Putting the sunk in sunk cost #nlpoli #cdnpoli

Muskrat Falls is basically an $800 million tax on the people of Newfoundland and Labrador. That's roughly the amount you get using numbers Nalcor chief executive Stan Marshall made public last summer.

Muskrat Falls is a tax on the people of Newfoundland and Labrador.  Always was that.  Never was anything else.  The plan was to collect the tax by doubling electricity rates.  Regular readers have known this since *before* Danny Williams announced the scheme.

Take all that as the starting point when you hear Dwight Ball tell Anthony Germain on the CBC St. John's Morning Show that Ball is spending a lot of time trying to figure out how to keep our electricity prices from doubling.

Williams concedes on royalties (2007) #nlpoli

As Bond Papers noted on Thursday, part of the Hebron deal will involve a change to the provincial royalty regime local media are characterising as a concession.

The Telegram reported on Friday morning that the province will indeed lower the initial royalty to a flat 1% on gross from an escalating regime that maxed at 7.5% until the project recovered its initial development costs.

After that, royalties jumped to a combined 305 in two separate tiers. After simple payout, provincial royalties were based on net profits which provided the companies with a rate of return allowance.

Under the royalty regime for Hebron, the province will collect 1% for as long as it takes the project to recover start-up costs.

Public Support for Muskrat Falls #nlpoli

Corporate Research Associates isn't the only pollster in the universe, no matter what some people locally seem to believe.

CRA released  the results of a question the company asked during its omnibus last November.  They found support for Muskrat Falls at 45%.  That's down from 54% in May 2016,  65% in May 2015, and 63% in February 2013.

"For the first time",  CBC reported on Wednesday,  more people don't support the project than support it.

First time?

For CRA maybe but not for others.

The Danny Brand (2006) #nlpoli

 The defining characteristic of Danny Williams' term as a politician - and particularly his term as Premier thus far - has been his relentless use of specific marketing approaches to maintain a permanent campaign.

The notion of a permanent political campaign is not new. The concept of a party continuing to use campaign communications approaches when in government first appeared in a memo from Democratic political consultant Patrick Caddell to Jimmy Carter before Carter's inauguration in January 1977.

Former American president Bill Clinton and British prime minister Tony Blair have been accused of handling their communications once in office no differently from what they did during an election campaign. As Catherine Needham has described it:

[Permanent campaigning] captured a sense that there was no stark distinction between campaigning and governing given that the personnel, tactics and tools of the election campaign followed the successful candidate into office. The permanent campaign concept involves more than a recognition that politicians start gearing up for re-election well before the official campaign begins. It is a claim that campaigning is 'nonstop'.

Needham contends that the permanent campaign concept is too limited to explain both Clinton's and Blair's repeated electoral success in highly competitive and complex political markets. Both Clinton and Blair have experienced highs and lows in public support, reflective of their respective political environments that are characterized by strong two-party or multi-party systems and the difficulty of sustaining a deference to political authority in systems where dissent from popularly held ideas is commonplace. Instead, Needham applies notions of branding and relationship marketing to explain the Clinton and Blair approach to government in a more complex form of permanent campaign.

However, in Newfoundland and Labrador, the political environment is small, does not have a strong party system and has certain conventional ideas that both suppress dissent and encourage a deference to dominant ideas and political actors. In such an environment, permanent campaigning - coupled with a rudimentary notion of branding - can explain Danny Williams continued strong popular support.

Books, tents, fishing rods and such #nlpoli

Don't ask why but Statistics Canada groups books in with sporting goods, hobbies, and music.

The picture shows total sales in Newfoundland and Labrador each months from january 2014 to October 2016 for these items.

The figures are in thousands of dollars.

The average per month over the whole period is about $9.8 million.

The two peaks are the pre-Christmas rush.

Everything on that list right there was subject to provincial sales tax for the whole list, except for the books. In 2015,  the sector generated a little under $130 million in retail sales, in total.

