No Muskrat Falls in BMO forecast

Curiously, BMO’s latest economic forecast for the province doesn’t include any reference to Muskrat Falls.

The bank’s economists forecast overall economic growth in the province of 3.,9% in 2011 driven by provincial government infrastructure spending totalling $5.0 billion “over the next several years.  BMO says that the province’s capital spending hit 3% of the province’s gross domestic product in 2010.

BMO forecasts continued strong capital spending over the next three years.  While the bank mentions Hebron, Hibernia South and Long Harbour, there’s no reference to Muskrat Falls. That stands out like the proverbial sore thumb since the forecast is up-to-date enough to note the change in Conservative leadership late last year. it’s also odd because the forecast of capital spending comes entirely from the provincial government’s figures.

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Related:  Labour force indicators raise questions about economic health and competitiveness

Building permits value drops almost 50% in November

The value of all building permits issued in Newfoundland and Labrador in November 2010 dropped 49.3% from the month before, according to figures from Statistics Canada released last week.

The value of non-residential permits dropped 74.5% in the same period while residential permit value increased 4.3%

Those were the largest drops of any Canadian province.

In St. John’s, the value of permits dropped 60% from $149.8 million in October to $59 million in November. Permits in September for St. John’s were valued at $54.5 million.

You can get a better perspective on these figures by comparing them with a post from last December.

Paternalism on display

Members of Danny Williams’ personality cult tend to infantilise themselves and those around them. It’s an expression of paternalism, one of the hallmarks of the past seven years in local politics.

Take for example, this comment on a post by Nalcor lobbyist Tim Powers over at the Globe and Mail:

Cullihall

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. You are correct: we cannot take a step back. Danny has set the bar high enough that no politician will dare settle for less and survive the people's wrath. Deceitful people, like the PM and other provincial people will continually try to impede us as they have always done. Thankfully, we now have the confidence and pride to stand up to them.

The basic construction here is that a group of people were childish and incapable of properly looking after themselves until a strongman political leader stepped into protect them.  This strongman then gifted the child-like people with self-esteem.

The same sort of ideas have cropped up in several online comments by different people.  They all have variations on the same idea:  he gave us pride.

Take a look at the words “I felt like an orphan”.  The idea behind it, though, seems to be paternalism, although your humble e-scribbler has rendered it a little differently.  Individuals are supposedly incapable of governing themselves and must be cared for by an authority figure. While it is usually referred to as paternalism, having someone who is apparently not part of a ruling elite advance the idea seems to be more a case of reducing oneself to a child-like state of incompetence, i.e. infantilizing.

You can see here the victim mythology that is prevalent in certain segments of political culture in Newfoundland and Labrador.  According to this view, outsiders take advantage of the place and its people, sometimes helped by locals.

surrounded by those who will, again, try and rob us of what we have achieved

And that’s a related and very intense part of Williams’ political message:  fear of outsiders with the corollary that only Father Dan  - or some comparable parental figure - could protect his children.

Is it any wonder how many of Danny’s loyal followers have used Brad Cabana’s birthplace as a reason to suspect him and his motives?

Minnie on Night Line proposing all sorts of conspiracies including that Cabana is a Harperite plant sent to cause strife among the Danny faithful?

Or Ross Wiseman in a scrum with reporters noting, almost as a throw-away line, that Cabana hasn’t been in the province very long.

Talk about dog-whistling Ross.

But it all fits the pattern.

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Empty gestures and tells

The fact that Kathy Dunderdale volunteered a certain comment in a scrum on Thursday tells you it was a prepared line, likely to try and counteract the fairly plain idea that her leadership is a done-der-deal cooked up in a back-room somewhere before Christmas.

Dunderdale volunteered that she “would have” welcomed a contested leadership for the Conservative Party.  She changed the verb tense because the one that first spilled from her lips actually confirmed the “done deal” impression everyone has but the damage was done.

It’s a bit like the Conservative Party website. Before Christmas it proudly displayed a heavily photoshopped shot of the new Premier, identified as the party’s “interim” leader.

Now the whole thing is gone.  It looks like the Conservatives don’t have a leader at all.

You can tell the Conservatives have a mess.

The tell you they have a mess by all their gestures to deny there is a mess.

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Cabinet Shuffle Bored

The back room plan to slide Kathy Dunderdale into the Premier’s job isn’t going so well.

The Gang that Couldn’t Shoot Straight is back shooting itself in the foot.

Kathy Dunderdale meets with Danny Williams one day and then the next day there is a surprise cabinet shuffle that Dunderdale explains with some lame comment about getting fresh blood and shifting ministers around to give them experience.

That is most definitely NOT what this is about.

Oh and to be really sure, you can guarantee that it is not about Dunderdale “picking her key lieutenants” as CBC has been presenting it. None of the portfolios involved are biggies.  This is purely a shuffling around at the bottom end of the cabinet list.

So what is it about?

Well, for Derrick Dalley it is a huge promotion that can only mean he is in serious political trouble in his district.  Danny’s coat-tails were barely enough to get him elected last time and without the Old Man, that seat is likely to flip.  This way Dalley gets a nice boost in pay and a higher profile.

Dalley has no background in business so sticking him in that portfolio makes no sense at all.

Charlene Johnson got a sweet little promotion after years of slogging it out in a  department that is usually a starter department for ministers.  She’s a loyal Dan-ite so giving her a higher profile helps bolster the back-room deal crowd:  she takes direction very well.  Johnson’s never shown signs of understanding the portfolio she had and she’s unlikely to inject anything other than further listlessness in a new department that is still struggling.

