreement. [Emphasis added]

That pretty much blew what was left of her credibility out of the water.

Dunderdale also disclosed that the total value of the cancelled work is less than $50 million.  Her office earlier refused to disclose what they claimed was commercially sensitive information.

The Hebron partners – including the provincial government’s NALCOR Energy -cancelled the work because it was deemed “uneconomic and has significant execution and schedule risks” for the project Dunderdale estimates may cost as much as $7.0 billion.

NALCOR to foot bill?

If the agreement in principle is actually signed, it is unclear at this point if the $50 million of replacement work will be provided by the oil companies or by the provincial government’s energy company in its capacity as an equity partner on the project.

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The die is cast aside

“The die is cast!”

That’s what then-education minister Joan Burke said back in 2007 when the current provincial administration unveiled its plan to give Sir Wilfred Grenfell College something called “autonomy” from Memorial University. 

She was arrogantly dismissing concerns raised about the feasibility of creating a second university in the province.

Burke even used the word “independent” in a news release in 2007 - “Grenfell College is about to gain independence…” – something she predicted would happen in 2008. 

Well, in 2009, none of the promises came true.

And you can tell none of the promises came true because the announcement was made by Darrin King, the education minister, and not Danny Williams, the premier behind the whole drive.

You can also tell there’s nothing to get excited about because the release is gigantic – 13 paragraphs – and there are no fewer than five media contacts.  The way these things usually go, the less positive news there is, the more names are listed as media contacts.

Under the proposed approach, Grenfell will lose its separate and proud identity, becoming instead something to be called Memorial University  - Corner Brook.

It also won’t get a separate president or senate, as recommended by two consultants hired in 2005 to look at the whole idea of Grenfell “autonomy”.  Their Option 1A was the one supposedly on the books to be implemented.

Instead, the current senior official – named the Principal – will continue to be called the Principal and will report directly to the President of Memorial.  And there will be a separate budget presented to government through Memorial University in St. John’s.

Whoopee ding.

The whole thing looks suspiciously like the consultant’s Option 2A  but without the administrative clout of having a separate president for the new university at Corner Brook.

And what were the disadvantages noted for that by the consultants, you may ask?

• common Senate reduces Grenfell’s academic autonomy and
  development potential;
• little change from current unsatisfactory situation.

That’s right.  The consultant’s considered that the approach government ultimately  would actually reduce Grenfell’s autonomy and offer little change from the status quo.

Looks like the die for Grenfell autonomy Joan Burke talked about wound up getting cast alright, cast aside.

Expect lots of negative reaction to this as the magnitude of the broken promise starts to sink in for people in Corner Brook.

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The Placentia Bay Nostradamus

If the Telegram editors ever get jammed up for copy, they could easily recycle Ray Guy columns from 40 years ago. 

Most people wouldn’t be able to tell the difference between goings on then and now.

Back then, partridgeberries were the economic salvation of this cove or that harbour.  These days, cranberries will replace the income from a pulp and paper mill in Grand Falls.

Back then people were complaining about the great partisan conspiracy against the beloved saviour of His People.

These days, Bill Westcott is lacing into Peter Pickersgill on much the same basis. Poor Pickersgill has the extra misfortune of not only being the progeny of mainlanders but of being not pur laine hisself:

Despite spending a lot of his adult life in Salvage, we must remember PIC is not even an (Island-born) Newfoundlander, one of da boys! His genes, I think are rooted in Winnipeg and Ottawa.

That explains everything, of course.

There is no way the truth could be known by someone who wasn’t born here or who doesn’t live here.

Sure John Hickey said so dealing with another one of the confounded traitors:

Of course Mr. Waugh is entitled to his opinions on any and all Labrador matters, even as he writes from the comfort of his Nova Scotia home.

And Bill Westcott? 

He writes his truth from Florida.

That must be Florida, Bonavista Bay.

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Bon Deal. Bad Deal.

Turns out buying NB Power could be a very bad deal for Hydro-Quebec.

Of course, that would make it a very good deal for New Brunswickers.

Update:  As Mark correctly noted in a comment, a bad deal for one doesn't make it a good deal for the other.

If you read the article, though, you will see that many of the points made early on discuss what are the positive aspects for New Brunswick.  There are positive aspects for Hydro-Quebec as well; the variation just depends on what the price of power turns out to be down the road.

And of course, by the end of the article, Claude Garcia  of the Montreal Economic Institute, makes an argument based about MEi's projections for power prices over the medium- to long-term.

Despite the huge difference between the price offered and the real value of the assets being acquired, no allowance is made for the increase in electricity prices likely to result from the enforcement of a new international treaty significantly limiting carbon emissions. This deal is not acceptable as currently structured. The price is too high for the benefits to be obtained.Despite the huge difference between the price offered and the real value of the assets being acquired, no allowance is made for the increase in electricity prices likely to result from the enforcement of a new international treaty significantly limiting carbon emissions. This deal is not acceptable as currently structured. The price is too high for the benefits to be obtained.

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Eight appointed to Order of Newfoundland and Labrador

His Honour John Crosbie inducted eight new members  into the Order of Newfoundland and Labrador in a ceremony at Government House last week.

The inductees to the Order are Gerard Blackmore, Donna Butt, Jon Lien, Hazel Newhook, Gladys Osmond, John Perlin, and Margaret Pike. Alan Perry was invested as an honorary member of the Order of Newfoundland and Labrador. Geoffrey William Stirling will be inducted at a later time.

