While most readers here liked to click out to links at the Telegram, the design geniuses at TransCon have decided they don’t need the traffic.
With the new sucky design for the Transcon websites in the province, they’ve eliminated the RSS feeds for columnists and blogs. As such, your humble e-scribbler can’t give you the easy links off to the latest content from Wangersky, Wakeham, Griffin or Meeker. The feed for news turns out to be the feed to local news only.
Oh well.
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From the Canada-Newfoundland and Labrador Offshore Petroleum Board:
“The CNLOPB wishes to advise that Operator Oil Spill Response Plans will be available to the public upon request, and the plans will include oil spill trajectory model information and oil spill response management information that had previously been redacted.
Redaction of this information had been done based on advice given to staff, but the decision to release the information now is being made in the interest of the public’s right to know.
The CNLOPB committed to make Oil Spill Response Plans available to the pubic and to redact only the information that falls within a classification of being either personal, proprietary or security sensitive information.
Copies of the plans are available on request by e-mailing information@cnlopb.nl.ca”
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In a letter to Quebec natural resources minister Nathalie Normandeau, Newfoundland and Labrador deputy premier Kathy Dunderdale said that the provincial government had no plans for a moratorium on oil drilling offshore and dismissed any question about the interprovincial border in the Gulf of St. Lawrence.
The Montreal Gazette reported Wednesday on the exchange of correspondence between the two ministers in a story that highlights the border dispute and its impact on oil exploration in the Gulf.
According to the Gazette, Normandeau wrote Dunderdale to ask what measures were contemplated in light of the disaster in the Gulf of Mexico.
Dunderdale replied that Newfoundland had adopted "new oversight measures," had no plans for a moratorium on offshore drilling, and noted Normandeau's reference to a " 'cross-border geological structure,' by which I assume you are referring to the Old Harry prospect."
There’s no clear indication when the letters flew back and forth but the provincial government’s position has been clear since the Deepwater Horizon rig exploded in late April.
Premier Danny Williams dismissed calls for an offshore drilling moratorium in early June. As in his remarks in early May, Williams focused on three fields in the north Atlantic. He ignored other areas including the Gulf of St. Lawrence where the Old Harry field promises to match or dwarf Hibernia in size.
Williams referred to meetings he held in Calgary with officials of two companies operating offshore Newfoundland and Labrador. As CBC reported,
The premier said he's confident the companies are doing everything possible to prepare in case a similar situation ever happens off the province's shores.
"I also asked them to elaborate for me on what additional measures have been put in place and am actually in the process of preparing a list and would only be too delighted to provide a list of the safeguards that were in place and the additional safeguards that are being put in place," Williams said…
It was not clear from the context of his comments if he was meeting with them in his capacity as premier of the province or as their de facto partner in offshore oil development. In some respects that wouldn’t matter since under some conditions of the Hebron agreement, Williams is legally obliged to follow the position dictated by the oil companies to oppose any new regulations that would - in the opinion of the oil companies – adversely affect Hebron development.
Corridor Resources holds exploration permits from Quebec and from the Canada-Newfoundland and Labrador Offshore Petroleum Board for the Old Harry field. Work on the permits has been hampered by a dispute over the border between Quebec and Newfoundland and Labrador and by the absence of a jurisdiction arrangement between the Government of Quebec and the Government of Canada over the seabed resources in the Gulf.
While Danny Williams has been focusing his public comments on the distant offshore – and downplaying the implications as a result - a spill from any future Old Harry development could have disastrous consequences. This map, produced earlier this year, shows a map of the British Petroleum spill superimposed on Old Harry.
The dashed lines represent interprovincial boundaries but, for Newfoundland and Labrador, only the one between the province and Nova Scotia is formally in place. The boundary with Quebec shown in this map has never been formally adopted.
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Scientists from the Department of Fisheries and Oceans, three Canadian universities and the Spanish Institute of Oceanography have discovered marine life previously unknown to science in international waters offshore Newfoundland.
The team has turned up two species of coral and six types of sponge living thousands of feet below the ocean surface.
The researchers are investigating 11 specific areas offshore that collectively cover a portion of seabed one and a half times the size of Prince Edward Island. The areas examined include Sable Gully, the Flemish Cap and the Orphan Knoll.
The Flemish Cap is a relatively shallow area and a well-known fishing ground. The Orphan Knoll is in much deeper water about 500 kilometres east of St. John’s.
Almost a dozen areas around the Flemish Cap and the Orphan Knoll received protections by the Northwest Atlantic Fisheries Organization after the United Nations passed a resolution on vulnerable marine ecosystems. Research from this trip will be used to determine if those protected areas need to be refined or expanded when they are reviewed next year, and could determine future fishing policy.
The Flemish Cap, marked in the picture below with a red “X”, and the Orphan Knoll, outlined with a red dashed line, are also prominent features adjacent to areas currently open to oil exploration.
The team is using remotely piloted vehicles as part of a 20 day expedition. Some of the dives have been to depths of 3,000 metres.
Information collected during the expedition may help to understand temperature and chemical changes in the ocean over the course of the last 1,000 years. Some of the corals found may live that long.
