The Financial Reality of Election 2019 #nlpoli

The financial reality confronting any administration after May 16 is the same regardless of which party wins the election. 

The government is unlikely to balance the budget in 2022, regardless of who wins the 2019 election. 

In 2019, as in 2015, the last government budget before the election did not accurately describe the government’s current or likely future financial position.  All three parties did not make this an election issue in 2015 and have ignored the government’s financial situation in 2019. 

The governing Liberals are running on their current budget, which is included in the campaign platform. They apparently have no new spending plans beyond the current budget. The Conservatives cost their plan at $254 million.  These promises must be assessed against the financial realities of the provincial government.

The Financial Situation

We can accept the government forecasts of revenue for what they are although there are some issues, as noted below.  We must add the following expenditures to the government's projected spending in 2020 and beyond.  These additional expenses are why it is highly unlikely the government will balance the books in 2022.

Voter Turn-out and Popular Vote Shares of Parties, 1949 - 2019 #nlpoli

Election turn-out has been declining steadily for provincial elections since the mid-1990s.  The 2019 general election is on track to show a record low turn-out at 44% of eligible voters.

Party share of eligible vote had declined in the same period.  The Liberal victory in 2015 went against the pattern since Confederation of an increased turn-out in an election in which the government changes hands.

In the 70 years since Confederation, provincial voter turn-out has varied in each election.

Turnout tended to be highest when there was a well-contested election such as on three occasions when the government changed hands.  The exception to this rule was 2015 when turn-out dropped from the previous election.

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In 1989, turn-out was higher than the previous election but, curiously enough, in the hotly contested election of 1993,  turn-out actually went up.  That was the third-highest turn-out since Confederation, falling only five percentage points behind the 1971 general election that effectively ended Joe Smallwood’s reign as Premier.

There was a slight uptick in turn-out in 2003, but what is unmistakable is the steady trend downward of turn-out since the peak in 1993 (the green arrow).  The 2019 projection – based on MQO’s last poll for NTV  - would put turn-out in the general election at 44%.  Turn-out might be higher than that, but the signs are pointing toward a record low turn-out even if it does not reach below 50% of eligible voters.

Where do elections come from? #nlpoli

From fixed election dates to the number of candidates that run in an election,  what Newfoundlanders and Labradorians believe about one of the basic institutions of their democracy is as much myth and rumour as reality. 

Here are some facts to help you navigate the world of post-Confederation elections in Newfoundland and Labrador.

The Crown Prerogative, exercised with the advice of the Premier

Newfoundland and Labrador does not have a fixed election date.

The changes to the House of Assembly Act in 2004 that supposedly set the election date for a day in October every four years starts with a simple clause that supersedes the fixed date bit:

3. (1) Notwithstanding another provision of this section, the Lieutenant-Governor may, by proclamation in Her Majesty's name, prorogue or dissolve the House of Assembly when the Lieutenant-Governor sees fit.

To understand how that works, we need to recall some basic constitutional points first.  Except in some very rare – but important – instances, the Lieutenant-Governor may only act with the advice of the Executive Council.

Restoring Power - Mitigating the Impacts of Muskrat Falls #nlpoli

Left untended, the Muskrat Falls project threatens the financial well-being of the government and people of Newfoundland and Labrador. The threat cannot be removed merely by directing money from one pot or another to offset the impact the mismanaged project’s costs would have on electricity rates in the province.  

The threat from Muskrat Falls can only be removed by concerted action that addresses the project’s financial burden, restores integrity to the system of electricity regulation, and that breaks, once and for all time, the fundamentally corrupt relationship between the provincial hydro-electric corporation and the provincial government. This is the only way to restore power to the province’s people so that they may control their own future.

Budget 2019 - revised trends #nlpoli

Budget 2019 was an election budget in the sense it contained a lot of little goodies, but there was nothing to get overly excited about.

While everyone else is focused on the shot-term,  the long-term trending contains more interesting tidbits.  The following slides update the post from Monday.

Income versus Spending

Budget 2019 forecasts cash spending (capital and current) of about $8.0 billion, about $200 million above the 2018 actual spending.

A CHEAP Framework - the PC and Liberal Muskrat Falls plans #nlpoli

The Conservative and Liberal Muskrat Falls rate mitigation plans are the same.  Both include magical assumptions of revenue.  Both omit crucial details.

Note: Some people asked on Monday for comment or analysis of the two plans to mitigate Muskrat Falls' impact on provincial electricity rates.  

This is an abbreviated summary of the two plans and some issues flowing from it. A more substantive analysis will come on Monday 22 April 2019 with the publication here of the SRBP rate mitigation proposal  called "Restoring Power."

General

The Conservative and Liberal rate mitigation plans are the same idea. 

This is not surprising since the Conservatives copied the Liberal approach and used the same information from the Public Utilities Board review as the basis for the plan details.