Here’s hoping there are no more giant controversies in a department known to generate nasty headlines. Charlene had a tough time even with Danny on the ground to shore her up.  With the Old Man out of the picture, she could be a major disaster waiting to happen. 

Ross Wiseman slides downward to environment and conservation.  He isn’t likely to run again so this just keeps around one of the Dan-ite stalwarts until Dunderdale gets through the current crisis and the spring budget.

Darin King gets a huge demotion.  The leadership hopeful and likely internal dissident got the big ole bitch slap for something.  Like he’s paying a double price that includes a bill for the shitstorm he caused by trying to do his old job at Eastern School District.  Darin’s school reorganization is a cock-up of monumental proportions since it has served only to agitate voters needlessly in seats the Conservatives normally would call safe. 

Joan Burke is being called back to the limelight likely to clean up Darin’s mess.  It’s a novel concept and logically, Burke’s arrival should mean the plan goes in the bin.  Burke’s usual approach would be like adding gasoline to a political fire and even Dunderdale couldn’t blunder that badly. 

Putting her back in charge of education also gives Burke the chance to raise her profile again in anticipation of the leadership race that will inevitably follow the next election. 

Everyone knows Dunderdale is just a placeholder.  Well, everyone except people who think she is promoting her key lieutenants for the next election.

Sheesh, what a head-slapper of an idea.

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Scrum Update:  Take a watch of the post-swearing in scrum. The most over-used line – after Charlene talking about “the children” and how important they are -  is the effort to portray this as some sort of renewal and refreshment.

The cliché is so over-worn that all you’d have to say is “deck chairs” but everyone will know instantly how true it is as a description of Thursday’s cabinet shuffle.

As for Darin King, notice that he spoke last of all and started by thanking Dunderdale for the privilege of serving.  If anyone has any doubt that this guy is being punished then let them watch the scrum and seen the proof.

Connie Leadership 2011: Logically challenged Conservatives

So if the whole thing was a slam dunk  because all the Tories – by their own definition – were backing Kathy Dunderdale and Brad was wasting his time, why have so many Tories been so agitated for the past week or more about the prospect he might file nomination papers?

I mean if he had no chance then an experienced political operator like Chick shouldn’t have been so agitated that he took it upon himself – according to Ross Wiseman -  to head out and have a chat with Brad to explain to him why he didn’t stand a chance.

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Connie Leadership 2011: Dunderball Run!

How many surprising things could we find out on Wednesday in the ongoing  soap opera that is the back-room deal to a leadership contest of any kind within the province’s Conservative Party?

Well, certainly no one would have expected that the Conservatives would send out business minister Ross Wiseman to confirm that the whole thing was, in fact, a lash up.

He didn’t mean to do that, supposedly, but he did.

Wiseman spoke to reporters after wannabe Conservative candidate Brad Cabana accused Wiseman’s executive assistant of threatening him and otherwise trying to persuade Cabana to stay out of the race.

We’ll get to that scrum in a minute.

Let us first of all consider the contents of an e-mail that the executive assistant – Chick Cholock – sent to Cabana, apparently some time in December.  You have to say apparently because in the version posted by CBC the thing is devoid of any identifying marks of any kind. The e-mail could have been typed up on Wednesday or heavily edited to remove any incriminating or dubious statements.

For the sake of keeping this moving, let’s just imagine for a moment that the parties to this farce are not complete imbeciles incapable of organizing even a garden variety Christmas pantomime.  And let’s note that Cholock is either not very well informed, incidentally, or is pulling his nose in the opening sentence, but that is another story.

Let’s just look at this bit, first:

In an ideal world there would be no leadership challenge.  They always end badly.  This paragraph displays Cholock’s ignorance of political history in the province.  It also shows a fundamental anti-democratic strain that is, sad to say, not very surprising.

On the other hand, it confirms, as regular readers know, that there are indeed cleavages inside the Conservative Party that are so deep that the back-room types are petrified at the prospect.

Let us now turn to Wiseman’s scrum.  There’s a version on the CBC website and another on the Telegram’s website.

In his first long answer to the first question, Ross states that “it was well known and well understood” that the entire caucus backed Dunderdale at that point as were most of the district associations. Wiseman says that given that it was highly unlikely any challenger could succeed.

That hardly sounds like an open process.

When asked about an open process, Wiseman tries to insist that the process is open but then quickly returns to the point that everyone – caucus and district executives – were all backing Dunderdale and therefore Cabana had a tough row to hoe if he ran.  That was the “backdrop”, according to Wiseman, for Cholock’s comments.

Wiseman insists that Cholock was acting as a private individual when he visited Cabana’s house in the middle of the work week to discuss Cabana’s candidacy.  Wiseman does rattle off Cholock’s extensive experience in the party and his history of party involvement but then claims that any conversation was done on Cholock’s own time and was unofficial. Wiseman did not explain why he was speaking for his executive assistant on a personal matter, as opposed to having Cholock do the talking for himself.

Wiseman also acknowledges that Cabana contacted the Tory caucus seeking support before he submitted his nomination papers.

But here’s the thing:  Wiseman essentially confirms that Cholock went to cabana’s house to explain that Cabana was wasting his time, given that everyone had already declared for Dunderdale.  David Cochrane from CBC asks the question using those words – “wasting his time” – and Wiseman concurs.