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Related: “Agency withholds key elements in plans for spills” Postmedia News, July 21, 2010
So with Jay going over the hill in Ottawa, speculation is starting about who else is going to leave Stephen Harper’s fold before the next election.
But with an election expected in this province in October 2011 (barring any sudden developments), speculation is likely to start mounting about which of the local pile of politicians won’t be running again.
Just in the interests of getting the discussion started, here’s a list of some of the local Conservatives your humble e-scribbler expects to depart before the next provincial writ drops:
There are undoubtedly others, especially the ones relatively long in the tooth and up for a chunky pension.
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Introduced in 1995, the Economic Diversification and Growth Enterprises program – known as EDGE – is the most successful economic development program currently offered by the provincial government.
According to an article in the March 20 issue of the Telegram,
The province estimates that EDGE has created 1,500-1,600 jobs over the years. The government has forked out $17 million in rebates to employers under the program. Those rebates are linked to things like provincial income tax, payroll tax and corporate income tax.
Roughly 40 municipal governments also signed on to the EDGE scheme, providing their own tax relief to qualified companies.
Within the past five years alone, 30 companies have applied for support under the program and two thirds were accepted.
Compare that to the hand-out programs introduced under the current administration. Of the $75 million budgeted over the past three years, the programs have only managed to give away $14 million; of that amount $8.0 million went to a company that promised to increase its workforce but in the end cut jobs.
The provincial government is reviewing the EDGE program to see how it can be improved. Currently 69 companies hold EDGE status. A further 54 held the status at one point but no longer qualify.
As the Telegram described the EDGE program:
To be eligible, a company must create and maintain 10 new permanent jobs in Newfoundland and Labrador and make a minimum capital investment of $300,000 or have incremental annual sales of $500,000.
Tax incentives are provided to EDGE-designated companies for a period of 10 or 15 years, followed by a five-year period of partial rebates.
Part of the program’s enduring success is the philosophy behind it. EDGE recognised the changed global economic circumstances and placed its greatest emphasis on encouraging the private sector to develop innovative, globally-competitive industries that could survive without extensive government cash support.
The background to the program is contained in a public consultation paper released in the summer of 1994. The main sections of that document are reproduced below. in light of the current government policy and the review of EDGE, it would be useful if more people in the province were aware of an economic development philosophy that continues to deliver strong results almost two decades after it first appeared.
Excerpts from:
Attracting new business investment: a White Paper on proposed new legislation to promote economic diversification and growth enterprises in the province
(June 1994)
1.0 BACKGROUND
The Strategic Economic Plan for Newfoundland and Labrador, which was released in June of 1992, outlined the economic challenges facing the Province and charted new policy directions to guide economic development over the long term.
The Strategic Economic Plan noted in particular that the globalization of economic activity and the liberalization of world trade presents significant new export opportunities for manufactured goods and commercial services. Technological advances made in transportation and communications over the past decade, combined with the shift towards a more knowledge based world economy, have also reduced the relative importance placed on geographic location for many industries and firms, and this has created further opportunity for the development of new products and services. At the same time, however, these trends have brought increased international competition for economic activity, not only in the development of new products and services, but in respect of many of our existing industries as well.
These profound changes in global trade patterns, investment flows and technology constitute the driving force behind the fundamental economic restructuring that is now occurring in many countries. In an increasingly competitive and knowledge based world economy, it is clear that we can no longer rely on traditional approaches to attract new business investment and expand existing business enterprises. We will, out of necessity, have to become more outward looking in our approach to economic development and create an appropriate investment climate that supports international competitiveness.
It must also be recognized that the private sector is and will continue to be the engine of economic growth. This is a key principle embodied in the Strategic Economic Plan and reflects the reality that the private sector is the most effective vehicle through which lasting economic wealth and employment opportunities can be created for the people of this Province. It is the role of government in this context to create the economic climate in which private sector investment can occur and be successful.
2.0 GOAL
The goal of attracting new business investment as a means to create additional employment opportunity for the people of this Province is not a new concept. Indeed, various governmental incentive programs have met with measured degrees of success over time in this regard. However, the rapidly changing global marketplace and the province-wide impact on the economy resulting from the collapse of the groundfish fishery have heightened the need to significantly improve the attractiveness of the Province to the private sector as a place to invest and prosper. New business investment directed at economic diversification and general economic growth is not only an objective but an imperative at this juncture of the Province's history.
The Government of Newfoundland and Labrador intends to adopt bold and innovative measures to transform the Province into one of the most attractive locations - not only in Canada but in all of North America - for new business investment and to take aggressive new steps to market and promote the Province's strengths in this regard on a national and international basis.
The main elements of this new program will be reflected in legislation to be known as "An Act to Promote Economic Diversification and Growth Enterprises in the Province". This legislation will be presented to the House of Assembly for its consideration in the fall of 1994 and will provide an enhanced "business friendly" regime for new and expanding business enterprises in the Province.
3.0 SCOPE OF PROPOSED LEGISLATION
3.1 Eligibility
New business enterprises wishing to establish in the Province and existing businesses wishing to expand their enterprises will be eligible to receive a range of special business development incentives, provided that certain conditions are met. These will be in addition to any other incentives the enterprise may be eligible for under other assistance programs established to encourage business development in the Province.
