03 January 2011

Undisclosed risk: financing the Lower Churchill

“We had discussions about loan guarantee, and if they’ll do that, we think we could drive hydro rates down even lower and save millions.”
Finance minister Tom Marshall, December 2010
Ah yes, it is all so simple.

One little loan guarantee and everything is solved. 

Borrow billions and save millions.

The provincial government could issue bonds to cover the billions it will take to build Muskrat Falls.  No sweat.  Apparently, someone told Marshall the bonds would sell out in 15 minutes.  Well, at least that’s what Tom said in December.

Of course government-backed bonds would sell out in 15 minutes. Investors can’t lose.  Governments don’t evaporate in a cloud of financial pixie dust like companies do. Governments  - especially provincial governments inside big G-8 countries - always pay off. 

And that’s where Tom’s assessment starts to go off the rails:  disclosure.

02 January 2011

Fin min admits power rates are sensitive issue

Finance minister Tom Marshall admitted last week that electricity rates resulting from the Danny Williams Legacy project are a very sensitive political issue.

In a year-end interview with the Western Star, Marshall said that he’d recently spoken with the federal finance minister about a federal loan guarantee for the project:

“We had discussions about loan guarantee, and if they’ll do that, we think we could drive hydro rates down even lower and save millions.”

Until now, the Marshall and his colleagues insisted that the project would be great from rate payers even without a loan guarantee.

Marshall’s comments mirror those of Premier Kathy Dunderdale in what is fairly obviously a concerted effort to allay concerns about massive increases in electricity rates resulting from the Williams’ legacy project.

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Dunderdale admits financials are problem for Muskrat project

In an interview with NTV news, Premier Kathy Dunderdale admitted last week that costs for consumers are a sensitive political issue with the proposed Muskrat Falls memorial project to Danny Williams.

Dunderdale said that the provincial government is interested in a federal loan guarantee for the project because it would lower the interest rate Nalcor – the provincial government’s energy company - would have to pay to develop the project. She said that the provincial government would pass on any savings resulting from the loan guarantee to consumers.

Until now, Dunderdale has insisted that the project would be a financial boon to ratepayers in the province by keeping  electricity rates down from what they might be without the project.

 

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Pater knows best

Telegram editor Russell Wangersky has some suggestions for the provincial Conservatives now that Danny is gone:

  • “Reform the province’s access to information legislation so that citizens of the province actually have a right to information, rather than depending on the divine right of cabinet ministers to release what they deign fit. …”
  • “Whistleblower legislation….”
  • House of Assembly sittings….”  More of ‘em, says Russell.
  • “Provide more information on just what is happening with Muskrat Falls, the single largest project on this province’s horizon and one that could topple us into Irish-style superdebt.”

Wonderful ideas.

Great ones, in fact.

There’s only one teensy problem.

The Conservatives didn’t get to their awesome standing in the province by letting these sorts of pesky things like transparency and accountability get in their way.

And what’s more, Russell said that was cool:

“I voted for him, and, truth be told, I would have voted for him again. Premier Danny Williams, that is.”

“That being said, for the last seven years, Danny Williams has been the right choice to run this province, and, regardless of any number of complaints, he’s done it well.”

You see, the same guy who Russell thinks was just neat-o had no time for all those things Russell writes about.

He didn’t.

He said he was all about accountability and transparency. 

But as we all know,  his actions spoke volumes louder than any words he ever uttered.

You just can’t endorse political strong-men on the one hand and then wonder where the democracy went on the other.

And as for the gang who held Danny aloft and who now run the place in his stead?  Well, just expect more of the same.  Politicians go with what works and, as Russell so ably demonstrated, nothing succeeds around these parts like old-fashioned paternalism.

