Is the Abitibi Fiasco on the agenda?

The Premier’s trip to Ottawa announced late Tuesday morning is only a surprise if you didn’t know about it in advance.

Regular readers of these scribblers had it yesterday:

When Danny heads off to Ottawa later this week for a round of meetings on a bunch of subjects, …

One item not mentioned on the agenda  - but surely to come up  - will be how the provincial government will repay the feds for the Abitibi expropriation fiasco the Premier will be leaving behind for his ministers to defend. Ministers are discovering the idea of collective responsibility, likely for the first time since the Tories took office in 2003. 

If the provincial government expropriated half the town of Grand Falls by mistake – you could not make up this kind of blunder - you can safely bet they don’t stand a snowball’s chance in hell of winning the claim for $500 million or more that Abitibi levelled against Canada under NAFTA.   The federal government may pay up front but, at some point they will likely come looking for reimbursement from the one who caused the mess in the first place.

What better time to discuss that than when Hisself is in town for meetings?

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Where the money goes – 15 years later

Just to put the Strategic Social Plan (1995) in a bit of context, you should realise that health care spending as a share of the provincial budget has increased dramatically in the past 15 years while other sectors have stayed the same or decreased.

The change is actually quite dramatic – 10 percentage points – from 265 in 1995 to reportedly 36.8% in 2010.  In dollars, spending on health care has tripled in the province since 1995 and the health share of the budget going from $933 million to $2.7 billion in a decade and a half.

This chart compares the 1995 figures from the Estimates with the recently tabled budget. It corresponds to a chart (Figure 2) from the 1995 Strategic Social Plan consultation paper. The light blue line represents the 1995 budget while the purple-blue line is the current budget estimate.

The province’s business development and economic diversification efforts – ITT then and INTRD and Business today – take less of a share of the budget now.  That’s despite government claims that it has a plan to expand the economy and that the plan is in place.

Mind you, the amounts spent have increased.  For example, the cost of operating the departments has gone from about $50 million for the Industry, Trade and technology department to about $66 million spread over Business and Innovation, Trade and Rural Development today. 

The amount available for business investment is also up:  $18 million then compared to $29 million. Even then, though, the province’s business department -  the vehicle through which Danny Williams was once supposed to personally reinvigorate the provincial economy – actually doesn’t do very much with the cash in the budget.  Sure there are plenty of free gifts – like Rolls Royce – or the apparently endless supply of cash for inflatable shelters. 

But as the Telegram discovered two years ago, the provincial government spent nothing at all of the $30 million budgeted for business development in 2007. And earlier this year the Telegram confirmed that in the past three years, less than one third of the $90 budgeted for business attraction was ever spent.

Spending on education is down as a share of the overall budget, even though the amount spent is up from $763 million to $1.2 billion.

Interestingly, the most dramatic decline has been in what the budget estimates call Consolidated Fund Services.  Basically CFS covers all those expenditures that it takes to pay the interest on the public debt, maybe retire whatever tiny portion comes due each year, cover bank charges and  that sort of thing.

As a share of the budget, CFS has gone from 17% to 6.6%.  In dollars we are talking $403 million this year to service the public debt and another $87 million to cover employee retirement plans.  Fifteen years ago, the figures were $544 million and $60 million respectively.

Some bright bunny out there is likely hopping up and down thinking that the big improvement there is due to the actions of the current administration in paying off debt. 

Some bright bunny like innovation minister Shawn Skinner, speaking in the budget debate last week:

Our net debt, that big yolk around our necks that everybody talks about, that big millstone that drags everybody down which was about $12 billion - that is billion with a ‘b’ - when this government took office is now down by $3.9 billion to just under $8 billion. We have gone from a twelve-billion-dollar debt down to an eight-billion-dollar debt in six short years. Now, that is good economic policy I would suggest to you, Mr. Speaker. That is good fiscal policy and that is something that the people of this Province understand and appreciate. I do not have the figures right in front of me …

Well, not exactly.