To qualify for the special incentives, an enterprise must meet the following tests:
Both new businesses and existing businesses expanding their operations will be eligible for the special incentives. However, in the case of existing businesses, only those elements of a company's operation which are incremental to its existing scale of operation will be eligible for the incentives.
3.2 Review and Approval Process
Companies seeking the special incentives available through the new legislation will be required to provide documentation in the form of a comprehensive business plan to allow for a thorough assessment of its proposal. The specific requirements in this regard will be outlined fully in the legislation.
Particular attention will be given during the review process to the commercial viability of the proposed business activity over the long term. It is not the intent of the legislation to artificially support new industries or new business activity in the Province, but rather to attract and assist in the development of viable and sustainable economic enterprises and employment opportunities for the long term benefit of the people of this Province.
All applications received under the new legislation will be reviewed by a committee of Cabinet Ministers chaired by the Minister of Industry, Trade and Technology, with final decisions on eligibility to be made by Cabinet. Part of the process in making a determination as to whether or not the special incentives will be granted to a company will involve a public notice procedure whereby Government will invite interested parties to make submissions respecting all proposals received. This is intended to ensure that all proposals are available for public scrutiny in respect of their potential competitive impact on existing business enterprises and jobs. Appropriate steps will be taken to protect the proprietary and commercial interests of the company when this public notice procedure is invoked.
While all proposals made to Government under the new legislation will be thoroughly assessed to protect the general public interest, Government is committed to a timely review process such that potential investors are not unduly delayed in the implementation of their business plans. Once the committee of Cabinet Ministers is satisfied that it has all the information it considers necessary to properly evaluate a proposal, a decision will be rendered by Cabinet on acceptance or otherwise of a company's proposal within 60 days.
Successful companies will be expected to enter into a formal contract with Government in which the Province will guarantee the benefits provided in the new legislation and the company will bind itself to implement the business proposal as accepted by Government. Notification will subsequently be given to the House of Assembly of all such contracts entered into, and ongoing monitoring of their terms and conditions will be carried out by senior officials.
3.3 Incentives Available through the Legislation
3.3.1 Taxation Incentives
The private sector is presently faced with a relatively high burden of taxation which impedes new investment and the creation of new employment opportunities in the Province. While a number of significant changes to the existing business tax structure have been made by Government in a number of areas in recent years, the entire taxation regime requires further attention if it is to be used as a means of promoting the Province as a highly competitive location in which to do business. Accordingly, the following taxation incentives are proposed for those companies qualifying for assistance under the new legislation:
(i) A full tax free holiday for ten years in respect of provincial corporate income tax, the health and post-secondary education "payroll" tax, and retail sales tax.
(ii) Further relief in these specific tax areas for an additional five year period on a reduced scale, commencing in the first year at 80% of total taxes payable and declining by a factor of 20% each year thereafter.
Municipalities will also be given the necessary legislative authority to grant full property and business tax exemptions on the same basis as outlined in (i) and (ii) above with a majority vote of the respective municipal council. At present, municipalities do not have the legislative flexibility to offer tax relief to individual companies to the extent contemplated herein.
3.3.2 Productivity Incentive
All new and expanding business enterprises experience a significant "learning curve" during the formative years of their operation. Part of this process inevitably results in a productivity "loss" that is incurred by the company at all levels in the organization.
To offset part of this productivity "cost", the Province will provide financial assistance to new and expanding business enterprises in an amount of $2,000 for each full time job created in the Province during its initial five year operating period where the company employs a resident of the Province to permanently occupy the job from the time of its creation.
Appropriate provisions will be included in the legislation to protect the pubic interest in the event of failure by a company to fulfil the conditions upon which the productivity incentive has been granted.
3.3.3 Labour Relations Incentives
A new approach to labour-management relations is required to attract new investment and stimulate new business enterprises in the Province. Government remains fully committed to ensuring that adequate safeguards are in place to protect the legitimate interests of employees and unions. However, it is in the broader public interest to achieve this objective in a balanced manner that also assures those who wish to make new business investments and provide economic opportunity in the Province have a reasonable prospect of receiving an acceptable level of return on their investment without undue risk from uncertain labour relations conditions.
Pursuant to a commitment made in the Strategic Economic Plan, Government is presently developing a comprehensive consultation document which will address various concerns respecting the general labour relations regime in the Province. While the intent will be to develop consensus on changes necessary to make the general labour climate more favourable for all businesses, Government believes that extraordinary measures are required beyond this if new business enterprises are to be stimulated in the increasingly competitive global economy.
Government's proposal in this regard is to make available different Labour Relations Act provisions to new enterprises wishing to establish in the Province and to do so in a manner that will not affect the application of current labour legislation to existing businesses. As well, any existing business where a bargaining agent has been certified for the employees of that company prior to the time it wishes to expand and take advantage of the special incentives under the new legislation will not be eligible for the labour relations provisions of the legislation. Considerable difficulty from a number of perspectives would be encountered in applying two different labour relations regimes to a single business operation, as one firm could have two separate collective bargaining processes, labour contracts and wage rates applying to employees doing the same kind of work. Accordingly, the labour relations provisions of the new legislation will apply to new business start-ups only.
