Privatizing Hydro: a glance back

Introductory Note:

One of the more controversial proposals over the past 20 years was the privatization of Newfoundland and Labrador Hydro.

Much of the Hydro privatization story has passed into myth, much like the Churchill Falls story. Unfortunately for anyone interested in looking more closely at the idea of Hydro privatization today, some of the documents publicly available 15 years ago are no longer readily accessible.

Following is a text of an address delivered by Premier Clyde Wells to the St. John's Board of Trade in November 1993. It is the prepared text, not a transcript of the actual speech. It doesn't need much comment; the thing speaks for itself.

In order to produce this post, the original hard copy of this speech was scanned electronically. Please note that errors in spelling and so forth may remain, despite careful editing.

Next in this series will be the 1969 Churchill Falls contract. Given the documents length, it will take some time to scan and edit and the subsequent online versions will be broken down into smaller segments.

Government of Newfoundland and Labrador

Restructuring and Privatizing the Electrical Industry
of Newfoundland and Labrador

An Address by
The Honourable Clyde K. Wells
Premier of Newfoundland and Labrador
to the
St. John's Board of Trade
November 17, 1993
Check Against Delivery

I want at the outset to express my appreciation to the Board of Trade for giving me this opportunity to advise you and through you the people of the province of the government's position with respect to privatization of Newfoundland and Labrador Hydro.

Contrary to some suggestions you have been hearing this is not a proposal intended to benefit a particular company or group of people. This proposal is intended to benefit the province and its people both in their capacity as electrical ratepayers and in their capacity as taxpayers. It is also completely consistent with the overall economic vision and goals that the government is pursuing for Newfoundland and Labrador.

In June of 1992, after nearly two years of research and extensive consultation throughout every region of this province, government released its strategic plan entitled, Change and Challenge. At that time we stated that Change and Challenge is a living document for the Newfoundland and Labrador economy in the latter years of the 20th century and beyond the year 2000. To quote:

Our economic vision for Newfoundland and Labrador is that of an enterprising, educated, distinctive and prosperous people working together to create a competitive economy based on innovation, creativity, productivity and quality.

Two of our set of eight guiding principles for economic development are worthy of repeating today:

1. The private sector must be the engine of growth. While it is a role of government to create an economic and social environment that promotes competitiveness, it is the enterprising spirit of the private sector that will stimulate lasting economic growth, and
2. Government policies and actions must have a developmental focus where the client comes first. The structure of government must be streamlined, efficient and responsive to public need and to changes in the economy.
   

As well Action Item 31 of the Strategic Economic Plan specifically commits the government to "avoid providing services where they can be provided by the private sector".

The ultimate goal of privatization and restructuring is to improve the economy as a whole. There is hardly a country in the world today that does not have a major privatization plan in hand. These plans constitute a main pillar for the future economic strategy of most governments.

December 1992 Economic Statement by the Finance Minister

As part of his address to the House of Assembly on December 4, 1992, the Honourable Winston Baker, Minister of Finance, reviewed the state of the provincial economy and outlined a number of important decisions that the government was taking to deal with our financial and economic position.

One of the fundamental policy statements articulated by Mr. Baker at that time was government's decision to review the various operations, crown corporations and agencies of government and to pursue a privatization and restructuring program for those areas presently in the public sector that could be owned and operated by the private sector. That was also consistent with the government's often stated position that scarce and difficult to raise public funds should not be tied up providing commercial type services that the private sector is prepared to provide unless there is an overwhelming public policy reason for so doing.

Since the presentation of that economic statement, we have been pursuing the privatization of several government activities including the provincially owned Computer Services Corporation, certain assets of Newfoundland and Labrador Housing Corporation, Newfoundland Hardwoods and Newfoundland and Labrador Hydro. We are currently considering other possible restructuring and privatization opportunities.

One of these has attracted a significant amount of attention in the past few weeks. That one is Newfoundland and Labrador Hydro.

A little background might be helpful to a full understanding of the issues.

In 1989, Fortis, the parent company of Newfoundland Power, approached government with a view to purchasing certain select rural assets of Newfoundland and Labrador Hydro, mainly all the lower voltage transmission and distribution assets. Government, on the advice of Hydro and others, rejected the offer. Fortis, offering slightly different terms, pursued the matter again in 1992.

Government again asked Hydro for advice. The Board of Directors of Hydro initiated an assessment of the Fortis offer. The Board also decided to review at the same time various other alternative structures for the province's electrical industry.