The taxpayers of Newfoundland and Labrador actually have greater liabilities now than they did in 1995. 

What Skinner mentioned was net debt – liabilities less any assets – and that figure has actually gone back up in the past year.  Why?  Well because the provincial government had to dip into its cash reserves to avoid borrowing money from the banks to cover the $500 million they were short last year.  It’s also a couple of billion or so beyond what it was in the bad old days of the mid-1990s when the provincial government had no where near as much cash flowing in as it does today.

There’s no real point in going into the debt charade Skinner and his colleagues have been foisting the past few years. Regular readers of these scribbles are well-used to the argument.

What we really have to look at are the things that make the cost of carrying that debt lower today than in 1995. 

For one thing, interest rates are much lower than they were when some of that debt was incurred in the 1980s.  As old debt at high interest rates has matured, successive administrations simply rolled it over at much lower rates.  In that respect, the current crowd are doing exactly what the former crowd used to do. It’s a perfectly sensible thing to do when you don’t have the cash to pay debt off.

For another thing, the debt today is pretty much all in Canadian currency.  In the 1990s, chunks of the debt  - upwards of a third of it - were in American dollars and Japanese yen.  The weak Canadian dollar over the years meant that the taxpayers shelled out bundles in order to pay interest in higher valued currency.  Starting in the Wells administration, the provincial government started rolling over that foreign debt and borrowing Canadian.  That has saved the taxpayers hundreds of millions over the years.

For a third thing, the direct provincial debt  - the money the provincial government itself owes – has been dropping again from the high incurred during the Williams administration. Yes, that’s right for all the pitcher plants clogging the local media Internet sites thinking other. 

The direct public debt actually hit its peak of almost $7.0 billion under the current crew.  In fact,  the guy the pitcher plants and Fan Clubbers love to hate – Roger Grimes – left office in 2003 with the provincial government direct debt lower than the direct debt under Danny Williams today:  Grimes = $6.5915  billion versus Williams 2010 = $6.6468 billion. 

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The Abitibi Fiasco: a house divided

Premier Danny Williams  - House of Assembly, April 21, 2010 - on the costs associated with his disastrous expropriation bill:

What we are trying to do, and we have throughout this negotiation, is protect the interests of the people of Newfoundland and Labrador because Abitibi owes us anywhere from $200 million to $300 million in environmental liabilities for the mess that they left us, in addition to the severance for the workers that have paid, in addition to what we as a government have put into Grand Falls-Windsor and the Central Newfoundland region.

Provincial environment minister Charlene Johnson  - House of Assembly, April 22, 2010 - on the costs of Abitibi’s environmental liabilities:

Mr. Speaker, under the act the way that we - under the orders that we issued [November 2009]  we require Abitibi to submit to us a remediation plan. There were five orders: Botwood, Stephenville, Grand Falls-Windsor, Buchans and some logging camps. So, until they submit a remediation plan to us - and they had one year to submit this plan and they have done some work on it in the past. Until they submit that plan and until we are satisfied with the plan to ensure that the environmental liabilities will be dealt with, I cannot give you a firm, actual cost until that comes to us and we are satisfied with it.

 

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Kremlinology 20: Who will replace Danny?

There’s a question that will likely be on the lips of most Newfoundlanders and Labradorians within 12 months.

Even if, by some strange set of circumstances, he decides to subject himself to another two full years of the kind of public ingratitude he’s seen over the past nine months, Danny Williams will likely have an increasingly hard time suppressing speculation about when he will retire and who will replace him. 

People may not have readily accepted the idea that someone in his own inner circle blew away the Premier’s plan to keep his heart surgery secret. But think of events of the past few months -  let alone the bizarre meltdown last week – and you can’t hit the local mall without finding someone wondering how much longer the Old Man will be around.

When Danny heads off to Ottawa later this week for a round of meetings on a bunch of subjects, it might be fun just to kick back and wonder who in the crowd he left behind has designs on his office.

