Desperate Remedies

All principle converts to cash.

The official policy is reductio ad argentum.  As your humble e-scribbler put it only a few weeks ago:

Take a look at the current administration and you can quickly see the prominent role money plays.  In fact, money is the only real measure of anything.  News releases typically refer to how much money will be spent and how much has been spent.

To wit, from the House of Assembly, The Native, returned again from sunnier climes, and on the first day the House sat in three weeks, bristles as his own weapon – the condescending lecture – is turned against him:

Thank you for the Sermon on the Mount. That was lovely; I really appreciated it. I do not need a lecture from you or anybody else, I can tell you that much.

We are trying to get this resolved. There is a letter that is going out this afternoon that is putting $79 million of public money on the table and offering close to Atlantic parity which is exactly what the doctors have been looking for….

…

Mr. Speaker, what did we do when the ER-PR situation came up? What did we do when the oncologists wanted to meet? What did we do when they wanted to have a raise? We acted immediately. We gave them a significant raise which virtually put them close to Ontario parity. So we stepped up immediately.

What have we done as a government? We are now up to, I guess, close to $2.6 billion or $2.7 billion. That is what we have done; we have dramatically increased it. We have put money into information technology. We have put money into equipment. We have put money into long-term care facilities. We have put money into nurses.

…

Neither the issue or the sides in the current dispute are important for this discussion here.

Rather, notice that the only perspective the Premier took was one that considered how much money had been spent or how much he was proposing be spent.

Action is spending money and spending money is the only action the Premier seems to understand.

In another part of his exchange with New Democratic Party leader Lorraine Michael, the Premier put it this way:

There is never enough money around because all you want to do is criticize; get on the bandwagon!

That last exclamation  - as misplaced as it is even in a sentence that itself makes no sense – adequately conveys the essence of the rather bizarre tirade which the Premier delivered in his responses to Michael’s questions.

But there is no mistaking the connection the Premier makes between spending money and displaying interest, concern or attention.

It is always about spending money.

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Offshore board announces 2010 land sale

The official release:

“The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) announced today the details of the 2010 Call for Bids in the Newfoundland and Labrador Offshore Area. Call for Bids NL10-01 (Jeanne d’Arc Basin) will consist of two parcels, which comprise 169,400 hectares.

Interested parties will have until 4:00 p.m. on November 17, 2010 to submit sealed bids for parcels offered in Call for Bids NL10-01 (Jeanne d’Arc Basin). The sole criterion for selecting winning bids will be the total amount of money the bidder commits to spend on exploration of the respective parcel during Period I (the first five years of a nine-year licence). The minimum bid for each parcel offered in the Call for Bids, Jeanne d’Arc Basin, is one million dollars.

The Call for Bids contains provisions for rentals during the term of an exploration licence and during the term of any resulting significant discovery licence. This Call for Bids contains a sample exploration licence which incorporates a sample significant discovery licence. This area has been previously assessed to identify any mitigative measures that may be required in relation to exploration activity on these parcels. Notification of any changes made to this Call for Bids will be posted on the Board’s website.

Subject to Ministerial approval, successful bidders will be issued an exploration licence for a term of nine years; however, during Period I, a well must be spudded to validate the licence for the full nine-year term.

For a complete copy of the text of the Call for Bids, visit the C-NLOPB website at www.cnlopb.nl.ca.”

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Megamania: Wacky edition

A 40-year-old hydro-electric megaproject, on a river already home to massive hydro development, estimated to cost at least $6 billion, that will add dramatically to the provincial debt load for 30 or 40 years.

Lower Churchill?

Nope.

British Columbia.

The whole thing is a throw-back to British Columbia’s longest-serving Premier.  W.A.C. Bennett  - known derisively as Wacky - served from 1952 until 1972.

The Lower Churchill dates back to the time of Newfoundland and Labrador’s longest-serving Premier.  Joe Smallwood – who many considered wacky – served from 1949 to 1972.

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Strategic Social Plan (1995) - Forward

This Strategic Social Plan Consultation Paper initiates the final phase of an intensive Provincial planning process which began more than six years ago. When this Government took office in 1989, we made a commitment to the people of Newfoundland and Labrador to review all economic and social programs and mandates and to develop strategic plans to carry the Province through the turbulent changes of the 1990s into a stronger future in the 21st century.

