St. John's Land Prices 1997 - 2015

An argy-bargy erupted on Twitter Wednesday involving a bunch of Danny Williams Fan Klubbers on the one side and a couple of people who have a few issues with the recent plan by some folks at St. John’s city council to buy land from Danny Williams that Williams had purchased over the years from the provincial government at pretty cheap prices.

One of the Klubbers raised the issue of the change in land prices since Williams first started the land assembly for what became Glencrest and then Galway.  The idea – apparently  - was that Williams’ asking price for the land was justified since prices had climbed a lot since 1997.

That leaves out a whole whack of details that we’ll return to in another post.  For now, let’s take a look at the change in land prices since 1997.  The source for the information is Statistics Canada’s monthly report of house prices, that breaks down the price for the house and land in a typical parcel.

Let's hear it for the Fraser Institute geniuses #nlpoli

A year after Kathy Dunderdale left office, the Fraser Institute said she was one of the best fiscal managers of all the Premiers in Canada.

Provincial Conservatives repeated the story anywhere and everywhere they could, just as they had done the other time the Fraser Institute said Kathy was a financial genius.

Sound fiscal management was a big thing for the crowd that just finished up their latest term running the place.  Danny Williams listed “sound fiscal management” as one of his big promises when he announced his first cabinet.

In his first budget speech,  Conservative finance minister Loyola Sullivan reminded everyone of the promises he and his colleagues made in the 2003 election.

Prior to and during the election, we outlined a number of commitments to the people of Newfoundland and Labrador. I would like to focus today on three major commitments: 

First, to balance the Budget on a cash basis in four years and restore sound fiscal management; 

Second, to expand the economy and create jobs; and 

Third, to ensure that our health and education systems meet the needs of Newfoundlanders and Labradorians and are sustainable into the future.

In hindsight, it all looks like some kind of sick joke.  And it would be finny too if we all weren’t the ones living through the awful truth of just how badly wrong the Fraser Institute and all the rest of them were.

Metrics #nlpoli

Telegram editor Russell Wangersky tried on Monday to put the government’s financial mess into some shape that people could understand.

The simple fact, to put a shortfall of $2 billion into perspective, is that if the provincial government wanted to cover those costs outside of oil revenues, it would have to not only double the province’s income tax rates, but double the provincial share of the HST as well. (Given the current five per cent federal and eight per cent provincial breakdown of the 13 per cent HST, that would bring this province’s total sales tax to 21 per cent.)

If we could do that, we’d break even, says Russell.

Well, ummm,  no.

Russell’s got the right idea.  He just missed another billion dollars of borrowing in the budget for capital spending.  The way the government reports its spending that capital works borrowing keeps getting left out but it is stuff we have to pay for. 

And that  $3.0 billion is just to cover this year.  Next year,  the problem is due to get worse again.

The Bridge to Ottawa #nlpoli

Premier Dwight Ball said everything is on the table to deal with the massive financial problem facing his administration.

And then, in a string of year-end interviews,  Ball immediately took everything off the table.

No cuts to spending as that would slow the economy.  Ditto for tax increases.  Even “efficiency” went out as Ball told the Telegram’s James McLeod that you couldn’t deliver existing services without the existing staffing levels.

Ball told NTV’s Mike Connors that we “need to find a way to bridge us [from] where we are currently until the commodities rebound and be [sic] the significant contributor we need them to be."

The bridge Ball wants to take is a familiar one.  According to McLeod, Ball is “ counting on infrastructure money from the federal government to help out some, and he’s also taking a close look at the equalization formula, to see if the province can wring any more money out of Ottawa.”

What are Ball’s options in Ottawa?

Up the harbour and down the shore, again #nlpoli

Today marks SRBP's anniversary.  The first post appeared on January 3, 2005.

Events of the past few weeks are a reminder of both how much has changed - we have a new government party - and at the same time, how little has changed.  Read on and you will see how little has changed.

Danny Williams and the Conservatives won the 2003 election promising to cure all the province's financial ills by "growing the economy."  Danny Williams said time and again that he was all about "jobs, jobs, jobs."   They'd attacked the Liberals over their poor financial management and promised to do things better.