Take Jerome Kennedy, for instance.  He’s got all the buzz of an heir apparent. Aside from the moustache incident earlier the year, Jerome has been trying to change his appearance and, by extension, the appearance of government from one of combativeness and nastiness to something a little more palatable.

But we’d all be pretty naive if we didn’t think Jerome knows already that he will have to present himself as a major change of style in order to succeed Williams. There are likely other things going on out of plain site.  The little political favours for people whose support he will need.  A job here, there and everywhere someone in the public service for his supporters.

Others are likely up to the same thing.

Like Joan Burke.  Creating a new department for her to set up has given her plenty of time to travel around the province meeting with public servants in the day and local Tories in the evening.  She’s reputed to have a war chest as big as her ambition. Plus, the new department allows her to soften up her tough-as-concrete image.

There are probably a few other caucus contenders quietly putting together their bands of supporters. 

Permits and licenses minister Kevin O’Brien at least looks like he has the Grecian formula for a run.  He may well have some cash and supporters left over from his abortive run the year Danny decided to go for it.  O’Brien was party president in 2000 but took a leave of absence as he contemplated taking a shot at the leadership.  Once Danny entered the race, Kevin knew enough to leave it alone.  He’d be a really long shot but then again, any potential candidate can always look to the 1989 long shot:  Tom Rideout.

Then there’s Tommy Osborne.  Scion of the townie Tory power family, Osborne’s name pops up in some conversations about potential leadership candidates after The Old Man leaves.  If nothing else he came out of the Cameron inquiry looking pretty good.  Osborne could  make a mark, even if he didn’t win, and that might be enough:  whoever wins the race will have to reward his or her competitors with decent cabinet jobs or risk civil war. Osborne could enjoy a second career in cabinet and still retire relatively young.

Don’t be surprised if Ross Wiseman or Darin King took a shot at the job or at least considered it. 

Other that that there aren’t any members of the current caucus who seem likely to run to replace Danny.  Natural resources minister Kathy Dunderdale is likely to leave at the end of this term as is finance minister Tom Marshall.

As for the idea of an outsider coming in, that would be a long shot for sure.  Brian Tobin was the last one to try it and win from outside caucus.  But he started making his move quietly in late 1995 and was a politician the whole time. No one has ever come cold  - completely outside elected politics - into the top job in the incumbent party and hence the province.

One name you can cross off your list:  Wade Verge.  Seems his move away from the door was just a temporary, almost cruel joke.  Paul Davis, the most junior member of the legislature and the Tory caucus, now has the plum bit of seal skin vacated by Beth Marshall’s now senatorial tuchus.  Evidently someone really likes Davis.

Kremlinology is an inexact science.

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Strong. Proud. Determined. …or something like that.

For those who didn’t read Maxime Bernier’s speech that ruffled a few feathers in Quebec, Bernier posted the text on his blog.

The speech, titled “For a proud, responsible and autonomous Quebec”, includes tan idea people living an interventionist province – like Newfoundland and Labrador these days – ought to find provocative ideas:

And if we are poorer, it’s not the rest of Canada’s fault. It should be obvious enough that unbridled state interventionism does not lead to prosperity. If that were the case, Quebec would be the richest place in North America instead of being one of the poorest.

Many studies have shown that the less its government intervenes in the economy, the more prosperous a society becomes. The Fraser Institute regularly compares the economic situation in the provinces and states of North America and has found a direct correlation between the level of economic freedom and prosperity. An analysis of 23 OECD countries over a period of 36 years has also shown that economic growth is inversely proportional with government spending. For every additional ten percentage points of government spending as a proportion of GDP, economic growth is permanently reduced by one percent a year.

So, to repeat, the rest of Canada has nothing to do with the fact that we are poorer, as the bloquistes claim. We are poorer because of bad economic policies that made Quebec’s economy less productive; we are poorer because we live beyond our means instead of having responsible policies; we are poorer because the first reflex of much of our political class is to constantly beg for more money in Ottawa instead of taking the necessary decisions that would solve our problems and put our house in order.

