Economic recovery – not exactly as illustrated, part two

cbc.ca/nl is reporting an economic miracle in Grand Falls-Windsor.

That’s the town where the major private sector employer closed its doors and where the provincial government expropriated the mill and hydroelectric assets.

When AbitibiBowater stopped production at the mill in early 2009 there were concerns the town's economy would tank, but that hasn't happened.

This time last year, construction was started on 16 houses in Grand Falls-Windsor, but by this June, work had begun on 60 new homes in the town.

There’s even a comment in the electronic version of the story, the one that aired on the supper hour news, to the effect that uncertainty about the mill kept a lid on development.  Now that things are resolved, as it were, then people are now spending freely.

Well, that’s exactly the same sort of story the Telegram carried back in February;  but then, as now, the story looks more like a contrived bit of nonsense rather than a factual appraisal.

Take for example, the thing about housing and a supposed dampening effect before the mill close din early 2009.

As the Telly reported in February,  there were 118 housing starts in Grand Falls-Windsor in 2008, but only 50 in all of 2009.  You can get links to the Telly story and other details in the Bond Papers post from February.

Based on that, the current number of housing starts in 2010 is only 20% above the 2009 level. And even if the housing starts continued at the same pace and there were another 60 houses built in the second half of the year, that would only match the last year the mill operated.

That wouldn’t be too bad, if it turns out to be correct.  But it sure as heck is a far cry from the idea that people are thinking differently now that the fate of the mill is known.

The potential cause for the resurgence  - such as it is -  can be found in the sources of cash identified in the CBC story:

The town's hospital — the Central Newfoundland Regional Health Centre — is the community's largest employer. It serves people from dozens of communities in central Newfoundland who spend money in Grand Falls-Windsor when they come for health care.

You can add to that a bunch of other government offices moved into to the town under Brian Tobin’s administration and more recently by the Williams’ one.  In other words, the town is now dependent on government spending for its major economic activity. 

And what isn’t coming from government is coming from migrant labour.  That would be former mill workers who are commuting to places like Alberta.

And lastly there’s another source of growth:  retirees flocking home after a lifetime spent working on the mainland.  Nice as that is, those retirees only add to the burden of an economy where there are fewer and fewer people earning a wage compared to those in the so-called dependent portion of the population.

If you look at it, what you see in Grand Falls-Windsor is not the picture of some sort of miracle but rather of the increasingly fragile nature of the Newfoundland and Labrador economy. No amount of spin from a local car salesman can cover over the very real problems that fragility brings for a beautiful community and for the province as a whole.

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Audio Update:  CBC Central Morning Show.  Look at around 6:54 for the start.  The intro to one section repeats the “housing boom” – complete with the 16 to 59 numbers -  evidently because someone forgot to do a simple check of the facts.

Building permits continue downward slide

The value of building permits in Newfoundland and Labrador fell from $114 million in March to $65 million in May, according to figures released on Tuesday by Statistics Canada.  The value of building permits fell in seven of 10 provinces.

Residential building permits fell from $103 million to $50 million in the same time period.  Non-residential permits went from $11 million in March to $23 million in April before falling back to $14 million in May.

In the St. John’s census metropolitan region, permit value fell from $66 million to $44 million in the same time period. The permit value fell in 18 of the 34 census regions reported by Statistics Canada.

Note the relative change in St. John’s compared to the province as a whole.  St. John’s went from being 57.8% of total permits in March to 67% in May.  Things are evidently not as good outside the census metropolitan area as they are inside it.

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Offshore board announces two more call for bids on offshore parcels

The Canada-Newfoundland and Labrador Offshore Petroleum Board
today announced calls for bids on offshore parcels in the Flemish Pass/Central Ridge region.

Call NL10-02 consists of two parcels comprising 327,372 hectares while Call NL10-03 consists of one parcel of 3,773 hectares and a one significant discovery licence. This is the first time in 22 years a significant discovery license has been offered.

Description:

NL10-02 (Area “C” - Central Ridge/Flemish Pass)

Parcel No.1 is NL10-02-01

• Water depth ranging from 1000 to 2000m
• Total number of hectares = 201,951
• Total Number of Sections = 594

No wells were drilled on Parcel 1, however Mizzen 0-16, L-11 and Baccalieu I-78 are drilled on adjacent lands. Mizzen O-16 is an abandoned oil well by Statoil, which is SDL 1047. L-11 had an oil show. I-78 is abandoned.

The lands are North of SDL 1047

Parcel No.2 is NL-10-02-02

• Water depth ranging from 1000 to 2000m
• Total number of hectares = 125,421
• Total Number of Sections = 365

No wells were drilled on Parcel 1, however Mizzen 0-16, L-11 and Baccalieu I-78 are drilled on adjacent lands. Mizzen O-16 is an abandoned oil well by Statoil, which is SDL 1047. L-11 had an oil show. I-78 is abandoned.