The government's own estimate puts the value of the book tax at $2.1 million.

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Taxing our understanding #nlpoli

Over the past week, there's been a flurry of comment about gasoline prices and the fact that, as of New Year's Day, a  provincial sales tax now applies to books.  It's 10%, on top of the federal sales tax of five per cent.

All sorts of people are talking about these two things as if they are the most important things in the world and the most horrible things in the world.

Let's look at the book tax.

Spending the future (2005) #nlpoli

" [The change in the province's financial outlook] That's very dramatic...Some people are going to stand back and say 'Oh yeah, that's just because your very lucky. That's because the oil prices have gone up.' Well, no. That's part of it. But we had a tough budget, a prudent budget. We've managed the province, fiscally, very tightly."

Premier Danny Williams

Quoted in "Cash boon may fund province's infrastructure"

by Rob Antle, The Telegram, 22 October 2005, p. A3

Premier Danny Williams is absolutely correct.

The provincial government's financial state is a direct result of oil and gas revenues. High oil prices have produced a boost beyond what the Real Atlantic Accord, the offshore royalty regimes and development at Voisey's Bay would have produced anyway.

Unfortunately, the premier's positive comments may have two unwelcome results. First it may make it seem as though the province can afford to increase spending in a number of ways. Second, his comments divert attention away from the fundamental failure of the Williams administration, two years into its mandate, to produce integrated plans to address the province's financial windfalls in a way that will yield the greatest long term benefit.

Newfoundland and Nutrition in the 1940s #nlpoli #cdnpoli

Scholarly papers seldom get news media attention.

When a paper combines a well-known, emotionally charged issue – aboriginal residential schools – with intimations of racism and unethical medical experiments on unwitting human subjects, it’s hard not to get noticed.

Ian Mosby's paper published in 2013 deserves attention for many reasons, but one of the areas not likely to get noticed by most readers is one that would be familiar to many in Newfoundland and Labrador. 

And it's also a major problem with Moseby's historical spin.

On Meaning #nlpoli

Brexit supporter and insurance magnate Arron Banks got into a tussle on Twitter late last year with Cambridge classicist Mary Beard. Banks tweeted that Rome had been done in by immigrants, with the obvious implication that western European countries should be wary of letting all sorts of people cross their borders and settle down.

Beard took issue with that rather superficial view, and things went down hill from there. Banks pitted his very best recollection of grammar school history  - as well as Gladiator and I, Claudius apparently - against a Cambridge don.  Even J.K Rowling got in on the act.

This sort of clash is going on more and more these days with the rise of a nationalists and nativists across western Europe and North America.  As in the discussion of the Beard-Banks exchange, lots of people decried the comments as an example of the post-factual world we live in.  Facts don't matter any more. Folks believe what they want to believe and will act accordingly.

Lots of people on the political left or in the centre are decrying this supposedly new trend but there's a bit more to it than the rise of ignorance or the end of western civilization as we know it.

Praying for a miracle #nlpoli

People are talking about austerity but the simple truth is the people talking that way have a vested interest in exaggerating what is going on in the provincial government.

Yes, we *are* in a very dangerous financial state.

But... the provincial government is doing the bare minimum to keep the creditors happy while waiting nervously for oil to come back​.

In the meantime, there is no austerity and anyone who says otherwise is either ignorant or a liar. 

Some folks are looking at the price of oil and get excited over the teensiest of changes in the price per barrel.  They are missing some simple stuff, though, and at the start of the New Year, it is worthwhile for us to take a quick refresher in basic oil royalty math.

2016 in books #nlpoli

1.  Brand Command by Alex Marland.  The book that political marketing and communications academics will be quoting for a while to come.

2.  Observing the outports by Jeff Webb.  An accessible examination of the role the new university, its professors, and students played in the social and economic changes in Newfoundland and Labrador during the first 30 years after Confederation.