Then there’s Max’s endorsement of subsidiarity as a new way to run a federal state.

Now maybe others have pushed that idea too, but the only name that comes readily to mind is Liam O’Brien, the local lawyer who is now a staffer in Ottawa.  Maybe Max and Liam have been having a few chats since max got himself turfed from cabinet.

In any event, the speech is readily available for those who care to read it.  And for what it’s worth note that here is a politician – a backbencher at that – who actually took the time to deliver a speech about the future of his province. 

Regardless of what Max plans for his political future, it’s a model others in this province could do well to follow. Then we might actually have a discussion of ideas instead of seeing the foolishness, nonsense, and just plain crap we’ve tended to get around these parts for the past seven years.

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Bank of Canada gov warns about recovery

From the Globe and Mail:

“Anyone who sits and looks at what happened and says, ‘Well, that wasn’t a Great Recession,’ hasn’t appreciated the scale of what was done to ensure an outcome that wasn’t as extreme as before,” [Mark] Carney told reporters Saturday. “Particularly on the fiscal side,” Mr. Carney added. Anyone who doesn’t appreciate the gravity of the last couple of years “hasn’t thought through or appreciated the scale of what will be required to adjust fiscal back to normal.”

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Dunderdale on Abitibi/Fortis/ENEL expropriation: Oops!

An obviously stressed natural resources minister Kathy Dunderdale admitted to the House of Assembly yesterday that there were problems with the provincial government’s hasty seizure of  assets belong to AbitibiBowater, Fortis and ENEL.

The paper mill itself – originally supposed to be left out of the deal – wound up being left in.  As a result, taxpayers are stuck with a potentially major environmental liability.

CBC puts the Premier’s reaction to the shag-up this way:

Outside the legislature, Premier Danny Williams told reporters he's embarrassed by the turn of events, but he can live with them.

"It was something I wasn't happy with when it happened, but it was an innocent mistake that was made by an official in the department," Williams said. "As simple as that."

That’s bad enough, except adding the mill when you explicitly wanted to leave it out isn’t the only shag up in the whole confiscation.

According to a court decision in Quebec where Abitibi is working through a bankruptcy protection proceeding with its creditors, the Williams administration also forgot to pick up a few of the Abitibi assets in the province that should have been seized as well in the Chavez-esque sweep.

The Legal Genius(es) behind the whole fiasco left out the port facilities at Botwood and the former mill site in Stephenville.

Abitibi closed the mill at Stephenville closed in 2005 after a prolonged battle with the provincial government that included threats by the Premier to expropriate Abitibi’s assets:

"If there's an interested party that can have that mill up and running, we'd be interested in talking to them," Williams said Monday.

"If that requires expropriation, then that's something we'd certainly consider."

In the end no other buyers emerged and the mill closed despite the Premier’s 2003 election commitment that the mill would not shut down on his watch.

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Fragile Economy: now three steps back …and loving it

Not only did the provincial government explicitly refuse to participate in talks that would diversify the provincial economic trade base, its members are proud of it:

PREMIER WILLIAMS: Mr. Speaker, what this government is very, very proud of is we are the only jurisdiction of thirteen jurisdictions in all of Canada who has not gone along with the European Free Trade Agreement which Canada is trying to enter into. We are the only ones who have stood our ground and said we are not prepared to agree unless there are certain conditions. The seal industry, of course, is obviously one; the shrimp tariff is another one. …

But if that wasn’t bad enough, the Premier justified the position by claiming that it had worked in one important respect:

We have been very successful in having the shrimp tariff reduced and, in fact, removed over time. It has made a huge difference to the shrimp industry. [Emphasis added]

The first problem is that “we” – the Premier and his ministers – didn’t have very much to do with lowering the shrimp tariff in the first place.

And the second problem is that “we” did not accomplish this by boycotting important trade talks.