The main features of the proposed new labour relations provisions are as follows:
a. All collective agreements entered into between a company and the bargaining agent for the employees will remain in force for a period of at least five years, unless the contract entered into between the Province and the company in respect of the business undertaking as a whole expires in a period of less than five years.
b. In circumstances where a company and a bargaining agent engage in collective bargaining but are unable to reach a collective agreement, a special panel consisting of a representative appointed by each of the parties and a chairperson appointed by the Minister of Employment and Labour Relations will establish a collective agreement by addressing those specific matters in dispute at the time the matter is referred to the panel.
c. Where a company and a bargaining agent are unable to conclude a collective agreement and the matters in dispute are referred to a panel, the company will not be permitted to lock-out the employees and the employees will not be permitted to strike.
d. A panel, in concluding a collective agreement, will take into account the following factors:
(i) the overall policy objective of the new legislation which is to create conditions favourable to the establishment of new businesses and the expansion of existing businesses in the Province (this factor will be given paramount consideration by the panel);
(ii) the effect of the agreement on the profitability of the business;
(iii) the terms and conditions of employment of employees in occupations in the same or similar businesses both within and outside the Province, with consideration to be given to geographic, industrial, economic, social and other variations that the panel considers relevant;
(iv) the need to establish terms and conditions of employment that are fair and reasonable in relation to the qualifications required, the work performed, the responsibility assumed and the nature of the service provided; and
(v) the needs of the employer for qualified employees.
e. An agreement concluded by a panel will be binding on all parties.
f. The panel will be required to conclude an agreement no later than 90 days after disputes are referred to it for resolution.
g. Every collective agreement entered into between a bargaining agent and a company, including an agreement concluded by a panel, will contain provisions:
(i) requiring the application of progressive work practices in the work place including the use of composite crews;
(ii) relating to wages and to wage increases of employees during the term of the agreement, but those increases will not be permitted to exceed the percentage rise in the consumer price index as reported by Statistics Canada for that area; and
(iii) respecting the final and binding resolution of disputes without work stoppage.
Notwithstanding the provisions outlined above, where a company and a bargaining agent both agree that it would not be in their collective interest to apply the labour relations provisions of the new legislation in its entirety or in part, then those provisions will not apply to the parties concerned. Similarly, in circumstances where a panel has concluded a collective agreement, the parties concerned may, where they mutually agree, vary any term or condition the panel has applied, provided that such agreement does not offend other applicable provisions of the new labour relations regime.
3.3.4 Access to Crown Land
Crown land that a company may require to implement its business plan as approved by Government will be leased to the company for a nominal sum of $1.00.
3.3.5 Appointment of a Facilitator
Upon the request of a company, Government may appoint a person, either from within or outside of Government, to assist the company in obtaining governmental permits, licenses, options for use of Crown assets, and any other authorizations that the company may be required to obtain in connection with its business. This will expedite the processing of all applications for regulatory approval of the business plan and thereby allow the business plan to be implemented in a timely manner. The responsibility for actual decision-making in these areas will, however, remain with the appropriate regulatory agency.
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New Brunswick Power and Nova Scotia Power are looking at the prospect of building a new 500 megawatt connection between the two provinces.
The Chronicle Herald estimated the connection would cost $200 million when they reported on the potential interconnection earlier in July.
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We are in a bubble. I think we are in a protected bubble.
That’s Danny Williams making a few observations at the close of the most recent session of the provincial legislature.
It’s not the first time Williams talked about bubbles. He said the same thing in October 2008 as the world headed into the worst recession since the Great Depression in the 1930s:
We now, for the first time in our lives, are in a bit of a financial bubble and that's a wonderful thing. We have that protection and the people of this province got the support of the provincial government
Williams even claimed during that call to a radio open line show that “[h]opefully our [budget] surpluses will continue, hopefully they'll get even larger, it will enable us to do the things that we've been doing. I mean this, for us this hasn't happened overnight. We've been preparing for this.”
Then the talk of surpluses and bubbles disappeared.
You see, bubbles are wonderful things, all pretty and shimmery in the sunlight.
But bubbles are flimsy and insubstantial.
Bubbles have a distressing tendency to burst.
And in the case of the Williams economic bubble, the whole thing burst quite spectacularly. The provincial gross domestic product dropped 22% in 2009, or 10.2% in real terms as RBC assessed it. Deficit spending became the new order not just for the day but for the years to come and cabinet ministers openly admitted provincial government spending was unsustainable.
Now for those reasons alone it was nothing short of bizarre to see Williams return to the complete nonsense that somehow the province – let alone the provincial government – had emerged from the recession safely wrapped in some sort of bubble. It was even more bizarre to see Williams repeating this line:
However, when I look at what is happening here in Newfoundland and Labrador, the fact that we do have our debt reduced,…
It’s bizarre because it simply isn’t true. The total public sector liabilities remain as high in 2009 as they were at just about any point in the last five years. Even the net debt – government’s favourite misleading measure – increased as the 2009 cash shortfall sucked up a half billion dollars of cash the government had laying about and which had previously been used to offset government’s liabilities, even if only paper.