Hydro retained ScotiaMacLeod and RBC Dominion Securities, two of Canada's largest and most respected investment dealers. These two companies have participated in billions of dollars of successful privatization and restructuring transactions in Canada and throughout the world. It is noteworthy that they were the lead advisors in the recent successful privatization of Nova Scotia Power. They have also been the senior fiscal advisors to Hydro and the province for over ten years.

The financial advisors recommended that Hydro and the government reject the Fortis offer because it did not represent fair price and payment terms for the assets in question and was not the best strategic alternative for the future structure of the electrical industry of Newfoundland and Labrador.

Hydro's Board of Directors and its advisors pursued the assessment further and ultimately advised the government that the status quo was obviously a viable option but if the government wished to privatize it could do so successfully either by privatizing Hydro on a stand-alone basis or by first merging with Fortis and/or Newfoundland Power and then selling its shares in the merged company. They did however advise that the combination with Fortis/Newfoundland Power was preferable to a stand-alone privatization, from the point of view of government, taxpayers and ratepayers, if the combination could be effected on acceptable terms.

Government reviewed the results of this process, but before proceeding decided to further consult with experienced electrical industry experts both within and outside the province. All affirmed that in the event of privatization, merger was the preferred course and nearly all recommended privatization as the best course for government to follow. Accordingly the government decided:

1. To reject the offer from Fortis; and
2. That it was in the best interest of the people of the province to pursue the restructuring and privatization of the industry by either merging Hydro and Fortis/Newfoundland Power, or by privatizing Hydro on a stand-alone basis.
   

Shortly after making this decision, the President of Hydro, the Minister of Mines & Energy, and I met with the Chairman of Fortis and the President of Newfoundland Power. At this meeting on August 30th, we asked them if they were interested in participating in an investigative process to determine whether the merger of the two Newfoundland electrical companies into a single integrated investor owned utility might be achievable and in the interest of all concerned.

I also advised the Fortis/Newfoundland Power representatives that if satisfactory progress towards a merger that would achieve government's stated objectives could not be accomplished in a reasonable period of time, then we would proceed to privatize Hydro on a stand-alone basis.

Overview of the Negotiation Principles and Current Status

It might be helpful to review some of the major principles and objectives that we established for these discussions, and to provide an overview of the major components that will be part of any merger with Fortis/Newfoundland Power, or the privatization of Hydro on its own.

Objectives Established

Before any discussions began with Fortis/Newfoundland Power, government established its set of overall objectives for any merger between Hydro and Fortis. In summary, these objectives are:

1. To get the highest reasonable price possible for its hydro assets;
2. The elimination of the guaranteed debt of Hydro from the Province's financial statements is to take place as soon as possible, and the government is to have no future financial responsibilities.
3. To achieve the most efficient and effective provincial electrical industry.
4. Either by restructuring the industry or privatizing on its own, government would intend to divest itself fully of its shareholdings in the electrical industry (except for its investments in Churchill Falls (Labrador) Corporation, the Lower Churchill Development Corporation and the Gull Island Power Corporation) as soon as practical, by way of a broad public offering of common shares in Newfoundland, the rest of Canada and possibly elsewhere.
5. Discussions are to proceed in an appropriate and orderly manner and both parties are to observe confidentiality until an understanding in principle can be disclosed, or negotiations are discontinued. This is normal and necessary in a negotiation of this nature.
6. The initial executive management team and the initial board of directors of the merged company would require input and approval of government.
   
7. Ownership, voting and possibly other restrictions would apply to the shares of the new merged entity to ensure the electrical industry is widely held and not controlled by a small number of individuals or corporations, nor controlled by foreign investors.
8. To ensure the restructured and privatized industry is well capitalized and credit worthy so that it will be able to finance the Province's future electrical requirements, and
9. To achieve stable or improved revenues for the provincial treasury from the electrical industry.
10. Within the context of these objectives to minimize the rate increases charged industrial, commercial and domestic customers in the immediate and longer terms.
    

A few days after the initial meeting with Fortis representatives, the Chairman of Fortis informed me that they were interested in participating in such discussions. Accordingly it was agreed to establish negotiating teams to start the discussions. It was also agreed that the public and Fortis shareholders should be made aware of what was occurring. This was done by a joint news release on October 1st. These discussions are now proceeding but they are still at a very preliminary stage.