In the fall of 1990, Government began the first phase of this planning process through a review of economy's strengths and weaknesses, examination of the activities and policies of economic departments and agencies, and the subsequent development of a public consultation paper to provide an opportunity for the people of the Province to have direct input into the vision, guiding principles, and actions that eventually became the Strategic Economic Plan (SEP).

When the SEP was released in June 1992, however, we stressed that it was only half of the planning cess. Economic issues cannot be examined or addressed in isolation from social issues and realities, and it was imperative to move on to the second phase of our strategic planning: the development of a Strategic Social Plan. A Social Planning Group (SPG) of senior officials was established, and on March 4, 1993, the Throne Speech in the House of Assembly reaffirmed Government's commitment to the development of a Strategic Social Plan as the essential and equal partner to the SEP.

During the past three years, the SPG faced many challenges in their task of researching global trends reviewing programs and policies. Unlike economic planning activity, strategic social planning models were virtually unknown, and the Group were for the most part breaking new ground. In addition, they were caught in a maelstrom of social change and reform at both the Provincial and Federal levels, and were obliged to constantly revise data and projections to keep pace with national social reforms and in funding.

Nevertheless, the work of the SPG progressed to the point where relatively stable data could be provided to Cabinet and a consultation paper could be developed. This document is not a final Strategic Social Plan but it is a clear statement of the direction in which Government intends to proceed in terms of providing essential services for the social well-being of our citizens in as effective and efficient as possible. We now invite comment and suggestions from the people of Newfoundland and through the extensive public consultation process which will precede the development of the Strategic Social Plan.

I encourage all citizens, and especially organizations concerned with various social issues, to examine this paper thoroughly and to give serious consideration to the social challenges that are outlined and to the strategies and actions that are proposed. I look forward to receiving the thoughtful views of people throughout the Province as we continue the process of planning our social order for generations to come.

[original signed by]

Clyde K. Wells

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To come:  “Introduction and Background”

• Introduction
• Social profile
• Demographic Change and Challenge
• Living in a Different World
• Realities
• Principles
• Vision

Explanatory Note:  The 159 page Strategic Social Plan [SSP] consultation paper is being presented in a series of instalments.  A companion to the 1992 Strategic Economic Plan, it lays out both a clear statement of where the province was in 1995,  the challenges to be faced in the future and policies to deal with those challenges successfully.

Approved by cabinet for release in December 1995, the 1,000 copies of the consultation document were ordered destroyed by the Tobin administration in 1996.  Only a handful of copies survived.

The planned consultation never took place.  Instead, and while something subsequently emerged which was labelled a Strategic Social Plan, the new Tobin administration went down an entirely different road from the one envisaged in the 1995 consultation paper.

Some specific initiatives from the 1995 document did make it into action.  Others did not. Unfortunately, the fundamental approach – the integrated concept – that underpinned the strategy went out the window with the change of administration in January 1996. 

It never returned.

The current state of the provincial government – unsustainable levels of public spending in an increasingly fragile economy – are a direct result. 

In a province facing an uncertain future, where political leaders are devoid of ideas, let alone sustainable or new ones, the 1995 Strategic Social Plan remains relevant.

Taking responsibility – comments, courts and disclosure

A Nova Scotia court decision last week ordering The Coast to cough up details of people who left comments on the newspaper’s website caused a bit of a stir in some communities over the weekend.

The Telegram Saturday editorial takes up the issue, as does Telly editor Pam Frampton in her weekend column.  There’s also an editorial in Halifax’s major daily the Chronicle-Herald.

Each focuses on the the idea that people making comments online should not expect complete anonymity.  They should be expected to take responsibility for their words. As the Herald editorialist concludes:

The bottom line is that freedom of speech online has no exemption from the same legal limitations that exist everywhere else in society.

Amen to that, brothers and sisters.

But with your head suitably swollen with such lofty thoughts, go to The Coast website and look at what is actually there in the stories stories about the Halifax regional fire department and allegations of racism.

That’s where things get a wee bit more complicated.

For starters, the two people who sought the identities of the commenters were not just “two firefighters” as both the Herald and the Telegram opted to describe them. Rather they were the chief and deputy chief of the department.  Both are directly involved in a human rights case launched by a group of black firefighters that alleges not only that racism takes place with the regional fire department but also that senior officials did not act promptly to deal with the issues.

