Another call for an oil investment fund #nlpoli

In a column in the weekend Ottawa Citizen, Brian Lee Crowley of the Macdonald-Laurier Institute made a convincing argument for investing provincial government oil revenue in an investment fund:

Natural resource revenues, by contrast, gyrate wildly. The temptation, when prices are high, is to pretend those revenues will always exist, causing a cycle of booms and busts in public finances. Moreover if you acquire recurrent obligations on the basis of one-time asset sales, an inevitable day of reckoning comes. The natural resource is gone and you have a lot of public servants you can’t pay and a lot of people reliant on public services you can no longer afford.

This problem is resolved by using the money to pay off debt and then investing the rest and only spending the fund’s returns.

Ah yes, the temptation to spend irresponsibly – i.e. unsustainably - followed by the day of reckoning.

Sounds familiar.

-srbp-

The Bow-Wow Parliament lacks bark and bite #nlpoli

In the wake of the latest revelations of financial mismanagement in the provincial government, SRBP has been looking at some of the possible contributing developments over the past decade or more.

Last week, SRBP noted that it appears the provincial government broke up the treasury board secretariat around 2007.  They sent some of its bits off to one department and put the rump of its administration  – about the size it had been in 1968 -  under the finance department, as it had been before the 1973 reforms introduced by the Moores administration. 

At around the same time, the provincial cabinet started a series of massive annual increases in public spending that Premier Kathy Dunderdale admits is unsustainable.

And the same cabinet also ballooned the size of the provincial public service. Again, it’s something that Kathy Dunderdale admitted was something she and her colleagues now had to sort out.

These three things are connected. 

Even if the government loosened the constraints of its internal financial controls, there are other agencies that have a role to play in keeping an eye on the public treasury.

Province sinks more into inflatable shelter company #nlpoli

The provincial government is giving $50,000 to a company in Grand bank that makes inflatable shelters for industrial and emergency use, according to a news release issued Friday.

Dynamic Air Shelters Ltd. will [use the money to] engage the services of Advanta Industrial Design Group Inc. to conduct staff training and improve the company’s design and production processes. The company will also upgrade its computer systems and drafting software program.

Since 2006, Dynamic Air Shelters has received more than $4.0 million from the provincial and federal government.

-srbp-

NAFTA and Hebron #nlpoli

ExxonMobil and Murphy Oil have won a North American Free Trade Agreement appeal of a 2004 offshore board regulation that sets the amount of research and development money oil companies operating offshore must make in the province.

They filed the appeal in 2007

That means the oil companies will have to pay the much lower fixed amount for research and development accepted by the provincial government in the Hebron final agreement.

-srbp-

Dunderdale rejects Locke’s advice on Muskrat #nlpoli

Sometimes you agree with people.  Sometimes you don’t.

All it means is that you agree sometimes and disagree at others.

Premier Kathy Dunderdale didn’t seem to understand that point when she spoke to the St. John’s Board of Trade back in January:

Memorial University economist Dr. Wade Locke, has concluded Muskrat Falls is the least-cost option by a factor of 2.2 billion dollars.  

It is interesting to me that the most vocal and ever predictable critics of the Muskrat Falls development were quick in their attempts to disparage the work of Dr. Locke – something they had not done previously when Dr. Locke has presented on, for example, the province’s financial position.

The Premier liked what Wade had to say because it matched what she wanted.  Well, these days, Kathy is in the same spot as the unnamed “most vocal and predictable critics” she found interesting six months ago.

Mismanagement and Media Math #nlpoli

CBC’s online story takes a weird tack on the tale of recent financial and management problems at Eastern Health, the province’s largest regional health authority.

CBC headlines its story “Hospital Tim’s never came close to predict profit”.

That’s true but the full story is so much more interesting. While the profit may have been less than originally predicted, the facts are the outlet worked as intended for most of the time its been in operation:  it made money.

The losses, though, are spectacular and recent.

Hebron Development Approved #nlpoli #cdnpoli

From the Canada-Newfoundland and Labrador Offshore Petroleum Board:

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) announced today that the Hebron Development Application is approved.