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Month-end Traffic Report for December 2010

  1. Is Gerry Byrne completely nuts or what?
  2. Williams to head Rogers sports empire?
  3. Connie Leadership 2011
  4. Williams’ abrupt departure “shocking”:  Dunderdale
  5. Conservatives to give back seized hydro assets
  6. Williams’ disgraceful Christmas cards
  7. Who isn’t running in 2011
  8. All your incoherence are belong to us
  9. Connie Leadership 2011 – Mid-December night’s ruminations
  10. The return to “normal”

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31 December 2010

Connie Leadership 2011: Fear and Loathing in the Caucus Room

Most people now realise that Kathy Dunderdale is staying on as leader and Premier a result of some secret backroom deal within the Conservative Party.

As nottawa notes, the Connies are giving potential rivals a mere 11 days to come forward.  That compares to the couple of months Yvonne Jones’ potential rivals had.  In other words, the Conservatives will go through a complete charade including what they are calling a leadership convention.

Despite this rather obvious political fraud, the people of the province know that they have a new premier thanks to a secret deal – not even a vote – cut by unnamed people in dark rooms.  It is like the good old 1920s all over again when administrations came and went over-night based on shifting alliances and unspoken promises.

And the people of the province can sleep soundly knowing their fate and that fate of the public treasury is determined by shadowy figures and endorsed by the Connie caucus.

Well, virtually all, according to the semi-official news agency VOCM – voice of the cabinet minister.

That word “virtually” suggests that some members objected or at the very least didn’t display the requisite enthusiasm.

Now there may well be nothing to that beyond an inexperienced reporter’s careless use of words.  But then again, there might be a bit more to it.  Politicians are, by nature, an ambitious lot.  Some of them have been forced to curb their tongues for upwards of seven years.  Their personal ambitions took a back seat to the Old Man’s interests and his iron grip on the caucus and the Confederation Building. Now they are told to sit on their ambitions yet again for another period of time.

Some other members of the Conservative caucus may well be uncomfortable with the decidedly anti-democratic way that Kathy Dunderdale is getting the job.  Some may recall the anointed Connie kingpin Danny Williams’ attacks on Roger Grimes over a far more democratic selection in the Liberal Party in 2001.  Hypocrisy never bothered Williams like it does others, but that is another story.

That lack of unanimity may well explain why Dunderdale held such a low-key announcement of her candidacy:  a scrum, attended by none save a single aide and the local media. it had the air of being a lash-up job.

That lack of unanimity, of course, is what this backroom deal is really all about.  Conservatives in St. John’s are clearly afraid that a leadership fight over the next two or three months will make for a Conservative of repeat of what they characterise as the divisive 2001 Liberal contest.

There are divisions within the Conservative Party.  Those divisions must be deep.  They must be deep enough to put the fear of God into the back-room boys.

Were it otherwise, the Conservatives would have a contest as they did  - successfully - in 1979 and 1989.  Instead they are afraid and loathe to tempt fate.

And for the record, the Liberal campaign in 2001 was divisive.  All leadership fights are.

John Efford and his team built part of Efford’s support on discontent over the way Brian Tobin and his close associates supposedly ran the entire party from St. John’s.  The party rank and file were passed over, according to some, in favour of those chosen by the old leader and his cronies.  Whether it is true or not is another matter, but there certainly were Liberals who felt abused.

And yes while Roger Grimes initially had some strong words about John Efford’s man Danny Dumaresque, wounds healed up before the 2003 campaign.  Grimes made a couple of appointments and everyone got on with business.

That’s what happens in politics. People have different opinions.  Leaders get paid to deal with those differences openly and cleanly, if possible, but certainly in a way that doesn’t let grievances fester.  Successful leaders are the ones who can bring a party together after a fight.  If a leader cannot unite his or her party then he or she is really not up to the job of being premier.

It is a simple and irrefutable train of logic.

By cutting a back-room deal, though, the province’s Conservatives have wound up in a very odd, and very troubling spot. 

Yes they’ve taken an anti-democratic approach. That is obvious. But then again their entire administration since 2003 is built on some of the oldest, most backward, and most pernicious political traditions of the province. It isn’t surprising they’d lurch back to the 1920s for inspiration when times got a bit tough.