The lands are adjacent and North of SDL 1047

No. NL10-02 (Area “C” - Central Ridge/Flemish Pass)

One SDL Parcel

Parcel No.1 is NL10-03-01

• Water depth ranging from 1000 to 2000m
• Total number of hectares = 3,773
• Total Number of Sections = 11

No wells were drilled on Parcel 1, however Mizzen 0-16, L-11 and Baccalieu I-78 are drilled on adjacent lands. Mizzen O-16 is an abandoned oil well by Statoil, which is SDL 1047. L-11 had an oil show. I-78 is abandoned.

The lands are North of SDL 1047.

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Another new era…

Last Friday, it was a new era in fisheries research, supposedly.

Truth be told, a government that either doesn’t know what to do on a subject or that is afraid to do anything will launch a study. It’s a marvellous way of avoiding an actual decision while appearing to do something.

Friday’s $14 million buys a lot of avoiding and appearing without actually doing anything at all except spend yet more public money.

Meanwhile, the provincial justice minister will unveil a new era in corrections at ten in the forenoon this glorious July 6 as he unveils a brand new panel van in front of the Confederation Building.

A new truck, or as the media advisory christens it, a “prisoner transport vehicle”.

Masters of our domain we shall be as we enter a new era in criminal locomotive relocation on a go forward basis.

The universe can scarce withstand such wonders being unleashed so close together in time and space.

Ye gods!

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Unfortunate optics update:  organizing a ministerial newser to unveil a new pick-up truck is one thing, but positioning the results of government’s latest “investment” – no shit,  the release actually says “invested” – in front of the provincial legislature just invites a host of jokes.

Incidentally, the new Crimporter can hold up to 16 prisoners at any one time.

Don’t worry Jennifer.  No reason for them to suspect who is paying you. <weg>

And no fish swam

For an administration that has always been better known for delivering the sizzle rather than the steak, Premier Danny Williams’ announcement Friday of almost $14 million for fisheries research marks another achievement.

The announcement garnered swift editorial and political support. The Telegram gushed from the first sentence of Saturday’s editorial:

As a general rule, more information is better than less. And that's why the announcement that the province is getting into the fisheries research business in a big way is good news.

So too did the opposition leader, Yvonne Jones and fisheries critic Marshall Dean.  They think that the “funding allocation by the provincial government for fisheries science research is welcome news that should boost the industry’s chances to survive in the long-term.”

Even the language the Premier and the Opposition Leader used was similar.  As Williams put it:

No longer will we exclusively rely upon the research of others to guide the fishery into the future. Today, we once again take control of our destiny by investing in our own fisheries research and development.

Jones chimed in:

Clearly, one of the building blocks in this process [of rebuilding the fishery] has to be sound research that we can trust and use to make strategic management decisions in this industry.

All this is wonderful.  Memorial University and its Marine Institute get a bag of cash with which to hire some new graduate students and post-doctoral researchers.  Dr. George Rose gets a new job as the head of  something to be called the Centre for Fisheries Ecosystem Research.

Even the Irish government is happier after Friday.  The financially strapped country will get a bag of cash – the better part of half the total announced – to help operate its seven year old fisheries research vessel, the Celtic Explorer.

Friday’s announcement is three years overdue. The Progressive Conservative 2007 election platform included these commitments:

• invest $5 million a year in the province's research and development Crown corporation and dedicate $1 million of this funding exclusively for oceans research, [and…]
• provide $6 million for fishing industry research and developmental work over the next three years, which will include work associated with the development of new species, new products, new markets and new techniques to harvest, handle, process and market our marine fish resources.

The program announced on Friday seems to have less to do with genetic engineering [2007’s “development of new species”] or marketing and industry diversification as it does something else that does not appear to be defined beyond the notion that locally generated science might somehow be different from that produced by foreign infidels. The research vessel seems to be an idea cooked up on the spot by Danny Williams during the last provincial campaign.

Much about the announcement seems to be ill-defined.  The whole premise – that local scientists might discover some truths that others haven’t found or are hiding – is, itself, highly suspect.  Rose, for example, and other scientists at Memorial are quite knowledgeable about the fisheries ecosystem.  They and their predecessors have been studying the ocean and the creatures living in it for decades.

Perhaps that lack of definition is because the whole thing was hastily pulled together. It would appear that Friday’s announcement didn’t really exist until some six weeks ago. A month and a half ago, the provincial government was getting a political pounding for the latest in what has been a series of failures and fiascos.  The government has no fisheries policy worthy of the name;  that too has been painfully obvious from problems in some sectors of the fishery and the decidedly poor progress on the memorandum of understanding.

