Aboriginal land claims remain substantial barrier to Williams’ legacy plan

Innu leader Joseph Roche may have been at the news conference announcing something or other about Muskrat Falls but, as he told the invite-only audience, the whole thing isn’t going anywhere until the Innu land claims issues are settled.

"One of the key outstanding issues now is the consent of our Innu people," Riche said.

"But we cannot do that yet, we need the federal government to resolve outstanding issues for our land rights agreement … it has been thirty years in the making and we have lost many of our elders and leaders in that time. Without this, the Lower Churchill project can not proceed." [cbc.ca/nl]

Riche was one of the invitees and the provincial government distributed a backgrounder on Innu issues.  But, as Premier Danny Williams knows already, the New Dawn agreement is stone cold dead. Riche reportedly put a damper on the excitement at the hotel news conference when he reminded people this thing wasn’t close to being a deal as far as Innu were concerned.

Chief Riche was talking about issues with the federal government, a key player the provincial government left out of the talks to this point.  That’s just one of the problems.  There is a substantial opposition within the Innu community to the project self and they aren’t interested in seeking anything happen on the river, period, full-stop, end of story, do-not-pass go and forget about the two hundred bucks.

And for those who missed it, someone seems to think that by selecting Muskrat falls as the first site, that will outflank the Innu opposition.  Elizabeth Penashue’s annual walk to Gull island doesn’t mean that Muskrat Falls isn’t as important.

The Innu aren’t the only aboriginal group with a claim that needs attention.

So far the provincial government has ignored the Metis of Labrador even though the Lower Churchill dams would be within the Metis claim area.  What’s worse for Williams is that the Metis are still smarting over his broken election promise from 2003 or his comment in 2009 that the project needed the Innu but not the Metis.

Other Premiers have long under-estimated the challenges of aboriginal land claims issues.  At the time he announced a memorandum of understanding to do way more that Danny Williams proposed, Premier Brian Tobin boasted he could finish a land claims deal with the Innu in 12 weeks.

That was 12 years ago. 

And Tobin’s proposal had a far more substantial basis for agreement than a terms sheet.

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Loyola off to Dublin

As your humble e-scribbler told you on August 13, Loyola Hearn is Canada’s new ambassador to Dublin.

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The World of Tomorrow: media studies ph.d edition

When there is so much official bullshit flying around, it shouldn’t be surprising that conventional news media wind up piling it higher and deeper on their own.

From the only newspaper Newfoundland nationalists care about comes a comment that ties Shawn McCarthy with the Ceeb’s Vic Adopia  for most ludicrous assertion of the day by a reporter:

He has been battling Quebec Premier Jean Charest for years over Hydro-Québec’s refusal to transmit power from the Lower Churchill project through its existing transmission grid to markets in Ontario and the United States.

Hydro-Quebec hasn’t refused to wheel Lower Churchill power.  NALCOR energy has refused to option space on the grid or start talks to build any needed extra transmission capacity.

But it gets better. 

Since April 2009, NALCOR has been wheeling Churchill Falls power through Quebec to Emera at the New York border. That deal – which came long after the Lower Churchill transmission requests involved in recent Regie decisions – prompted Danny Williams to state proudly that Labrador power was no longer stranded:

This is truly a historic and momentous occasion for the people of our province, as never before have we been granted access through the province of Quebec with our own power.

But what is really amazing about the Globe piece is that Danny Williams actually spent five years trying to get Hydro-Quebec to take an ownership stake in the Lower Churchill without redress for the 1969 deal set to one side.

Oh, and just for fun, here’s what Danny Williams said in St. John’s on Thursday about whatever it was he announced with Darrell Dexter:

This is a day of great historic significance to Newfoundland and Labrador as we move forward with development of the Lower Churchill project, on our own terms and free of the geographic stranglehold of Quebec which has for too long determined the fate of the most attractive clean energy project in North America.

Historic agreement with Quebec. 

Historic agreement with someone else because Quebec wouldn’t agree.

Which is it?

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The World of Tomorrow: Basic Math

Muskrat Falls:  824 megawatts with an estimated capital cost of $6.2 billion.  That works out to about $7.5 million per installed megawatt.