Fortis has not yet agreed to fully meet the requirements of government, that I have just outlined, to ensure that what occurs is not a take over by Fortis but is genuinely a merger of the two corporations with the final structure reflecting the level of assets and strengths each of the two parties will bring to the merged company. Unless such requirements are met there will be no merger.

Major issues to be addressed

Recent public commentary has raised a variety of questions. Valid or not these questions should be addressed. I will do so by posing the questions that have been raised and providing government's answer.

Why is the proposed transaction a merger?

1. The only way to effectively eliminate the duplication that presently exists and would continue to exist if Hydro were simply privatized on a stand-alone basis would be a merger. All of the expert advice available to government recommends such a merger.

2. The newly merged company would be neither Fortis, nor Hydro, but a true combination of the people, assets and shareholdings of Hydro and Fortis.

3. The percentage of the new entity that is coming from the government's ownership of Hydro is the majority interest in the new company, and will then be sold to investors in Newfoundland and Labrador, throughout Canada and the world by a public share offering.

Why is Hydro and Government negotiating only with Fortis?

1. Newfoundland Power, a company wholly owned by Fortis, is the only other electrical utility in the province and it distributes electricity to 85 % of all electrical customers in the province. Any effort to restructure the industry in the province must include Fortis, and only Fortis.

2. The advisors and government are of the opinion that the most efficient operating structure for the electrical industry is to have a fully integrated operation for the generation, transmission and distribution of the product to the customer, and that can only be achieved by negotiating with Fortis.

3. We do not want control to be with another corporation outside the province and we do not want private interests, either within or outside the province, to buy Hydro. Therefore, it is not appropriate to seek bids for Hydro. The interests of the province will be best served if its electrical industry is a widely held public company that cannot be controlled by any group either within or outside the province and can raise the capital required for future growth of the industry.

Will the Government get fair value for its investment?

1. Most definitely, Hydro and government's financial advisors are among the best in the world. Their projections indicate a very attractive value can be achieved and that there will be a profit to the people of the province from the privatization of their investment in Hydro.

2. The government will not privatize Hydro, either in a merged entity or on a stand-alone basis, unless the value received is fair and is consistent with values other governments have received in similar privatizations.

3. The government will only agree to proceeding with a transaction with Fortis if the proceeds are at least equal to or greater than would be received by privatizing Hydro on a stand-alone basis.

4. Government will obtain an opinion from recognized investment bankers that the proposed transaction is fair to the taxpayers of the province. Without such an opinion there will be no merger.

How will the province's financial position be improved?

1. The guaranteed debt of Hydro represents approximately 18% of the total direct and indirect debt of the province. This will be significantly reduced immediately, and completely eliminated over the longer term. Hydro's current debt and equity today is approximately $1,250,000,000.

2. The province will receive a substantial amount of cash from the profitable sale of the securities that it will receive in the privatized company. This cash will be used to reduce the province's debt by lowering our future borrowing requirements, thus saving current account interest expense, which means avoiding tax increases and/or government program cuts that would otherwise occur.

Will this mean that there will be an increased outflow of capital from the province through payment of dividends?

I believe the answer is NO. More than 90% of Hydro's current interest payments are to institutions outside the province. While part of the debt will be converted to equity, dividend payments won't make us worse off. Thousands of Newfoundlanders and Labradorians will be encouraged to invest in the shares of the new entity, thus keeping more dividends in the province. In addition the retained profits in the new utility will be reinvested in new fixed assets within the province, no different than what occurs now. In total, more money will remain within the province.

Will this assist the province's credit rating?

1. The major U.S. credit rating agencies, Standard & Poors and Moody's visited with me and senior ministers and officials earlier this year. They were strongly supportive of government's plans to restructure and privatize various crown agencies including Newfoundland and Labrador Hydro, as well as our other financial management initiatives.

2. The province's total direct and indirect debt as a percent of gross provincial product is 61.5%, the highest in Canada. Financial institutions frequently emphasize this when commenting on the province's financial state or its credit rating. The elimination of the Hydro debt and the reduction of future debt and borrowing requirements from privatization can only be positive, and will result in improved creditworthiness.

What will be the government's on-going role in the electrical industry?

1. The new company will be totally subject to regulation by the Public Utilities Board in respect of all of its electrical utility activities.