Sure the Premier and his fisheries minister took a much publicised junket to Europe, but there isn’t much sign they did much else except try to take credit for lowering the shrimp tariff back in 2007 before the trade talks were on. Someone else did the work.

By the way, if you take a look at that last link you’ll see this line:

Fishery Products International said about half of its shrimp is exported to the United Kingdom alone.

That would be the same Fishery Products International that had a European trade division “we” helped sell off in the break-up of FPI.

But anyway, not only are “we” no longer one step back, “we” are now not even a mere two steps back.

Provincial trade policy is effectively three steps backward:  headed in the wrong direction, proud of it and then justifying the gross strategic mistake by claiming credit for things the backward-assed policy didn’t do in the first place.

If the first step toward any solution is admitting there’s a problem, “we” are a long way from solving very much when it comes to provincial trade policy.

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A million monkeys…

There’s an old joke about putting a millions to work banging away at typewriters.  Eventually, according to the law of averages, probability or whatever these things are governed by, those monkeys might bang out the Encyclopaedia Britannica.

By accident.

That’s the first thought that crossed ye olde scribbler’s mind on reading a post over at Christopher Locket’s blog An Ontarian in Newfoundland.  “Lockett’s first law of Internet-based research” holds that:

THE RELIABILITY OF A GIVEN WIKIPEDIA ENTRY IS IN DIRECT PROPORTION TO THE GEEKINESS OF THE TOPIC'S MOST PROMINENT AUDIENCE.

He’s right.  An obscure topic is less likely to be given the intense scrutiny of an Internet peer and multiple edits on a site like Wikipedia.

One point Lockett touches on is the idea that much can be learned from doing research the old-fashioned way.  There is context, for example, in the books on a shelf that have been sorted according to the library’s cataloguing system. 

But that’s not the whole story.  You can stumble across stuff inadvertently but even in wandering the stacks, the poor or average researcher can miss a great deal.  To really appreciate the library and to use it to full advantage one ought to understand how the cataloguing system works.  Otherwise, you are stuck with information filtered through the logic of the cataloguing system and the librarian who decided where that book fits. Unless you take time to think of ideas, concepts and words that are related to your topic, you might miss a great deal of fascinating  - and relevant – stuff if you limit yourself to the genius of Dewey or the Library of Congress.

Lockett goes as far as to ban Internet based sources from papers in some of his undergraduate courses:  a URL in a footnote is an automatic fail. That may seem harsh to some, but at the beginning, doing stuff the old-fashioned way can be a useful method of illustrating a number of valuable lessons.

To force the logical leap in this little post, though, a wander through the stacks is a bit like using a search engine like google.  People bash in words and links pop out based on a complex calculation that remains inscrutable to most web users.  What pops out as part of any given search is often – essentially - random.  If people get useful links, let alone reliable ones, it is often as the result of happenstance.

One of the enduring sources of amusement Chez Scribbler is the check of keyword search terms that people use before ending up reading something on Bond Papers.  That’s where you get to see those sorts of things for real. 

Sure, there are the people searching for this blog by title.   There are search words that come up every week.  “Court docket” has been so popular since the day they were posted that both the Supreme Court and Provincial Court earned a spot right up at the top of a side bar.  There are the regular hunts for Janice Mackey Freyer and her alter ego ‘P.J. Jazzy Jan.”

And not to be outdone, the post containing the phrase “squirrel’s are the Devil’s oven mitts” actually scored as the most popular specific page for over 24 hours.  No fewer than 10 people from across North America and Europe searched it at the same time.

Then there are the ones you could consider to be the babes in the woods.  They are like the proverbial million monkeys typing in that they are unlikely to get much of any value in completing their term paper.  You can tell it is a term paper, incidentally, because the search words consist of entire sentences or portions of sentences that have been cut and pasted from the assignment.

This week’s winner in the crap search sweepstakes would have to go to some poor sod  - you could not make this up - who used Yahoo! to search for “how inextricably interconnected with social, economic and political that constitute communities”.