La Romaine:  1,550 megawatts for $6.5 billion.  That works out to $4.1 million per installed megawatt.

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The World of Tomorrow

Wow.

Seldom has an announcement of any kind been accompanied by such a litany of sheer bullshit.

CBC is claiming that this is a deal to build the Lower Churchill and that, oddly enough is what CBC already announced in January 2008. One mainland CBC reporter debriefed his mainland colleague with the ludicrous claim that in the Churchill Falls deal  Newfoundland bore all the costs, and Quebec collects most of the revenue. The rest of his debrief was no better.

So what was announced?

Well, let’s just remind everyone that this morning your humble e-scribbler put it this way:

If this isn’t a concrete deal to start work soon, then Thursday’s announcement can all evaporate as easily as the others did.

This is not even a memorandum of understanding

Today, two companies signed something called a terms sheet.  That’s not a deal, an agreement, an agreement in principle, a memorandum of understanding or a letter of intent.

A terms sheet is – in business parlance – nothing more than a general, non-binding set of instructions to negotiators to guide their future discussions.  For all practical purposes, it has only slightly more value than an informal chat over a beer.

You can tell this is not a firm commitment by the companies to do much beyond keep talking because it has a time limit:  November 30, 2011.

When Danny Williams announced a memorandum of understanding on Hebron, he could treat the thing as a fairly solid basis of agreement.  There were details to work out and there was always the chance of things going sour.  But there was no timeline.  Everyone knew the lawyers would set to work to come up with a formal agreement, but they didn’t stick an expiry date on it.

That’s because they had a commitment to carry forward unless something dramatic intervened.

But this thing has an expiry date clearly stamped on it.

As exciting as some people would like Thursday’s announcement to be, the reality of the it is far different.

Heck, Danny Williams didn’t even get the date right.

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Contextual Update:

• Ready for a better tomorrow:  a May 2006 post that puts the political value of Labrador hydropower in a wider context.  The post title was Brian Tobin’s 1996 provincial election campaign slogan. 

More to follow…

Muskrat Love

To help you get ready for the splendiferous announcement later today, here are some things to keep an eye on.  Undoubtedly, there’ll be more spin than a baton twirlers’ convention riding on the Mad Hatter’s Tea Party ride at Disneyworld.

Just keep your head and you won’t get nauseous.

1.  Ready for a better tomorrow.  Just remember that tomorrow is a day that never seems to get here.

There have been memoranda of understanding before that came to naught.  Remember 1998?  Brian Tobin and Lucien Bouchard dropped a half million to announce not only a Lower Churchill deal but a reworking of the Churchill Falls project as well.  Result:  Nada.

Then there was the memorandum of understanding to sell 200 megawatts of power to Rhode Island.  That fell apart because NALCOR couldn’t deliver the power to Rhode Island at a price anyone could afford.

Don’t forget Frank Moores’ big explosions on either side of the Straits.

And as we look at a likely memorandum of understanding between NALCOR on one side and the Government of Nova Scotia and Emera on the other, let’s not forget that NALCOR already has one:  signed in January 2008.

If this isn’t a concrete deal to start work soon, then Thursday’s announcement can all evaporate as easily as the others did.

2. Cost.  The lower the number the less likely it is real.  CBC’s David Cochrane mentioned a figure of $4.0 billion.

The line from Muskrat Falls to Soldier’s Pond, just outside St. John’s came with an estimated cost of $2.2 billion in 1998. That would be close to $3.0 billion today.  There’s an estimate of the Nova Scotia line that runs between $800 million and $1.2 billion. Take the upper one just to be on the safe side since proponents tend to underestimate megaproject costs big time. So just the lines alone are likely to cost more than $4.0 billion.

A 900 megawatt project in British Columbia (Site C) is coming with a $6.6 billion price tag so it is safe to work with a cost estimate for this project of around the same amount.

The 70/30 debt-equity ratio NALCOR boss Ed Martin has mused about publicly would give you a borrowing requirement of around $4.0 billion.  There’s David Cochrane’s number.  The rest of the cash would come from NALCOR’s small equity stakes in three offshore projects, unless Emera is coming on board with an ownership stake.