Next, take a look at the comments under the various Coast stories dating back to last spring. Unless the Coast has removed the comments – there doesn’t seem to be any sign of that -  it’s pretty hard to find one which connects the two applicants directly with alleged actions.

With that done, you should realise there might be more to this story than meets the eye.  Someone might want to take a hard look at the speed with which the judge in this case issued the order.  A similar case in Ontario – as the Herald notes – is still awaiting decision.

If nothing else,  people might want to consider the implication of any such easy order for whistleblowers, especially in a province  with no legal protection for disclosure of confidential information in the public interest. 

Again, the Herald raised that point but did nothing with it in the editorial. 

Nova Scotia provincial public servants are protected by a set of regulations but it doesn’t appear those protections extend to municipal employees. In Newfoundland and Labrador, public interest disclosure is looked upon, apparently, with the same disdain as any disclosure of information under the province’s access to information laws.  Although the current administration promised a whistleblower bill in 2007, there’s no sign one will come to the legislature while the current administration is in power.

Some commentators criticised the editors at The Coast for stating they will quickly comply with the court order.  The editors are right to do so.  If there is libel in the comments, then those defamed have the right to seek redress. No one should be able to make scurrilous, defamatory comments with impunity:  speech online ought to be subject to the same law as speech everywhere else in this country. 

At the same time, though, those same commentators ought to realise that free speech isn’t really threatened in this case.  Even in the worst scenario where now or in the future someone tries to silence legitimate speech with the chill of legal action, the Coast editors are likely to pursue that issue with the same vigour they have used thus far in tackling the allegations of racism within Nova Scotia society.

A free press stands alongside free speech as a means of ensuring that those in power are held to account.  Both are secure in this Nova Scotia example.

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Will Americans shift oil attention to own offshore?

According to figures in a 2006 study for the United States federal government, the Atlantic offshore area that may be opened soon to drilling likely contains at least 3.8 billion barrels of recoverable oil and 10 trillion cubic feet of natural gas.

That puts it on par with the Newfoundland and Labrador offshore.

But the total United States offshore potential is more than 86 billion barrels of oil and 419 trillion cubic feet of natural gas.

President Barack Obama committed last month to open up portions of the American offshore to drilling. 

Obama talked about the same issue during the election campaign in 2008 saying he was willing to consider lifting the current ban if it would mean lower prices for American consumers.

So far the major oil companies are sending positive signals about the decision.  It’s also a bit too soon to see what impact this may have on exploration offshore Newfoundland and Labrador.

This is a development worth keeping an eye on, however.  Given a choice between working at home in stable working environment and working in places where policies tend to shift erratically, the big oil companies with the deep pockets may opt for working closer to home.

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NL manufacturing nosedived in February

Manufacturing sales in Newfoundland and Labrador dropped almost 40% in February 2010 compared to February 2009, according to figures released by Statistics Canada on April 16.

Manufacturing in February was down 33% from the previous month.  No other province registered double-digit drops.

By contrast, manufacturing sector sales were up 6.4% nationally. New Brunswick registered a 26% increase in manufacturing year over year while Ontario was up 10%.

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Offshore oil production remained down in February

Oil production offshore Newfoundland and Labrador continued to trend lower in February 2010, despite continued high oil prices.

Total production from the Hibernia, Terra Nova and White Rose fields hit 8,213,115 barrels according to figures produced by the Canada-Newfoundland and Labrador Offshore Regulatory Board.

That’s down from 9.5 million barrels in February 2009 and 10.1 million barrels in February 2008.

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I thought *you* had jobs to send to *us*…

Take a look at the very limited amount coverage available on the Internet about the southern governors and Canadian premiers conference.

There are lots of platitudes about relationships.  There was plenty of interest in energy jobs. But aside from vapid comments about things like the international awareness of American business leaders – they are apparently very, very good -  there wasn’t much of substance coming from any mouths.

That’s hardly surprising:  the southern United States is looking for people to move in a create local jobs. Take, for example, the situation in Alabama, as described by an editorial in the Anniston Star newspaper:

It's a non-debatable, obvious fact. Alabama needs jobs.

