Cash Debt and GDP #nlpoli

For those who find this stuff interesting, here are some numbers to mull over.

You may have heard of comparing the net debt to the gross domestic product. Somebody gave Tracy Perry a bunch of numbers to read out during the recent waste-of-time filibuster.  One of the problems with her numbers was that she wasn't always comparing apples to apples.  The numbers she used from the 1990s compared cash debt to GDP while the more recent figures use a completely different accounting basis to make comparisons.

There are problems with this, as we've noted before, not the least of which is that oil revenues tend to cloud the picture.So just for the sake of making a comparison,  your humble e-scribbler took the GDP figures presented in The economy, a document released with the budget.  For debt,  let's use the cash debt figures from the Estimates.  That'll make it easier to compare apples to apples over the next few posts as we wade through this.

It's all in millions of dollars.  In other words, the 31 thousand million means $31 billion.

Marc "Two Engines" Garneau and Bad Decision-Making #nlpoli

Cast your mind all the way back to the last time Canada bought new fighter jets.​

Ooop. 

 Lost most of you already.  

No memory back that far.

Well,  it was the late 1970s.  Canada needed new jets to replace the F-104 Starfighters doing duty for NATO,  the F101 Voodoos handling the defence of Canada role, and even the old F-5 Freedom fighters doing a stint on ground attack.

The finalists were the single-engined F-16 and the F-17/F-18.  The -17. for those who don't recall, was the land version of the -18.  Same aircraft just lacking the reinforced landing gear and other bits the navy aircraft needed to slam into carrier decks.

In the end,  the air force picked the -18, in no small part because it had two engines.  Lots of pilots said that when you are flying long stretches over the vast and largely empty North,  you needed the second engine in case one of them crapped out.

Now as we look at replacing those F-18s,  we are hearing precisely the same criticism levied by some like Marc Garneau at the air force's preferred choice, the F-35.  Only one engine.  No good.

The curious thing about that old F-16 argument is that it doesn't hold up.  The F-16 has proven to be a very successful aircraft still flown and loved by all sorts of pilots around the world 40 years after its introduction.  It's performed well in combat,  including in heavily defended hostile airspace where its many critics used to think it wouldn't survive.   The F-18 is also a very successful aircraft.  Available statistics suggest that the aircraft loss rates due to engine failure is comparable for the two aircraft.

Prejudices bolstered by misinformation is no basis for making decisions that affect people's lives. The story that a bunch of cabinet ministers will sort out the purchase of Canada's next generation  of fighter aircraft is troubling on two accounts.  First there is the prejudices issue.  Second, and just as important is that the cabinet ministers are unqualified to make such a choice. \

 To see how unsuccessful this approach can be we need only look at the Sea King replacement.  Close to 25 years after the air force picked the right aircraft, we are still struggling to get a new ship-borne helicopter in service.  The right choice - the EH-101 - fell victim to the political interests and whimsical decisions of the Liberals before the 1993 federal election. They not only cancelled the EH-101 purchase,  they delayed a decision on an alternative for years, needlessly. As it stands now,  the derivative of an air frame that first flew in the 1970s won't all be in service until 2021.  That's almost 30 years after the cancellation of the EH-101s.

Had the federal government gone ahead with the EH-101s at the time or had we bought EH-101s under a revised contract,  we'd have a proven, successful aircraft in service today.  As it is,  bad decisions have cost taxpayers billions in wasteful procurement and delays only to wind up with an aircraft that simply won't ever be able to do the job properly.  It would be hard to find a better monument to stupidity than the EH-101 cancellation and the subsequent helicopter procurement.  The current federal cabinet is in danger of making the same sort of bone-headed decision again with the new fighter aircraft.

-srbp-

What's wrong #nlpoli

As with a lot of things in local politics,  the most interesting thing wasn't the fact that Steve Marshall barred Roger Grimes from a hockey rink Marshall owns.

What was fascinating was the response of plenty of folks in the province.  Some just blew it off as childish or small.  And at least one even tried the old game of blaming "both sides" for being a good example of what's wrong with local politics.

And in the process, they all approved of the behaviour.