3.  How much is being exported?   A couple of weeks ago 60% of the project’s estimated 800 megawatts would go to Nova Scotia.  According to reports on Wednesday, 60% of the power is now coming to the island and – here’s the kicker – the island portion of the province doesn’t need it.  However, NALCOR does need the captive market in Newfoundland to help underwrite the massive project.

Keep your eye on this one because it will tell you how expensive electricity will get in Newfoundland and Labrador. As it looks now, things are lining up to prove Danny Williams was right when he said last fall that “…good, cheap, competitively priced energy, can't be offered to that whole region.” 

4.  Environmental process Day Zero:  As regular readers already know, this thing will have to go through an environmental review with a whole new section never before considered.

5.  Holyrood.  For some unfathomable reason, no one seems to want to believe NALCOR’s own words on Holyrood:

It is important to consider that whichever expansion scenario occurs, an isolated Island electrical system or interconnected to the Lower Churchill via HVDC link, Holyrood will be an integral and vital component of the electrical system for decades to come. In the isolated case Holyrood will continue to be a generating station; in the interconnected scenario its three generating units will operate as synchronous condensers, providing system stability, inertia and voltage control.

The diesel plant at Holyrood will not be shuttered, mothballed or otherwise displaced or taken offline.  To the contrary, it will run 24/7/365 but at a reduced capacity. Holyrood will be an “integral and vital” component of the province’s electrical system.

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Offshore board releases helicopter inquiry report

From the Canada-Newfoundland and Labrador Offshore Petroleum Board:

The Canada-Newfoundland and Labrador Offshore Petroleum Board
(C-NLOPB) received the Report of the Offshore Helicopter Safety Inquiry today and is releasing it to the public immediately.

"On behalf of the Board, I thank Commissioner Robert Wells, commission counsel and the staff of the commission for their work during the course of Phase I of the Inquiry and with respect to the completion of this report," said Max Ruelokke, Chair and CEO of the C-NLOPB.

"I would also like to extend our thanks and appreciation to those who testified during the Inquiry for their time, commitment and contributions."

The C-NLOPB will take up to 30 days to review the recommendations and move toward the development of an implementation plan. The Board will not be commenting on the report until it has completed its review.

To obtain a print copy of this report, please contact information@cnlopb.nl.ca with a full mailing address. The report will be sent within three business days. Persons wishing to pick-up the report are asked to state this in their request.

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Lower Churchill MOU – the invitation

Some people are getting them via e-mail.

Your humble e-scribbler wasn’t one of them, nor was Nova Scotia Premier Darrell Dexter.

Print this off and save it as a souvenir.

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Sky Captain got his wingman after all Update:  Apparent Dex was just joshin’ Sounded like he just had bad talking points.  Dex is  on the way to tie his province to this very expensive version of the Lower Churchill.

Atta boy, Dex!

Lower Churchill MOU - developing

1.  CBC is reporting an announcement tomorrow on a memorandum of understanding involving Emera, NALCOR, the Government of Nova scotia and the Government of Newfoundland and Labrador to develop Muskrat falls (800 MW)

2.  Nova Scotia Premier Darrell Dexter is denying the reports.

This story is developing.  More will follow.

In the meantime, amuse yourself with:

• Williams announces political exit plan
• US and NL taxpayers might help subsidise costly big-hydro project
• Williams’ shift sends Lower Churchill back to enviro drawing board for second time in a year
• More potato, potato
• Tshaukesh leads quiet resistance to Old Man’s Dream
• What Danny actually said (with translation)
• Danny Williams and the Philosopher’s Stone:  converting principles to cash

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The Fragile Economy: reversing the entrepreneurial drive

In a province that is so heavily dependent on public sector spending, it’s hard to imagine anyone would think that having the government play such a huge role in  the provincial government in the economy would be a great idea.

Step forward the head of the St. John’s Board of Trade:

Chairman of the Board of Trade, Derek Sullivan said government contracts give a competitive advantage for local businesses and “can be a very powerful and reliable revenue stream.”