Follow that link and you will notice that Bond Papers turned up as the second item on the page.

But it’s the second link on the sixth page of returns.  If this lost soul knew anything, he’d know that anything on the sixth page of any set of search results is likely of no conceivable relevance to whatever he was trying to find in the first place. Yet, as one might suspect, this benighted soul likely clicked and read every, single one of the links from one to umpteen. 

There’s no way of knowing which of them turned up in the term paper or whatever the assignment was.  odds are, though, that it fit perfectly the outcome Lockett described in a comment following that post of his:

It is a paradox, isn't it? Nearly infinite information available at a keystroke, and so frequently it ends up rendering inane, incorrect or simply reductive research.

What you wind up getting, for the most part, is  basically what you’d get from the million monkeys before they typed out the Britannica.

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Law Test Addendum:  Search for “million monkeys” and you will find a Wikipedia entry on the Infinite Monkey Theorem:

The infinite monkey theorem states that a monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type a given text, such as the complete works of William Shakespeare.

Western Star raises issue of Danny Williams’ resignation

The Western Star, the only other daily newspaper in Newfoundland and Labrador and the newspaper in the Premier’s district, is raising the prospect that it might be time for Danny Williams to retire:

We’re nearing the end of Williams’ second term at the helm of the province, and it could be time for him to re-evaluate his wish to carry on.

The suggestion comes as a result of Williams’ bizarre meltdown on Tuesday answering questions from New Democrat leader Lorraine Michael:

Barking across the floor is nothing new for Williams but his attack on NDP leader Lorraine Michael seemed to be a little more than the usual bare-knuckle back and forth.

The premier seemed visibly unnerved by the questions about the protracted talks with the doctors ... and dismissive of the questioner. [Emphasis added]

Wow.  Williams was something, but whether it was unnerved or just frustrated at having to run a different game from his finance minister – a house divided? – is another question.

The Star’s suggestion comes complete with a fairly obvious rationale;

It’s a good time to decide if he has the desire to carry on in public life — there are still a couple of years before the next election, the Liberals are having a leadership convention in the fall and there are plenty of Tories who would love a shot at the top job.

Williams talked about resigning in 2006 during his year-end interviews. Here’s the way your humble e-scribbler put it at the time:

Williams announced his resignation - actually that he would not seek a third term in 2011 - in comments made to VOCM and then repeated in subsequent year-end interviews.

Williams' resignation, likely to come in 2009 or 2010 after a decision on the Lower Churchill, comes at the end of a year of continued set-backs for the premier who has been in equal measures petulant and posturing.

He’s also said more recently that he would stick around for another term. But that was before the world knew of Williams’ health issues.  it was also before the scope of the province’s financial problems became clear.  Then there is the ongoing problem with the hasty confiscation of assets belonging to three companies in central Newfoundland.  None have been compensated and the litigation and other costs for the venture are mounting.

Meanwhile, for all the talk about it, the Lower Churchill, remains an essentially fictitious project.  With no markets and no money to build the  $6.0 to $10.0 billion project, it isn’t going anywhere soon.

All that would weigh on any politician’s mind.  But it must weigh especially heavily on the brow of a man who, from the day he was sworn in as Premier, made it abundantly he clear he found the level of scrutiny he faced to be a burden that sometimes seemed beyond bearing.  Williams has had a soft ride from the media until more recently but still he bitched at every opportunity at the questions.

But as the news media environment in the province has returned to normal lately, not a single reporter or editorialist has broached the idea Williams’ might consider resigning.

Until now.

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Strategic Social Plan (1995) – Social Profile

This Province's unique advantage is the strength of character, resilience, ingenuity and enterprise of its people. In the past 50 years, the people of Newfoundland and Labrador have experienced a political, cultural, economic, and social revolution.