What better way might there be to get out of a raft of political sinkholes, one can imagine the Old Man thinking, than to change the channel.  Announce more cash for something  - it’s always about the money with these guys - and trot out the stuff that’s always worked before: the old pseudo-nationalist rhetoric. Never mind that the announcement will fall on a Friday smack in the middle of a holiday long weekend.

The one thing we know about this announcement is that it wasn’t about “[b]etter fisheries management through better fisheries science” and “an opportunity to improve and sustain this industry.”

The problem in the fishery today is the same as it was 18 years ago.  The problem is not a lack of knowledge, scientific (biological) or otherwise. The problem is a lack of political will to make decisions for a fishery that is both economically and environmentally sustainable.

Cod stocks collapsed because politicians opted to meet the demands of their constituents to keep fishing at unsustainably high levels when the scientists  - federally-funded scientists - said it would be a good idea to slow down or stop.  John Crosbie closed the fishery in 1992 because he had no choice.  There were no more fish.

And there never will be any more cod or any other fish stock for that matter as long as people disregard knowledge and make decisions based on unvarnished self-interest.  Whether it is the head of the hunters and gatherers union who wants to increase quotas on an endangered species (cod), to Open Line callers, or the blocheads who think cod jigging is some sort of racial entitlement or to the politicians  - federal and provincial  - who side with them daily, they all speak based on something other than sound, verifiable knowledge.

So spending $14 million won’t make a difference to that.

Spend $140 million.

Same result.

Heck, spend the entire anticipated cost of the non-existent Lower Churchill project - $14 billion – and you will still have the same calls for continued fishing.

Knowledge is not the problem in the fishery.

Impotence is.

And no amount of money, no army of scientists, no fleet of research vessels will ever find a little blue pill to cure that problem.

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Update:  The dog whistling worked.

Tentative deal at Vale in Ontario

From the Globe and Mail:

The end to a long-running and bitter strike in Ontario is in sight as mining giant Vale announced it reached a tentative agreement with production and maintenance workers on Sunday.

The metals miner says the agreement involves a new five-year contract with United Steel Workers Locals 6500 and 6200, which represent production and maintenance employees in Sudbury and Port Colborne.

No word on Sunday about a possible settlement of the year-long strike at Vale Inco’s Voisey’s bay operation.

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The harsh reality

While someone in the provincial government may have decided that an estimated population increase of 96 people was something to crow about, surely there is more good news than just that.

Why of course there is, as the new release writer tells us, via a quote from the minister involved:

For seven successive quarters now, there has been a net inflow of people to the province,” said the Honourable Tom Marshall, Minister of Finance and President of Treasury Board. “This sustained gain is encouraging, and an indication that more people recognize and have confidence in the opportunities offered in Newfoundland and Labrador.”

Sure enough, if you take the Statistics Canada numbers and graph them you will see what appears to be a net increase in population over time.

As the chart shows, there has been net growth overall  - not just in migration flow - in the last four quarters.
But just take a look at the drop from the third quarter in 2005;  10,000 fewer in the province by the middle of 2007 compared to two years earlier.  Since then the gains have been generally more modest each quarter.

Still, it’s an upward trend and those loyal to the cause will surely take that as a good thing.

Before you get too happy, though, try graphing the change in the population each quarter compared to the one previous to it.  You’ll get something that looks like this:
Here you’ll find something decidedly less comforting. Not only has there been a net loss in population over time, you can notice that there has been a rather precipitous drop in the rate of increase over the last three quarters.  in other words, while the population is going up each quarter, it is going by less and less.  First it was about 1350 or so in the second and third quarter of last year, then 533 and then a mere 96 for the first quarter of 2010.

That’s pretty much what you’ll see in the big chart of population, by the way.  Think of the most trend as being potentially like a ball thrown into the air: it goes higher and higher  but as it runs out of energy, it  climbs less and less.  Then at a point, gravity becomes the dominant force and down she comes again.

Now that may not be what is going on here, but odds are the net growth in population due to people coming here will start slowing.  The growth from the middle of 2007 onwards was due entirely to Newfoundlanders and Labradorians returning home as the first casualties of an impending recession.  Think of them as canaries in a coal mine.

Except for a big drop in early 2009, the population has been going up as the recession took hold nationally.  Stimulus spending took a while to work into the economy so there isn’t a perfect match between the local population and the deepening of the recession.  Overall though it’s a bit hard to mistake the connection between the recession on the one hand and the local growth in population.

And don’t forget, either, that the local economy actually shrank here by 10% last year.  If it wasn’t for the massive government infrastructure spending, things would have been much more bleak.  That public money continues to flow this year and  has already been credited with driving a huge chunk of the economic growth. 