Turning Point #nlpoli

The Great Filibuster of 2016 came to an abrupt end on Thursday afternoon as the two opposition parties decided to pack it in, having gaining precisely nothing of any substance.

The filibuster confirmed the NDP are as politically impotent as they have always been.  Meanwhile, the Conservatives lack punch, depth, and direction.  The Liberals left themselves vulnerable and rather than do them lasting damage,  the opposition parties flinched at the crucial moment.  The result is that the Liberals now get to regroup and come back stronger, having learned powerful lessons out of the spring.

To give a sense of how ineffective the filibuster was, consider that on Tuesday and Wednesday, the Liberals were able to get two crucial pieces of legislation through the House.  In both the school boards election bill and the new greenhouse gas emissions bill, the Liberals got to calmly and rationally lay out the arguments in favour of their position.  The opposition meekly listened.

Environment minister Perry Trimper came away stronger in the public eye as a result.  Education minister Dale Kirby can be abrasive when riled but on this occasion he spoke eloquently about the bill the NDp had spent the earlier part of the session hammering him over.  Kirby also got to explain why full-day kindergarten was so important as part of the government's agenda.

Now with that in mind take a look at the CRA poll released on Thursday.

The 'eart of Darkness #nlpoli

No one would be surprised if a cell phone video turned up in the next few days on youtube showing Dwight Ball before he broke his silence and talked to reporters on Wednesday.

The video would be Dwight himself, in his office in the middle of the night, hunched in the corner, staring off into the inky blackness, the only light a faint glimmer coming into a darkened Premier's Office through the large picture windows.

Out of the shadows of the grainy, found-footage clip would be nothing but his voice,  a raspy, dry-throated whisper  over and over :  " the 'orror.  The 'orror."

The Fan Klub, Churchill, and taxes - update

As the provincial Conservatives and New Democrats filibuster the levy bill in the House of Assembly that Winston Churchill quote about taxes popped up again.

The ones pushing the quote hard on Twitter seem to be mostly charter members of the Danny Williams Fan Klub. That's not surprising given that responsibility for the financial mess,  the chronic, deliberate overspending and the morass at Muskrat rest solely on his shoulders.

The House and Twitter #nlpoli

Guest post by Simon Lono

The latest House of Assembly Twitter flap raises more issues that it first appears.  Leaving aside the wisdom of the timing, it’s worth understanding why the point was raised at all.

The Telegram, in their Saturday thundering and mocking editorial condemned the whole exercise because “We actually have a right to know if you or your fellow MHAs don’t deign to come to work”.

This is true but ultimately irrelevant to the issue.  And like so many rules of parliament, pointing out absence or presence of members just seems silly until you examine why it’s there.

Entitlements and examples #nlpoli

Canadian income tax law requires that all people over the age of 71 must take payments from their registered pension plan.

Lorraine Michael is over the age of 71 and so she is collecting her pension from the House of Assembly.  She's earned it.  She's got every right to receive it.

Michael is also collecting her full salary as a member of the House of Assembly. The Telegram's James McLeod broke the story last winter.  Michael said two things about it.  First, she felt she was entitled to even more money because she was doing extra work in the House of Assembly as the de facto leader of the third party.  Second, Michael told CBC she had to double dip because that's what the law said she had to do.

Well, no, it doesn't really.

What's next for Nalco? #nlpoli

Just so that everyone is clear on this, it has taken Dwight Ball every single day from May 23 until June 2 to admit that he knew Ed Martin had received a severance payment on his departure from Nalcor despite the fact that Martin has supposedly resigned.

In effect,  Dwight Ball - as the chief representative of the only shareholder in Nalcor  - approved of the severance with his silence.  The same thing went for natural resources minister Siobhan Coady.

What's more, Ball reminded us all again that whatever happened with respect to Martin's contract was solely at the discretion of the Nalcor board, which has since resigned.

Right.

So what exactly has Dwight Ball's knickers in such a bunch?

Seriously.

Priorities #nlpoli

While everyone has been pre-occupied with Dwight Ball's psycho-drama this past couple of weeks, odds are most people missed a little bill that went through the House.

