Experience still counts #nlpoli

Now that Frank Coleman is the de facto leader of the provincial Conservative party, there’s no reason why Coleman can’t be in the Premier’s Office with his new cabinet in place when the House of Assembly resumes its current sitting in early May.

Absolutely no reason whatsoever.

Coleman can appoint Tom Marshall as the deputy Premier or leave whomever Coleman appoints as Government House leader to stand in for him until Coleman can get a seat in the legislature.

It’s really simple.

And when the budget is done,  Coleman can head down to Government House and ask the Lieutenant Governor to issue a writ for a provincial general election to be held by the end of June.

There is no reason for Coleman to delay going to the voters to ask them for a mandate of his own to govern the province as Premier.

Pearl Necklace #nlpoli

Mount Pearl is alive with rumours this week that Steve Kent is trying to cross the floor (back) to the Liberals.

Kent’s open dispute with the education minister Clyde Jackman over school re-organization in the bedroom city seems to have been the catalyst for the flurry of rumours.

Now it could all be nothing, except for the fact that Kent’s fellow Mount Pearlers…Pearlites…Pearlies…whatever … know that the former child mayor has a reputation for changing his political affiliations when it suits.

How not to bolster public confidence: the umpteenth Nalcor edition #nlpoli

The folks at Nalcor held a media briefing at 11:00 AM on Tuesday.  it was supposed to be about the release of the independent engineer’s review of Muskrat Falls done as part of the federal loan guarantee.

You may recall this was part of some great confusion a few months ago when the provincial energy department answered an access to information request by saying they didn’t have a copy of the report only to have it emerge that Nalcor had had the report since the previous November and briefed at least a couple of cabinet ministers on it in the meantime.

That led to a bizarro series of telephone conversations between energy minister Derek Dalley and the Telegram’s James McLeod that just added to the sense that Dalley  - among others – had no idea what was going on in the world. Later on the provincial government announced they were creating yet another form of Nalcor oversight regime all built around informing the public. That turned out to be a whole lot of nothing at all and, to cap it off, Nalcor missed its commitment to issue a financial update at the end of the last fiscal year. (March 31)

Not a very good way to bolster public confidence in a company after the Nalcor-induced blackouts in January.

The Virginia Waters Come-Back Myth #nlpoli

Danny Williams said it.

Tom Marshall said it.

In the Virginia Waters by-election the Conservatives were trailing by 15 percentage points and managed to come back and tie it up in the matter of a couple of weeks.

Marshall embellished the story in his most recent interview with David Cochrane.  Supposedly the Conservatives were trailing from the start and some unknown people expected the Conservatives to lose the Virginia Waters by-election.

The Conservatives claim they came from behind to tie it up but there is no objective evidence that the claim is true.

Budget Basics: Unfunded Pension and Benefits Liabilities #nlpoli

While the provincial budget for 2014 was all about spending government money, the budget speech did raise one issue that the provincial government appears intent on cutting dramatically.

A key component of the province’s net debt relates to unfunded pension and other post-retirement liabilities. Despite an investment of more than $3.6 billion, the liabilities have continued to grow. As of March 31, 2013, they accounted for 67 per cent of net debt. By 2016-17, they will account for 85 per cent of net debt – almost $9 billion.

The provincial government has been talking about the unfunded pension and benefits liabilities for a couple of years now.  It’s a hot issue among business groups like the employers’ council or the Canadian Federation of Independent Business. 

As regular readers know, the board of trade is keen to deal with the unfunded liability, too, even if the president or whoever wrote her column in last week’s Saturday Telegram don’t appear to understand what it is all about.

For whatever reason, business groups get quite agitated about public sector workers and their pensions.  Other public debt doesn’t get them quite as worked up and, as the board of trade demonstrated quite clearly, there’s a fair bit of misinformation about the unfunded pension liability.

In this second post in the Budget Basic series, let’s take a look at public sector pensions and put them in a wider context.  Misinformation never leads to good public policy but right now, pretty well all the anti-pension commentary is based on some amount of misinformation.

Premier Peek-a-boo #nlpoli

Pretty well every Conservative who is anyone in the province turned up on Wednesday night at Danny Breen’s by-election headquarters.

Every Conservative, that is, except the fellow who is the heir-apparent to the leadership.  Frank Coleman wasn’t anywhere to be seen according to reporters at the headquarters after the polls closed.

It turned out that Coleman had shown up at around 7:00 PM, an hour before the polls closed, looked around for a bit and then left.  Apparently, he had better things to do.  He didn’t speak to reporters about the by-election loss. 

Instead, Coleman sent out a written statement.  If he gets to be Premier, someone wrote on Coleman’s behalf,  Coleman would welcome Breen as a candidate in the next election. 