It’s not like the province is an Alberta-like hotbed of private sector investment, no matter how much the provincial would like you to think otherwise.

So if things are actually getting better elsewhere, it would only make sense that the local population growth would slow down.  Don’t be surprised if the population starts to drop again within the next two quarters.

On the other hand, pay attention to the news.  If we are looking at a “w”-shaped recession – that is if there’s another slowdown – the population will jump up again.

And just to keep all this in perspective, take a look at an opinion piece in this weekend’s National Post.  The subject is Alberta.  Note the similarity in the situation there and here:

Last week, for instance, the government crowed that it had nearly demolished the projections for the 2009-10 deficit, overspending by just $1-billion instead of the nearly $5-billion expected. The reason, however, was due to higher-than-expected royalty revenues from the oil sands, and not more careful fiscal management in Edmonton, where spending continues to swell. This year's projected deficit is still heading toward breaking red-ink records, unless serendipity again intervenes.

There are other economic indicators to examine, as the Post piece notes, but just think about what it means when a provincial government crows about a net growth in population of a mere 96 people after a loss of 10,000 in two years.

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Traffic Drivers, June 28 to July 2

1. NL population up by estimated 96 people (28 Jun)
2. Potential investor quits mill talks, accuses government of “overt politicization”: CBC
3. Mind-boggled Dunderdale continues to blunder
4. In Alberta, they have problems too…
5. Beaumont Hamel
6. Potential GFW mill buyer in German bankruptcy protection for second time in six years (extend the date range to 26 Jun when this was first posted and it becomes the Number One story)
7. Five years of secret talks on Lower Churchill:  the Dunderdale audio
8. Motion Invest’s statement on Grand falls-Windsor project
9. A Crown corporation by any other name
10. Calamity Kath Dunderdale:  the Miracle Max ploy

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The Delusion of Competence

Natural resources minister Kathy Dunderdale, in full rhetorical flight during Question Period in the legislature, May 26, 2010:

Mr. Speaker, when the members opposite sat over here they certainly had no expertise in developing deals, negotiating contracts, as we saw on a number of occasions in the fourteen years of their mandate. Voisey’s which we had to renegotiate, I tell the Opposition Leader, Mr. Speaker.

No shortage of confidence in her own abilities and that of colleagues, would you dare say? Not much, at all especially in her own estimation.  In fact, Dunderdale seems supremely confident in her assessment that her crowd will do better than the crowd that went before.

Friends and supporters of the current administration would likely all nod in agreement and might even offer that Dunderdale’s confidence in their abilities is well justified. Confidence, after all, is something people usually assume comes with competence.

But it isn’t a safe assumption.

Research at Cornell in 1999 showed that the tendency to braggadocio is associated with people who are actually less competent than others. The confidence people often see in others, especially when expressed as a self-appraisal is pretty much a product of self-delusion. 

Remember the old saying “buy him for what he’s worth and sell him for what he thinks he’s worth?  That’s pretty much exactly the phenomenon researchers found.

Very often, people think they are much better at tasks than they actually are.  Now in an of itself, that hardly seems like a penetrating insight into anything except the obvious.  Well, that might be true except that you actually have to apply these little observations. Bear in mind that people who pump themselves up are likely actually not very good at whatever they are bragging about. 

Think about the delusion of competence when someone engages in excessive self-congratulation, in public oratorical onanism as your humble e-scribbler used to call it.

Or brags and blusters as Dunderdale did at the beginning of the whole Lott/Motion Invest affair and then performs far short of her self-appraisal when all is said and done.

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When the quota of good news meets a failure to perform

The provincial government’s business department issued a news release today crowing about an estimated increase of the province’s population by a mere 96 people.

To see the business department’s stunning record of success to date, check out the list of news releases for 2010 or read about the fragile economy.

What will they say when the recovery sets in and outmigration resumes once more?

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WGB re-releases original album on CD this Saturday

Straight from the release:

“The Wonderful Grand Band is pleased to announce the release of its very first record album The Wonderful Grand Band on CD.

Recorded at Clode Sound Studios in Stephenville in 1978 after the success of their first television series The Root Seller, the album features the original band members Sandy Morris, Ron Hynes, Kelly Russell, Glenn Simmons, Rocky Wiseman, Bryan Hennessey and Bawnie Oulton and also a guest appearance on one track by Peter Narvaez. The album was mastered at Joāo Carvalho Mastering in Toronto in 2010.