Talk about throwing the engine of economic development into complete reverse. 

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Food bank use up in Newfoundland and Labrador

Our poverty reduction strategy has been nationally acclaimed.

-  Premier Danny Williams, National Post, August 2010*

Food bank use in Newfoundland and Labrador is higher in 2010 than it was a decade ago, according to a new report released on Tuesday by Food Banks Canada, the national organisation of community food support organizations.

Food banks across the province serve six percent of the population, the highest ratio of any province in Canada.

Food bank use in Newfoundland and Labrador is up 3% from 2009.  According to the annual Hungercount, 71% of food bank users in the province receive provincial government income support,  14% receive employment insurance and 10% reported employment income. The Newfoundland and Labrador portion of the report was prepared by Eg Walters, head of the province’s Community Food Sharing Network.

For the third year in a row, we have seen an increase in the demand for
food bank services throughout Newfoundland & Labrador. While it may be argued that it is only a modest 3% increase, this, combined with previous years’ figures, shows a continued upward trend on the demand for food aid.

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* This is the same article in which Williams tied his own political philosophy to that of the Reform Party: 

“On his own brand of Red Tory-ism We have a Reform-based Conservative Party which is probably ideologically more right-wing. I’m very fiscally conservative. What I wanted to do in Newfoundland and Labrador was get our fiscal situation under control. We were headed to bankruptcy six years ago. Now we’re a have-province. That’s the fiscally conservative side.

On the other side, I’m very socially conscious. Our poverty reduction strategy has been nationally acclaimed. We’ve doubled our health-care budget. We’ve put a lot of money into education. I felt our transportation and communication infrastructure was very important. I’m trying to give us all the basics to succeed after a non-renewable oil [resource] moves on.”

Hydro: different province, same political problem, same political solution

The province is different  - Ontario, this time – but the raw politics underneath a pledge to cut electricity rates for all homeowners is pretty plain to see.

The government has already rolled out tax measures for residents of Northern Ontario as well as seniors to give them a break on their hydro bills. But amid worries that hydro rates will become an election issue, the government is under pressure to introduce measures covering a broader group of Ontarians.

Speculation was rampant throughout the energy industry that the government plans to tackle hydro rates. But energy sources said an across-the-board rate freeze is unlikely. Such a move would leave the Liberals in the unenviable position of following former Progressive Conservative premier Ernie Eves, who froze household and small-business electricity rates in 2002. A McGuinty government rate freeze would repudiate its assertions made in 2004 that consumers would have to pay the real cost of electricity, said energy consultant Tom Adams.

Freezing or cutting energy rates is pretty much the stock vote-buying method found in several provinces, including Newfoundland and Labrador. 

And the arguments tossed out by the local New Democrats and the province’s Reform-based Conservatives are still energy policy bollocks.

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The Dismal Science: Debunking the “federal presence” fairy tale

Far from being hard done-by when it comes to federal jobs in the province, Newfoundland and Labrador is pretty much on par, according to a recent study conducted by the Frontier Centre for Public Policy, and reported by the National Post.

You can find a news release summarising the report here, while the full report is available in pdf format.

Some provinces  - Prince Edward Island, New Brunswick, Nova Scotia and Manitoba – have significantly more than the national average number of federal jobs per 100,000 population.  Quebec, Saskatchewan, British Columbia and Alberta have less.

Newfoundland and Labrador and Ontario are only slightly higher than the national average.

The study effectively refutes claims that this province is receiving something less than its “entitlement’ to federal pork spending.  The comparative figures also demolish two reports released by Memorial University’s Harris Centre in 2005 and 2006.  The provincial government has used those studies repeatedly to bolster its claims for increased federal transfers to the province to offset what turn out to be imaginary grievances.

The Frontier Centre study refers to these federal jobs as a form of “stealth” Equalization.  That is, they contend that the federal jobs serve as a type of federal transfer to the local economy in each of the provinces. More importantly, though, the Frontier Centre contends that the transfer comes in addition to the formal Equalization program and is particularly heavy in the provinces it refers to as “major” have-provinces.