But the fix was not in.

Sure.

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The persistence of patronage politics

Former auditor general Elizabeth Marshall made the news this past week in her new capacity as a Conservative senator from Newfoundland and Labrador.

Senator Marshall racked up $51,000 in airfares in a three month period, making her the senator from the province with the highest spending on travel.  According to Marshall’s staff the whole thing was for business class travel between St. John’s and Ottawa.  It’s really expensive to commute to work these days, especially when you live the better part of half a continent from the office.

Some people might credit Senator Marshall with uncovering what became known as the House of Assembly spending scandal.  She was trying to audit one member of the legislature almost a decade ago when the committee overseeing the legislature barred her from finishing the job.

When the scandal finally erupted into public view in 2006, the scandal shook the province’s political system.  Four politicians went to jail, along with the legislature’s former chief financial officer.  Millions of dollars of public money remain unaccounted for, despite an extensive police investigation, supposedly detailed reviews by Marshall’s former deputy and an investigation by the province’s top judge.

In one of those great cosmic coincidences, a local businessman involved in the scandal found out this week he’d be going to jail for upwards of three years. John Hand pleaded guilty to defrauding the public of almost half a million dollars.

Marshall didn’t actually uncover the spending scandal. She was focused on a particular member of the legislature whom she felt was using public money to purchase win and artwork for himself. A subsequent review by Marshall’s successor didn’t add significantly to what others had already found.

The more significant story, though, lay somewhere else.

Between 1996 and 2006, members of the legislature gave themselves the power to take money set aside to help them do their jobs as members of the legislature and to spend it on just about anything each of them deemed appropriate.  While some enriched themselves, and a few spent public money on women’s clothes, season hockey tickets or perfume, virtually all members of the legislature in that decade gave money to their own constituents.

In his lengthy report on the scandal, Chief Justice Derek Green described the practice  - and the problem - as eloquently as anyone might:

“First and foremost, the practice of making financial contributions and spending in this way supports the unacceptable notion that the politician’s success is tied to buying support with favours. Such things, especially the buying of drinks, tickets and other items at events, has overtones of the old practice of treating - providing food, drink or entertainment for the purpose of influencing a decision to vote or not to vote. As I wrote in Chapter 9, it demeans the role of the elected representative and reinforces the view that the standards of the politician are not grounded in principle. In fact, I would go further. The old practice of treating was usually undertaken using the politician’s own funds or his or her campaign funds. To the extent that the current practice involves the use of public funds, it is doubly objectionable.

Related to the notion of using public funds to ingratiate oneself with voters is the unfair advantage that the ability to do that gives to the incumbent politician over other contenders in the next election.”

For his part, former Speaker Harvey Hodder made plain his own attachment to the system this way:

"Some members, myself included, paid some of my constituency expenses out of my own pocket so I would have more money to give to the school breakfast program ... I don't apologize for that."

And former auditor general Elizabeth Marshall saw nothing wrong with the practice of handing out cash, often without receipt, with no established rules and for purposes which duplicated existing government programs.

What Chief Justice Green called “treating” is actually the old practice of patronage.  That isn’t just about giving party workers government jobs.  It’s basically one element of a system in which citizens trade their status as citizens for that of being the client of a particular patron.  The patron gets political power and the ability to dispense benefits of some kind.  In exchange, the client gives the patron support.  Explicitly or implicitly, as the Chief Justice stated, there's a connection between the favour and support.

In a model government bureaucracy, the rules that govern how a particular program works are well known.  Everyone in the society who meets the requirements would typically get the benefit of the program. 

But in a patronage system, the rules are hidden or there are difference between the formal rules and the ones that are actually used to hand out the benefit. The patrons and their associates control access to the benefits and so can reward people who comply with their wishes or punish those who do not.

There are as many variations on the patronage idea as there are societies.  The notion is well known in Newfoundland and Labrador politics. As political scientist George Perlin put it in 1971:

“Historically, the dominant factor in the Newfoundland context has been the use of public resources to make personal allocations or allocations which can be made in personal terms, in return for the delivery of votes.”

More recently, political scientist Alex Marland had this to say about the House of Assembly:

A final, but perhaps most critical, theme is the politics of deference towards charismatic power-hungry men and an outdated paternalistic ethos. Backbenchers, bureaucrats and journalists are scared to be on the wrong side of the executive for fear of harsh repercussions that can harm their careers. A massive spending scandal  occurred because, unlike Peter Cashin had done years before, nobody in the legislature had the courage or whistleblower protections to speak up about questionable expenses.  Political participation is sufficiently limited that interest groups prefer to meet behind closed doors and family networks continue to hold considerable sway within party politics. There is a historical pattern of democratic fragility and of  Newfoundlanders and Labradorians trusting elites to represent their interests.

Marland is understandably scathing in his criticism of politics in the province in the early years of the 21st century.  His assessment of the contributing factors  - way more than the paternalism mentioned above - is thorough and accurate even if his conclusion is a bit pollyannaish.

What’s more interesting is the way that seemingly unconnected events can relate to each other.  Those relationships explain much about the state of politics in the province.  Next, we'll add another element to the picture and discuss the Conservative leadership fiasco.*

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*  In the original version this sentence read "Tomorrow" instead of "Next".  The second installment of this mini-series on patronage and local politics is going to take a bit longer to complete since so many rich examples can be found in current events.

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Connie Leadership 2011: Is anyone surprised?