The Wonderful Grand Band CD is a collector’s treat for any fans of the Wonderful Grand Band or Newfoundland music. The CD has the original version of Sonny’s Dream and several other Ron Hynes songs and it marks the first recording of the late great Emile Benoit’s tunes. Kelly Russell, the founding fiddler player with the Band and a great collector of Newfoundland fiddle tunes, also appears in his only recording with the WGB. As well, on the CD you will hear the familiar vocal harmonies of the talented Bawnie Oulton, also an original member of the WGB and long-time resident of St. John’s who passed away in Nova Scotia May 30, 2010. The Band was saddened by Bawnie’s untimely passing and is pleased to be able to present her to the public on this long-awaited CD.

The CD is part of the Wonderful Grand Band’s effort to release some of its body of work to its fans. In November the WGB toured Newfoundland and Labrador to promote the release of the DVDs The Best of WGB Vol 1 and 2 from the TV series WGB. On July 31, the Wonderful Grand Band will be appearing at That Show in Gander, and on Aug 7 they will be performing at the Folk Festival in Bannerman Park in St John’s. Tickets are already selling fast for both events.

The CD will be released in stores July 3, 2010 and at Fred’s Records the first 25 customers will receive a free poster of the CD release.

For further information, or to get your media copy of the WGB CD contact White at WGB Management 709-722-7775 and visit our new website at www.wonderfulgrandband.com.”

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Calamity Kathy’s story doesn’t add up

From a cbc.ca/nl story posted on Wednesday June 30, here’s natural resources minister and deputy premier Kathy Dunderdale after the people of the province learned that a company she said had been interested in the Grand Falls-Windsor mill was insolvent and after the investor backed away from the deal:

Dunderdale said she was aware of the company's troubled financial past.

"We knew that there were financial issues, but we knew that their investment wasn't coming from Lott Paper," said Dunderdale.

But here’s what Dunderdale said about the troubled financial past of the company before Saturday, June 26 when Bond Papers posted the news that the company Dunderdale identified as the interested party was insolvent yet again:

Speaking with reporters outside the legislature on June 24, Dunderdale was unequivocal about the name of the company:

The minister revealed that the company, later identified as Lott Paper, is in the process of submitting a business plan. [The Advertiser]

or…

Responding to questions in the legislature, Dunderdale said Lott Paper is working with the government in hopes of acquiring the Grand Falls-Windsor mill that closed in February 2009. [CBC version]

None of this gets better in her scrum on June 30.  During the scrum [posted to cbc.ca/nl] Dunderdale claims that the individual who visited the Grand Falls-Windsor mill site explained to her that the investment would be coming from Motion Invest.  So why then did she claim it was from Lott when she ought to have clearly known the difference, that is if she’d actually met the chap, had his business card and understood clearly in may who was putting up the cash?

She was also pretty clear about what the company did on May 26:

"It's a pulp and paper company that sees some opportunity because Abitibi is withdrawing from its markets in Europe," Dunderdale later told reporters.

"It's a very credible company, but it's very early days."

And as for the caution Dunderdale now claims she had all along – the “reservation” to use her own word -  let’s just say that Calamity Kathy has a very short memory. 

On May 25, New Democratic Party leader Lorraine Michael asked a simple question:

Since that is so important - I agree it is - I am asking the Premier: Are they out looking for that major industrial customer to make that happen [to drive industrial development in central Newfoundland]? That is the question I am asking.

Dunderdale did not reply with a general answer that the government was actively seeking expressions of interest, would continue to do so and would announce anything when there was concrete news to report.

No.

She did not do that.

Instead she said:

While we have not had the results that we are looking for particularly from that Expression of Interest, Mr. Speaker; I am happy to say that we have had an Expression of Interest from Germany last week, principals in, looking at what we have to offer in Central Newfoundland. We are very hopeful about that prospect, Mr. Speaker.

We are very hopeful about that prospect, Mr. Speaker.

She avoided a general answer that would have certainly prevented anyone from having any false expectations or hopes.  She decided not to give a non-committal answer, one that would be prudent given that  - as any experienced negotiator knows – there is a long way between the first contact and the final deal.

Instead, she said the government had an expression of interest and that “we” – the provincial government – were full of hope about it.

Not cautiously optimistic.

Not wary.

Not concerned, lest people get too excited too early.

Hopeful.

Her caution, such as it was in both May and a month later, seemed to be more about ensuring the public didn’t expect something to happen very suddenly.  Her claim on Wednesday that she had reservations all along just isn’t backed up by her own public statements. 

Dunderdale only developed any serious reservations about the company once Bond Papers and others revealed the financial problems with the company.  And if those concerns weren’t enough, CBC did a fine job of digging out greater detail on the potential investors themselves.  All this information was readily available to anyone doing some fairly simple checks. it isn’t rocket science.

All of this checking ought to have been done from the outset.  Instead, if one listens to Dunderdale’s scrum from Wednesday,  it is clear that neither she nor her staff did anything to check into the company.  Dunderdale states at one point well into the questioning that her staff would only do the necessary analysis -doing “due diligence”  as Dunderdale puts it in her cliche-ridden way of speaking – once the company sent along a detailed business plan.