In ordinary circumstances,  people would likely consider Coleman’s actions to be quite bizarre.  But then again, these are not ordinary circumstances. 

Ripples #nlpoli

The provincial Conservatives lost a crucial by-election in Virginia Waters on Wednesday, but not for lack of effort.  The could not possible have pulled out any more stops to try and win the seat in the last two weeks of the campaign.

Even on polling day the Conservatives mounted a prodigious effort and the last couple of days before the final vote, the Conservatives had every cabinet minister, caucus member, and political staffer doing whatever it took to find every possible vote.

They came close, but the Conservatives lost

And that simple fact will have enormous implications.

Major Muskrat Costs Missing #nlpoli

As of April 4, Nalcor was “still in the process of negotiating and letting some large contracts for the [Muskrat Falls] project.”

That’s the reply the Telegram got from Nalcor about missing the Muskrat financial update the company was supposed to issue at the end of March.

Haven’t got the information yet.

Okay.

Well, that’s a bit troubling in itself, given that Nalcor is supposed to be reporting monthly to the provincial government on project costs.  So if Nalcor is telling the provincial government that sort of information they can tell the people who are paying the bills – the local taxpayers – the same information, without any deletions or omissions.

And if the provincial government had any stones, they would insist that the Nalcor board not deliver any bonuses to the president and the corporation vice presidents until the company sorts out its financial reporting.  Ed, Gil, and Dawn would be spitting out real numbers  pretty damn fast if someone actually held them accountable.

No one should hold their breath waiting for that, of course.  At least, not any time soon.

Anyway, if Nalcor won’t report its costs accurately and on time, here’s a little tidbit to hold you over.

Astaldi is the company that won the tender last year to build the Muskrat Falls dam itself. The company and Nalcor valued the contract last fall at CDN$1.0 billion.

You can see that in the screen capture from Astaldi’s 2013 year-end financial report, released at the end of March.

The company reported the CDN$1.0 billion figure as well in its third quarter report released last November. There’s also a mention of payments on Muskrat Falls that would come before the end of Astaldi’s fiscal year:

Payments expected from Italy (Rome Subway Line C, Milan Subway Line 5) and Canada (Muskrat Falls Hydroelectric Project) are forecast to decrease net debt levels by year end to approx. €800mn [from 896 million]

Lovely stuff.

But hang on.

What’s the exchange rate on the Euro these days? 

Well, friends, if you plug that 822 million Euro valuation Astaldi gave the project into a currency converter you find out that it works out to CDN$1.24 billion, or 24% more than the project’s face value at the time Nalcor announced the tender award last October.

That’s a hefty cost increase in a very short space of time. Now Nalcor has something else to explain besides just why they are tardy – yet again – with their project reporting.

-srbp-

Related:

• Muskrat Falls costs jump by $1.0 billion (December 2013)

Budget basics: debt #nlpoli

Board of trade president Sharon Horan wrote in her Telegram column last weekend that the unfunded pension liability will make up 85% of the provincial government’s debt not to long into the future.  That will be up from the 75% of the public debt it makes today.

There you have proof that even the president of the largest business organization in the province does not understand the first thing about the state of the provincial government’s finances.

Public debt is a really basic idea that you have to know if you want to understand public finance.  And you need to understand public finance if you want to have a useful say in how the government is running things.  That’s what the folks at the board of trade want to do, one would expect.

And yet Horan got it wrong. 

Not a mere technicality.

But dead wrong.

So if the board of trade can bugger up public debt, let’s see if we can walk everyone through the notion in a way that we can all understand.

Electricity “review” a waste of time, money #nlpoli

Now we know why it took the provincial government so long to release the “review” of the provincial electrical system that former Premier Kathy Dunderdale made up off the top of her head when people were trying to take her head off over Nalcor’s giant blackout in January.

The “review” is going to involve nothing more than a description of the existing electrical system and other systems across Canada.

There’s nothing in the request for proposals – not a commission of inquiry (!!!) – that people in the provincial government either don’t know already or should know.

And since this will be just another consultant’s report, the consultant has no legal ability to obtain detailed information the way the public utilities board or a public inquiry could.

There also doesn’t appear to be any provision for a discussion of the regressive, monopoly system the provincial government created in 2012 because Muskrat Falls isn’t the cheapest way to provide electricity for provincial demand.

What’s the point of examining the province’s electricity policy if you don;t actually look critically at the policy and propose alternatives?

Yes, folks, it is a waste of time.  And you know it’s a waste of time because they released word of the request for proposals after normal working hours on Monday.  It’s a new version of “take out the trash”.

-srbp-

Repealing Bill 29 #nlpoli

The Liberals proposed a motion during last week’s private member’s day that the government repeal Bill 29.