The Order of Newfoundland and Labrador recognizes individuals who have demonstrated excellence and achievement in any field of endeavour benefiting in an outstanding manner Newfoundland and Labrador and its residents. An individual who is not a Canadian citizen or current or former long-term resident of the province, but who has demonstrated excellence in their field, and has benefited the province and its residents in an outstanding manner, may be nominated as an honorary member.

As Chancellor of the Order, the Lieutenant Governor presented an insignia of the Order, a stylized pitcher plant, to each inductee, as well as a miniature of the insignia, a lapel pin and a certificate signed by the Chancellor and sealed with the Seal of the Order.

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Net debt and liabilities

In the next of this series of snapshots of the provincial government’s financial state, let’s take a look at few more charts.

First, there’s net debt.  That’s the sum of assets less liabilities.  This table was taken from data compiled by RBC economics from provincial budget documents going back to 1981. The scale on the left is measured in millions of Canadian dollars.

That big jump in 1993-1994 can be directly attributed to changes in federal transfers instituted to deal with the federal government’s financial problems and the recession which had begun three years earlier.

The jump in 2003 is one your humble e-scribbler can’t readily explain and there seems to be some discrepancy in the government’s financial statements.  RBC has used the second set of figures but there seems to have been a revision done in 2004 to the figures for the previous year.

The big drop over the two years between 2006 and 2007 is attributable to one thing and one thing only:  a doubling of the provincial government’s financial assets, basically represented by temporary investments. That’s all oil royalties flowing from  deals struck before 2003.

So when you see the provincial government crowing about debt reduction, they are really talking about the increase in cash they have, not the real reduction in liabilities. There is $1.8 billion in temporary investments held by the provincial government directly and another pile of cash and on-financial assets in various agencies and Crown corporations that brings the total assets up to $4.4 billion.  The $12.4 billion in liabilities minus the $4.4 in assets gives you the current net debt of $8.0 billion.

That’s clear from the second chart which shows only the liabilities as presented in the Public Accounts from 1998 to 2008.

The dip in liabilities in 2007 into 2008 comes from a drop in the unfunded liability in public sector pensions.  That number was cut in half by a combination of spending by the provincial government starting under Grimes and continuing under Williams.  But the biggest part of the drop is directly attributable to the $2.0 billion one time payment from the federal government in 2005.

Now some smarty-pants will notice that there hasn’t been a huge drop since 2005 that would equal the $2.0 billion plus a few more contributions that brought down the unfunded liability.   Well that’s because there have been some other liabilities incurred since 2005, like some new borrowing.  Overall, though, there has been a reduction in the total liabilities with the biggest reduction being the change in unfunded liabilities. 

Incidentally, that pension liability is still there but there is now cash to deal with it. 

Now as a last chart, let’s take a look at the net borrowings numbers.  We looked at the net borrowings per capita, but let’s look at the actual net borrowing figures for the past decade. Remember that  net borrowings are the total amount borrowed less any money set aside to pay the debt when it comes due.

Net borrowing is about a billion dollars higher than it was a decade ago.

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Hebron changes: uncertainty over implications of work cancellation

Under questioning in the House of Assembly on Monday, natural resources minister Kathy Dunderdale couldn’t point to a section of the benefits agreement that allowed a replacement of work cancelled by the Hebron partners in September.

Dunderdale could only say that there was an unspecified “sub-agreement”. 

She’ll probably have trouble finding the magic clause she thinks is there.  The benefits agreement is specifically identified as a stand-alone document that isn’t affected by other parts of the overall deal except as provided within the benefits agreement.  There’s no section that refers to offsets for cancelled work.

Dunderdale told the legislature the provincial government was represented through NALCOR Energy as the equity partner when the decision was made to chop the “sub-sea drilling template and the components of the field mooring system and positioning and docking system.”

However, when asked about the potential impact on communities like Marystown, Dunderdale answered as if the provincial government didn’t have an equity stake:

Mr. Speaker, some of these questions are better put to the operators to explain the scope of work, the magnitude of work, the kind of expertise that is required and the kind of services that are going to be required to do this work. All we can do, as a government, is negotiate an offshore oil and gas project with specific benefits around the kind of work that is required to construct. In this case, Mr. Speaker, modification needs to be made in order to reduce delays and proper execution.

She’s right, of course.  The 4.9% stake amounts to exactly nothing when it comes to substantive decisions if the government acts as an oil company/partner. The Big Players needed to “reduce delays and [ensure] proper execution” and the provincial government – apparently reduced to a bit player -  simply followed along.

That evident lack of control exercised by the provincial government is the opposite of what people were told when the equity stake idea was being sold politically. But it is consistent with the spirit of a section of the financial agreement that obliges the provincial government to back the oil companies on any regulatory issues as the oil companies see fit.

The Hebron partners were originally supposed to submit a development application this month to the offshore regulatory.  However, the changes made to the fabrication program a year after final agreements were signed points to the potential for further delays.

The Hebron project is not yet sanctioned by the partners.  Under the agreement with the provincial government, they do not have to sanction the project – that is approve it for development – at all.  They don’t have to green-light the development even if the project clears regulatory approval.

The final agreements signed in 2008 provided for less oil and possibly fewer local benefits than the 2007 memorandum of understanding.

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Net borrowings up since 2000

 

Net borrowing per person is higher now than it was in 2000, according to the province’s audited financial statements.

In Fiscal Year 2000, net borrowings  - accumulated borrowing less money set aside to pay off debt when it comes due (sinking funds) – stood at $10,684 per person in the province.

The number hit $13,074 in 2004 and has stayed in the same neighbourhood ever since.  Part of the reason for that is a drop in population since 2004.  The other reason is the increase in net borrowings since 2000.  Net borrowings increased in the period from $5.8 billion in 2000 to $6.6 billion last year.

 

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