Anniston – roughly the size of Corner Brook - is looking for someone to come to the state, set up a business and create jobs for Alabamans. Neal Wade, of the state economic development agency, told Associated Press [quoted in the Anniston Star]:

"What we want to see is not just the assembly jobs, but the research and development, renewable energy projects that will impact not just our state but all of the country…. I think there are tremendous opportunities not just to reduce the cost of energy in our state, but also to increase jobs."

Three years into the exercise this particular conference of governors and premiers seems to be coming up very short.  Some provinces, like Quebec, may be able to profit but it is hard to know why a province like Newfoundland and Labrador is devoting such effort as sending the premier to the meetings while other, more lucrative prospects have been either neglected or trashed.

After all, you can just hear Mississippi Governor Haley Barbour and Premier Danny Williams when they first met:  “But I thought you had jobs to send to us.”

At least, Danny didn’t have to travel far to get to Biloxi.

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Jon Lien: mensch

Jon Lien, known around the world for his work with humpback whales, died in St. John’s today, age 71.

He was a remarkable human being and anyone who had the chance to know him on any level – your humble e-scribbler did through work with a local conservation foundation – knew immediately of his energy, enthusiasm and respect for all living things. 

There will be no shortage of tributes to Dr. Lien.  One of the best you will find anywhere came from Geoff Meeker two years ago when Dr. Lien was inducted into the Order of Canada.  Like most recipients of the Order, Dr. Lien got it for one thing but his life was filled with reasons to acknowledge him and honour him. Geoff reprinted a profile he’d written 20 years ago and it still holds up today.

Few will be able to put it any better about a man few will be able to equal, let alone better.

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Interconnection key to reliable wind power

A recent study from the University of Delaware’s College of Earth, Ocean and Environment shows that a network of offshore wind sites can be managed to ensure consistent power generation from the system. [Full report in pdf]

One of the major problems with single wind farm sites is the unpredictable nature of generation.  Power only flows when the wind blows and there is no guarantee when it blow or if the wind will be strong enough to generate power.

Researchers at CEOE analysed five years of data from sites stretching 2500 kilometres along the east coast of the United States. By simulating an interconnection they demonstrated that the system could provide consistent, sustainable power.  While other studies have shown the benefit of interconnection, the key to success in this case lay in the wide geographic dispersion of the wind farms.

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Show Trial

Charges laid against one Innu hunter from events in 2009 caused a minor flurry in St. John’s when the news broke charges had been laid. This will likely wind up being a big political story but a very short legal story.

Essentially, this is a political prosecution, done for show and nothing more. The government had to hunt around for someone to charge after all the controversy earlier in the year.  If it was a real charge, the justice minister would be speaking to it and since he was nowhere to be seen, you can draw the logical conclusion.

The fact the wildlife crowd came up with one lone guy to charge – from 2009 – would cause even the most blind judge to wonder what was being tossed in front of him. 

In the end the hunter will get off for one of several reasons.  The most obvious one is the aboriginal right to pursue traditional ways.  That’s the most obvious reason and the one that is pretty hard for the Crown to refute.

They can’t play the endangered herd card for one simple reason:  if the Innu actually had been killing the herd at the rate claimed, the herd would have been killed off 25 years ago.

Second, there is the angle to use if the guy has a lawyer bent on embarrassing the living crap out of the Legal Genius(es) behind the prosecution. 

If that’s the case, the lawyer will scream that his client is being abused because he is from another province. He will have plenty of evidence to back up this line.

The lawyer will point to the treatment of his client compared to Innu hunters from Labrador who were caught red-handed killing animals of an endangered herd who had their gear and vehicles returned to them. The lawyer can point to the need to get a deal on the Lower Churchill as a motivation for the blatantly unfair treatment accorded to the Labrador Innu. He doesn’t have to prove that, mind you.  He can just allege it.  Think of it like claiming your client got a shit knocking on George Street because his old man was in a labour dispute or words to that effect. 

He can also have a go at the natural resources minister for alleging the Innu were potential murderous bastards.  Her whole line about something flung into the blades of a government helicopter seems a tad overblown. 

And if in the process the lawyer for the poor fellow facing charges can coax a characteristically intemperate outburst from the province’s Chief Lawyer, then all the better for his client.

Ginger, get the popcorn.