Two copies at Broken Books by the war memorial.

3.  Beating against the wind by Calvin Hollett. On one level,  a history of a theological dispute among Anglicans in Newfoundland 150 years ago but on another a book offers greater insight into the country and the people who built it. History from the ground up.

In the interest of full disclosure, Hollett is no close relation relation but a key figure in the book - Thomas Edward Collett of Harbour Buffett  - is my maternal great-great-great grandfather.

4.  Conflicted colony by Kurt Korneski.  A study of five conflicts that broadens and deepens our understanding of Newfoundland in the 19th century by applying a new lens to our view.  Far from being culturally or politically homogeneous,  Newfoundland in the 19th century was a frontier where diverse groups formed and reformed relationships in a constantly changing environment.

5.  Sweat equity by Chris Sharpe and AJ Shawyer.   This is the story of how the Commission government and the new provincial government after 1949 first recognised the desperate need for decent housing and then tried to meet the need using the resources available.

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Top 10 Posts of 2016 #nlpoli

These are the posts you read the most of all.

01.  Balls digs himself deeper into hole - May 2016 and yet another twist in the tale of Ed Martin's departure from Nalcor,  Dwight Ball knew and when he knew it.
02.  A no-holds-barred review - Bill Rowe's latest book, reviewed.  Shoulda been the No Punches Pulled review.  No holds barred was John Crosbie's 1997 memoir.
03.  Jim Thistle, 1954 - 2016
04.  Anger Ball - June 2016 - Dwight's head exploded
05.  Thank you, Danny Williams - Hebron is on the way but it won;t be as lucrative as people might hope.  Prices are down, Hebron oil will be discounted by the market, and to cap it all,  the development agreement with the province included a huge give-away on royalties.
06.  Worst possible time for HQ deal - Lots of talk that there's a deal in the offing between Hydro-Quebec and Nalcor.  Not a good time for it.
07.  Water rights, Muskrat Falls, and the Muskrat Falls Disaster - Controlling water flows on the lower Churchill River are crucial to operating Muskrat Falls properly.
08.  The Rasputitsa and the 2016 Budget - We are still mired in a financial sinkhole
09.  Not just another pretty face - Stan Marshall
10.  From a decade of prosperity to $2 billion deficits:  what happened?  (Roger Grimes)

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Reality Check: gas tax and debt/deficit #nlpoli

Comment on Twitter:

"If my household spends too much and goes into debt I don't expect others too pay for my mistakes, yet govn makes us pay for theirs."

Reality Check:

The provincial government is your household.  It's heavily in debt and seriously overspending. No one else is going to pay for it.  This one is on you and the rest of us. Glad you understand the principle, though, and will cheerfully help clean up.

Comment on Twitter:

When the gas tax was introduced Ms. Bennett promised: "that as oil prices rise the gas tax will go down"

Reality Check:

That bit in quotes isn't anything Cathy Bennett ever said.  Nobody has been able to find any comment anywhere that comes close to saying that the tax will go down as the price goes up.  That implies the government has some maximum price in mind and it suggests the tax will go down proportionately as gasoline increases.  

Here's finance minister Cathy Bennett during the budget speech:   "Effective June 2, 2016, gasoline tax will temporarily increase by 16.5 cents per litre. This tax increase will be reviewed ahead of the fall 2016 supplemental budget."  She said the same thing in the House of Assembly during the spring session. 

In the fall, the government opted not to have a supplemental budget and they didn't review the gasoline tax.  Bennett just promised there'd be "more clarity" come the spring budget.The closest anyone could find - including the guy who tweeted the comment - was a comment by the person who wrote a CBC story.   

Nothing from Bennett, though.

Meanwhile, if someone does find a quote that Bennett said the tax will go down as the price goes up, this post will change.   Stay tuned.

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Fact-checking CBC and Food Banks #nlpoli

The headline on the CBC story just felt wrong.

The kind of over-the-top exaggeration that just sounds biased.