2. Government will still be responsible for the regulatory policy regime of the electrical industry. We will be introducing a new Electrical Power Control Act that will ensure the people of Newfoundland and Labrador, and specifically the consumers, will continue to have an efficient, fair and reliable electrical industry.

3. The restructuring and privatizing of the industry will be governed by a Privatization Act which will outline the policies under which the new company will operate. This Act will cover major policy issues such as ownership rules, to ensure regulation and management of the industry remains within the province and not with other organizations in Canada or foreign countries.

4. The government will continue to control and be responsible for the development of future electrical development because it will retain ownership of Churchill Falls Labrador Corporation, The Lower Churchill Development Corporation, all other Labrador water rights, all undeveloped island water rights, and the policy direction for non-utility independent generators and alternate power sources.

Will electrical rates increase?

1. Rates in the future, as now, will only be set after hearings by the Public Utilities Board. Under any of the alternatives of the industry, including leaving things as they are today, rates will increase as costs increase.

2. Privatization, whether by merger or on a stand alone basis, will cause some additional rate increase beyond that which would otherwise occur in the first five years. That additional increase due solely to privatization should average about 1 % per year or less. Merger and privatization should result in lower rate increases beyond that five years.

3. Any rate increases must be considered in light of the benefits to the provincial treasury of privatization. Generally speaking the more the people as taxpayers get from the sale the more the same people as ratepayers will have to pay in the future. Government's objective will be to achieve the greatest fair return we can get while at the same striving to keep any increase at a minimum.

What will be the impact on the employees and the unions?

1. One of the objectives of the industry restructuring is to improve operating efficiencies. Merging two large utilities such as Hydro and Fortis/Newfoundland Power will result in the elimination of certain areas of duplication in management, administration, and maintenance. These will be identified and a fair and equitable program will be developed to accommodate early retirement, voluntary severance and position redundancies.

2. The Unions will be involved in the merger process if a transaction is agreed upon. So will the non union employees.

3. It is premature to speculate on numbers or specific areas of operating efficiencies that will result.

Concluding comments

On October 1st when we announced that we were beginning discussions with Fortis/Newfoundland Power, we stated that any transaction would have to meet three objectives:

1. To create a more efficient electrical industry.

2. To be fair to the current public shareholders of Fortis and Newfoundland Power and to the electrical utility ratepayers of the province, and

3. To maximize the proceeds of privatization of Newfoundland Hydro for the people of this province.

I hope my comments today have helped explain how we arrived at the strategic decision to begin a restructuring process for the electrical industry; that we are going about it in a careful and responsible way; and that the achievement of our objectives will be in the best interests of all the people of Newfoundland and Labrador.

The restructuring and privatizing of the electrical utility industry is not being done behind closed doors. I advised the people of the province as soon as the basis for negotiations was decided upon by both parties. We have considered many different alternatives; sought advice from the industry experts; and engaged highly respected and experienced financial advisors, before deciding to restructure and privatize the industry. We will keep the public and House of Assembly fully informed as discussion progress. In any event no such privatization can be completed without full debate and passage of the necessary legislation by the House of Assembly.

The government's stated policy is that we will privatize and restructure government operations, crown corporations and agencies where there is no overriding public policy purpose for government to remain as an owner. The electrical industry meets this policy criteria.

The province is being affected by the profound economic and financial forces which are impacting the economies of all countries of the world. These forces make it imperative that we make wise use of investment capital and that the electrical industry, and for that matter, all sectors of our economy, be operated in the most productive fashion possible. That is what we are seeking to achieve.

Thank you very much.

-srbp-

The Narrative War #nlpoli

The day after a massive Liberal victory in the general election,  CBC’s David Cochrane posted an analysis piece on the new administration.  CBC distributed it nationally.

Cochrane described Dwight Ball as a man “unlikely” to be Premier:

Four campaigns. Two losses. Two wins.  By a combined 75 votes.

Cochrane’s account leaves out relevant context.  When it comes to describing how the Liberals won,  Cochrane focuses not on anything the Liberals did but rather a string of Tory blunders that  - according to Cochrane  - made it easy for the Liberals to win the election essentially by accident.

And now, as Cochrane’s story goes, Ball The Unlikely will have to face enormous financial problems using a plan that Cochrane claims “was greeted with enormous skepticism in the final week of the campaign.”

Confederation 60: Federalism and the Newfoundlanders

The 60th anniversary of Confederation in 1949 is gaining a fair bit of attention but not nearly as much as it should.

