Deficit *is* higher than previously announced #nlpoli

The House of Assembly will have to deliver a budget that keeps access to new public debt for the foreseeable future. The politicians must satisfy the bond-rating agencies, not the voters. 

Parties don't matter.  Ideologies don't matter.  Voters don't matter.  

That is the essence of politics in Newfoundland and Labrador in the early 21st century.

Anyone who knows Dwight Ball knows that he does not make simple mistakes with numbers.

Yet, the official explanation is that he made a simple mistake with numbers on Sunday's Issues and Answers when he said the deficit for the current year is between $800 and $900 million dollars. SRBP pointed out his comments on Tuesday.

As NTV's Michael Connors reported first via Twitter and later on the NTV Evening News,  Premier's Office and finance department officials claim that the Premier's comments "were actually looking ahead to 2020-21, which has a projected deficit of $796 million."  The deficit projection for 2019 remains at $577 million, according to officials.

Deficit $250 - $300 million higher than announced before election according to Premier #nlpoli

In the episode that aired on 26 May 2019, Premier Dwight Ball told NTV's Issues and Answers that the deficit for the current budget is between $800 - $900 million.

"Are you prepared to make any specific changes to the budget in order to get their support?" asked Mike Connors.

"I think this budget is the one we ran on... everyone understands this budget is between an 800 to 900 million dollar deficit..."

Minor problem.

When finance minister Tom Osborne delivered the budget on April 16,  he confirmed that the deficit in the budget the Liberals ran on was $575 million, once you took out the payments from the Hibernia Asset-Backed Dividend Agreement.  That's the figure finance officials gave during the budget lock-up to media and other groups.

Simon Lono , 1963-2019

Simon Lono  - husband, father, grandfather, advocate, orator, writer, mentor, friend  - died Friday, May 24, 2019.  

He was 56.  

When our friends are alive, we do not spend time thinking about the past.  We do not think about how we met them, about all the things we did with them, or why it is that we like them.

When they are alive, we do not need to remember because they are there, every day.

We only feel a need to remember, once they are not there any more.

Simon Lono’s family and friends spent Saturday as they are likely to spend a lot of days from now on.  They thought about him, remembered when they first met him, all the things they had done together, why they loved him.

Simon is dead.

And so, we remember.

We recall.

Frantically.

As if the memories will make the hard truth go away.

As if the memories will replace all of the things that could have been or would have been.

But that will never be.

Because there is a hard truth.

Simon is dead.

Killed by a rare disease.

In itself, entirely fitting.

The Lowest-Common Denominator Minority Legislature #nlpoli

An inherently unstable minority legislature where the parties have a history of finding political agreement through public spending is not exactly a recipe for tough decisions.

There is something seductively sweet about the idea that the minority government that resulted from last week’s general election has now solved all our problems Just get back to work, some people are saying.  And play nice, together.  No more of this bickering and name-calling.

Something seductively sweet but the sweetness reveals itself as bitter naïveté when one considers that we now have a fundamentally unstable legislature at the very time when both the government’s finances and the Muskrat Falls mess are coming together.

Make no mistake about it.  Minority legislatures are inherently unstable.  They tend not to last more than a couple of years. The one elected last week will get through six months or so without much chance of upheaval.  But once the opposition parties have sorted out their finances and, in all likelihood, the Tories have found a new leader, they will be ready to bring down the House.

Anyone who tells you that the public doesn’t want an election, either now or in the near future, simply has not been paying attention.  For the past three years, poll after poll gave the current administration very low marks.  Respondents consistently rated the Premier poorly.  The last poll before the lection and two during it all showed the same thing.

The 1908 Election all over again #nlpoli

You will hear a lot of spin about Thursday’s election result.  

Doesn’t matter where it is coming from. 

 It is all spin and all spin is bullshit.

Thursday night’s election result has been coming for three years.  The polls have pointed to the public mood and their views of parties and leaders.  Only the blind ignored it.  Robocalls and dirty tricks did not produce the result.  No Blue Waves were involved.

The Forecast

On Thursday morning, SRBP posted a projection based on polling and information coming from all three parties directly and indirectly.

Here’s how it played out compared to the result at about 10:00 PM Thursday.

	Lib	PC	NDP	Ind
Forecast	19	18	1	2
Range	+/- 2	+/- 3	+/- 1	- 1
Actual	20	15	3	2

The Liberal projection was almost bang on.  The Conservatives were within the range of the projection.  The Independent forecast was bang on.  Only the NDP exceeded expectations and that was by virtue of a good candidate who succeeded, in some respects, despite the deadweight of the Dipper crowd in town.