At its April 27, 2012 meeting, the Board approved the Hebron Benefits Plan and Development Plan subject to the conditions outlined in Decision Report 2012.01. In its deliberation with respect to these plans the Board considered advice provided in the Benefits Plan and Development Plan staff analysis as well as recommendations resulting from the Report of the Hebron Public Review Commissioner.

Under the Atlantic Accord Implementation Acts, Fundamental Decisions of the Board must be ratified by both governments before they can be implemented. The Board’s Approval of the Hebron Development Plan was a Fundamental Decision. The approval of the Development Plan by both governments now enables ExxonMobil Canada Properties Limited to proceed with development of the Hebron Field, which is estimated to contain 707 million barrels of oil.

-srbp-

What she said… visionary leadership edition #nlpoli

Newly minted Premier Kathy Dunderdale from her 20 Questions interview in the Telegram, December 24, 2010:

Still, Dunderdale maintains being premier was never on her radar.

She says she’s not the kinds of person who envisions things 10 years down the road, but prefers to live in the now.

“If you live your life more in the moment, the rest of it will work its way out.”

-srbp-

The Root of the Problem #nlpoli

Mr. Speaker, if the members opposite think that the level of scrutiny that we do over a $3 billion expenditure in health care is to take every single health authority and work down line by line by line through every piece of that, I do not know what they are thinking over there.

Health and community services minister Susan Sullivan, House of Assembly, May 30, 2012

Let’s hope that health minister Susan Sullivan doesn’t sit on the treasury board. 

That’s a committee of cabinet created under the Financial Administration Act.  Passed by the House of Assembly in 1973,  the Financial Administration Act was one of several great reforms of public administration in the province introduced by the Conservatives after they defeated Joe Smallwood and the Liberals in the 1972 general election.

Every provincial government and the federal government has a treasury board.  It is typically the most important or one of the most important cabinet committee by virtue of its control over money and people within government. Treasury board is also the only cabinet committee whose existence is set down by law.

The treasury board’s main job is to oversee how the provincial government and its agencies spend public money. 

The Provincial Public Debt…again #nlpoli

As often as they say it, the facts don’t bear out the claim some politician like to make about the provincial public debt.

The Premier did it again in the House of Assembly Tuesday evening.  We can all give her a bit of a break since she was on her feet and obvious her blood was up. 

But still, this is an old claim that is as false now as it was when the Tories first started using it a few years ago.  And frankly, Kathy Dunderdale should have a better grasp of the facts.  Otherwise what some people think is visionary leadership is just another delusional politician on a rant.  Heaven knows our province has been saddled with enough of those.

The Hard Road Ahead #nlpoli

If the provincial government can actually get control on its spending and head down the road to management reform along the lines that Eastern Health’s Vicki Kaminski talked about on Tuesday, then they are headed down the right road.

What they said…Part Deux #nlpoli

Basic public relations problem.

Say one thing.

Say another thing.

A few weeks later, do something else, twice over.

For starters, here’s the what Premier Kathy Dunderdale said in the House of Assembly in March about job cuts and the provincial budget:

What they said… #nlpoli

Here’s what Premier Kathy Dunderdale said on March 6 about possible job cuts in the provincial public sector (emphasis added in all):

Mr. Speaker, we have not talked about cuts….Front-line health and education services will be exempted.

Here’s what education minister Clyde Jackman said on March 29:

I spoke at an NLTA meeting a little while ago; I said to them, we are looking at our budgets across departments, but the Premier said there will be no frontline cuts.

And then there’s what health minister Susan Sullivan said on May 28, the day before Eastern health’s planned announcement:

Mr. Speaker, our resolve has not changed. There will not be any cuts in programs and services. The announcement that you will hear tomorrow will lay out some particular initiatives that Eastern Health wishes to embark upon, but we have made our commitment firm to the people of Newfoundland and Labrador; there will not be cuts in programs and services, Mr. Speaker.