Williams went even beyond those crazy remarks, claiming that the previously unfunded pension liabilities had been addressed. Of course, that isn’t correct either. As Budget 2010 forecasts, the unfunded pension liabilities will increase in the current fiscal year just as the net debt will increase.
So aside from a decidedly unhealthy dose of self-delusion, it’s pretty hard to tell what the Premier was getting on with in the House of assembly only a month or so ago.
The prospect of a second and prolonged recession - widely discussed for some weeks now – only makes the premier’s claims that much harder to fathom. If the United States economy slows down again, then the Newfoundland and Labrador economy will follow suit. Williams’ own economic policies have seen to that.
If economist George Athanassakos turns out to be right, things in Newfoundland and Labrador could be even worse:
Economies are still extremely vulnerable to speculative bubbles and dips and increased volatility. The panic of 2008 and the subsequent rescue packages did not provide the necessary catharsis that recessions bring to economies. Demand for broader reforms has also waned as a result of the rescue of the economy from the panic of 2008. If this were not enough, economies have become addicted to low interest rates and to liquidity infusions.
Rather than being protected by a bubble, Newfoundland and Labrador may be more vulnerable to a second economic downturn than other parts of the western world. First of all, more and more of the local economy under the Williams administration is based on unsustainable public sector spending.* Second of all, the metro St. John’s area housing explosion - even as it subsides – has been built on public sector spending coupled with low interest rate policies. A second recession will likely kill both of those simultaneously.
Incidentally, the most recent figures from Statistics Canada suggest that the construction boom in Newfoundland and Labrador isn’t a commercial one.
Even as spending on the Vale Long Harbour project, Hibernia South and Hebron ramp up in 2012, they won’t be able to offset a decline through all other sectors of the economy. And that’s even allowing that oil prices don’t drop thereby putting development of Hebron in some doubt.
The forest industry is a pale shadow of what it was even a half dozen years ago. The fishery is mired in restructuring talks. In any event, the industry is woefully short of the capital investment needed to sustain itself let alone retool for global competition. Destroying Fishery Products International and selling off its most useful and lucrative assets will prove to be one of several catastrophic policy failures of the current administration.
Mining may be doing reasonably well in the year ahead, but a second global recession will also adversely affect commodity prices. Even if oil prices remain at current levels, declining production over the next two to three years will reduce government revenues significantly.
Meanwhile, provincial government cash deficits in 2010 and again in 2011 would rapidly eat up whatever cash reserves are on hand. A significant economic downturn through the latter half of 2010 and into the 2011 election could force the government into a difficult financial position likely meaning spending cuts and wage freezes.
The province is not protected by a bubble. It is subject to the same forces that affect the rest of the world. Far from insulating the provincial economy from global forces, government policy has left the province in a more precarious position than it has been in two decades.
That’s the thing about bubbles. Like delusions, they have a tendency to burst in the most unsettling way imaginable.
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* The growth in the provincial public service in recent years is not just a relative growth owing to a decline in other sectors, like forestry. From labradore:
In the past decade, the absolute numbers of people in NL who work in the provincial public sector — the provincial civil service, public health care, social service, and education system, and public post-secondary education institutions — has increased by 35%. Not only is that the largest increase, start to finish, of any of the ten provinces, for most of the decade, NL has topped the chart in terms of the growth rate. And, starting in 2006, that growth curve spiked steeply upwards, with annualized growth of up to seven percent per year, unmatched by any other province except, starting in the second half of 2008, Prince Edward Island. [Emphasis added]
A Canadian Forces court martial found Captain Robert Semrau guilty of behaving in a cruel or disgraceful manner on Monday but found him not guilty second degree murder, attempted murder and negligent performance of a duty.
The infantry officer faced charges arising out of the death of a wounded insurgent in Afghanistan.
Under s. 93 of the National Defence Act, an individual “who behaves in a cruel or disgraceful manner is guilty of an offence and on conviction is liable to imprisonment for a term not exceeding five years or to less punishment.”
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It’s July 19, 2010 and while the Department of Government Services has updated its website design, the whole thing is still aimed at browsers which no longer exist.
Your humble e-scribbler last pointed this embarrassment out in July 2009.
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Last week, labradore comments on the size of the provincial labour force occupied by the provincial government public sector. He capped it off with a chart (below) showing a comparison for all 10 provinces over the past decade.
All this brings home one of the points made here earlier this year in a series of posts on the increasingly fragile state of the provincial economy. More the provincial economy is dependent on trade with a single market, namely the United States. There are fewer private sector industries driving the economy and, at the same time, provincial government spending has assumed an increasingly large role in the economy as a whole.
If you extend the picture back over the three decades for which data is available, you can see both the persistent over-reliance in Newfoundland and Labrador on public sector labour compared to the situation in other provinces as well as the increase in the public sector labour force over the past three years.
These charts go a long way to demonstrating the extent to which popular perceptions of local prosperity are entirely wrong. Whatever is going on locally is most certainly not the result of private sector economic development.