Poor Ed's Almanac - a hot summer is coming #nlpoli

The prospect of a minority government coupled with the need to pass a budget in the legislature after the election could produce a long, hot summer of political manoeuvring.

Mainstreet Research released its poll on the Newfoundland and Labrador election.  It basically shows what Abacus and Forum showed, which is a slightly Conservative lead in overall vote intention.

With that and the election due tomorrow, here's a guess at a possible seat count. This is based on the polls, observation of the campaign, and a bit of guesswork. There is no right answer and this version could be off by a seat or two for the Liberals.  You might add an extra New Democrat to the mix but no more.  There might be one fewer Independent.

Ego, Brain Farts, and Electoral Reform #nlpoli

Public ignorance of our political system is a scourge. Tackling that is the first step to meaningful electoral reform in Newfoundland and Labrador.  The second priority is to make sure the players do not set the rules for everyone, as they have done repeatedly, and disastrously, since 2003. Most of all, we need to get on with reform, as soon as possible.

While there are many good reasons for electoral reform in Newfoundland and Labrador, most of the recent talk of changes to how elections run in the province is from people who want to give an advantage to a party they like.

Take the decision in 2015 to slash public representation in the House.  The Conservatives who were behind the notion, figured it would be easier to win a majority of 20 seats instead of 48. They knew they couldn’t get 24 but hoped they could cling to power with 20 or 21.  Depending on how the count goes on Thursday, they might be right.

The Liberals who backed the cuts, like Dwight Ball, were concerned only that the idea appeared popular.  They thought that by siding with a popular initiative they would gain favour with voters. 

Lots of popular things don’t drive votes and this was one of them.  If they thought about the electoral math – and there’s no sign they did – then they likely hit on the same self-serving reason the Conservatives did.  Depending on how the count goes on Thursday, they might be as right or as wrong as the Conservatives when they last held power.

Then there’s the business of fixed election dates.

The Abacus Poll for Election 2019 #nlpoli

The chart below looks like there has been a huge jump up and down in “no choice” and a corresponding big change in party choice but actually there is some consistency across the board.

Click to enlarge

As SRBP has been saying for a couple of months, the Conservatives and Liberals have basically been polling in the 20s for the past three years.  These results are within that 10-point spread, allowing with the odd leap above 30 or below 20.  The “no choice” option (green dotted line) has been consistently above 35 the whole time.  Abacus is an outlier in that sense but, there is an election campaign underway.

The Abacus poll – conducted between May 2 and May 5 – shows the Conservatives in the lead with the Liberals trailing.,  But here’s the thing,  the gap, even in the presentation of “decideds” or “committed” is really inside the bounds of possibilities covered by the margin of error.

Just to drive the point home.  Here is a sample of MQO and Abacus results over the past year or so.

	Liberal	Conservative	New Democrat	No Choice
Abacus Feb-18	22	18	12	48
Abacus May-18	22	24	13	41
MQO Apr-19	25	20	06	47
Abacus May-19	29	33	12	21

Election 2019 - First Poll #nlpoli

While the MQO poll shows the Liberals in the lead, a new poll from Abacus  - released with an hour of this appearing - will likely show that since the debate, the political landscape of the province has changed dramatically.

The latest poll from MQO showed that after a week and bit of campaigning, voters were almost precisely where they were at the end of March when MQO conducted a poll for NTV.

When asked which party they would vote for in an election, 47% made no choice compared to 56% in March.  More chose Liberals (25/21) than Conservatives (20/18) or New Democrats (6/4). One percent chose the NL Alliance and one percent chose the Green Party.  Neither registered support in March.

The gap between Liberals and Conservatives is within the margin of error.

Detailed poll data courtesy MQO Research
Click image to enlarge

The variation between March and April results is also within the margin of error for the poll (plus or minus four percentage points 19 times out of 20). The margin of error for the “decideds”-only sub-sample, widely reported by news media, would be higher since it based on only half the total sample.

NTV included a question in the MQO quarterly omnibus.  They asked which party people thought would win the election.  46% of respondents chose the Liberals, 21% the Conservatives and 30% made no choice. This is a useful question since research suggests the response to this question frequently closely matches the popular vote result in an election.

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.

Click to enlarge

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."