Nor is all of this confusion on Dunderdale’s part the only sort of problems there are with this most recent of her cock-ups.  Take a good listen to the scrum.  What she claimed on June 24 was a letter of intent with a great amount of detail has morphed – now that the problems with the company are in public – into something that wasn’t sufficiently detailed enough for anyone to make a decision on. On June 24 she described the letter – now with insufficient information – as being a business plan.

All of this goes back to an episode much like the current one.  It dates from the days when Dunderdale was in charge of the business development portfolio.  Then as now, Dunderdale was long on meaningless jargon - “due diligence piece” and very short on either comprehension or details.

As Bond Papers put it in 2005:

She also said this information turned up by reporters wouldn't have "negatively impacted" on government's decision, had it been known.

The problem, Kath is not that you might have acted differently if you knew. The point is you just didn't have all relevant information in front of you when you opened my chequebook to hand some American company some of my cash.

The problem is that we out here among the toiling masses don't know what else it is that you don't know before you make a decision.

Five years later and with considerably more public money up for grabs here, Kathy Dunderdale’s old problem – making decisions without having adequate information – remains the same.  So too does her apparent inability to understand what it is that she actually does have in the first place.

Dunderdale has considerably more power now than she did in 2005. 

The public still cannot be assured, however, of what she doesn’t know – or care to know – before she’s prepared to carry forward with a project involving potentially tens of millions of dollars of public money.

This is no way to run a provincial government and it is astonishing that the Premier, as capable a businessman as he supposedly is, would allow this situation to continue for five years.

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Addendum: From an exchange in the comments section, here are a string of questions coming out of this latest fiasco that need answers. 

The answers are important not merely to get to the bottom of this particular episode;  they are important because the public should be assured of exactly what the provincial government policy is on using public money to subsidize private businesses.  The answers are important because they can give the public some assurance that those in charge of handing out public cash are capable of doing the job of protecting the public interest they get paid to do.

1. If Dunderdale knew the difference between Lott and Motion Invest, when did she know it?

2. Was it before or after she claimed that Lott was the company that would be investing?

3. If she had concerns about the company's financial state, did she have them before or after Lott's bankrupt status was made public (not by Dunderdale)?

4. If she had any doubts at all about this company and its interest, then why did she even mention the whole affair on May 25 and therefore set up the circumstance on June 24 [in which she was asked a follow-on question]?

5. Since she is a cabinet minister with knowledge (presumably), why does she elect to blame someone for merely asking a question?

6. Is the whole thing on or off? According to her comments in the scrum, it's only nearly almost dead. According to the excellent reporting at [the Telegram], the deal is dead.

7. Therefore, what exactly did she say to Roche and what did he say to her in their telephone conversations on Wednesday that could lead to two diametrically opposed comments? [Update:  According to Dunderdale in the scrum, she never spoke to Roche:  her unidentified CEO did.  That raises another question: which CEO was it -  Ed Martin or the agrifoods boss?  This sort of thing should be going through Ross Wiseman’s department.]

8. And since we are asking, why did she make several calls on Wednesday given that she basically pissed all over the company and their proposal publicly the night before?

9. What is the difference between a letter of intent and a business plan?'

10. Did Kathy actually read the letter from Roche (or whoever sent it)?

11. Will the government pour cash and other subsidies into any venture or will they stand by her earlier comment that there was no cash available?

12. If there is no cash, why didn't she just tell Roche that $52 million was nonsense instead of considering the proposal?

13. If there is cash, then how much is government willing to pour into a venture?

14. Would the government cash be in an equity stake or would it be - as with others - basically like a set of free steak knives for playing the game?

Beaumont Hamel

If you want to know more about the attack at Beaumont Hamel, July 1, 1916, being remembered across Newfoundland and Labrador today, visit this section  - Newfoundland Beaumont Hamel Memorial Park - of an excellent website on the entire Somme campaign.  The website is a production of the Imperial War Museum.

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June Traffic Drivers – Happy Canada Day!

Of the 12,500 visitors who read 17,260 pages in June, these are the top 10 pages for the month:

1. Sun News?  Ya gotta be kidding
2. Five years of secret talks on the Lower Churchill:  the Dunderdale audio
3. Telling quotes:  Lower Churchill version
4. A Crown corporation by any other name
5. Eventually the other guys will lose
6. Salma Hayek and Maria Bello freak out over a snake
7. Potential GFW mill buyer in German bankruptcy protection for the second time in six years
8. Lower Churchill costs:  now up to $14 billion and counting
9. Roger Fitzgerald’s bias
10. The World the Old Man Lives in (larger picture)

The top post for June isn’t surprising at all: word of a new news channel in the country caught attention across the country.