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Wolfe Island Wind Farm

Since last summer, pictures of the Wolfe Island wind farm have been one of the most popular search terms to drive traffic to Bond Papers.

Unfortunately, they haven’t been readily available since the site redesign. Well, by popular demand, here’s the best shot, taken from the Wolfe Islander III on the return run from the island to Kingston.

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Government-subsidised government jobs

There are two things to notice about a provincial government news release from the human resources and labour department announcing the awarding of $67,000 of job subsidies for seven jobs in the electoral district represented by the minister responsible for human resources and labour.

Well, there’s three if you include the fact that Susan Sullivan is announcing money for her own district and at no time makes reference to the fact it is her district.

But there are two other aspects of this release that scream out for attention:

Firstly, the news release gives absolutely no background whatsoever on what the seven people benefitting from the cash will be doing. In fact, aside from the first paragraph, the rest of the release pours out tons of boilerplate on the program used to pay for the jobs.

Secondly, one of the employers involved in the projects is the Nova Central School District. The money is for “the hiring of staff…” for the district.

In other words, the provincial government is using government money from one department to subsidize jobs in another line department.  Nova Central gets its funding from Darrin King, the education minister.

Talk about jobs that depend on taxes.

Talk about make-work schemes.

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Oil above $80/bbl may hamper recovery

The International Energy Agency is warning that oil prices above US$80 a barrel may jeopardise economic recovery in major countries.

From the Globe and Mail:

“Ultimately, things might turn messy for producers if $80-100 (per barrel) is merely seen as the new $60-80 (per barrel), stunting economic recovery while prompting resurgent non-oil and non-OPEC supply investment,” the Paris-based IEA said in its monthly oil market report.

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Labour Force and Employment, March 2007-March 2010

Just for the fun of it all, here’s a table showing the Newfoundland and Labrador labour force (top line and the employment, by month, from March 2007 to March 2010.

The numbers are from Statistics Canada’s The Daily.

There are a few things to notice:

1.   Employment in Newfoundland and Labrador peaked in May 2008 at 224,700. Then it dropped drastically and kept on falling until November 2009.  That’s when it seems to have started a rebound.

2.  May 2008 was two to three months before oil prices peaked and the recession started.

3. As one might have expected, all that provincial government capital spending last year kept construction workers employed but it sure as heck didn’t work any miracles in the job market. 

4. Even though there’s been a pretty steady climb in employment since later 2009, there doesn’t seem to be any particular reason for the climb, at least not in the private sector. The employment level also seems to have hit a plateau for a while.

5.  The only major private construction project due to ramp up in the near future is the Vale Inco project at Long Harbour.  The Hibernia South and White Rose work aren’t really jab-makers. Hebron is the next big one to hit and that won’t show up until 2012 at the earliest.

6.  Notice that the labour force in the province has been growing steadily since  the middle of 2007.  That matches the observation made by labradore about economic refugees who started returning home in advance of the recession.

7. Is the recession really over? Continued labour force grow suggests there is a problem elsewhere and that economic refugees continue to head back to Newfoundland and Labrador in the hopes things are easier at home.

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The Fragile Economy: …and two steps back

In 2007, the contracts manager at Metalcraft Marine, a Kingston Ontario boat builder noticed the growing number of reports from the united States that predicted a looming downturn in the American market.

The threat was potentially devastating for a company that did 95% of its business manufacturing small patrol boats for American government agencies.

The company shifted its marketing focus to South America, the Middle East and Asia.  The work paid off:  revenues in 2010 will be 50% higher than 2007 based on new customers outside North America.

Inertia

Meanwhile, since 2007, the provincial government in Newfoundland and Labrador has been working alongside the other eastern Canadian provinces to increase trade with the United States. There is now a whole trade focus on the south-eastern Untied States complete with junkets and conferences. 

Just this weekend – April 2010 -  the Premier co-hosted the latest conference for the south-eastern project.  This is the same trade venture. incidentally, that drew Paul Oram to Georgia when he was the business minister. His grasp of recent events in the province is breathtaking.  Well, breathtaking that is, if you have no idea what he is talking about.  If you do have half a clue, you’d wonder what planet he was from to have cocked everything up so badly.

Now to be fair, the whole idea for this venture seems to have been cooked up back before 2007 when it looked to some like the growth in the United States economy would know no end. By the time the bureaucrats and politicians managed to get themselves organized, the first signs of looming trouble were showing up.  And by October 2008 when Oram was in Georgia, the entire arse had fallen out of the American economy.