People who have not yet reached retirement age have lived through, and coped with, the events of World War II and the impact of the establishment and subsequent decline of American and Canadian military bases; the dawn of the nuclear age; the change of political status from a British dominion to a province of Canada; the surge toward industrial development, inflow of national and multinational companies, globalization of trade, decline of traditional resource industries and shift to new-economy enterprises; the disappearance of hundreds of small rural communities; the victory over tuberculosis, and the threat of AIDS; progress in achieving women's rights and equality of opportunity and the emergence of women as a force for social change, economic renewal, and expansion of the labour market; changes in traditional family structures; the establishment of social safety nets such as unemployment insurance, social security programs, and universal health care; chronic unemployment, the loss of career security and the increase in public awareness of, and concern for, the environment.

The pace of change has been challenging for North America generally, but it has been more dramatic in Newfoundland and Labrador because of the relatively sheltered existence and relaxed lifestyle which we enjoyed before the flood of highways, radio and television, fast-food and retail chains, and computers. Other people in cities and towns across Canada and the United States have not had to make such a quantum leap economically and culturally in the past half-century.  It is a long way indeed from pondering the literary delights of The Royal Readers to indulging in nightly armchair visits to the televised violence in the streets of downtown Detroit.

Economists and historians talk of the three great revolutions which have shaped civilization: the agrarian (natural resource), industrial, and information ages. Many Newfoundlanders and Labradorians have experienced all three eras in the condensed time frame of the past five decades.

We have not only withstood such immense culture shock, but we have profited by it. This Province's unique advantage is the strength of character, resilience, ingenuity and enterprise of its people which has endured and intensified through 500 years of colourful, often chaotic, and always challenge-filled history. We have a tradition of turning constraints into opportunities, adversity into achievement, and despair into hope. It is this legacy of self-reliant determination and creativity that has sustained Newfoundland and Labrador through recession, fiscal restraint and the loss of its basic resource industry, and is building an economy that will be stronger and more diversified in the global market-place. It is also the force which must be brought to bear upon the challenge of effectively addressing social changes and issues of the late 1990s, identifying future trends and planning appropriate long-term strategy and allocating available financial resources in a manner that supports the goals and objectives.

In this respect, the Province's social ing efforts are constrained by national fiscal  realities. Social reform in Canada today is characterized by reductions in Unemployment Insurance benefits, limita­tions on the Canada Assistance Plan, re-evaluation of health care, less federal assistance for education and training, and a move toward block funding for overall provincial social programs.  Untenable and unsustainable national and provincial debt loads and lower transfer payments combine to further restrict the ability of Newfoundland and Labrador to address pressing social issues. The comparative national and provincial fiscal resources are shown in Figure 3.

The message is clear:  we have to find ways and means to spend smarter; in other words to do more with less.  It is a daunting challenge.

In order to accomplish this task, we must first consider realistically where we are and where we are heading as a province.  We cannot address 21st century problems with 20th century (or in some cases 19th century) approaches, solutions, or attitudes.

Although sectoral issues and trends will be dealt with in greater detail in succeeding chapters of this Consultation Paper, certain elements of our Provincial social profile are highlighted in this section in order to put the planning exercise in perspective and to provide the basis for determining an overall social vision, appropriate guiding principles, and attainable goals and objectives.

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Next:  Demographic Change and Challenge

Strategic Social Plan (1995) - Introduction

In June 1992, the Government of Newfoundland and Labrador released Change and Challenge, the Province's Strategic Economic Plan. In the preparation of this document, involving an extensive public consultation process, it was stated repeatedly that economic planning was — in the words of Premier Wells — "only one half of the equation”. It was recognized that planning for the future development of the Province and the well-being of its people cannot be done on the basis of economic factors alone; it must embrace the social component as well.

This "other half of the equation" must reflect the needs of the people of Newfoundland and Labrador for more effective and equitable distribution of social services and benefits, improvement of educational levels, and progressive and innovative programs in health care and justice.