In the middle of 2006,  CBC updated the world on Williams' progress. "These days," SRBP wrote, "the Premier is feeling a bit beleaguered, at least if a piece that aired recently on CBC is anything to go by.

The Premier's own take on things doesn't really have any evident shred of optimism. 

Rather the Premier appeared to be speaking defensively: gimme credit for saving the place from imminent bankruptcy. We have things going on that no one can control. In the meantime,we are working on planning to plant seeds for future growth. 

Interestingly enough, the province was never facing imminent bankruptcy: that was the Premier's fiction. The other factors he mentioned [in the interview] were specific to ... some companies in the fishery alone. The same factors - like Chinese competition and high exchange rates - don't affect other economic initiatives or don't affect other industries in the same way.  

The segments with the Premier were an interesting clue to Danny Williams' current state of mind. If March was manic, then June is borderline depressive.

That June 2006 post continued:

What was pretty clear in 2003 was the province could get out of its budget woes with some careful planning and with the continued economic growth coming from the offshore and Voisey's Bay. We all knew that growth was coming. Danny knew it too and that's why he ran the election on the up-note of growth. 

What no one knew was that oil would hit US$70 a barrel and the cash would be pouring in at a rate no one in the province had ever seen before. That allowed Danny Williams to avoid making a whole bunch of good decisions and to crank up spending to unprecedented and, and in light of the economic slowdowns, likely unsustainable heights. 

These days, though, there is no mistaking the point that the provincial government is in a hard spot. There are some factors in the economy that are beyond Williams' control. The stuff that is within his purview either foundered for one reason or another or simply have never existed. 

And that goes to the core point of this piece from shortly after the 2003 election: government needs to focus on what government does. 

In largest measure, since 2003 Danny Williams has focused his considerable talents in areas where, as Premier, he simply can't have an impact. He has been trying to run in the business sector rather than applying his managerial skills to running a government that will in turn create an environment where the private sector will develop the economy.

If he wanted to create jobs, he should have stayed in the private sector and put together the deals to create jobs and generate wealth. Instead, we have wound up with a mismatch between Danny Williams' considerable skills and the challenges at hand. 

Worse still, the centralizing tendency of government bureaucracy merely reinforces the most pernicious attributes of Williams' own hands-on leadership style. This has slowed down government's processes such that many policies are done one at a time rather than in parallel.
 Government has slowed to the point where it has taken three full years to get even the vaguest idea of some policy areas - like widening Hydro's mandate - and others, like the role and impact of the Business department or Danny Williams' own economic development seeds still haven't been seen at all.

... 

Running government is like drinking from a four-inch firehose.
 The most important thing for an incoming administration is having a way of figuring out how much to drink so it can avoid getting drowned. An incoming administration has a list of the things it definitely wants to accomplish and sets to work on them right away. For everything else there is a framework that identifies what is important, what is not important and gives a guide that helps triage the stuff that pops up along the way. 

In a sense, we are looking at a Premier and a government, three years into its mandate, that is increasingly being driven on some major issues instead of doing the driving. It's a variation on the idea discussed in another "Outside the Box" column from early 2004.

Back then, it looked like those columns were just penetrating insights into the flipping obvious. In hindsight, the observations seemed to be all too relevant.

2006.

Government spending ramped up to unsustainable heights based on oil at US$70 a barrel.

Now here we are in 2016 with Danny Williams' legacy of unprecedented financial mismanagement staring us plainly in the face.

And just to show how timely a column your humble e-scribbler wrote for the old Independent in late 2003,  here's that column again for your anniversary reading pleasure.  Note the bit at the end.  That isn;t what Dwight Ball talks about when he refers to consultations, but it is the sort of thing that would change the way government operates in this province fundamentally.

---------------------------------

Up the harbour and down the shore 

If Danny Williams wants to solve the government deficit problem by producing new jobs, as he said he would, he will have to create something between 50, 000 and 100, 000 new jobs in the province over the next eight years. 

To put that in perspective, there are about 219, 000 full-time equivalent jobs in the province today according to the Economics and Statistics branch of the provincial government. Since 1996, the economy produced about 31, 000 new jobs. To meet his commitments, Danny Williams will have to produce twice or three times as many jobs in the next eight years as the province could create in the past eight. 