The noisy minority

The one feature of the reporting and commentary seems to be the list of grievances, complaints and problems.  Now to be sure, this comes from a relatively small group of people to be found largely in St. John’s. They are the progeny of the crowd who, for their own reasons, have never gotten over losing the two referenda in 1948 that led to Confederation.

For the past 60 years this relatively small band has thrived on the belief that the whole thing was a plot and that all the ills of Newfoundland and Labrador can be placed squarely at the feet of “Canadians” and Confederation. They have thrived on the belief but not on the fact of the matters, and that is definitely not from lack of trying. 

There are three other reasons why they are such a small number, however, than the fact that they haven’t turned up evidence to back their claims.  There is a reason why the majority of Newfoundlanders and Labradorians do not give any support to their pseudo-separatist cause.

First, theirs is a negative message.  Not only does it claim this place is a mess, a claim that is hard to sustain for any length of time, it places blame for the mess squarely at the feet of Newfoundlanders and Labradorians for being too stunned – in the local meaning of the word – to look after their own affairs.

You’ll find no less an authority than Mary Walsh delivering just such a judgement in Hard rock and water, a fantasy film a few years ago that compared Newfoundland and Iceland. Most of the crowd that flocked to the showings of the film in St. John’s likely didn’t hear that part but it’s there if you listen. This is not to say Walsh is one of that small band, but her judgment is the logical conclusion one must come to from listening to the litany of grievances.

You’ll see the same thing in comments by the current Premier delivered in jest admittedly to a crowd of writers for Macleans back in 2004. The transcript is online, but here’s a synopsis from that first link along with the facetious view of the whole interview:

Understand that the editor’s question came after the Premier volunteered the opinion that the House of Assembly was “unproductive” and joked that if he had his way he would probably never call it in session. D’oh! That question came after the Macleans crowd asked the Premier why the provincial deficit was so big. His response was mismanagement over the past 10 years. There was a lengthy bit about the Stunnel; two sentences on the fishery. D’oh! The last question had the Premier calling for a seal cull. D’oh! The Premier made some misstatements of fact, for good measure (D’oh!) and a couple of big ideas got a handful of words, without explanation. D’oh! Take the whole interview and you have a bunch of poor, laughing drunks, complaining about having no money, who apparently can’t manage their own affairs, and yet who want to build grandiose megaprojects and kill seals.

There is a corollary to this that is worth mentioning in passing.  The story they tell is of a hard-done-by crowd victimised by the outside world and constantly needing a hand-out. it’s a cliche, of course, and one that they rightly find insulting but it is the essence of the story they tell.

Secondly, their message is almost invariably nothing more than a photocopy of something from somewhere else.  Masters of our own house, the constant airing of grievances, the list of demands, and the idea of getting into Confederation are all ideas advanced by the nationalist/separatist movement in Quebec. They are nothing more than a variation on the hand-me-down political ideas of copying the Irish or Icelandic models.  They don’t resonate with people who have a substantively different understanding of the world than Quebeckers, Icelanders or the Irish.

Thirdly, and flowing from that, their message has no vision for the future, no substantive way of correcting the pattern of behaviour they claim is responsible for the mess.  They do not speak to the people of Newfoundland and Labrador about their future in a way that people can actually relate to.

The time before Confederation is within the memory of people living today.  Even those of us first generation Canadians can recall how far we have come since the 1960s but except for those inculcated with what John Crosbie once called townie bullshit talk, our experience of the world is not driven by innate insecurity and feelings of inadequacy, individually or collectively.

And what’s more, the second generation Canadians now in adulthood do not recall the days of self-imposed insecurity.  Theirs is a world where it is perfectly natural for Newfoundlanders and Labradorians to be judged on their own individual merits. They are able to go anywhere in the world and succeed and, with few exceptions, they do.  Theirs is a world much larger than what can be seen from the nearest headland.  The revolution between the ears of the people of this place happened a long while ago.

The rolling of thunder

Confederation came quietly in 1949 but the reverberations from it continue to shake Newfoundland and Labrador.

The most obvious change after April 1, 1949 that most people saw was a change in their individual financial standing.  Not only did Canadian social welfare programs start to flow, but prices dropped throughout the former country as protectionist tariffs disappeared. Traveling to Canada no longer required a passport and leaving Newfoundland to work on the mainland no longer meant traveling to a foreign land. The walls that had once served to hold Newfoundlanders and Labradorians in came down immediately.