More importantly, they sought to avoid what they perceived as a Liberal mistake and in the process have blundered into a much bigger one.  They have a caucus that is not united. That is never good.

To compound that, they now have a leader who is – at the very best – a caretaker until after the next general election.  Dunderdale was due to retire:  they all know that.  She is at the end of her political career. 

After October 2011, Dunderdale is gone.  It is only a question of how long she will hang on and then the Conservatives will be back in the same boat again.

In the meantime, Dunderdale has no plans and no ideas.  She is merely holding things together for an unknown period of time.

Kathy Dunderdale is a leader with no plans and – even worse - with no real political authority.

Kathy Dunderdale has her job because other people agreed to let her have it. It is not as though they were given a chance and decided not to run of their own accord.  They were persuaded not to run and that is a very different thing.

In a tough spot, Kathy Dunderdale cannot pull a Danny and lay down any laws to anyone. She cannot even build a consensus based on her own political constituency of supporters. Nor can she truthfully build a consensus based on her savvy.  She has blundered too badly in public too often for that to have any real effect for her cabinet mates. People who thought Roger grimes came out of his leadership beholden to every one of his caucus can now look on Kathy Dunderdale put in exactly the same spot, or a worse one.

Kathy Dunderdale will also have a tough time disciplining those who step out of line. Since she serves at the pleasure of her caucus she can also be dismissed by them as easily.

How much will it take to crack the veneer covering the Conservative Party?

Time will tell.

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Another fundamental shift

Rob Antle is leaving the Telegram to take up a new job with Atlantic Business Magazine.

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The Year-end Traffic Wrap Up 2010

Here are the top Bond Papers posts for 2010 as determined by readers. 

If you clicked these pages and read them specifically, here’s what you helped push to the top of the pile.

  1. Court docket now online! (Do lawyers know how to bookmark stuff?)
  2. Five years of secret talks on Lower Churchill:  the Dunderdale audio (The conventional media ignored it, but people found it anyway)
  3. General and master corporal face charges over relationship (Betcha forgot this one!)
  4. Williams to head Rogers sports empire? (Apparently, he isn’t but lots of people think it’s an interesting idea)
  5. Connie Leadership 2011 (this is the first of the series of updates – you can find a bunch more here)
  6. Conservatives to give back seized hydro assets  (A short session but another December reminder of just how badly the Conservatives shagged the people of Newfoundland and Labrador with this little fiasco)
  7. Williams abrupt departure “shocking”: Dunderdale  (Shocked is one word to describe provincial Conservatives’ reaction.  Sh*t-baked was another)
  8. Williams’ disgraceful Christmas cards (The guy writes his own political obit!)
  9. Bell 206 Crash:  photo interpretation (There are many sides to srbp readers)
  10. The World the Old Man Lives In:  larger picture  (If this one had been on tee shirts and mugs, your humble e-scribbler could have bought a condo in Florida right next to the Old Man’s place.)

 

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30 December 2010

Kathy Dunderdale: The New Paternalism

Dunderdale has sought to continue key points of the Williams government, including development of the Lower Churchill megaproject, but she has already shown a different approach on labour relations.

She ordered ministers to settle a 13-month strike involving a small group of support workers on the Burin Peninsula, and later asked ministers to end a nearly two-year negotiation with physicians that concluded last week with ratification of a new pay package.

That’s the way cbc.ca/nl described Kathy Dunderdale on a story Wednesday that did everything but explain that the Conservative caucus met on Wednesday to endorse the deal that had already been cooked up in order to avoid a leadership contest.

Note that last paragraph, though.  It shows how readily conventional news media are already absorbing the new Conservative Party political narrative about the kind of leader Kathy Dunderdale will be.

It’s right in line with a comment by Conservative parliamentary assistant Steve Kent, as reported by VOCM:

Kent describes Dunderdale as a compassionate, thoughtful, and principle-centered leader.