The study also notes that the have-not provinces with the highest ratio of federal government jobs also tend to have higher than average reliance on provincial public sector jobs generally. They compare provinces based on the number of public sector employers as a share of the total population.  Newfoundland and Labrador is third highest on that scale, with Prince Edward Island and Manitoba coming, respectively, first and second.

Looking at the same information but as a share of the provincial labour force, Newfoundland and Labrador is by far the province with the largest dependence on the public sector.  Almost 30% of the provincial labour force is employed by the federal, provincial or municipal government.

The Frontier Centre study puts the findings into a particular context, namely transfer payment reform:

The stealth equalization of unbalanced federal employment described in this paper is part of a much bigger problem —an approach to public policy in Canada that transfers money out of high-productivity regions into low-productivity regions.

Not only is this policy approach harmful to our productivity growth, it is also, quite simply, unsustainable. Historically, the taxpayers in three provinces—British Columbia, Alberta and Ontario, have paid most of the bill for high levels of public sector employment in the have-not provinces.

At the same time, the study does point to issues that are especially relevant to Newfoundland and Labrador, even if the report’s authors simply missed the poster child for their argument of unsustainable public spending and the dangers of reliance on what the author’s call “the state driven approach to economic development”.

Most residents of the recipient provinces are unaware of the extent to which their economies are state-driven and reliant on transfers. Beyond the official equalization money, massive amounts of revenue from elsewhere flow into these provinces from a number of different sources. Stealth equalization through federal employment is one important example—but there are others. Higher dependence on federal
government transfers to individuals and discrimination in ordinary  operating programs in favour of the have-nots are two more examples of ways Canadian public policy transfers wealth into the have-nots.

Most residents of Newfoundland and Labrador are unaware of the extent to which the provincial economy is state-driven and reliant on federal transfers in addition to overall public sector spending.

They aren’t alone, of course.  The current provincial administration operates as if going off Equalization was a tragedy of biblical proportions.

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Related: 

• Fragile Economy:  staying the course
• Fragile Economy:  reductio ad argentum
• Fragile Economy:  The public sector
• Fragile Economy: …and two steps back
• Fragile Economy: …now three steps back and loving it

Un-publishing

No, it isn’t like uncommunication.

The Canadian Association of Journalists has a new draft set of guidelines on correcting online information and dealing with requests to remove online material. CAJ handed the job of drafting the guidelines to an “unpublishing panel” of the CAJ ethics committee.

You can find an excellent summary of the issues involved at j-source.ca.

Here are the basic principles CAJ is proposing for how to handle requests to unpublish a particular post.  Again, there is a more detailed discussion at j-source.ca along with an explanation of each point.

1. We [the online publisher] are in the publishing business and generally should not unpublish.
2. Ongoing accuracy is our responsibility.
3. Put a clear policy in place.
4. Unpublish for the right reasons.
5. It’s fair to be human.
6. Source remorse is not a right reason to unpublish.
7. Unpublish by consensus.
8. Explain your unpublishing policy.
9. Help sources understand the implications of digital publishing.
10. Consider the impact of publishing before publication.

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Let’s slap some study on that

This is a government that talks more and more about less and less.

The latest example:

• a feasibility study of a single province-wide emergency telephone number.

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The politics of energy subsidies

From the Atlantic Institute for Market Studies comes a timely rejoinder to the policy in Prince Edward Island of subsidising energy prices out of tax dollars. The arguments in this post refer to the New Democratic Party policy of taxing tax off home heating prices but the concept is the same. The piece is also a timely one for Newfoundland and Labrador where Lorraine Michael recently embraced the policy.  

The argument against the policy of cutting home heating taxes is simple:

It gave people with more than sufficient ability to pay a subsidy they did not need. It encouraged continued consumption at unsustainable levels and it helped the poor not by treating the problem (inefficient homes and too much consumption), but by treating the symptom (high electricity bills).

In Newfoundland and Labrador one suspects that political parties eager – or desperate – for votes in the coming year will lay this sort of policy on thickly to try and buy them up. 