And he will have to do that while providing increased health services to an aging population, providing education, services, roads, water and sewer and all the other things people expect from the provincial government. And he can'’t lay off government employees or increase the deficit. 

Sounds impossible? 

It is. Just look at our collective experience in the province and you can see why making promises like "“Jobs, Jobs, Jobs" ” is nothing short of silly. Politicians seem to forget that whenever government tries to create jobs, it fails and fails miserably. 

Stupidity, someone once said, is doing the same thing over and over and hoping for a different outcome. To stop being stupid, politicians need to focus not on creating jobs - something they can'’t do - and focus on politics, something they can do. 

That'’s why, a decade ago, the provincial government decided to get out of the job-making business. It decided the best it could do is creating a climate where entrepreneurs - – people with ideas - – could focus on making jobs that last. There was a bit more to it, though. The regional economic boards were supposed to be a way to let people in the different areas of the province decide for themselves what they would do to develop their local economy. 

The boards were also part of a wider move toward more regional control over a number of things, including health care and education. After all, politics is about who decides. In a province as big as this one, with a very small population, the "“who"” who decides often shouldn'’t be someone hundreds or thousands of kilometres from the issue. One major problem is that it has been hard to wrestle power out of the hands of bureaucrats and politicians in St. John'’s who want to keep deciding just about everything, right down to who can and cannot ride the local school bus. 

But the logic remains. Take Eastport, for example, or other areas of the province where local fishermen have had a greater say in how the resources they depend on are managed. They make sensible decisions based on science, their own knowledge and their own interests. They virtually eliminate poaching. They close fishing in areas where it needs to be closed and develop new ways to improve the price they get for their product. 

Maybe it is time to take these ideas a step farther and create a form of regional government that promotes economic development and administers health care, municipal services, education and even social welfare programs. New regional councils, elected regularly, would sort out local priorities and make decisions on that basis. The provincial government can look after setting broad strategic goals, much like the federal government set down basic principles for Medicare and then lets the provinces actually deliver the services. But the decisions on where hospitals go, or indeed if a new hospital is actually the best way to deliver health care in that particular region are left to the people who will be directly affected. 

Transferring power for some decisions from St. John'’s to new regional governments wouldn'’t be a magical solution to job creation or anything else. It also won'’t guarantee equal success everywhere. What it will do is involve more people in deciding what the future will look like in Newfoundland and Labrador. In an odd way, a new approach of regional government -– a county system - might help people realize that the issues up the harbour are much the same as the ones down the shore or in the four distinct regions of Labrador. 

For the provincial government, those politicians can look at projects like Voisey'’s Bay or the offshore for the government revenues they generate, rather than the number of jobs. The deficit problem might just get sorted out by thinking outside the box for a change.

-srbp- 

Consistency #nlpoli

"We need to find a way to bridge us [from] where we are currently until the commodities rebound and be [sic] the significant contributor we need them to be." That’s what Premier Dwight Ball told NTV’s Mike Connors in an interview that will air in full this coming Sunday.

The words are very familiar. 

We heard them just a few short months ago.

"I have laid out a five year plan,” Conservative finance minister Ross Wiseman told the House of Assembly last spring, “to bridge the commodity revenue dip and get us back to surplus, step by responsible step." 

Advice #nlpoli

New governments often wind up in a bit of a pickle.

They walk into a new job where they are supposed to be the folks in charge, but they very often aren’t the people who initially know how everything works. They don’t know how to get things done but they have things they need to accomplish.

The folks who do know how everything runs are the public servants.  According to the theory,  the public servants are supposed to be the impartial professionals who give every government expert advice n how to handle every problem.  They are supposed to be separate from the politicians.

The theory is one thing. 

Practice is another.

Do election signs work? #nlpoli

Apparently, they do.

In four randomised field experiments, researchers at Columbia University found that lawn signs increased vote share by about 1.7%. They published results of their research online on Christmas Day.

That isn’t going to win an election single-handedly but it could be the difference in a tight race. The advertising didn’t drive turn-out but it did increase awareness of a candidate.

Sasha Issenberg, author of The Victory Lab, looked at lawn signs for Slate magazine in a 2012 article. Issenberg noted studies that showed a correlation between signs and voting. In one study, “households that displayed either an American flag, football insignia, or campaign sign were 2.4 times more likely to have a resident who voted in the elections than houses which had none of the three.”