Meanwhile, at the Telegram, legislative reporter James McLeod has been waging a one-man crusade to get everyone to stop trying to repeal Bill 29.  Bill 29 actually fixed a few nasty things,  according to McLeod.  For example, rather than force reporters to chase after ministerial briefing notes,  Bill 29 banned release of them outright:

When Bill 29 came along, it created a specific exception to end this game. Now, the government could withhold any document which was “a record created solely for the purpose of briefing a member of the Executive Council with respect to assuming responsibility for a department, secretariat or agency.”

Then there is the matter of requests for information that the bureaucrats think are “frivolous and vexatious.”  The example McLeod uses to endorse that part of the bill is odd.  He filed a request for documents about the cod moratorium.  The Telly dropped the request when they discovered that a couple of days after getting their pile, the government proposed to release the whole pile on the Internet.  That wasn’t a frivolous request, incidentally, but McLeod holds it out as a justification for that bit of Bill 29. 

Horsefeathers #nlpoli

While people have been agitated about comments on Twitter,  the Premier has been dazzling the politicians in the House with his explanation of the marvellous financial position of the provincial government under the Conservative Party.

On Monday, the former finance minister buggered up the amount of dividend that Nalcor will provide thanks to Muskrat Falls.

On Tuesday, he corrected himself and noted he meant all of Nalcor instead of just Muskrat Falls. That just made matters worse, though.  You see,  the Premier’s comments didn’t exactly jive with information one of his colleagues talked about in the House a year or so ago.  That’s not including the fact that much of the money the Premier attributed to Nalcor was actually coming from oil that the people of the province gifted Nalcor with for nothing.

On Wednesday, the Premier went for the hat-trick with a discussion of debt.

Enormous dividends #nlpoli

Back when he was in another cabinet job, Premier Tom Marshall made some comments about dividends from Muskrat Falls.

Let’s take a look at them.

Premier Confusing #nlpoli

Premier Tom Marshall has been in cabinet since 2003.  He’s held pretty well all the big portfolios connected to Muskrat Falls, including natural resources and finance.

He should know details about Muskrat Falls backwards.

That’s why his comments in the House of Assembly on Monday caused such a stir:

Political Parties and Ideology in Newfoundland and Labrador #nlpoli

If you haven’t read it already, flip on over to Drew Brown’s blog coaker’s ghost and check out his post called “much ado about nothing.”

Drew discusses some recent events in local politics and makes two major points:

• There isn’t much of an ideological difference between the Liberal and Conservative parties in Newfoundland and Labrador.
• Maybe this explains why the activists for the parties tend to fight among themselves so aggressively.

There’s more there  - and Drew is always worth your time - but those are the two points to take up here.

Kremlinology 45: Optics 2 #nlpoli

On Monday,  Danny Williams was actively campaigning with Danny Breen in Virginia Waters.

Breen posted this photo to Facebook:

Breen’s campaign is in serious trouble if the Old Man is knocking doors.

-srbp-

Related:

• Kremlinology 44:  Optics

Kremlinology 46: Verb Tense #nlpoli

Premier-in-waiting Frank Coleman, anointed replacement for Danny Williams, turned up with CBC’s David Cochrane to explain to the On Point audience what he is all about.

Cochrane asked him about Danny Williams and the widespread stories about Williams’ support for Coleman’s candidacy.

What happened next is fascinating.

Kremlinology 44: Optics #nlpoli

Danny Williams appeared in Virginia Waters on Saturday  to campaign for Danny Breen, the Conservative candidate in the by-election.

Breen’s campaign wasted no time in pushing out pictures of The Appearance, like the one above, another one showing him with some young fellows out posting Breen campaign signs in the district, or the one below showing him with some volunteers in Breen’s headquarters.

Sharp eyes will notice that the shot of the two Dannys is actually from something else entirely, not the campaign, but that’s neither here nor there.

What is important to notice is that this is the first time the Old Man has turned out publicly for His party since Hisself left the leadership in an unseemly haste in late 2010.

That’s what makes The Appearance stand out. 

The Old Man has been content until now to do his work behind the scenes either directly or through agents.  The fact Hisself is out pressing the flesh among the faithful sends a bunch of potent messages.

The Whizzo Quality Assortment #nlpoli

On the outside, the spring budget for 2014 looks like a delicious assortment of goodies for everyone.  You can tell it is delectable because everyone is shouting for joy and drooling over their good fortune.

There is not a single group who have had their hands out for government money that did not get something. And they are telling anyone who will listen just how happy they are. 

Once you bite into one of sweetmeats in the Conservative Quality Assortment budget,  though, the result might be a wee bit less tasteful.

Talking about Change… #nlpoli

As you recover from what is hopefully the last big storm of the 2014 winter season, cast yourself in the role of Conservative party strategist for a second and think of what you might do.

Just to help you get your head in the right place, let’s go over the situation.