Debt servicing and revenue, 2013-2016 #nlpoli

There are lots of ways of looking the government's budget. Here's one that's a bit unconventional.

Rather than look at how much the government is spending on debt servicing as a share of all expenses, let's take a look at what it means as a share of the government's income from its own sources.

Debt servicing is the amount spent to pay the interest on public debt. Own-source revenues excludes federal transfers and borrowing.

Year	Percent of Own-Source
2016b	21
2015	16
2014	07
2013	06

The percentage is a function of the amount spent to pay interest on the public debt and the amount of money the government earned from its own sources.

Debt servicing tripled in four years, going from $360 million to more than $1.0 billion. Own-source revenues dropped by about a billion dollars, going from $5.762 billion in 2013 to $4.775 billion in the 2016 budget.

That's a really good indicator of how rapidly the government's financial situation deteriorated.

-srbp-

Torque wars: media, politicians, and the Muskrat Falls loan guarantee #nlpoli (2011)

Some people will tell you there the federal and provincial governments have a deal for a federal loan guarantee on Muskrat Falls.  The provincial government has already met three criteria set by the federal government and Stephen Harper confirmed that in a speech in St. John’s.

That’s what you could take out of some stories from different media outlets coming out of Harper’s campaign stop in Newfoundland and Labrador.

Bear in mind though that the loan guarantee story took a couple of turns within the past 24 hours even for one single news outlet. 

On Wednesday, CBC reported the deal was done:

Multiple sources tell CBC News, though, that the federal and provincial governments have reached a deal on the terms of a loan guarantee.

Multiple sources.

Multiple unidentified sources.

Not even a hint if they were highly placed in both the federal and provincial governments.

Sometimes that happens.  You don’t even give the slightest clue as to the authenticity of the sources on which the story is based. Put it down to a judgment call.  Doesn’t mean that the comments are right or wrong, but it could put a question mark over the accuracy of the information.

Campaign Finance Reform: shifting attention #nlpoli

Until 1996,  there were no campaign finance laws in Newfoundland and Labrador at all.

In 2003,  the Conservatives promised to make dramatic changes to the laws governing how parties financed election campaigns.

They delivered none of it.

In 2015,  the Liberals promised changes to campaign finance laws and one year into their new mandate, the Liberals are looking at appointing some experts to make recommendations on changes to elections laws.

In the weekend Telegram,  James McLeod described this lack of action one year into a new mandate as "massive delays" on democratic reform but starts out his story by talking about something else entirely.

That's your first clue something is out of focus.

Williams announces political exit plan (2010)

Danny Williams always said that building the Lower Churchill was the only thing he wanted to do before leaving politics. He took a huge step down that road in 2006 when he rejected other options in favour of the supposed go-it-alone strategy.

With no markets and no money for the project, and with setback after setback in the environmental and land claims fronts, the odds were slim he could achieve that dream.

Slim odds, that is, until this weekend. Williams told provincial Conservatives he is trying to lure Nova Scotia and Emera  into a deal to build a greatly scaled down version of the project.  That confirms he is trying to cut a deal so he can leave politics.

If only we were New Brunswick... #nlpoli

Premier Dwight Ball has talked about it.

CBC's Peter Cowan tweeted about it Sunday night.

If only we were like all those lucky provinces that get Equalization,  we'd be right as rain.

We can allow that Peter may not understand federal-provincial finances at all, even if he does cover the legislature a lot.  If there's one thing SRBP readers will know is that most people in the country, including pretty well every reporter and politician,  hasn't got a clue about Equalization.  Well, give Peter a bit of a break but there's no excuse for cabinet ministers being stupid enough to talk about Equalization like a province was entitled to it because it was running a deficit.

You can find a summary of Equalization from SRBP last January. You can find an earlier dose from 2005. That should give you the basic understanding Dwight and Peter evidently lack. But for the fun of it, let's look at how we might fare if we were the same as New Brunswick as far as Equalization is concerned.

Behaviour Patterns #nlpoli

January 2016.

Dwight Ball tells reporters in year-end interviews that "everything is on the table" to deal with the government's financial problem.

Then, Ball took everything off the table. As SRBP put it last year:

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.

In the budget,  the provincial government boosted spending by 12%.  That was on top of the 12% boost the year before.  Ball increased taxes, largely because the bond raters and the short of cash in the markets gave him no choice.  There were some modest cuts but the cash just got shifted to spending somewhere else.