-srbp-

Top SRBP Posts of 2015 #nlpoli

1.  The Dunphy Shooting:  Serious questions  In January, we are supposed to get the results of the police investigation into the shooting of Don Dunphy.  Then there'll be a public inquiry.  Maybe then we'll get the whole story into both the shooting and the efforts to spin the story over a couple of tweets that ended with the shooting death of their author.

2.  DHDM 2:  St. John's East  The biggest political upset in recent newfoundland and Labrador political history was Nick Whalen's defeat of Jack Harris in St. John's East.  Harris and his team were beaten by a young upstart who worked really hard.  The NDP campaign was hampered by a combination of arrogance, the incompetence of the national campaign, and just sheer laziness on the part of the local NDP.  For Whalen supporters, the night was all the sweeter as the upset in St. John's East became the story out of Newfoundland and Labrador, replacing the heavily spun story that Seamus O'Regan,  the good friend of the prime minister and guaranteed cabinet minister was really where all the news would be.

3.  Rumpole and the Family Compact  The last year of the Conservative term in office was marked by a series of abusive appointments.  None was more odd than the sudden switcheroo of Pam Goulding and her husband, Mark Pike, as chief judge of the Provincial Court.  Pike had a year left in his term of office and was certain not to be re-appointed by a new Liberal administration in light of Pike's disastrous term. As the story filtered out of the Confederation Building some people within the government at the time tried to get Pike appointed to a second term a year early.  When that provided to be impossible, the people looking to manipulate the appointments process did the next best thing:  Pike quit inexplicably and cabinet stuffed his wife in the job.

Infant Holy (low brass quintet)

Santa Baby

-srbp-

The Merry Christmas Financial Update and other sick jokes #nlpoli

First, anyone who keeps talking about the two percent HST cut simply has no idea what the hell is going on in provincial finances.

Seriously.

Give it up.

You are only embarrassing yourself.

Second, absolutely no surprises in the latest update on provincial government spending. Well, no surprise for anyone who has been following SRBP faithfully.

For the rest of the folks out there,  the whole thing probably came as quite a shock.

Blind in one EY #nlpoli

The new Liberal administration is firmly, irrevocably committed to completing the Muskrat Falls project regardless of the final cost to the people of Newfoundland and Labrador.

We know the Liberals will build the MF project because Dwight Ball said precisely that several weeks ago. We cannot let it fail,  Ball told a CBC audience in September.

We know Ball is committed to building Muskrat Falls because he told reporters on Monday that “cancelling this project is not what this review is about.”

Ball and the Liberals have argued for some time now that the problem with Muskrat Falls was nothing more than bad management.  To prove this, Ball and natural resources minister Siobhan Coady announced on Monday that they would send an accounting firm back to do what the same firm just finished doing a few months ago.

Mr. Speaker Osborne #nlpoli

Members of the House of Assembly had the good fortune of having two fine candidates for Speaker.

While SRBP endorsed Scott Reid, the House made an excellent choice in Tom Osborne. Tom is the longest-serving member in the House having first been elected to the House in 1996. He held a number of cabinet portfolios in the first Williams administration before crossing the floor to sit as an independent. he eventually joined the Liberal caucus.

Osborne brings considerable experience to the job, plus he brings a reputation for fairness and integrity. He is well-liked and widely respected.

Adios comments section

The comments section at SRBP is gone,  this time for good.

The theory was great.

People could offer their own views on your writing and then you could have an exchange of views based on mutual respect,  even if the conversation got animated.

In practice,  online comments – whether on blogs or on conventional media sites – quickly became the domain of  arseholes.  They post under a variety of fake identities and spew what most arseholes spew. More often than not the same arsehole had multiple identities to increase the quantity of mayhem.

So it is that newspapers have started to shut down the comments functions on websites.  No one will mourn their loss.

Scott Reid for Speaker #nlpoli

Liberal member of the House of Assembly Scott Reid is a candidate for Speaker of the House.

By the looks of things,  members will have a competition for the Speaker's chair.  That will be a first.
In the past,  nomination of the Speaker was treated as a prerogative of the Premier.