By then, of course, or even by 2007, the bureaucratic juggernaut couldn’t be stopped even if someone wanted to.  And now three years after the first one, a whole bunch of people get together regularly at taxpayer expense to talk about how nice it would be if the private sector companies in the respective jurisdictions did a little business with one another. 

These trade affairs never seem to do much more than talk, of course and set up permanent offices employing public servants to help co-ordinate future meetings.  That’s what happened with the Tobin-era Irish junket-fest, revived by the Williams crew or the Team Atlantic missions to anywhere that has warmth and sun in the wintertime.  But the purpose of this discussion let’s run with the assumption used by governments, namely that these trade missions and junkets actually work.

Increasing Dependence on a Single Market

Politicians who come into office without any idea of what to do usually wind up following the flow.  This American trade idea is likely no exception. 

You see, the United States has been the province’s major foreign trading partner for decades.  In 1999, two thirds of all exports from Newfoundland and Labrador  went to the States. By 2006, that proportion had climbed to 75%.  Even in 2008 – the last year for which the provincial government provides statistics – 71% of exports from Newfoundland and Labrador went into the American market.

To put it another way, take a look at the export value compared to the province’s gross domestic product (GDP):  the  total value of goods and services produced in Newfoundland and Labrador. In 2008, about half the GDP went to the Untied States. The GDP in 2009 was 22 billion.  The drop was pretty much all due to the collapse of the American market.

Now that level of dependence is not as bad as Metalcraft's problem in 2007, but it certainly should have made someone within the provincial government sit up and take notice.  After all, the provincial government’s own statistics analysts produced the figures cited above.  The level of dependence on the American economy is not a state secret.

Rather than trying to increase trade with the United States, Newfoundland and Labrador would be strategically better advised to diversify its markets. But since 2003, the provincial government has been doing exactly the opposite. 

What’s more, the provincial government  - in an apparently capricious move -  specifically rejected getting involved with a major international trade initiative aimed at diversifying the markets for local goods and services. 

Sure Paul Oram took a jet to India in 2008, but the very next year, the provincial government rejected a major national effort designed to open the European union to free trade with Canada. A few million dollars worth of seal bits trumped what had managed to become, by 2008, close to a couple of billion dollars of trade into the European Union. The prospect of more trade with the Europeans opens opportunities for new business throughout the province not to mention offering the chance to resolve some long-standing trade issues in the fishery.

However, none of that seems to have had any impact on the group of politicians and bureaucrats determining the province’s economic policy.  So it is that the European opportunity was neglected, to put it mildly, while the American continues.

Markets?  We dun need no stinking markets?

Now this is not the first or only time such a situation has occurred since 2003.

The provincial government took a hand in smashing to bits the only internationally competitive fishing enterprise based in the province.  Fishery Products International continues as a brand.  The brand, along with the international marketing arm went to a Nova Scotia-based company.  Another section, a seafood marketing arm based in the United Kingdom also wound up on the block, snapped up just as quickly by someone else with far greater vision than the provincial government and the band that sliced the company to pieces.

Now it does not matter if the provincial government actively worked to destroy FPI or if it merely went along for the ride because it lacked a coherent fisheries policy of its own.  The end result is the same:  The parts of the company that could have helped to diversify markets for local seafood are gone to others.  The unprofitable and problematic bits – the processing bits – remain in the province and continue to be highly problematic  although they are now held by a smaller company with far less global clout.

The others are doing quite well for themselves.  John Risley, vilified by the Premier during the FPI debacle, personally runs a successful company that last year turned a profit of $25.8 million despite the downturn in the American market and the high Canadian dollar.  A key part of the success is the FPI stuff Risley bought with the same Premier’s agreement.

Oh to be in that room

There is no small joke in discovering that the Biloxi conference co-hosted by Danny Williams is sponsored,in part, by AbitibiBowater. Williams’ expropriation gambit of AbitibiBowater’s and other’s assets in 2008 has turned out to be a legal disaster for the provincial government and may well prove to be as big a financial mess too.

Irrespective of that, though, there is something fitting in having Williams hosting an event designed to encourage trade while it is sponsored by a company which is the poster-child for the Williams administration’s erratic, contradictory policies. 