The Liberal and Conservative plan uses the following approach:

1.  Pick a Number
2. Subtract other Numbers
3. Use Magic
4. Hit zero

Budget 2019 Context #nlpoli

Most of the commentary about Budget 2019 on Tuesday will be focused on the short-term.

Here are some slides that show longer-term trending.  We'll update them later on with the Budget 2019 figures.This is the sort of stuff that bears watching especially since the announcement of a new federal transfer payment came with the unexplained claim that it will magically reduce public debt and return the government to surplus over night.

The 2005 and 2019 Federal-Provincial Agreements #nlpoli

The Atlantic Accord functions in Newfoundland and Labrador politics in two ways.  There is the agreement between the Government of Canada and the provincial government that established the joint management framework for the Newfoundland and Labrador offshore. At the same time, there is the political prop and the associated mythology that has, in largest measure, replaced the actual agreement in both the popular and political/bureaucratic understanding of it.

Neither the 2005 nor 2019 federal-provincial agreements commonly referred to as the Atlantic Accord or revised Atlantic Accord had anything to do with development and management of the oil and gas resources offshore Newfoundland and Labrador. Neither changed the 1985 agreement directly or indirectly.

The widely-held belief is completely different. The popular misconception comes from the fact that in both cases, the premiers faced with financial difficulties linked their demands for money from Ottawa to the Atlantic Accord. In both cases, the issues were about something else.  In 2005, the discussion was actually about Equalization. It 2019, the final agreement was about financial assistance for the provincial government about its own financial difficulties and to deal with the troubled Muskrat Falls project.   

The Atlantic Accord: background to the 1985 agreement #nlpoli

The Atlantic Accord functions in Newfoundland and Labrador politics in two ways.  There is the agreement between the Government of Canada and the provincial government that established the joint management framework for the Newfoundland and Labrador offshore. At the same time, there is the political prop and the associated mythology that has, in largest measure, replaced the actual agreement in both the popular and political/bureaucratic understanding of it.

Provincial Concerns and Objectives

The Atlantic Accord ended a decade of often acrimonious dispute between the federal and provincial governments over offshore oil and gas resources.  The province had initially staked its claim to ownership of the resource in 1975, based on the premise that Newfoundland and Labrador brought the resources with them at the time of Confederation and had retained jurisdiction over them.

The Supreme Court of Canada ended the dispute in its decision on a reference from the Government of Canada.  The Court found that, for several reasons, the right to explore and exploit offshore resources and the legislative jurisdiction to do so lay with the federal government. The court decided that, in addition to other considerations, control of the offshore was a function of Canada’s international status.  Under the Terms of Union, this part of Newfoundland’s pre-Confederation legal status transferred to the federal government.

The Supreme Court of Newfoundland and Labrador Court of Appeal addressed a reference from the provincial government that also concluded the federal government had jurisdiction over the offshore.

Gaslighting a society #nlpoli

Saturday morning and Facebook delivered a video clip of Peter Mansbridge accepting a lifetime achievement award.

After the obligatory thanks to everyone, Mansbridge delivers a scripted couple of minutes about journalism in the age of fake news and alternate facts.

"Journalism is under threat," Mansbridge warned, "in a way we haven't witnessed before."

"The very principle that we stand for is under attack."

"Truth is under attack."

Finding truth and presenting truth is important, according to Mansbridge.

Challenging power and those who wield it is important for "power unchallenged too often becomes power abused."

Everyone loses: new MQO poll for NTV #nlpoli

On the eve of an anticipated election call, voters in Newfoundland and Labrador turn up their noses at everyone currently on the field.

The latest MQO poll for NTV shows why no one should discard the people who don;t pick a party when asked who they would vote for.

When asked which party, they would vote for if an election were held tomorrow,  a majority - 56%  - said either that they would not vote,  refused to answer, or said they were undecided.

Liberal support dropped five points from the previous MQO poll, going from 26 to 21.  PC Support dropped from 25% to 18% and NDP support sank to four percent.  The party defectors all went into the bag of supposedly undecided voters.  It looks much more like they were opting for "none of the above."

Banning plastic bags and public policy in Newfoundland and Labrador #nlpoli

Effective public policy must be based on a clear understanding of the problem and its relation to other issues, as well as public needs and behaviour.

"...almost 50% of all wind borne litter escaping from landfills in Newfoundland and Labrador is plastic, much of it single-use plastic bags....

There's the problem, defined neatly.

The quote is from Municipalities Newfoundland and Labrador's campaign against plastic shopping bags.

Put the quote in a search engine on the Internet and you will turn up all sorts of places, including news stories, that use that phrase or a slight variation on it in coverage of the popular campaign to ban plastic bags from the province.  Here's an example from The Telegram in 2017 and another a couple of days later that went province-wide.

One small question:  what's the source for the statistic?

Unformation #nlpoli

Changes in the news media,  changes in the audience, and changes in what information organizations provide to the pubic have created the Unformation Age.  Information  -  facts, figures, data - is less important than unsubstantiated opinion assembled to serve a temporary purpose and often lacking coherence over time. This is the abandonment of  a common means of assembling information coherently that affects all aspects of society.  