Brad Cabana’s candidacy is ruled invalid.

The Telly reported based on Cabana’s Twitter feed. CBC reported based on comments by convention co-chair Shawn Skinner and Cabana.

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Connie Leadership 2011: Acorns and trees

nottawa succinctly describes the way that Danny Williams’ supporters are applying the lessons he taught them to defeat a challenger to their back room plans and yet who claims he wants to carry on with the Williams legacy and style:

Brad Cabana, in a mere few hours, has somehow managed to present the regime with a bit of a conundrum. He's all three enemies rolled into one.

If he wants to be one of them, and if he wants to lead them, then what kind of a traitor/enemy/non-person is he? And what is the appropriate response?

The party brass are meeting to discuss.

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A sweet energy deal for someone

The following op-ed piece is from opposition leader Kelvin Parsons.  It appeared in several conventional news media last weekend.

 

A sweet deal, but not for the citizens of Newfoundland and Labrador

by Kelvin Parsons

The proposed Term Sheet to develop hydroelectric power at Muskrat Falls, Labrador with Emera Energy of Nova Scotia is badly flawed. If it proceeds, it will cause an exorbitant rise in electricity rates and increase our provincial debt by as much as 50 per cent, a worrisome development given that we already have the highest per capita debt in Canada.

The Government of Premier Kathy Dunderdale would have us believe this deal is necessary to provide stable, long term energy prices and that if it doesn’t proceed our energy prices will be even higher. However, neither the premier, nor Nalcor, has provided any information to substantiate that claim. Neither has Ms. Dunderdale or Nalcor offered any proof that energy demand is increasing on the island and that we actually need the additional power Muskrat could provide. It would be instructive to see Nalcor’s energy demand projections given this province has lost two pulp and paper mills under the current government’s watch and our population is projected to decrease over the long term.

As for her contention that replacing the thermal plant at Holyrood with Muskrat power would make this province 98 per cent green, Ms. Dunderdale is not telling the full story. She is failing to disclose that Holyrood generates only 20 per cent of the island’s electricity and that the other 80 per cent is already “green energy” that comes from hydroelectric stations such as the ones at Bay d’Espoir and Cat Arm and from wind farms such as the one at St. Lawrence. Using the premier’s own formula for calculating our “greenness,” which includes the 5,400 megawatts of energy already being produced on the upper Churchill, this province is already 91 per cent “green.”

The premier is proposing that we spend $6.2 billion to build a new power plant in Labrador and run lines thousands of kilometers over land and under water to replace just 20 per cent of our energy production. Adding such a huge financial burden on top of our existing debt - for such limited gain - makes no financial sense.

Refurbishing Holyrood to reduce its emissions is a far cheaper option. Eliminating Holyrood also eliminates the prospect of eventually using this province’s large stores of natural gas for electrical generation here at home. There is much more gas in the oil fields now under production in the Jeanne ‘d’Arc basin than in the Sable reserves off Nova Scotia. And that’s not counting the potential reserves in Western Newfoundland or the large gas reserves off Labrador.

As well, the citizens of this province should be told there are several other potential hydroelectric and wind projects that can be developed on the island of Newfoundland to meet any incremental growth in electrical demand for many years to come. These projects can be developed at far less cost than Muskrat Falls and with much less impact on us as taxpayers and electricity consumers.

Make no mistake, Muskrat will be a financial burden. By the premier’s own admission, the generating and transmission costs of Muskrat Falls power will be at least $143 per megawatt hour. That’s a 120 per cent increase over the base rate Nalcor now charges Newfoundland Power, the main provider of energy to consumers on the island. If there are cost overruns on the project, the base cost will be even higher.

If this project is approved, we will go from having the cheapest power rates in Atlantic Canada to the most expensive. Muskrat’s exorbitant energy costs will also hurt businesses, impair job creation and drive up the cost of living for everyone in this province as the higher electricity charges are added to consumer goods.

But there will be some beneficiaries – just not in Newfoundland and Labrador. Take the case of Emera Energy of Nova Scotia. Ms. Dunderdale claims Emera is paying $1.2 billion for 20 per cent of Muskrat’s energy. That is untrue. That $1.2 billion is being invested in a transmission line that Emera will wholly own for 35 years. The power that will run across that line to Emera will be provided for free. Emera will then sell its free power to consumers in Nova Scotia, recovering its $1.2 billion investment with a guaranteed rate of return. All this has been confirmed by Emera’s president, Bruce Huskilson, in a conference call with investment analysts.

This arrangement is akin to me letting my neighbour take water from my well for 35 years for free, as long as he pays for the hose. Whatever money he gets from selling that water, he keeps it all, not a cent of it comes back to me.

Premier Dunderdale claims the benefit of such a lopsided deal is that Nalcor will be allowed to run excess energy from Muskrat over Emera’s line for sale in the Maritimes and New England. That is true. But Nalcor will have to pay all the associated tariffs and very likely use Emera as the broker. That means more fees paid to our Nova Scotia “partner” and less revenue for the people of this province.

As well, any Muskrat power going to the Maritimes or New England will be sold at a fraction of its production cost. Comparing the current market price in New England of about $50 per megawatt hour with Muskrat’s production cost of $143 per megawatt hour, the people of this province would end up subsidizing two thirds of the cost of electricity going to New England. While Americans and people in the Maritimes would enjoy paying the lower market rate, consumers of electricity here on the island of Newfoundland would have to pay Muskrat’s full production cost plus allowances for profit.