Social planning is not a "necessary evil” which must be accommodated within economic activity. It is the hallmark of a caring, democratic society. However, it cannot be conducted in isolation, oblivious to the economic realities which dictate the extent of the fiscal resources which are available to provide the social services that are needed.

Indeed the sheer weight of Provincial social spending demands that programs be carefully examined and prioritized, or the economy will be unable to sustain them. In the current Provincial budget of over $3.5 billion, 67.8 percent ($2,402172,000) will be spent in the social sector as compared to 5.6 percent ($198,474,000) in economic development (see Figure 1 and 2) The combined expenditure of the Departments of Industry, Trade and Technology, Natural Resources, Tourism, Culture and Recreation, Fisheries, Food and Agriculture, and Environment are less than 55 percent of the cost of the Department of Social Services alone, and little more than one-fifth the cost of health care in the Province.

These costs have been more than the Province's tax base can bear, and consequently the direct Provincial debt has increased almost every year since Confederation until it now totals more than $6 billion and costs more than $540 million a year to service. The problem of serving a small population in more than 700 communities scattered over a large land-mass becomes clear when compared to other geographic and demographic indicators.

For example, the Province of Newfoundland and Labrador is large enough to accommodate the entire United Kingdom — England, Scotland, Wales, and Northern Ireland — and still have enough room left over to take the provinces of New Brunswick, Nova Scotia, and Prince Edward Island. Yet, our population is less than the city of Winnipeg.

These 576,000 souls maintain 8,900 kilometres of roads, 67 heath care institutions including hospitals, nursing homes and service agencies, 476 schools, a university and 23 facilities for community colleges and vocational training, and all the trappings of modern North American society. It is a financial burden that can only be borne by a strong and vibrant economy, and demands that priority attention be given to the task of increasing Provincial

revenues through stimulating new and existing enterprises. Without private sector business growth, we cannot survive as a province. At the same time, social services and facilities must be operated as efficiently as possible without sacrificing essential programs for health, education, and public safety.

Obviously, economic and social planning are inextricably linked. But they must be linked in support of each other, not in conflict or competition. They must be partners, not adversaries, and a viable economy and effective social system both depend on a healthy and sustainable environment. The three together constitute our human ecosystem. The simple fact is that in the everyday living of Newfoundlanders and Labradorians, social and economic factors merge into one single, simple priority: Quality of Life. Whether wealthy or impoverished, people share the same needs for health, happiness, enlightenment, security, freedom, opportunity, and community.

No one living in this Province wishes to create wealth either individually or collectively by wreaking third-world conditions on our physical environment or standard of living. The collapse of our basic resource industry through the devastation of groundfish stocks through foreign over-fishing, errors in resource management, and local over-production has demonstrated with a vengeance that it profits us nothing to gain short-term prosperity if we destroy our long-term resources in the process.

At the same time, no one will dispute that we cannot maintain our quality of life without a stronger economic base. In other words, we cannot build a vibrant economy without a strong social structure; neither can we maintain vital social support programs nor preserve our culture and quality of life without strong economic growth.

Accordingly, on March 4, 1993 the Throne Speech in the House of Assembly committed Government to continue its planning process with the development of a Strategic Social Plan as the essential and equal partner to the successful and highly-acclaimed economic plan. A Strategic Social Planning Committee of senior officials was established immediately, and work began on the first phase of the process, i.e., the initial task of reviewing all Government social programs and policies, studying emerging social trends locally and globally, collecting and analyzing data, and preparing discussion papers for Cabinet consideration. The result of that activity is this Consultation Paper which is offered for public consideration, discussion, and commentary in the second phase of the process.

As in the case of the Strategic Economic Plan, the public consultation will be conducted independently of Government to provide opportunity for objective and effective participation by the widest possible representation of the general public. The input of the people who participate in this process will be incorporated into the third phase of the process: the development, release and implementation of the completed Provincial Strategic Social Plan.

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Next:  Background – Social Profile

Dust to dust

Apparently, the last wish of the Icelandic economy was to have its ashes scattered across Europe.

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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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