The second Loan Act for 2016 set the maximum borrowing for the province this fiscal year at $3.4 billion.  An earlier version had set the borrowing at $1.6 billion but that was actually too low once the Estimates appeared and showed the cash required to balance the books was $3.0 billion.

Some people might a bit shocked by the apparent doubling of the borrowing requirement but that really isn't the figure.  The $1.6 billion was wrong at the time it appeared in the House.

What you should notice is that the cash deficit this year has already increased by 13% and that was before the House session even finished.  40% of government spending this year will come from borrowing.

Meanwhile, Dwight Ball is worried about being held responsible for $6.0 million in severance to Ed Martin.

Maybe Dwight  needs to give his head a shake.  That is, if he can find time to pull it out of his  backside.

-srbp-

Anger Ball

Premier Dwight Ball got angry on Tuesday.

He's angry at the suggestion that he approved paying severance to Ed Martin.

Well, really he's angry at is how much Martin wound up getting now that the amounts are becoming known and unpopular but we'll get back to that.

There's actually no question that Ball was aware Martin got severance.  As the Telegram's James McLeod has noted,  VOCM's Fred Hutton asked specifically about severance on April 21.  Here's the exchange:

VOCM News Director Fred Hutton: Has Ed Martin’s severance been worked out yet? 

Martin continues to set provincial political agenda #nlpoli

On the surface, Ed Martin's statement on Monday confirmed what we already knew.

Dwight Ball knew about and approved of Ed Martin's severance payment from Nalcor.  Ball may not have known the precise detail of the amount Martin received from his severance  - about $1.4 million - and Martin's twin pensions.  James McLeod at the Telegram has chased down that angle on the story and is awaiting a reply from Nalcor about whether Martin took the lump sum payout option on his pensions.

But there is no doubt Ball knew about and approved of the arrangement to pay Martin severance even if the official story was that Martin said he quit.  Ball has said as much on several occasions, as noted by McLeod last week.  He's also made the fine - but entirely meaningless - distinction that he had no part in discussing the details of Martin's severance.

The Running Man #nlpoli

With questions swirling about what Premier Dwight Ball knew about severance payments to former Nalcor boss Ed Martin and when he knew it,  Ball has asked the province's auditor general to take a look at whether or not it was appropriate to pay severance to Martin.

Different question.

That's a pretty transparent effort to run away from the controversy that exists purely because Ball refuses to tell the truth about what he knew and when he knew it.

The Oracle of Brunei and The Prophet of Boswarlos #nlpoli

You know that the local news media are hard up for stories when they  post the musings about the current budget of somebody from Newfoundland currently swanning it in Brunei.

Well, it helps that the body is former Conservative finance minister Charlene Johnson, but if you look at what she said, it's hard to understand why she got any attention.

There are three things to notice about Charlene's ideas on how to save a penny or two that the local media didn't mention.

The Oracle on the Parkway #nlpoli

Crude oil was trading north of US$50 a barrel for about 30 seconds this week.

What with the government's cash deficit being $3.0 billion and all, CBC had someone write up a little story about what that would mean for government finances.

You will see a lot of these stories when oil jumps because they are easy to write.

Could we be richer than we think? the headline asked.

Good question.

$1 change in crude prices brings the government an extra $23 million.  That means we could get an extra $230 million if oil averaged $50 a barrel this year instead of the $40 the government assumed in the budget. Extra 10 bucks a barrel, right?

Okay.

So how much would crude oil have to hit in order to fix the financial mess for this year alone?

Last Rites #nlpoli

This week Premier Dwight Ball became the punchline to a joke.

Ball spent yet another day not giving straight answers to simple questions about what they knew and when they knew about Ed Martin's severance.  For good measure,  the opposition Conservatives managed to drag natural resources minister Siobhan Coady into the mess.  She had the same lines as Ball.  That's no good for her.