There are other problems with the deal that Premier Dunderdale doesn’t want to talk about. For instance, while Nalcor has agreed to pay half of all cost overruns on the construction of Emera’s Maritime Link, there is no reciprocal agreement on Emera’s part to pay any cost overruns on the transmission line running from Labrador to Newfoundland. That’s despite the fact Emera is getting a 29 per cent ownership stake in our line and will enjoy 29 per cent of all the profits derived from transmitting power from Muskrat Falls to consumers here on the island.

Not surprisingly, financial analysts have hailed the project as a great deal for Emera. They have not made the same assessment for the residents of Newfoundland and Labrador.

The bottom line is this: Premier Dunderdale and her government is asking the residents of this province to pay more than double for their electricity and take on an additional $4.5 billion in debt to finance a project that will provide free energy to Nova Scotia and subsidized energy to consumers in the Maritimes and New England.

As for her contention that keeping Holyrood on stream will lead to energy costs that are even higher than Muskrat’s, to date neither her government nor Nalcor has provided any evidence to back that claim despite our repeated requests to see any such documents.

The Term Sheet to develop Muskrat Falls looks like it was slapped together in a hurry. Incredibly, it’s even worse than the historically unfair Upper Churchill contract. At least in the case of the Upper Churchill, Hydro Quebec pays something for our energy, albeit a pittance of its market value. If Ms. Dunderdale gets her way, Emera Energy will receive Muskrat’s energy for free as well as a 29 per cut of profits on all transmission of energy to our island. Meanwhile, the people of Newfoundland and Labrador will be financing this atrocious deal with even higher debt payments and exorbitant electricity bills.

It’s a sweet deal, alright, but not for the citizens of Newfoundland and Labrador.

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Connie Leadership 2011: Brad and circuses

Conservative Party insiders are so desperate to block any leadership contest that they are willing to creatively reinterpret the party constitution so that only people they chose get to be members for the purposes of deciding who gets to lead the party.

CBC’s David Cochrane reported on Monday that the Conservatives evaluating Cabana’s nomination forms have decided that “members” are only the members of district associations and other similar people described in one subsection of Article 5 of the party constitution:

ARTICLE 5 MEMBERSHIP

1. All persons who are residents or domiciled in the Province of Newfoundland and Labrador and who support the principles and aims of the Party are eligible to become members of the Party.

2. Subjects to Article 5-1 all individual members of affiliated associations and groups who support the principles and aims of the Party shall be members of the Party.

3. Notwithstanding Article 5-1 and Article 5-2, all members of the Provincial Executive Council as defined in Article 7-1 who support the principles and aims of the Party shall be members of the Party. Any member of the Provincial Executive Council who ceases to support the principles and aims of the Party will automatically cease to be a member of the Provincial Executive Council and forfeit all rights and privileges associated therewith.

Now that’s not really ambiguous except to anyone lacking basic English language skills.  The sub-section da byes are relying on is the third one but that only makes sure that the district and provincial executive people get counted as members and that resigning from such a position has a price.

The main bits of the section define membership pretty broadly.

But if the back-room boys succeed in disqualifying Brad Cabana because he doesn’t have any Sub-section 3 “members” on his nomination form, that might not be the only problem they cause.  Cabana is reportedly planning a legal challenge to this bit of  legal tomfoolery, and that would normally be enough of a problem.

The Conservative insiders who are trying to dictate who gets to be Premier may also cause themselves some other embarrassment if not real legal difficulties.

You see, membership also affects who can be candidates in elections.  Plus, under Article 12 of the Conservative party constitution the definition of membership also determines who may vote in a candidate selection process:

Eligible voters entitled to vote for a person to be elected as the Party Candidate are those persons who are members of the District Association, ordinarily resident in the Electoral District at the date of the Nominating Meeting and who are not less than eighteen (18) years of age either at the date of the nominating meeting or at the date of the election, if the date of the election has been set.

So it doesn’t take too much imagination to see that if “members” are only people currently serving on a district executive, then the party will pretty quickly cease to exist.  The only people they can nominate as a candidate to replace Danny for example are one of the people currently sitting on the Humber west executive.

Underneath it all, though, what people across Canada  are really seeing here is the attitude some people have to political parties in Newfoundland and Labrador.  The attitude is consistent with the sort of patronage-riddled, paternalism that has defined the past decade or so of provincial politics.

Under that model, the party is merely the handful of back-room brokers who rule over everyone and everything else. They are accountable to no one except themselves.

Listen to how many people who have said already that if the caucus is decided then Cabana doesn’t stand a chance. That reflects the old-fashioned view of a party and ignores the fact that even under the Conservative constitution, a significant chunk of the delegates to a leadership convention are supposed to be elected in each of the districts.

You can also see the old-fashioned notions contained in this if you look at the complete lunacy of the Conservative position.  Danny Williams argued that Roger Grimes, elected by a convention of elected delegates couldn’t stay on as premier.  To make sure that couldn’t happen again – supposedly – Williams and his colleagues set new rules with changes to the province’s Elections Act that would require a general election under certain circumstances.

Yet, under the Conservative Party’s own constitution, the caucus gets to appoint an interim leader. If by some chance Cabana’s nomination stands, the Conservative caucus will select not one but two caretaker Premiers in as many months. Newfoundlanders and Labradorians have not seen such transient premierships since the 1920s when premiers came and went with the shifting coalitions within the legislature.