Having a competition for Speaker will be a key element of reforming the House and separating the House from the control of the government.  Scott Reid has the personal integrity to uphold the traditions of the House,  to protect the rights of members, and to resist any efforts to curb the legislature.

Reform of the House is an important feature of the Liberal platform.  Reid has the professional knowledge as a political scientist and the experience as a political staffer to guide the reform.  Scott also has the personal qualities the new Speaker will need to work with both his newly elected and veteran colleagues to bring about that reform.

The Speaker has significant responsibilities to manage the statutory officers, such as the child and youth advocate,  the privacy commissioner, the chief electoral officer,  and the auditor general.  Scott's personal commitment to the integrity of those positions will be crucial to successfully reforming the way those positions have been filled and the way the incumbents fulfill their responsibilities to the people of Newfoundland and Labrador.

Scott will likely have competition from Tom Osborne.  Osborne has wanted the Speaker's job for some time now.  Kathy Dunderdale saw to it that Osborne didn't stand a chance after the 2011 election.  Tom Osborne would be a fine Speaker.

But for your humble e-scribbler,  as good a man as Tom Osborne is, Scott Reid is the choice.

-srbp-

The Quick Clay Dam #nlpoli

A very short post by James Gordon at Uncle Gnarley contains a whole lot of information about the dam Muskrat Falls.

Gordon is a retired professional engineer with a 60 year career that took him to projects in 15 countries. He knows about hydro-electric dams. Six of Gordon’s projects won awards of excellence for design.

Gordon took a look at the plan for Muskrat Falls. Here are a couple of key points.

Nalcor plans to use the North Spur as a key part of the dam. “The hill consists of three layers of sand, and two layers of quick clay, sloping downstream, on a deep foundation of quick clay extending down to far below tidewater.”

Even after Nalcor takes measures to counteract the tendency of quick clay to liquify when it is disturbed, two layers of quick clay will remain within the main body of the dam.

“To my knowledge, Gordon wrote, “quick clay has never before been used to form part of a dam structure, nor has a dam been built on a quick clay foundation.”

“Since the design of the North Spur dam is without precedent, and the consequences of a failure are catastrophic, it becomes imperative to have the design reviewed by an independent panel of experts – a Review Board, to provide added assurance that the design is acceptable.”

-srbp-

Changing the direction. Changing the tone. #nlpoli

A month ago,  a CBC “analysis” by David Cochrane warned against a band of Liberals running the government with too much power.

Two weeks ago,  another CBC “analysis” by David Cochrane told us that Dwight Ball was an “unlikely” fellow to be Premier who now faced an enormous task of dealing with the government’s financial problems based on a campaign platform that was, supposedly, “greeted with enormous skepticism in the final week of the campaign.”

And now we have the latest Cochrane “analysis” that tells us that the public service is liking their new bosses.  The administration has been delivering on “Ball's campaign promises of evidence-based decision-making and to bring [sic] stability to cabinet by ending the practice of frequent shuffles, thereby leaving ministers in place long enough to build command of their portfolios.”

What changed?

Well, it certainly hasn’t been Dwight Ball and the Liberals he led to a substantive victory in the recent election.

The Bonds of Muskrat Falls #nlpoli

15 minutes.

That’s all Tom Marshall said it would take to sell out the bonds on Muskrat Falls.

He also said that a federal loan guarantee would lower electricity prices for consumers from Muskrat falls.

The price one wasn’t true at all, as it turned out, and the bonds aren’t all that popular either.

Revisiting the spring budget: a little thought experiment #nlpoli

Last spring,  SRBP looked at some speculative budget projections using some different prices for oil and  assumed growth in revenue from non-oil sources.

The results weren’t pretty.  The only way to get to a surplus was if you managed to hold spending constant.  Even a modest increase in spending would throw everything out of whack.   And in the one scenario where you got a surplus, it vanished as oil production dropped.

Well, folks, reality turned out to be uglier than the optimistic forecast of the provincial government at the time and its pet economist, Wade Locke.  The assumed average price of oil last spring is now a distant memory.  The most recent forecasts from the United States suggest oil may hover around US$50 a barrel until we are into the next decade.

So let’s take another look at those figures.