Rather there are more public servants making more money, 20% more, in fact over the most recent four year contract. Couple this with the dramatic increase in overall provincial government spending – upwards of 60% in four years – and the picture is unmistakeable.
Those who want to talk about prosperity in the province or those who want to celebrate the province’s “have” status would do well to look at the three provinces with the smallest proportion of their labour forces working for the provincial government. It is no coincidence that those provinces with the strongest economies are also ones in which the public sector labour force is a relatively small proportion of the overall working population.
That doesn’t mean that public servants and public services are unimportant. Rather, the situation in Newfoundland and Labrador demonstrates the extent to which successive provincial governments in Newfoundland and Labrador – but most particularly the current one – have failed to create the climate in the province for sustainable economic development let alone diversification of the local economy.
What makes the current administration stand out, though, is that increasing the role of the public sector in the economy, whether through NALCOR or through admittedly unsustainable growth in public spending, is openly stated as the goal.
The fact that observers outside the provincial government have repeatedly failed to notice that this is occurring is another matter. No surprise, though, that if they cannot even correctly identify the trend to growing fragility, they may not pay any attention at all to the very serious implications from policies that promote the hollowing out of the province’s economic underpinnings.
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As you’ll discover fairly quickly in reading a Telegram story on class sizes, the idea of capping the number of students per class is aimed at improving student achievement: more of them will pass; they’ll get higher grades; that sort of thing.
In other words, by giving each classroom teacher fewer students to work with, you improve the chances that each student will do better in school. You can measure that a number of ways, one of which would be the national testing administered in Grades Three, Six and Nine.
So it is more than a bit odd that the very first sentence in the story says this:
School enrolment numbers suggest the provincial government's plan to cap class sizes has been mostly successful.
The number of students in a school isn’t a measure of success for capping the size of classrooms. It’s one of the things that can influence the outcome - better performance by each student – and it is a factor that varies despite the efforts of school administrators.
After all, as the story acknowledges, “[f]rom June to September, for example, a lot of things can change, he said. Children can move away from a certain school or a certain area; children can move into an area.”
So this story doesn’t do anything but tell us all that the people working at school boards managed to put enough teachers in classrooms to hit a target ratio of students to teachers.
That’s nice but it doesn’t really mean they achieved the goal, which, you may recall, was about ensuring students did better in school.
Where’s the measure of that?
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Fisheries reform is a success.
Well, that is if “success” means employing legions of bureaucrats to engage in endless meetings that produce exactly nothing after a full year of meetings.
Under the terms of agreement setting up those meetings, all the work was supposed to be finished seven months ago.
And it’s not like you haven’t heard this before:
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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As labradore has been putting it in a series of posts, the provincial public service in the first half of 2010 comprises 53,780 people working directly for the provincial government, the university and public colleges, health care authorities and public school boards.
That works out to 26.2% of the working people of the province. That’s double the comparable percentage for all 10 provinces.
And here’s the truly unsettling bit:
In the thirty years in which Statistics Canada has measured public sector employment, the percentage of employed people in Newfoundland and Labrador labour force who are employed in the provincial public sector has never been this high.
Those 53,780 comprise 21% of the entire labour force and, once again, that’s the highest this percentage has been in the three decades that Statistics Canada has been measuring public sector employment.
And they make up about 10% of the entire population of the province.
That’s a pretty sharp contrast to the talk in 2004. As CBC reported, Danny Williams’ first budget forecast a cut of 4,000 public service positions. By 2005, that planned cut disappeared. The planned cuts have evidently been replaced with a pretty hefty hiring plan.
Now if the private sector had grown at a similar or greater pace, there wouldn’t be so cause for concern. As the job numbers show, though, the proportion of the labour force employed in the public sector has grown to an amazing level. in some regions of the province – like, say, Grand Falls-Windsor - the provincial public service is the major employer.
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Earth, Wind and Fire:
And a cover version that isn’t Earth, Wind and Fire:
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Summertime is the season when politicians get to travel.
For example, take the annual meeting of governors from the New England states and premiers from the six eastern Canadian provinces. They got together from July 11 to 13 in Massachusetts for a series of meetings.
Not much came out of the meetings - there were a couple of initiatives they all agreed to implement but then again, these things are seldom about solving big issues. You can get an excellent sense of how little of substance ever gets done at these meetings by taking a look at the rather vague news release from the Premier’s Office on the meetings. And if that isn’t enough, look at the equally vacuous collection of scripted quotes issued by the four Atlantic Canadian premiers. One of them, incidentally wasn’t even at the meeting, but he did get included in the quote-fest.
Much like trade shows, these sorts of big meetings are not the places to cut deals. They are the places to sign deals worked out well in advance.
For example, Maine and Nova Scotia signed an agreement during the meetings to work jointly on development of ocean energy. That’s tidal power or wave power.
New Brunswick premier Shawn Graham even got a public endorsement from three New England governors for the proposed second nuclear reactor in new Brunswick. The governors of Maine, Rhode Island and Vermont support Lepreau 2. In fact, Rhode Island Governor Donald Carcieri thinks that nuclear energy must be part of the mix for the region’s future energy supply.