Politics in this province is in a parlous state.  The fundamental rot of the whole structure could not be more clearly seen than in the circus that is the once-proud Conservative Party struggling to find someone who actually wants the job while fighting to exclude someone who apparently does.

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Provincial Conservative membership provisions #nlpoli

Here’s a simple discussion of the membership definitions under the current Conservative party constitution in Newfoundland and Labrador:

“Membership has its privileges”

Interestingly enough, Twitter and other bits of the Internet are showing how few supporters of the Conservative party know what their party constitution actually says.

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Connie Leadership 2011: Cabana candidacy causes Connie caucus consternation

Joe Hickey turned out to be a giant jerk-off but Brad Cabana came out of nowhere and scuttled the carefully laid plans among the province’s Conservative back-room boys to crown Kathy Dunderdale as leader of the province’s Conservatives.

Unless the the boys can find some procedural way to disqualify Cabana, the Conservatives will now have to hold a leadership convention. That’s the one thing they were desperately trying to avoid.

More to follow…

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Kremlinology 29: Easybake Tories

Kremlinology has always been a series about trying to interpret signs to see if they can point out what is going on behind the scenes in politics.

In the case of recent monumental changes on the provincial political scene, though, it seems that the signs are unmistakeable even to someone with no political sense at all.

To get your head in the right space, recall that when the Tories lost a by-election in late 2009 – one, single political sideshow – the shockwaves rippled through the province like someone had whacked the jello. The surest sign of the anxiety within  the party? 

Tony Ducey, DBA Tony the Tory, wrote letters to every newspaper in the province saying that the Tory party was not dead. Who said it was even sick at the time?  Well aside from your humble e-scribbler.  All jokes aside, there really isn’t a person on the planet who would have suggested, even in jest, that a single belch of indigestion is a sign of a fatal heart attack.

The first clue to the big problems in the Kingdom of Dannystan was Tony’s denial of problems triggered by what was essentially a non-event. One by-election loss does not usually trigger the Gotterdammerung but apparently Tony was petrified that it did.

As everyone knows, much has changed in the meantime and many such tiny traces of evidence pointed to problems.  Some of these clues were unmistakeable.  The most obvious one of all happened last fall when, in the space of a week, Danny Williams went from being the guy who was poised to sweep to a third term as premier to being the guy standing third in line behind you at Canadian Tire.

Turns out that some Tories don’t believe in such obvious signs of resignation as…well…someone saying good-bye.  The rumour running through Newfoundland and Labrador last week was that Danny had actually not quit and run at all.

Nosirreee, Danny had some undisclosed personal business to deal with.  His resignation, His Christ-like admonition that we should all love each other and Kathy Dunderdale as Hisself loved Hisself’s children was merely a way of saying “Hang on, my duckie, this is really a big joke.  I’ll be back once I’ve tidied up a little mess.”  Once that was done, safely from the eyes of the evil news media, he’d come back.  Like maybe around May and then he’d be ready to kick ass and take names again.

That story is everywhere. 

Your humble e-scribbler heard it around town on Friday and got it in e-mails from several spots in the province and outside it.  As comforting as that thought may be to some, and as much as some might like to imagine that Elvis isn’t stone-cold in the ground these decades or that the Gloved One will return, let us be abundantly clear:

Hisself is gone.

That sighting last week in the Confed Building likely has some sensible explanation but rest assured, this is not some script for 22 Minutes again.  Danny is the ex-premier and not likely to be back.

Speaking of rumours – and Lord knows they have been all that most people passed around this Christmas -  the only rumour not flying around the past couple of months has been that Hisself is about to get a semi-permanent guest spot on Doyle with the possibility of a spin-off next season.  in that scenario, Danny would play a former politician slash lawyer slash saviour of the universe who rights wrongs from his office in a converted movie theatre where the roof collapsed. He’d have a couple of sidekicks from his political days and another couple from his legal days.  Think of it as a cross between The Mentalist (the saviour and sidekicks angle), Slapshot (comedy and the jock angle) and Hell’s Kitchen (the histrionics).

The rumour that he wants to go federal is not as much of a joke as it first appears.   You can find evidence of it in a year-end telegram interview in which he insists that his attacks on “Quebec” are aimed solely at Hydro-Quebec, not the lovely people of that province.  And, as Danny claimed in the interview, he always has to qualify his comments so people don’t misunderstand. 

Always qualify. 

Yeah, right.

As far as federal politics is concerned his anti-Quebec tirades make him radioactive but that doesn’t mean he didn’t harbour a few delusions about replacing Steve.

In any event, Danny is gone.

He is not coming back.

The intense and wildly-varied rumour market is a sign of nothing more than the gigantic shitbake that is gripping the province’s Conservatives.  And this latest one is the most bizarre of all.

Think about it for a second. 

If their story is true, Danny would be pulling a turn-around even greater than that pulled by Joe Smallwood in 1969.  The old bugger retired and then, in the middle of the leadership campaign to replace him, announced that only he was worthy enough to succeed himself. 

He launched a comeback and defeated all comers, including John Crosbie.

What’s more Danny would be going against his own mother’s wishes for him.  She did tell reporters, after al,l that she would shoot him if he tried to run again for anything other than the bus.

And Danny’s mom, it should be noted, used to drag her crowd door-to-door to get rid of Smallwood and the Satanical spawn he led.  How friggin’ cruel would the universe be to have Danny come back into politics against her wishes and do it in a way that shows more raw ego than Joe Smallwood. 