It is one thing to sell products in another market.  Another key component of trade missions is attracting new investors.  What could more readily turn off investors than the spectacle of a provincial government seizing control of assets, revoking permits and unilaterally quashing legal action? 

Williams did not just lay waste to AbitibiBowater’s presence in the province with his December 2008 surprise.  The expropriation bill also seized assets belonging to two other companies:  the Italian multi-national ENEL and St. John’s-based Fortis.  There is still no sign of any settlement with any of the parties affected, including those like ENEL and Fortis which appear to have been collateral damage in whatever war lay at heart of the expropriation.

One step forward and two steps back

Two decades ago, the Government of Newfoundland and Labrador recognised both the problems faced in the province and the opportunities posed by changes in the global economy. The Strategic Economic Plan aimed to make fundamental changes in the economy, diversify industries and markets.  The plan was a step forward.

Two decades later, the province is two steps back.  The SEP and all the knowledge that lay behind it are tossed aside. 

As the old adage goes:  fail to plan.  Plan to fail. 

The results are there for all to see:  increasingly, the provincial labour force is dominated by people whose jobs depend on tax dollars, rather than on jobs that generate tax dollars.

 

The provincial government now accounts for almost 25% of the employed labour force in the province.  This is not just the result of the near collapse of the forest sector and the steady decline of the fishery:  public sector employment like public sector spending generally continues to grow apace. Curiously enough, the Williams administration started out with a policy of reducing the public service.

Since 2003, the only development projects that have taken place were all either begun before the current administration took power or build modestly on existing work.  Nothing new has turned up despite the creation of an entire department supposedly devoted to generating new economic development.

More of the provincial economy in 2010 depends on exports to the United States than a decade ago. About 71% of all foreign exports now head to the United States.

Oil generated one third of the provincial gross domestic product in 2009;  that’s about seven billion dollars in a $22 billion economy. Total provincial government spending for 2010 is about seven billion.  As industries like forestry and the fishery have withered or faltered, the provincial government has stepped in to take its place.

The provincial economy is increasingly driven by public sector spending which, itself cannot be sustained at current levels.

There are ways to correct the course the provincial government has currently set.

That is where this series will turn next.

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Rosy with a chance of goofballs

Not only will the provincial government continue to make billions despite dwindling oil production, that situation will continue over the next decade with the provincial government raking in around $2.0 billion annually.

That includes 2016 when – according to the production forecast used to make these awesome predictions - production will be a mere 65 million barrels.

The source of this sunniness is none other than the local Blue Team’s favourite economist Wade Locke.

Yes, folks, the same guy who complained when he was accurately quoted (but unfortunately contradicting the official spin) is predicting sunny days ahead.

And it’s there for all to read, on the front page of the Saturday Telegram complete with a pretty graph of annual oil production.

Not surprising, is it?

And there is no reason for doubt.

Locke remains confident in his forecast, a year after he gave it:

"That what I was expecting before, and that's what I'm still expecting."

Of course, he is. 

Just like he was confident when he forecast gigantic things for Labrador at a time when the global economy was tanking.  he expected it then and he still expected it right up until it didn’t happen.

Or like 1990 when he pissed all over the economic benefit from Hibernia.

Yes, those economic boons can be hard to predict.

We just have to make sure the credit goes in the right direction.

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Let he who didn’t oppose The Deal…

cast the first stone against New Brunswick Power’s proposed 3% rate hike or any of the other proposals aimed at coping with the company’s financial problems.

The ones who worked to kill the NB Power/Hydro-Quebec deal can just suck it up end enjoy it.

(h/t David Campbell.

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Conveniently close to home

The Premier is co-hosting an international trade mission this weekend, as the provincial government’s information service dutifully tells us all on a sunny Friday.

The event will bring together a bunch of state governors and provincial premiers to talk about ways to promote trade among the states and provinces.

The conference is Biloxi, Mississippi and that, as we all now know, is just a short Citation hop across the Gulf of Mexico from the Premier’s condo in Sarasota, Florida.  It’s so nice when things take place so close to home.

Almost immediate Update:  Since his truck hasn’t been in the Premierial Parking Space, odds are the Premier’s been back in the Southern Tower since the House closed for a three week break.

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