The new premier may well be all those wonderful things but the point to notice here is that in the construction of the whole idea Dunderdale personally directed that ministers clear up not one but two embarrassing situations.  She has the positive qualities.  She personally bestowed benefits.

Incidentally, this is exactly how Dunderdale described her role at the news conference in which she announced the deal with doctors.  There’s no accident to this:  lines like that are worked out in advance and comments don’t wind up on the page in some sort of arbitrary fashion.  They are selected to convey very particular ideas.

Dunderdale’s prepared statement describes opening the lines of communication with doctors as “my first priority…”. According to Dunderdale’s prepared remarks, the two ministers directly involved in the negotiations merely played a role.

This is essentially the same construction used by Danny Williams:  he did things or directed them, especially when they were beneficially. Ministers took orders in a clearly subordinate role.

You can see the same sort of construction in the way his most ardent supporters describe Williams:  he personally bestowed pride, courage and so forth on the poor benighted people of Newfoundland (and Labrador). Take as an example this comment on a post by Nalcor lobbyist Tim Powers over at the Globe and Mail:

2:12 PM on November 27, 2010

I know we have to believe there are strong leaders out there who will step forward and continue the work of Danny Williams. Quite frankly, with the news of his departure, I felt somewhat orphaned, a sense of being left alone surrounded by those who will, again, try and rob us of what we have achieved. …

Williams is a father figure, in the classic paternalist sense.  His departure orphaned his children.

What this political line ignores, of course, is the role that Kathy Dunderdale played in the Williams administration,  She was Williams’ hand-picked Number Two and his hand-picked successor. Like Tom Rideout before her, she represented a direct link to the older Conservative Party and its supporters who predated Williams.

Had she felt strongly about the doctor’s dispute or about the Burin situation she was in a position to change the government’s position. She didn’t. She supported it consistently. Similarly, both Tom Marshall and Jerome Kennedy held ministerial portfolios that gave them both legal and political power to resolve the matters long before the government finally settled both. The truth is that cabinet changed its approach to these two issues for reasons other than the arrival of a new leader who is compassionate.

In other words, the reality of how political decisions get made is considerably more complicated.  It’s also not something politicians really want people to know about, let alone discuss.

Instead, politicians fall back on time-worn attitudes to politics that people quite readily accept without even realising what the words actually mean.

Premier Kathy Dunderdale is no change from the resurgence of paternalism in Newfoundland and Labrador politics.

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2010: The year in review

For the year-end post, you’ll have to wait until Friday to find out what the readers picked as their favourite stories of 2010.

For today, here’s another view.  Your humble e-scribbler has picked one Bond Papers post or topic from each month as a reminder of the year’s events.  I f you take the time to wander back through the archives, you’ll find all sorts of things from the UFO story that ran among last winter to a couple of posts on education.  There are also posts on the fishery that got some public attention – h/t to CBC’s Fisheries Broadcast.

So much more happened in the province than people seem to remember and the stuff they do remember is often not the most important things.

In any event, here’s the Year in Review:

January:  Spending scandal:  when “facts” aren’t true

February:  Three on one topic:  Deep Throat, Deep T’roat and Deep Throats

March:  The Fragile Economy:  staying the course

April:  Jon Lien:  mensch

May: The search for meaning challenge – yet more unfounded news media claims. 

June:  Roger Fitzgerald’s bias – the House of Assembly is at the point where partisan bias openly displayed by the Speaker is now commonplace.

July:  Calamity Kathy’s story doesn’t add up.  The local media are already praising her political genius.  Here’s another example of how short their memories are or how low are their standards.

August:  Good to the last fish

September:  The politicisation of public emergencies

October:  Breasts:  they’re not just for gawking at

November:  Reversing the entrepreneurial drive

December:  How to win without news media – Part 2

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29 December 2010

Is Gerry Byrne completely nuts or what?

Byrne says to saddle his constituents with massive debt and increased electricity prices.