Distorted.

Wrong.

"Food bank need jumps in N.L., ending years-long trend."

The first sentence was the same:  "After six years of near-consistent decline, food bank usage has jumped in Newfoundland and Labrador."

The second sentence, though, wasn't quite so emphatic.  Now there was just a change from 2015 to 2016 in the proportion of people in the province using food banks.

Time to check the data:  in this case, a report from the national food banks association. You cand find the same data and more besides in a report from the group Canada without Poverty.

The Tibb's Eve Accord #nlpoli

Health minister John Haggie said that the health deal signed with Ottawa on Tibb's Eve was the best deal that could be got.

Haggie's probably right.  At least, the deal contains a clause that if another province gets a better deal, we can opt for that one instead.

It's been so very long since we've seen federal-provincial rackets over money that most people in Canada seem to have forgotten what they look like.  Stephen Harper didn't run federal-provincial fiscal relations like other prime ministers so the provinces stopped squabbling publicly.  Even Paul Martin was basically about handing out cash so, aside from premiers who postured entirely for the show of it, there was never really much of the sort of disagreement and negotiation that Des Sullivan reminded us all about on Monday past.

Bullying and Bennett #nlpoli

Cathy Bennett is the finance minister.  She's one of the most powerful and influential people in the province, bar none and certainly she is among the most powerful and influential women in the province.  If you just counted politicians, her role as finance minister puts her among the most influential people in Canada at the moment.

Shortly before Christmas, Bennett held a news conference to say that she had been bullied by people making comments on social media. Some of the people were anonymous and at least one of the comments Bennett complained about came from a group that was specifically protesting the government's budget.  In fact, every single comment Bennett mentioned, no matter how harsh,  came as a result of the spring budget.

Bullying is an interesting word to use here because it involves a power relationship.  What Bennett claimed  - in essence - was that anonymous people on the Internet were more powerful than she was. Lots of people were quite quick to agree with her. People like Lana Payne, an influential union leader, who devoted her Christmas Eve column in the Telegram to affirming that Bennett was weak and impotent because she was a woman in the face of anonymous men  - or people she assumed were men on social media.

Policy is people #nlpoli

Kim Keating is a member of the newly-appointed council to advise the provincial government on oil and gas issues.

She's a professional engineer,  a senior official with a local company in the oil and gas business, and in the recent past she was the president of the St. John's Board of Trade the year that the Board wholeheartedly endorsed Muskrat Falls.

That's important because the Board not only endorsed Muskrat Falls for all the benefits that flowed to companies like the one Keating works for, but also because the Board was willing to trade away free enterprise in order to get those juicy business goodies. A key element of making Muskrat Falls work was the creation of a monopoly for Nalcor so that the company could force local consumers - and local businesses - to pay whatever it would take to satisfy Nalcor's creditors.

In other words, no matter how high the price for the project went,  local consumers would be stuck with the costs. Keating and her associates were okay with that.

But there's more to the issue than that.

Beethoven's 9th Symphony

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O come, o come Emmanuel

Canada-NL Health Deal: Warning Signs #nlpoli #cdnpoli

Late Friday evening, the provincial government announced it had signed a deal with the federal government on health funding.

We don't know what the arrangement is on the annual increase in funds but if it looks like what New Brunswick bought into,  Newfoundland and Labrador won;t see anything significant.  Once we've got more details, we'll get back to you on that.

As for the money tagged for home care and mental health,  there will be another $160.7 million over 10 years.  That works out to $16.7 annually. Since we get $738 million annual now from both the Canada Health Transfer and the Canada Social Transfer,  that works out to an annual increase of  zero point two percent (0.2%).  New Brunswick's deal got them zero point three percent (0.3%).

These health transfers will be delivered based on the population.  Since the government's own optimistic forecast has the population shrinking over the next decade, we may well wind up with less money from Ottawa at a time when our demand for health care funding will increase.

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