But look at Number Two:  the story the local conventional news media  have deliberately ignored for 10 months.

Right behind that, another Lower Churchill story that gained some national attention after the Premier’s speech in Ottawa. More people read that post that showed up for the speech.

Once again, a post on the sorry state of our provincial democracy made the top 10 list.  This time it is one about the political culture that feeds the current dysfunction. Add that to the one about Roger Fitzgerald’s blatant partisan bias  - a most unwelcome trait in a Speaker - and you can tell that a fair number of people are concerned about the decline in public life in the province.

Now let’s see what July looks like.

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Forget-me-not 2010

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Calamity Kath Dunderdale: the Miracle Max Ploy

Whoo-hoo-hoo, look who knows so much. It just so happens that your friend here is only *mostly* dead. There's a big difference between mostly dead and all dead. Mostly dead is slightly alive. With all dead, well, with all dead there's usually only one thing you can do.

On the one hand there is the CBC account of the latest Dunderdale-torqued version of  the Lott/Motion Invest proposal for Grand Falls-Windsor:

Despite several confusing twists and amidst accusations of 'confidentiality breaches' and 'misrepresentations' from a company seeking to revive a paper mill in central Newfoundland, the province's deputy premier says the deal may not be completely dead.

Then there is the version from the Telegram, straight from the company spokesperson:

“To be clear Motion Invests’ position has not changed since its release, and we have not communicated any message to any person in government which indicated otherwise,” the spokesman wrote in an e-mail to The Telegram.

Given Dunderdale’s propensity to shag things up so badly and blatantly, it’s amazing the Ceeb is still giving her the positive play on her obvious torque-ploys.

But when she starts channeling characters from the Princess Bride?

It’s just as well to go through the pockets and look for loose change.

Miracle Max knew what to do.

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Motion Invest’s statement on Grand Falls-Windsor project

“Date of Release : 28th June 2010

Motion Invest withdraws it's interests in the former Abitibi Bowater newsprint mill at Grand Falls-Windsor Canada

Motion Invest announced today that it has no longer any interest in the Abitibi Bowater newsprint mill at Grand Falls-Windsor Canada.

Motion Invest had been in confidential discussions to undertake a feasibility / viability study into creating a new non-newspaper print mill at Grand Falls-Windsor Canada.

However due to recent and wholly incorrect reports / statements that it was close to a deal to purchase the Abitibi Bowater newsprint mill in Grand Falls-Windsor Canada, Motion Invest has now decided to withdraw its interest.

At no time was Motion Invest ever close to preparing any offer for the Grand Falls-Windsor.  Its interest was wholly subject to the completion of a feasibility / viability study into moving production at the Grand Falls-Windsor mills away from newsprint production. 

Motion Invest has already spent over $ 75,000 conducting a preliminary review and site inspection of the mill regrets that the serious breach in the confidentiality and the misrepresentation of its interest in the mill makes the continuation of the project unviable.

Accordingly Motion Invest has been left with no option withdrawn its interest.”

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Mind-boggled Dunderdale continues to blunder

In an interview with CBC, natural resources minister Kathy Dunderdale misrepresented her own earlier comments on talks to re-activate the paper mill at Grand Falls-Windsor.

According to a story at cbc.ca/nl, Dunderdale said:

“We have said very little about it. My response was a reply to a direct question in the house of assembly [sic] when the leader of the Opposition [sic] asked had we received a proposal from this company."

But that’s only partially correct if one limits consideration to a fraction of what she said last week.

Dunderdale first discussed the interest in the mill in response to a question in the House of Assembly on May 25 from New Democratic Party leader Lorraine Michael.  She didn’t name the company but she did make it sound very up-beat and positive:

We are very hopeful about that prospect, Mr. Speaker.

The next day in the House she didn’t issue many notes of caution either.  Rather, Dunderdale was full of bluster about the ability of her party to negotiate with companies compared to the inability of the other crowd.  Then she added this bit:

Mr. Speaker, we have a very good company coming out of Germany that have expressed an interest in that fibre.

Dunderdale also told reporters that she expected to have further contact and that the visit to the mill was a sign of the seriousness with which the company – consistently identified as being a company with paper-making experience – was viewing the mill:

The indication of their seriousness, Mr. Speaker, is they sent somebody from Germany to have a look at this mill. When I asked him what his observations were, he told me quite frankly that it was exactly what he had expected to see. They have gone back to do some work. We expect to have some kind of a submission from them in the next month or so, Mr. Speaker, and based on that we will see where we go.

It’s likely no coincidence that Dunderdale raised the site visit and potential interest at the same time that the opposition was hammering Dunderdale and her cabinet colleagues over revelations about the botched mill expropriation.