Heck, even away from the conference regional energy deals are in the news. Nova Scotia Power and New Brunswick Power are working a deal on the 4200 million intertie upgrade Bond Papers mentioned last week. Daewoo will be building a wind turbine manufacturing plant in Nova Scotia, as well.
Conspicuously absent from all this concrete talk of energy deals is the place its own premier now describes as “a significant energy player” in North America.
Not energy hub. That job is now taken by New Brunswick.
No longer an energy warehouse.
Just a player, albeit a supposedly significant one, whatever that means.
The only specific reference to a project or initiative in Danny Williams vague news release was to the Lower Churchill. As readers of this space know, this project is now pretty much dead in the water. Mo markets, no money and - especially at an estimated cost $14 billion and counting - no sign of anyone willing to underwrite the whole thing. It is now obviously what it always has been all along: a mere political prop.
That’s what comes of putting every egg into a single basket. While other jurisdictions are allowing many different ideas to move simultaneously, the current administration in Newfoundland and Labrador is sitting as an obstacle to innovation. It’s obsession with a single megaproject - laid down in the official energy policy itself - prevents other ideas from getting any serious consideration.
Newfoundland and Labrador is being rapidly left behind in energy development. Despite abundant energy, a skilled work force and ample resources, new energy developments are happening somewhere else. Compare Grand Falls-Windsor to Trenton, Nova Scotia, for instance. The wind turbine plant is expected to employ 120 in its first year and upwards of 400 at peak. What’s likely to happen any time soon in the central Newfoundland town?
The Maritime provinces are becoming an energy hub. Newfoundland and Labrador is looking more and more like the loose economic development wheel.
The cause is flawed policy.
- srbp -
Some politicians just don’t know when to stop.
On Tuesday, new Democratic Party member of parliament Jack Harris (St. John’s East) did an interview with CBC’s St. John’s morning radio show. The subject of the interview was news yesterday that an offshore supply vessel working for Suncor had reduced its on-call fast rescue craft crewing from two crews to one.
That met Transport Canada’s regulations, a point Harris acknowledged during the interview very early on by referring to…well… “Transport Canada regulations”. Harris expressed some concern – others have too – have any reduction in available rescue crews in light of last year’s offshore helicopter crash.
Fair enough. It’s a good point and, later on Tuesday, the company restored the two-crew standard.*
Had Jack stopped there he might have been okay. As it is, the program host tossed Jack a question about the potential role in all this for the offshore regulatory board. Jack offered the view that, as some people have been suggesting to the ongoing offshore helicopter inquiry, this might be a good occasion to review the possible need for a separate regulatory agency that just looks after offshore safety.
Minor problem.
The offshore regulatory board doesn’t do safety regulations.
Jack obviously knows this, as he demonstrated earlier in the interview. This is one of those decisions that remain the exclusive jurisdiction of the Government of Canada under the 1985 Atlantic Accord.
Therefore – try and follow the logic – if the offshore regulatory board doesn’t do offshore safety regulations, then some other entirely separate organization must do it.
Already.
So what is the frackin’ point of studying the need for a separate regulatory board for safety when there is one already called Transport Canada?
There isn’t any.
Obviously.
-srbp-
* Clarification: Suncor will only have two crews on standby when there are two rigs. They will add the second standby crew when the Henry Goodrich is back in the fall to do additional drill work.
As the online CBC story puts it:
John Downton, communications manager for Suncor's east coast operations, said a second dedicated crew will return to the Burin Sea this fall, when the Henry Goodrich returns to work at Terra Nova.
Downton said Suncor, which merged last year with Petro-Canada and is the operating partner of the Terra Nova consortium, has been following regulations established under Canadian law, which require one fast-rescue craft per offshore installation.
"We meet regulatory requirements," Downton told CBC News. "We don't set the regulations — we follow them."
last week’s release of the latest labour force numbers from Statistics Canada prompted your humble e-scribbler to go back and try a comparison of the overall provincial labour force in comparison to national averages.
Right off the bat, let everyone understand this is nothing more than a quick comparison based on readily available information. It should serve as the jumping off point for future discussion and if nothing else, it should help everyone get way beyond the rather simplistic comparisons of month-to-month numbers. Sometimes those things are meaningful but as the past couple of months have shown, sometimes, the statistics are just off.
The provincial numbers comes from a document included with the last provincial budget. It’s called The Economy and gives an overview of the year just ended. The national numbers come from the latest labour force statistics. Both sources use the same job classification system. The listing below bundles them together so that the comparisons match up.
The figures are the percentage of the total number of jobs in each category. For example, 1.7% of jobs in Canada are classified as being agricultural. The corresponding percentage for Newfoundland and Labrador is 0.4%
To draw attention to aspects of the comparison, please note that categories where the provincial percentage lags behind the national significantly are marked with the digits underlined. Where the provincial is significantly above the national average, the figures are in red.
Statisticians may wonder what the definition of “significant” is. Well, it comes down to the relative difference in the two numbers as they appear on the face of it.