Do those words all mean the same thing?

-srbp-

Health Care Employment in NL #nlpoli

For those getting ready for this afternoon’s announcement by Eastern Health, here are some figures from Statistics Canada on employment in the health care sector in the province from October 2003 to December 2011.

The Premier and Open Line #nlpoli

Once upon a time,  premiers would spend time on radio talk shows every now and then taking calls from the punters.

Not so since 2003 and the New Approach.

Well, not so until Monday when Kathy Dunderdale spent two and a half hours with Randy Simms. regular readers of these e-scribbles were likely surprised at the number of times the Premier said exactly what SRBP's been saying for the past seven years on big topics like unsustainable public spending and the impact an aging population in the province will have on spending and the economy.  

As for the appearance, apparently, she thought it was just going to be a phone call.  Big difference.

Three take-aways:

• The miscommunication about what she was doing could be a clue as to one of the problems the Premier and her staff are evidently having.  Among other things, she must have a light work day if she could look at her schedule and not notice the 2.5 hours blocked out for VOCM.
• Something's up with Dunderdale's polling numbers.  The only time Danny ever changing his pattern was when his polls were off.
• The past two premiers, the current finance minister, and another former cabinet minister agree with SRBP that the Tories' public spending has been and is unsustainable.  That should frig with a few Tory heads out there.

Bonus take-away:

• Telling your political opponents to stop doing something is a guarantee they will keep doing it.  You really do have have to realise you are in a hole before you realise you need to stop digging.

-srbp-

Monday Potpourri #nlpoli

A new poll by CROP (via Paul Wells) shows that Quebeckers support having students at Quebec’s post-secondary colleges and universities pay more for their education. 

What’s more, they think that the law which tries to force protesting students back to class is a bad idea.

Take these results together and we begin to see the wisdom of crowds — not the ones in the street, necessarily, but of the whole population. Opinions are divided, but in the main, Quebecers:

• think it is more legitimate to ask students to contribute more to their education than to say they have paid enough.

• believe Law 78 asks for things a government should be able to ask of its citizens — i.e., that it’s a legitimate law;

• don’t think Law 78 will make student refuseniks more likely to cough up their tuition money — i.e., they don’t think it’s a pertinent law.

The Other Damn-Fool Fisheries Policy #nlpoli #cdnpoli

About 30 years ago, Kathy Dunderdale started out her political career fighting against fisheries reform.

Last December,  she scolded fish plant workers in Marystown for turning out 18 weeks work that would have qualified them for employment insurance and kept their plant open.

She continued her fight against fisheries reform over the weekend in a series of interviews with national media about the federal government’s proposed changes to the employment insurance system.

All’s Not Fairity in Love and War #nlpoli

Premier Kathy Dunderdale should appoint municipal affairs minister Kevin “Fairity” O’Brien to handle intergovernmental affairs.

While Dunderdale is busily lobbing hand grenades at the federal government, Fairity is taking a very different attitude:

The Dunderdale-O’Brien Confusion #nlpoli

In a scrum on Wednesday, May 23, Premier Kathy Dunderdale said:

“What we are talking about, in fact, is a two hour window here.”

In the House of Assembly on Thursday, May 24, Premier Kathy Dunderdale said:

I have asked Minister MacKay for an explanation of the gap that occurred on January 30 in the search when there was a five-hour period that they were not engaged in the search. The answers are not satisfactory; the protocols need to be changed.

There is no five-hour period in the Burton Winters search that matches whatever Kathy Dunderdale is talking about in that exchange in the House of Assembly.  In fact, it’s pretty hard for anyone with even a sketchy knowledge of the events in Makkovik in late January and early February to figure out what Kathy Dunderdale is getting on with.

The Perfect Storm #nlpoli

“In the fishery of the very near future,” SRBP wrote in February, “fishing subsidies like federal employment insurance wage subsidies,  state-sponsored marketing schemes and the stalinist political control of the economy… will all go by the wayside. International trade talks are already laying the groundwork for massive change.”

The very near future arrived this week.