What a savage twist would it be to have that sainted woman discover in her declining years that her favourite son is merely the meat-suit for her worst political enemy’s political soul?  If you see a ‘67 four-door Impala on Duckworth, you know you have tuned into a new episode of Supernatural. Sam and Dean will be looking for the season-ender to top last year’s season-ender:  the Apocalypse. 

Danny coming back a la Joe Smallwood would bring on something like the Apocalypse. It would certainly make his mom’s head spin around a few times.

Might be good TV though.  Gordon Pinsent could guest star as the ghost of Peter Cashin with Mark Critch as the young, pre-possession Danny. Kevin Noble could play an actor torn between his love of Joe and his love of Dan. There’d have to be a news release on Monday from Terry French announcing provincial government funding to support production of the series which will relocate from Vancouver to St. John’s. Plan is to build on local experience of a TV series shot in St. John’s and starring an old car.

Once you get past the shark jumping tale, though, there is another bit of speccy running around in some Tory circles as well that is worth having a laugh at.  That has to do with the reason for backroom deal currently playing out before our eyes. 

Apparently, Tories are sticking with Dunderdale because she is the status quo and that’s what everyone wants.  Everyone loves Danny.  Everyone loves things the way they are – the polls show that -  so the way to ensure victory in the fall is to keep things just the way people love them.  Think of this as a variation on the Danny:  Resurrection storyline since it derives from the theory that Danny is the key to any future Tory victory. It just confuses Danny with the party.

At least it has the advantage of being consistent with past Tory rationalisations.  Here’s the second paragraph of Tony the Tory’s letter from 2009:

Still, before anyone says that this is the beginning of the end for the PC party in the province and that the tide is turning towards the Liberals, it is not. It's far from it: the PC party is still in the 70s in the polls and have over 40 of the seats in the House of Assembly.

The only problem with this story would be the facts.  Even if we accept CRA polls as being anything close to real, their tracking of Tory party support is not encouraging. The party has been tracking behind its former leader.  In the most recent version, the party support continued the downward trend it’s been on since 2007.  In fact, over the past six months, the party support numbers went up but then dropped  dramatically in just three months.

If the Tories are keeping Kathy Dunderdale it is not because people want more of the Tory same.

No.

They are keeping Kathy because people in the Tory backrooms are scared shitless at the thought of a nomination fight. They are so scared of any nomination contest that they will use any and every excuse to justify the current charade, including claiming that it is nothing more than what the Liberals have done. If that’s the sort of lame-assed stuff they are coming up with, stand by when it turns out that Danny did a few massive give-aways of his on resources, by the by. 

But that, dear friends may turn out to be the least bizarre thing to happen in this year of massive political turmoil in the province.

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Connie Leadership 2011: the caucus’ worst nightmare

Joe Hickey is considering a challenge to Kathy Dunderdale as leader of the province’s Conservatives.

The Telegram reports Hickey has the cash and the 50 signatures and will announce his intentions on Monday morning.

CBC Radio St. John’s Morning Show has Hickey live at 7:40 AM, Newfoundland and Labrador Daylight Savings Time on Monday. Follow this link – here  - to listen live on Monday.

Update:  NTV is running a story generally similar to the Telly’s account.

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Traffic for 5K and 50 “members”

1. Connie Leadership rigged?
2. Undisclosed risk:  financing the Lower Churchill
3. Connie Leadership 2011:  democratic deficit
4. Connie Leadership 2011:  editorial kick-back
5. Leadership by fiat
6. Connie Leadership 2011:  Persistent Rumour Department
7. Fragile Economy:  finance minister complains about his own policies
8. Pater knows best
9. Is Gerry Byrne completely nuts or what?
10. Connie Leadership 2011:  for the sake of five large and a gang of kids

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Connie Leadership 2011: for the sake of five large and a gang of kids

Apparently the requirements for membership in the provincial Conservative Party pretty wide.

Might be interesting to see if anyone turns up by noon Monday to challenge Kathy Dunderdale for job of leading the local Connies brigade.

Here’s a warning for all you mainlanders who follow the link: this is not really what a “Reform-based” Conservative Party would look like.  Why Danny Williams ever described the party he used to lead that way remains as much of a mystery as the real reason for his very hasty departure.

The link:  “Membership has its privileges.”

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Undisclosed Risk: the cost of freedom is loss

You won’t hear the provincial Conservatives talking too much about an April 2009 deal to sell surplus power from Churchill falls to Emera in New York.

They talked about it a lot when they cut the deal. 

Back then, Danny Williams said the five year contract proved that Labrador hydro power wasn’t isolated any more.  Nalcor wheels Churchill falls power through Quebec to markets in the Untied States.  Nalcor pays Hydro-Quebec a fee for wheeling the power.

And Danny Williams was absolutely right.  Labrador hydro power isn’t isolated.  if Nalcor had customers for Labrador hydro, they could send the power through Quebec tomorrow.

The reason Nalcor isn’t developing the Lower Churchill and shipping the power through Quebec is because there is no market for the power.  Everything else you’ve may have heard from provincial Conservatives in Newfoundland and Labrador and from the local media about a big Quebec conspiracy to block Nalcor is – in a word – crap.

You can see that the Conservatives wouldn’t want to talk about the Wheeling Deal.  it proves that their more recent line, the one that supposedly justifies the Muskrat falls project is – in a word – crap.