With Confederation, Newfoundlanders and Labradorians found a financial prosperity they had not known before but they also found a financial security. Economic problems in a town or industry no longer had to mean local disaster and the permanent departure of local residents.

Before Confederation, a community like Stephenville would have assuredly faced disaster. The provincial government, as it turned out, did not need to lift a finger and indeed its meagre efforts to respond to the closure did not spell doom for the community.  Residents who used to work at the paper mill found work easily elsewhere in Canada and could continue to live in their homes. It may not be ideal and indeed we may take it for granted but the experience in Stephenville in 2005 stands in stark contrast to the experience of communities in Newfoundland in the century and more beforehand.

The Newfoundland and Labrador government also benefitted as well from the strategic financial depth provided by Confederation.  Government had the room to explore and to make mistakes in economic development – like the chocolate factories and rubber boot plants and cucumber hothouses – without the fear such mistakes would translate almost instantly into suffering for ordinary Newfoundlanders and Labradorians. 

Confederation gave the provincial government a wealth of cash in addition to its own modest surplus from the Commission.  Schools, roads and hospitals came as a direct consequence.

The most profound change that came with Confederation, though, was the restoration throughout Newfoundland and Labrador of responsible government. That one change gave individuals in the province – Labradorians for the first time ever – the direct responsibility to elect the people who would represent them not only in the provincial legislature but in the national parliament as well.  No longer confined to dealing with only local affairs or with issues directly related to Newfoundland and Labrador, the people of the province could have a hand in shaping the policies of a country with much wider influence globally and much wider responsibilities than they had known before.

The path ahead

Newfoundland and Labrador today enjoys a measure of individual and collective prosperity earlier generations could only dream of. All is not perfect, but it is immeasurably better than it might have been.

It is immeasurably better because we have – individually and collectively – been able to apply ourselves to making it better.  We have made mistakes and learned from them and we have also enjoyed great success.  The current prosperity comes entirely from policies followed by successive governments in the 1980s and 1990s that are denigrated as give-aways only by the ignorant or the self-interested.

The broader foundation of economic success grew out of policies which took advantage of the move toward a global economy and free trade. The 1992 Strategic Economic Plan, which remains in place to a great extent, grew out of the ideas of two projects of public consultation, one in the 1980s and the other to develop the plan itself.  These were meaningful consultations in which many people had a direct impact on what the final documents said.

As we mark this anniversary it is worth considering the three fundamental changes needed to implement the 1992 SEP.  Those three changes are important because they are fundamentally related to the changes that began in 1949:

• A change within people. There is a need for a renewed sense of pride, self-reliance and entrepreneurship. We must be outward-looking, enterprising and innovative, and to help bring about this change in attitude we will have to be better educated. During the consultation process, most people agreed that education is essential to our economic development.
• A change within governments. Governments (both politicians and the bureaucracy) must focus on long-term economic development and planning, while still responding to short-term problems and needs. Government programs and services must place a greater emphasis on the quality of the services provided and on the client. Changes in education, taxation and income security systems are also considered critical to our economic development.
• A change in relationships. To facilitate the necessary changes in the economy, new partnerships must be formed among governments, business, labour, academia and community groups. In particular, better co-ordination between the federal and provincial governments in the delivery of business and economic development programs is needed to eliminate duplication and to prevent confusion for those who use them.

As we mark this 60th anniversary of Confederation, it is worth considering the extent to which current government policies fail to continue those changes.  It is worth noting that in the endless wars with outsiders, there has been a steady rebuilding of the walls and barriers we have worked so hard to tear down.  We worked to tear them down because they served only to restrict us.

It is worth noting that genuine pride, innovation and self-reliance can be stifled by a late-night telephone call and by the relentless personal attacks that come from merely dissenting from official views. By choking off healthy debate about public policy issues within Newfoundland and Labrador, by strangling any alternative views we serve only to return this place to self-defeating isolation.

Confederation gave Newfoundlanders and Labradorians the tools and opportunities to make for themselves a better place in the world. In 1949, we became once more masters of our own destiny and masters of our own house.

On this 60th anniversary of Confederation, we must be mindful of how far we have come and at the same time, be aware that if we are to continue to grow and prosper we must safeguard the foundation on which our current prosperity is built.