Category | National | Newfoundland and Labrador |
| Goods-producing | 22% | 21% |
| Agriculture | 1.7 | 0.4 |
| Natural Res | 2.0 | 6.7 |
| Utilities | <1 | 2.1 |
| Construction | 7.0 | 7.3 |
| Manufacturing | 10.2 | 5.5 |
| Services-producing | 78 | 79 |
| Trade | 15.7 | 16.2 |
| Trans/warehouse | 4.7 | 5.4 |
| Fin, ins, RE,Bus | 10.5 | 6.7 |
| Prof./sci./tech. | 7.4 | 3.6 |
| Education | 7.2 | 8.1 |
| Health/soc asst | 11.9 | 16.1 |
| Accn | 6.0 | 6.1 |
| Public Admin | 5.5 | 7.9 |
| Other | 4.3 | 4.8 |
Right off the bat, note that the relative breakdown into goods-producing and service- producing is virtually the same for both the provincial and national economies.
Let’s look at the goods sector. Overall, the provincial economy in this sector is very heavily reliant on resource extraction. The natural resources grouping (which includes fishing, trapping, mining and oil extraction) accounts for three times as large a percentage of jobs within the province as the same grouping. Manufacturing, on the other hand, accounts for only half as much. That 5.5% manufacturing for the province includes 2.2% for fish processing.
In the services sector, there are some equally interesting comparisons. Finance, insurance, real estate and business services account for 6.7% of the jobs in this province while the same grouping accounts for 105% of jobs nationally. The professional, scientific and technical services sector accounts for 3.6% of local jobs versus 7.4% nationally.
Take a look, though, at two service sectors which are publicly funded. About 16% of local jobs are in the health sector compared to 11.9% nationally; that’s 33% above the national number. Public administration is 43%, accounting for 7.9% of provincial jobs compared to 5.5% nationally.
Fully a quarter of the jobs in the province are public sector jobs compared to 17.4% of jobs across the country. Given that some of the other categories likely also contain public sector employees, it wouldn’t take too much to estimate reasonably that the public sector accounts for about one third of all workers in the province.
Incidentally, just to put actual numbers on this, the health and social assistance sector accounted for 34,600 jobs in 2009 according to the provincial government figures. That’s out of a total of 214,900 jobs. It is the single largest category in the service sector, with retail trade coming in at 29,600 for second place There were 17,300 in educational services and 16,900 people working in public administration.
The largest job category in goods-producing was construction at 15,700. The second largest was manufacturing with 11,900. Of that manufacturing number, 4,700 were involved in fish processing.
- srbp -
Pre-publication post-script update: This posts was written the night before it appeared. labradore has a simple set of numbers using more recent data for the size of the public sector in the province. His estimates are for the provincial public sector alone; the figures above are for federal, provincial and municipal.
Still, according to labradore, the provincial government public sector accounted for 25% of the current labour force in the first half of 2010.
From the Department of National Defence:
CFNIS NR – 2010-11 - July 12, 2010
OTTAWA – The Canadian Forces National Investigation Service (CFNIS), which is the investigative arm of the Canadian Forces Military Police, has concluded its investigation relating to allegations of inappropriate conduct and has charged Brigadier-General Daniel Ménard and Master-Corporal Bianka Langlois. The investigation was initiated in May 2010 and is related to the Canadian Forces Personal Relationships and Fraternization directives [DAOD 5019-1].
Brig.-Gen. Ménard was charged with:
Master-Corporal Langlois was charged with:
The charges were laid following allegations made in May 2010 while Brig.-Gen. Ménard was the Task Force Commander in Afghanistan.
The CFNIS is an independent Military Police unit with a mandate to investigate serious and sensitive matters in relation to Department of National Defence (DND) property, DND employees, and CF personnel serving in Canada and abroad.
- 30 -
Section 129 of the National Defence Act (RSC 1985, c. N-5) provides that:
Conduct to the Prejudice of Good Order and Discipline
Prejudicing good order or discipline
129. (1) Any act, conduct, disorder or neglect to the prejudice of good order and discipline is an offence and every person convicted thereof is liable to dismissal with disgrace from Her Majesty’s service or to less punishment.
Offence and contraventions prejudicial to good order and discipline
(2) An act or omission constituting an offence under section 72 or a contravention by any person of
(a) any of the provisions of this Act,
(b) any regulations, orders or instructions published for the general information and guidance of the Canadian Forces or any part thereof, or
(c) any general, garrison, unit, station, standing, local or other orders,
is an act, conduct, disorder or neglect to the prejudice of good order and discipline.
(3) An attempt to commit any of the offences prescribed in sections 73 to 128 is an act, conduct, disorder or neglect to the prejudice of good order and discipline.
(4) Nothing in subsection (2) or (3) affects the generality of subsection (1).
Not intended to cover offences elsewhere provided for
(5) No person may be charged under this section with any offence for which special provision is made in sections 73 to 128 but the conviction of a person so charged is not invalid by reason only of the charge being in contravention of this subsection unless it appears that an injustice has been done to the person charged by reason of the contravention.
Officer’s responsibility not affected
(6) The responsibility of any officer for the contravention of subsection (5) is not affected by the validity of any conviction on the charge in contravention of that subsection.
Section 130 of the National Defence Act allows for charges to be laid against military personnel for offences under the Criminal Code of Canada.