That’s not exactly how Gerry Byrne might want to say it but that is exactly what the federal politician is looking to do.

The member of parliament for Humber-St. Barbe-Baie Verte wants the federal government to backstop Danny’s Get Outta Dodge legacy plan.  Danny wants exactly the same thing and, to be frank, that’s one of the few ways this pig of a deal will fly.

The other way is for Byrne’s constituents to pay for it with a guarantee of doubling their electricity rates – or worse – for electricity they could get more cheaply using other ideas.

Now why, in a likely election year, would a federal politician want to shaft his his constituents twice over with double their electricity rates and increasing their public debt by $4.0 billion or more?

Has he gone completely insane?

Totally bonkers?

Been spiking the eggnog with oxy?

Heavens knows, but Byrne is obviously getting very, very bad political advice from someone who clearly hasn’t thought this through and who most definitely doesn’t have Gerry’s political best interests at heart.

And rest assured, gentle readers, that whatever imp perched on Gerry’s shoulder, he certainly doesn’t give a toss for Gerry’s supporters. So how did this ludicrous thought get inside Gerry’s skull?  There’s a question begging for an answer.

Someone ought to get the miserable idea out damn quickly though before it festers any further and we ordinary mortals get screwed.

From VOCM, in case they disappear the story:
Liberal MP is encouraging the federal government to step in with support for the Muskrat Falls hydro development. Ottawa has been asked to help finance the subsea link across the Cabot Strait, as well as for a federal loan guarantee. Gerry Byrne says the latter wouldn't cost anything and says the federal government should recognize that when it comes to climate change the development of the Lower Churchill is vital. Byrne says the Lower Churchill is an absolute essential plank in the overall Canadian climate change strategy and for that reason there should be no hesitation in participating.
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The Top Stories of 2010

So it’s time for the obligatory top stories posts. 

Danny quits?  Been there, done that, shoulda printed tee shirts in 2006 when he announced it.

The big story coming out of Williams’ hasty departure is the evident panic within the Conservative Party.  Ordinary Conservatives were obviously expecting Williams to carry on.  His abrupt exit left them decidedly uneasy. For its part, the party leadership seemed to be caught flat-footed and despite initial claims there would be a leadership contest early in the New Year, someone started to work behind the scenes to engineer a deal to keep Danny Williams’ hand-picked successor in place through to 2012.

But the deal as it is currently shaping up is a stop-gap, at best.

Dunderdale was planning to retire from politics. Like Tom Marshall – another supposed successor – Dunderdale is getting toward the end of her political career.  She isn’t likely to be the one to lead the party through two general elections. So sometime between 2011 and 2015, the provincial Conservatives would be back in the leader-finding business again.

If Dunderdale packs it in before October 2014, the province will be plunged into an election thanks to Danny Williams’ Elections Act fiddling in 2004.  If she hangs on for four years, the party will still have to spend the early part of 2015 running some sort of leadership contest.

And in the meantime – the second biggest story to flow from Williams’ escape -the policy doldrums that have beset the Tory party since 2006ish will continue.  Odds will remain decidedly against the provincial government launching any significant new programs unless it involves spending bags of money, that is. There’s also no chance the provincial government will reform its fiscal policy to cope with a massive public sector gross debt.

In the worst case scenario – the third biggest potential story to come out of Williams’ departure -  the Conservatives will forge ahead with Danny Williams’ Get-Outta-Dodge legacy plan and move the province into an even more precarious financial position.  Remember when the public sector debt and  and the size of the economy were the same number?  You will.

The there’s the fourth biggest story to come out of Williams’ departure:  who will replace him.  Bottom line is that we still don’t know.  Likely we won’t know for upwards of four years.

Ready for a fifth story tied to Williams’ surprise retirement?  Hurricane Igor.  Absolutely.  A huge story that affected thousands.  Revealed some serious problems inside the province’s emergency response organization.  And let’s not forget that natural disasters seem to be tied to the political future of certain types of political leaders.