The Telegram's James McLeod tweeted on Thursday that Ball had denied in the scrum that afternoon that he knew any details.  Then someone reminded Ball of his interview with  his answer to VOCM's Fred Hutton during a news conference on April 21, the day after Martin's resignation.  Ball said that he would be speaking with Nalcor board chair "Kenny" Marshall to find out details of what Ball described as Martin's severance.  Later that afternoon,  Ball told reporters about the other payments approved by the board that morning, confirming in the process that he had spoken with Marshall immediately after his morning interview with Hutton.

McLeod is apparently planning a piece for the paper this morning that tries to document the twists and turns Ball's version of events has taken.  If anyone can pull it off, McLeod can.  What he will be doing, in effect, is writing Ball's political obituary.

Alarums and Excursions #nlpoli

Dwight Ball is hiding details of his involvement in the decision to give an enormous and unwarranted severance package paid to Ed Martin despite the fact Martin had quit as Nalcor's chief executive.

That became plain in Ball's responses to repeated questions from both opposition politicians and reporters on Wednesday.  They all asked Ball repeatedly if he discussed severance with Martin in either of two meetings the Premier had with Martin in mid-April. Ball's answer was deliberately evasive.  He had clearly rehearsed the wording precisely because he repeated it over and over and over again. The question required a mere yes or no in reply. Instead,  Ball said again and again that the matter of severance was one for the board.  Every word Ball said more than either yes or no confirmed that what he was saying was not true.

Ball also said repeatedly that he only became aware of the details of the severance on May 5. He stressed the word "details" because it is an important word for him.  Ball repeatedly stressed the word as if knowing the details of the severance were more important than knowing about and approving of the fact that Martin had received severance in the first place.

That's the sort of distinction that only comes to a certain breed of lawyers or people who would describe *themselves* political strategists.  They think this sort of thing is clever.  It isn't.  It is merely too cute by half.  Everyone knows the ploy for what it is.  It's as transparent as saying someone has quit an important job to spend more time with his family.  No one believes that one because we have heard the same lie so many times. Had we all played a drinking game with Dwight Ball on Wednesday, we'd be in hospital with acute alcohol poisoning for taking a shot every time he dodged.

Ball digs himself deeper into hole #nlpoli

Dwight Ball's latest version of Ed Martin's departure from Nalcor only deepens the political quagmire into which the Premier and his staff have worked themselves with diligent effort and persistence.

Here's how.

Red Flags #nlpoli

If you want to understand the depth of Dwight Ball's political problem,  understand that as of Victoria Day,  Paul Lane - never the sharpest of political knives in any drawer - has gotten the better of the Premier politically for the second time in a week and the third time in a year.

The first time was when Lane managed to get Ball to accept him into the Liberal caucus as a perfect "fit."  That's no mean feat given that at the time Lane was a big part of the Conservative goon squad along with Steve Kent and Sandy Collins. Overnight, Lane went from being an enemy to a close ally.

The second time was last week when Lane managed to get out of the Liberal caucus with Dwight Ball's unreserved endorsement. Had it been up to him,  Ball likely would have kept Lane in caucus. As it is,  Lane got away without a single critical word from the Liberals.  They even allowed Lane to frame his departure right down to the point of letting Lane's old political ally Steve Kent tell the world the Liberals had resorted to tactless move of sending Lane an email that he'd been voted out of caucus.  

That endorsement has now given Lane his hat-trick,  allowing to emerge on Monday as an apparently credible voice opposing the government and its very unpopular budget.  Lane can say all the things the other critics have been saying but without the stigma of being a partisan. Lane is supposedly a disaffected Grit who wanted to stay with the Liberal caucus, instead of being a Tory or Dipper. Lane can criticise the Liberals with all the credibility of someone even the Premier and the Liberals agree with:  they don't like their budget either.

How government decides - From Bow-Wow to Basenji #nlpoli

The Liberals' signature policy initiative is Bill 1.

It is so important that it is the only piece of new legislation the Liberals have introduced in this session that is directly connected to their election promises.

Bill 1 creates a new appointments commission that is supposed to ensure individuals appointed to positions by cabinet will be selected as the result of what the proposed law calls a merit-based process.

A merit-based appointments process for every appointment is such an important policy for the Liberals that, when faced with their first significant appointment,  they abandoned their own process last week.