The ruling Conservatives, despite their supposed reform-based Conservative philosophy, are already trying to sell a future deal on the Lower Churchill as a guarantee of stable prices. They don’t talk about the huge subsidies the thing may well involve or that the whole thing will add enormously to the public debt. Incidentally, the likely reason the Premier has stopped referring to loan guarantees as loan guarantees is that he is acutely aware that any Lower Churchill project as he has proposed it will – inevitably – demolish once and for all any claims about the current Conservative administration’s performance in controlling the public debt and deficit.

It’s all bollocks of course.  Energy prices in the province will stay stable anyways without the Lower Churchill.  NALCOR’s own energy demand forecasts don’t support any such megaproject to supply juice to the island portion of the province.  And with a bit of conservation and efficiency, what increased demand there is could go down.

That’s one of the reasons why this AIMS article is interesting:  it specifically points to conservation as an economically sound policy:

the need for some electricity does not undermine the basic math that it is still cheaper and more efficient and, long term, more sustainable to reduce consumption.

At the same time, providing subsidies to allow everyone, but especially low and fixed income Newfoundlanders and Labradorians, to improve the energy efficiency of their homes would treat the problem of high heating bills rather than the symptom.  At the same time, leaving the prices to reflect the cost of production would promote conservation and efficiency.  The whole idea is progressive socially in addition to being economically and ecologically sound.  It beggars the imagination to figure out why political parties would head down a road of subsidies they know is simply  unsustainable.

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A decade that changed the world

Talking Points Memo turned 10 this weekend.

Here’s the story of how it started, via The Atlantic.

Here’s how it looks now and here’s the column format that started it all.

And if you want to know why TPM is important, read the “About” bit from the website:

Talking Points Memo is one of the most innovative political news organizations in the country. Media watchers consider TPM the site to watch as the news business transforms from the old world of print to the online digital future. In March 2009 TPM topped TIME Magazine's list of 25 Best Blogs of 2009. "Talking Points," wrote Time's editors, "has become the prototype of what a successful Web-based news organization is likely to be in the future." And in September of 2009 The Atlantic listed founder Josh Marshall among the nation's 50 most influential commentators.

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Small island syndrome

So get this.

The provincial government in Prince Edward Island is going to borrow a bunch of money and turn it over to a private sector company – a subsidiary of Fortis, no less – so that islanders can think they are getting cheaper electricity.

In reality, they’ll pay the loan back plus interest out of their tax dollars that should be going to things like health care, education and roads.

And Stan Marshall will laugh all the way to the bank.

Meanwhile in other news, the Premier of another small island continues to chase the latest version of his Get-Outta-Dodge legacy plan. 

He promises to stay at the table – where and with whom we don’t know – trying to squeeze every penny out of the deal, as Faux News tells us, supposedly for the province. no word  on subsidies, but count on having to pay them.

That’s what Bob Ghiz told taxpayers in PEI, too.

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Missile: Impossible 3

The Daily Show gives the Los Angeles Missile story the ending it deserves.

Turns out that the California missile was a passenger jet.  The first clips looked like a missile.  The heli pilot says he tracked the thing for 10 minutes, a point that Jon Stewart ridicules for the rather obvious clue it is.  Makes you wonder if the gang at KCBS in Los Angeles is quite that stupid.

The news media – gotta love Fox News – and a few others blame the whole thing on the government for not knowing.

Sounds oddly familiar.

Aircraft misidentified,  hysteria ensues fuelled by local news media speculation. Gotta love local Faux News.  Even the Mother Corp went after the Faux News title on this one.

The truth is a lot less spectacular, of course.

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Traffic – November 7-12

The Top 10 Bond posts for the week, based on pageview activity:

1. Lower Churchill:  US and NL taxpayers may help subsidize costly big hydro project
2. Mysterious missile off Los Angeles
3. Kremlinology 20:  Who will replace Danny?
4. How to win without news media
5. US labour board files complaint over Facebook firing
6. How do you spell winner?
7. Kremlinology 28;  How will he go?
8. My own electoral grandpa:  vote in an election that isn’t happening yet
9. Pass the word
10. Lest we forget:  forgotten edition

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