Danny Williams’ political exit may wind up being the most commonly selected top political story for 20120 in Newfoundland and Labrador.  But it’s all the other bits related to his retirement that dwarf the event itself.

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28 December 2010

Counting your chickens

There’s something very odd about the way the provincial government and its agencies make huge announcements about not much.

Like say just before Christmas when Nalcor announced that it had signed a letter of intent with SNC-Lavalin to oversee construction of a generating plant and overland transmission lines if the Muskrat Falls deal goes ahead.

Big deal, right?

Well, maybe not. Here’s a line from the Montreal Gazette:

Leslie Quinton, SNC-Lavalin's vice-president of global communications, said: "We don't usually comment on letters-of-intent signings, but in this case we can say it's very good news for our Newfoundland office."

It will be even better news if the project goes ahead.  you see an experienced company like SNC-Lavalin usually doesn’t count its chickens before they are hatched.

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Media trends: the technical term is “suckass”

In a normal place, news media would not use this sort of commentary from a politician about his own caucus, well not unless it was to ridicule the comment and the politician who issued the statement.

Then again, they don’t call this particular media outlet voice of the cabinet minister for nothing:

Terra Nova MHA Sandy Collins says he's extremely pleased to see such a smooth transition of power after Danny Williams announced he was stepping down earlier this month. Collins says it could have been a difficult time for the party and government, but it went smoothly much to the credit of Premier Kathy Dunderdale.

Hey Gerry!

Ed Murrow called.

He said he wants his awards back.

Either that or put a disclaimer that any resemblance between this sort of shite and journalism is purely coincidental.

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27 December 2010

For the love of three oranges…

Via the Globe and Mail, a tale of one man and his Christmas orange tradition.

Not the colour.

The fruit.

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Pop Drop 2010 continues

Newfoundland and Labrador’s population dropped again in the third quarter of 2010, according to the latest estimates from Statistics Canada.

International migration is up, but wasn’t enough to pull things into the growth category.

population 1 Q3

Could it mean that the recession is over?

Well, at least it could be over to the extent that Newfoundlanders and Labradorians are feeling comfortable enough to venture off  - again - to Alberta or Ontario or wherever it is they will go to find work. The growth in population from the second quarter of 2007 onward is attributable to the North American recession.  As in previous recessions, outmigration from the province halted and more ex-pats started flowing back in as the economy slowed down.

That pattern started to change a the middle of 2009.

For those like finance minister Tom Marshall and his colleagues in the provincial cabinet - who tried to imagine this was due to the attractiveness of local economic opportunities -  these figures are bad news.  They confirm that their interpretation is wrong. If their view was correct, the population ought to be growing at a much greater rate than it has been for the past year or so.  Locals would be finding work and staying while more people would come from outside to take up the extra jobs created by a booming economy that somehow managed to escape the ravages of the worst recessions since the 1930s.

Short answer:  it didn’t.  And to go with that there are still some major economic problems in the province that the politicians aren’t talking about.  Let’s see if they start talking about them in 2011.

As a last point, as you can see from this second chart, the population of the province has dropped more often each quarter than it has grown over the past five years.  And if you were to extend that back to 2003, you’d see the downward trend continues.  In fact, the trend goes back before 2003.

population 2 Q3

So much for the government’s pronatalist policy.

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The politics of history - editorial version

The history of politics in Newfoundland and Labrador is very much the history of patronage.

The practice is accurately described in this Western Star editorial titled “Independence” (04 September 1956):

If an electorate thinks that the prime purpose of democracy in action is to provide patronage for their particular constituency and the politician gets the feeling that in order to curry votes he has to descend to the level of the electorate, then it is understandable at least why he follows the path of least resistance, expresses no disagreement whatsoever with the party in power, thereby hoping to be able to wheedle from the government patronage and public funds for his constituency where votes will reward him by returning him to office again.

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Related:  “The politics of history