Turns out there may be another reason why they aren’t talking about it.

Danny Dumaresque, a former director of Newfoundland and Labrador Hydro, issued a news release on Wednesday claiming that Nalcor is losing money on the Wheeler Deal. The story got decent media coverage across Newfoundland and Labrador and even made it onto the Radio Canada website. There’s also a short story about 20 minutes into the CBC’s Here and Now broadcast on January 5, 2010 and on NTV News from the same date.

Dumaresque looked at the Nalcor annual report and calculated that the company lost money on the deal compared to the previous deal to sell the power to Hydro-Quebec:

Over the past 18 months I have been told various figures of costs and revenue but because these figures were much different than the previous contract with Hydro Quebec, I was reluctant to cite them. However, today I can confirm that this province has lost $15 million in the last 9 months of 2009 under this ‘historic arrangement’ than we would have received from the contract with Hydro Quebec, a reduction of 40 percent.

My information is that results have not been any better in 2010 and up to $20 million will be lost. Therefore, in less than two short years we have lost $35 million of precious taxpayer’s money and the potential to lose up to $100 million over the life of a 5 year agreement which we had with Hydro Quebec!

In addition to this loss of revenue to the province I am also able to confirm that NALCOR has paid nearly $34 million to the Government of Quebec since this deal was done and $7 million to Emera Energy of Nova Scotia. [bold in original]

In the media interviews, natural resources minister Shawn Skinner doesn’t dispute the losses.  In fact he admits that under the deal, Nalcor would lose money when electricity prices are low but it could make them back if prices are high.  Even he uses the line with CBC to the effect that losing money is the price of freedom.  When a politician has to use complete bullshit like that you know he’s been caught out.

There are three things to note from this.

First of all, this is pretty much what you might expect from the deal.  It was clear at the time Nalcor inked the deal that – based on the numbers they released – the deal would only deliver about the same price per kilowatt hour to Nalcor that they were getting under the old fixed-price deal with Hydro-Quebec.  Sure electricity retails for 20-odd cents per kilowatt hour in New York city.  But by the time you take off the wheeling charges to Hydro-Quebec and all the other middlemen, and allow for Emera’s cut, the net for Nalcor was 3.5 to 4.0 cents per kilowatt hour.

As it turned out, electricity prices dropped in the United States what with the 2008 recession and all. They are so low that American producers can sell electricity produced by natural gas from the United States across the border into New Brunswick.  And as it stands right now, prices are going to stay down for the duration of this first contract. 

Newfoundland and Labrador Hydro considered wheeling the power in 1998 but figured out exactly what has happened.  They opted for selling power for the best return as opposed to going the Danny Williams route and losing money.  Pure business genius at work there signing a deal that only works if prices stay high or keep going up.

Second of all, you have to appreciate that this is exactly the same sort of financial wizardry that underpins the Muskrat Falls deal. 

In order for Danny’s retirement plan to work and for the taxpayers of Newfoundland and Labrador not to take it in the derriere, oil prices have to double from their current level within the next decade and keep going from there.

If anything else happens, then the taxpayers get jammed up badly.  The reason is simple:  Nalcor is building the whole project based on the only guaranteed sale being for power inside Newfoundland.  They can sell power to other provinces or to the United States and if the prices fall far short of the cost of production, then the taxpayers of this province will cover the loss through their electricity rates.  That’s exactly what provincial laws – amended since 2006 – require.

Notice that none of the other players involved lose anything.  Emera gets cash no matter what.  For $1.2 billion they get 35 years of essentially free power to sell to Nova Scotia.  They can sell other power for less than the cost of production and even at the end of the 35 years they will pay less for the power than it cost to produce it in 2017 when the first power is supposed to flow.

It’s the same as the Wheeler Deal.  Hydro-Quebec gets its fees for carrying the juice to the border.  Emera gets its fees and commissions.  The only people who come up short on the deal are the taxpayers of this province who – one way or another – have to cover Nalcor’s losses.

Not bad, eh?

Now the thing is that nobody mentioned this at the time Danny Williams announced the deal in April 2009. Danny never said taxpayers could lose money at all. He never even vaguely hinted at it.  In fact, while he acknowledged prices at the time were low, Nalcor boss Ed Martin said that

[b]ased on current electricity prices, Newfoundland and Labrador could earn about $40 million to $80 million in profits annually….

That’s the third thing and it is the biggest thing of all:  it’s called undisclosed risk. And in business circles, failure to disclose significant risk to investors -  or the de facto owners in this case - is a pretty big deal.  It goes straight to the trust that the ordinary people of Newfoundland and Labrador have placed in these politicians who are now acknowledging, in effect, that there are very important things about these deals that they haven’t bothered to tell people about.

It makes you wonder what other little secrets, what other little time bombs there are ticking away.

What other undisclosed risks are the people of the province facing that they didn’t face before 2003?

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High oil prices threaten economic recovery

Via the Globe and Mail:

"Oil prices are entering a dangerous zone for the global economy," the IEA's chief economist, Faith Birol, told The Financial Times. "The oil import bills are becoming a threat to the economic recovery. This is a wake-up call to the oil consuming countries and to the oil producers.

This warning, the newspaper said, will ramp up pressure on OPEC countries to boost their production.

The strength in oil, chief economist David Rosenberg of Gluskin Sheff + Associates said today, does not reflect stronger consumer demand in the United States, but rather external forces and heightened investor demand.

Wow.

Who knew?

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