"Deep Dive" is the name that Saltwire gives to its new series that is supposed to give readers more information on specific topics that are of concern across the Atlantic Canada.  

The series gives Saltwire a way to produce unique content using all its resources in Atlantic Canada, thereby lowering the burden on any one newsroom.  Saltwire hopes the Deep Dives will generate new income for the chain. In future, Deep Dives will be accessible only to subscribers.  The rest of us will be blocked by a paywall.  

It's a business model that has worked successfully at major newspapers, which have either halted declining revenue from subscriptions using paywalls or seen revenue growth to offset the losses from the old cash-cow advertising.

It might work.  The real question is whether Saltwire will produce the content that will make readers dig into their pockets.

So that makes you wonder how deep is the deep dive?

Seven Days of Books in One #nlpoli

The seven books from my part of the book challenge, with each described by the respective publisher's blurb:

1.  The myth of the strong leader by Archie Brown.

Archie Brown challenges the widespread belief that 'strong leaders', dominant individual wielders of power, are the most successful and admirable.

Within authoritarian regimes, a collective leadership is a lesser evil compared with a personal dictatorship. Within democracies, although ‘strong leaders’ are seldom as strong or independent as they purport to be, the idea that just one person is entitled to take the big decisions is harmful and should be resisted.

Examining Franklin D. Roosevelt and Mikhail Gorbachev, Deng Xiaoping and Nelson Mandela, Margaret Thatcher and Tony Blair amongst many others, this landmark study pinpoints different types and qualities of leadership. Overturning the popular notion of the strong leader, it makes us rethink preconceptions about what it means to lead."

The Politics of Beige #nlpoli

The trend is impossible to miss.

Utterly undeniable.

Since early 2016,  through poll after poll,  voters in Newfoundland and Labrador have chosen "None of the Above"  when asked what party they would vote for in an upcoming election.

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Support for the New Democrats has been shrinking steadily like an orange left in the sun.

And the Liberals and Progressive Conservatives, the only parties actually capable of presenting an alternative government to voters in an election have been ranging consistently between 20 and 30 percent.

There's no sign of that trend changing.

Napalm sticks... #nlpoli

The latest poll from MQO is being reported as a statistical tie by NTV , while CBC says it shows a "neck and neck" race between the PCs and Liberals.

That's not really the story of the polls, though and what they might mean.

Here's the pretty chart showing every party choice poll result since 2015 (except for Mainstreet*).

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Now here's what it shows.

The Turmoil and Topsy Turvy #nlpoli

With so much changing in any office,  what has "always" been done really only goes back to the time of the last person who came in the door.

In Newfoundland and Labrador,  the provincial government has been censoring laws since 2012.

That's sounds absolutely insane to anyone in the province and outside, but that is undeniably the case.

Orders-in-Council are a type of law.  They are the decisions of the Lieutenant Governor-in-Council under powers granted by specific laws or from something called the Royal prerogative.  They are public documents and in every Westminster-style government they are published regularly, without any form of redaction or censoring.

Except in Newfoundland Labrador.

Even in Newfoundland and Labrador, the idea of secret laws in a democracy would be downright sinister if it wasn't for the comical way the whole nonsense started and the reason it carries on.

Election year a time for serious issues #nlpoli

This originally appeared in The Telegram, 30 Jan 2019.

Budget consultations are not the place for serious discussions of government finances at the best of times but in an election year, the usual charade becomes something else again. 

This year, people lined up asking a government that is the better part of a billion dollars short on its budget this year to spend even more money that it doesn’t have next year.  There are the usual cries from the usual special interests to hire more of their members but even groups that two years ago were calling for drastic action to curb spending are now sticking their hands out toward the government election-year goodie bag in hopes a few treats.

For its part, the government is playing along.  There will likely be a tax cut this year and a few other bits of retail politics. But what you won’t hear about is that the government probably won’t hit its target of delivering a surplus budget in 2022.  That is a major problem. There are three reasons for it.

Turmoil, unusual #nlpoli

A petro-state with political instability is a pretty weird idea 

but then again we *are* talking Newfoundland and Labrador.

The Government in Newfoundland and Labrador brings in money revenue per person living in the province than any other government in Canada except Alberta.  It's been like that since 2009.

In fact, for a couple of years before 2009, the provincial government posted record cash surpluses based solely on the world price for oil.

At the same time,  though, Newfoundlanders and Labradorians have seen an unprecedented period of change in the most senior positions in their provincial government.  Political and public service jobs have changed hands at an unprecedented rate.

The Spring Election - when and why #nlpoli

There's likely going to be an election before Victoria Day.

If - by some miracle - the Liberals manage to win the Topsail-Paradise by-election next week you could be at the polls before the beer turns green for a day.

If you haven't heard that,  don't say now that you haven't been warned.