Getting her facts wrong is nothing new for Dunderdale on this issue.

As recently as last week, Dunderdale continued to link the company to pulp and paper production, something now known to be wrong.

Dunderdale also indicated in the House of Assembly that the company had submitted a business plan that was being assessed by three government departments.  Outside the legislature, though, she told reporters government had received a detailed letter and expected to have a business plan from the company – identified as Lott – on Monday, June 28. [Report starts at 2:30.]

According to a news release sent to CBC on Tuesday June 29, and quoted online, the company – now identified as Motion Invest was withdrawing its expression of interest in the mill.  And the release also identifies the potential project as being about something other than making newsprint:

“Motion Invest had been in confidential discussions to undertake a feasibility-viability study into creating a new non-newspaper print mill. However, due to recent and wholly incorrect reports and statements that it was close to a deal to purchase, Motion Invest has now decided to withdraw its interest,"

In comments to CBC on Tuesday, Dunderdale also claims that she didn’t miss-speak when she identified the company interested in the mill as Lott, a company that is in bankruptcy protection, rather than Motion Invest.

Dunderdale is confirming the new information which is in the public domain:

"The first contact we had was from Bob Roche on behalf of Lott Paper. The investment was going to be made by Motion Invest," she said. "The principal who was interested in making this investment was a principle with Lott Paper who would be bringing the knowledge and experience from Lott Paper to Grand Falls-Windsor, even though the investment was coming from Motion Invest."

Dunderdale never once mentioned Motion Invest at all until the company issued its own news release to CBC.

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Potential investor quits mill talks, accuses government of “overt politicization”: CBC

CBC’s David Cochrane reported this evening that the investment company that had expressed interest in the defunct Grand Falls-Windsor paper mill is withdrawing its offer. The first segment is at about 15:00 into the Here and Now broadcast.

Cochrane quoted from a statement issued by the company shortly after 1800 hrs Newfoundland Daylight Savings Time. 

According to the statement, Lott Feinpappen was never the company looking at the mill.  Instead it was a company called Motion Invest, in which an individual named Bob Roche was a principle.

Roche is quoted as saying that at no time was Motion Invest close to an offer for the mill.  There was an interest in doing a feasibility study on moving the mill away from what Cochrane described as unprofitable newsprint production.

In the statement as reported by CBC, Roche accuses the provincial government of a “serious breach of confidentiality of a commercial issue” of wholely incorrect statements and misrepresentations of Motion Invest’s intentions.

In the most recent session of the House, Dunderdale boasted about the ability of the current administration to negotiate successfully with companies.

The statement appeared to have been drafted in some haste, according to Cochrane, as it contained as many “broadsides” against the government as it did spelling mistakes.

Cochrane added to his report at about 49:00 with initial provincial government reaction.

According to Cochrane, natural resources minister Kathy Dunderdale found the Motion Invest comments to be “mindboggling” and “absolutely incorrect.”  The proposal went well beyond a feasibility study and included targets and timelines.  

The company was also looking for loans and loan guarantees totalling $52 million, according to Dunderdale. 

The provincial government may release documents within the next 24 hours but is currently consulting with justice department lawyers.

Dunderdale told reporters in St. John’s last week that the company was looking for financial assistance.  She did not specify what the amount was at the time.

The latest information is also significantly different from Dunderdale’s previous comments in which she consistently described the project as being about a pulp and paper operation of the type already in the defunct mill.  In late May, she said:

“It's a pulp and paper company that sees some opportunity because Abitibi is withdrawing from its markets in Europe.”

Dunderdale also initially rejected the idea of the government providing “big loan guarantees or big subsidies.” 

However, by last week she was more concerned to “understand clearly what they are looking for from us”.

Provincial government policy includes interest free loans and outright gifts of cash for companies.

Update:  Motion Investment’s brief statement

 

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In Alberta, they have problems too…

with a biased, incompetent Speaker in the provincial legislature.  As the Calgary Herald quoted recently:

In an unprecedented attack, she [Danielle Smith] went after legislature Speaker Ken Kowalski for twisting the rules to keep his party in power.

"The Speaker needs to remember that his job is to serve the interests of all Alberta," Smith said.

"Time and again he has failed in that role and failed Albertans. And make no mistake, it is Ed Stelmach who has given the Speaker permission to run roughshod over Alberta's democracy. . . ."

"I think Albertans are as shocked as we are by the behaviour of this government, having seen the games they play, having seen how they treat Albertans, having seen how they push around political leaders and bully their own caucus. . . . I don't recognize them as the party I once supported."

How many people in this province say the same sort of thing about the shenanigans that go on here?

Hint:  it’s a lot more than the freshie-gulpers would like you to believe.

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