The big cuts, the serious cuts or whatever Ball hoped to achieve with the unions would come in negotiations.

All the usual suspects - opposition politicians, union activists, people dependent on government hand-outs - accused Ball and the Liberals of "austerity".

Rumpole and Justice Delayed (2009) #nlpoli

There is no question that our system provides a great method for adjudicating questions of fact and law, but given the expenditure of public funds we are obliged to the people of Newfoundland and Labrador to provide the best possible system in terms of the efficiency of the process.

Report of the Task Force on Criminal Justice Efficiencies, February 2008

Administrative changes recommended by a committee of lawyers and judges to improve the province’s justice system still haven’t been implemented over 18 months after they were made public.

In December 2007, newbie justice minister Jerome Kennedy appointed a task force that included deputy minister Chris Curran, then Chief Provincial Court Judge Reg Reid and Mark Pike, the current associate chief judge, among others.  They issued their report in February 2008because they were specifically directed “to make recommendations and to meet any necessary budgetary deadlines for the ensuing fiscal year.”

The committee agreed that “with appropriate leadership, goodwill and resources, its recommendations could be fully implemented by the fall of 2008.”

Oil downturn slams petro-provinces' jobs #nlpoli

The four provinces heavily dependent on oil and gas resources took a major hit in jobs in 2016, according to seasonally-adjusted figures released on Friday by the Dominion's statistics bureau.

Alberta lost almost 35,000 full-time jobs. Nova Scotia lost more than 13,000 full-time jobs. Saskatchewan dropped 12,400 full-time jobs.  Newfoundland and Labrador lost 6,000 jobs between December 2015 and December 2016.

Growth in part-time employment in the same period offset the losses. Newfoundland and Labrador gained only 300 jobs, leaving it with a net employment loss of 5,700. Nova Scotia added almost 16,000 part-time jobs, though,  giving it a net gain in employment. Saskatchewan added 5,500 so the province ended the year with a net loss and in Alberta,  the economy added more than 16,000 part-time jobs.

None of this is a surprise to anyone who has been paying attention.  The downturn in the global oil industry that hammered Newfoundland and Labrador's government revenue has also been kicking the local labour force. In Newfoundland and Labrador, the government forecast last spring that the economy will shed jobs steadily over the next four years as the megaprojects at Long Harbour, Bull Arm, and Muskrat Falls wind down.  We got a reminder of that in August in some comments by education minister Dale Kirby.

Males fared worse than women in the Newfoundland and Labrador seasonally-adjusted full-time jobs figures.  Male full-time employment fell from 107,400 to 99,900 between December 2015 and December 2016.  By contrast,  1,400 women had full-time jobs in the province in the same period (from 87,400 to 88,800)  Part-time employment among males went from 9,500 to 13,000, while female part-time employment fell (28,600 to 25,400)

-srbp-

Media Donations to NL Political Parties #nlpoli #cdnpoli

Steele Communications and its subsidiary VOCM made a combined total of $23,600 in contributions to political parties in Newfoundland and Labrador between 1996 and 2009, according to party finance information published by the province's chief electoral officer.  All but $900 of it went to the provincial Liberal party.

Communications Ten,  owned by the publisher of Atlantic Business Magazine,  donated $7,700 to the provincial Conservatives between 2003 and 2015.  The company gave the Liberals $50, once.

Robinson-Blackmore operated a string of weekly newspapers across the province until it was bought out by TransCon.  Between 1996 and 2001, RB  made political donations totalling $7,489.20 to Liberals and Conservatives.

Electoral office records show one contribution by Newfoundland Broadcasting Corporation  to the Conservatives for $1,000 and a single donation of $150 to the Liberal party by Downhome Publishing since 1996.

Until 1996,  Newfoundland and Labrador had no rules governing election financing.

-srbp-

The poverty of "we so po'" rhetoric (2008) #nlpoli

“People need to understand government cannot write a cheque for everything,” said Williams.  

“We can’t be all things to all people.” “On the other hand, even in poor times, we have tried to do the best we could for people who were, for lack of a better term, in poorer positions.” 

Those were some comments made by the Premier to news media in Corner Brook after a two day cabinet retreat.

The first reaction would be to wonder when, over the past four years, has the provincial government actually experienced "poor times".

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.

-srbp-

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.