-srbp-

Change and Challenge: Chapter Four - Creating a competitive edge (1)

Creating a competitive edge is essential to improving our standard of living. Indeed, as the global economy changes, improved competitiveness will be necessary simply to maintain our present standard of living. To meet the legitimate expectations of our citizens about income, employment and public services, we must sell high value-added, competitively priced, quality goods and services that meet the needs of customers in local, national and international markets. Consequently, we must add value in our existing resource industries, consolidate them, develop new resource opportunities such as offshore oil and gas, and aggressively pursue high value-added opportunities in manufacturing and the services sector.

Government recognizes that it has a responsibility to work with other orders of government, business, labour and academia to create an environment which supports enterprise and economic development. Consequently, support policies will focus on developing the Province's entrepreneurial base; educating and training our labour force; creating a positive labour-relations climate; reforming the income-security system; encouraging product and process innovation; introducing new tax incentives and marketing programs; and providing a quality of government service which attracts investment and welcomes businesses.

Developing the Entrepreneurial Base

Government realizes that to generate wealth, the creativity, imagination and entrepreneurial drive of our people must be nurtured and harnessed. The entrepreneurial base of the Province requires both a balance of domestic and non-resident capital and expertise, and a mixture of small, medium and large enterprises selling goods and services in local, national and international markets.

It must be recognized, however, that we do not yet have an adequate entrepreneurial base. While Newfoundlanders and Labradorians have always been resourceful, our history of trading unprocessed commodities and our protectionist philosophy have restrained the development of the entrepreneurial spirit which is so necessary in these economic times. Because of our focus on selling primary resources, we have only limited expertise in marketing value-added goods and services, particularly in export markets. Consequently, we lack a marketing orientation. Recognition of Newfoundland and Labrador products in national and international markets is, for the most part, non-existent. Further, recent surveys indicate there is very little recognition of Newfoundland and Labrador products even within the Province.

The lack of a dynamic and thriving entrepreneurial base also contributes to the perception that Newfoundland and Labrador does not offer attractive investment opportunities, and this makes it difficult to leverage external investment. The Government is determined that these circumstances and the negative attitudes associated with them can and will be changed.

Provincial policy for rural and regional development will be directed towards stimulating the self-reliance and enterprise that have historically characterized social and economic life in rural areas. In addition to emphasising large, technology-based export industries, Government is committed to creating an environment that nurtures and supports all enterprise, including small-scale and home-based initiatives that turn the traditional strengths of the rural and household economies into commercial businesses.

Although the value of household, home-based activities is not included in formal economic measurements, it is significant and these activities will continue to play a vital role in developing a stronger enterprise culture in the market economy, particularly in rural Newfoundland and Labrador. In this regard, Government also recognizes the important role credit unions and producer/worker cooperatives play in fostering social and economic development in rural areas.

For economic development to succeed, we must provide our entrepreneurs with the opportunity to develop their managerial, technical, financial and marketing skills, help them turn good ideas into viable businesses, and promote our Province as a place which welcomes and supports outside investment. We will also recognize and promote our successful firms and entrepreneurs, both within the Province and outside, as part of an overall strategy to enhance the image of the Province. We will introduce our young people to the benefits of entrepreneurship through enterprise education in our secondary and post-secondary systems and we will provide adequate training to aspiring entrepreneurs. Through more co-ordinated Government efforts, we will encourage and support enterprises to seek out and penetrate national and international markets. We will aggressively pursue new investment to ensure that our core resource industries are maintained, especially investment in value-added activities, that new resource opportunities such as oil and gas are developed, that new manufacturing opportunities are pursued - especially those which are marine-related - and that services-sector opportunities, notably in tourism and professional services for export, are developed.

Strategy Statement. The Province will undertake measures to introduce students to the benefits of entrepreneurship; will provide appropriate training to aspiring entrepreneurs; will recognize and promote the success of local enterprises; will promote and assist local enterprises to develop and market their products in national and international markets; and will promote the Province's attractive investment opportunities, supportive investment climate and unsurpassed quality of life.

Actions. To implement this strategy, the Province will:

1. Support entrepreneurship by:

• instituting a Province-wide promotional campaign in support of entrepreneurship and developing an enterprise culture;
• expanding enterprise education throughout the school system;
• encouraging Memorial University, through the Faculty of Business Administration, and the Community Colleges to expand business skills training to entrepreneurs in the Province;
• supporting changes to the income security system, in cooperation with the Federal Government, that will strengthen entrepreneurship; and
• encouraging and supporting the growth of home-based businesses,
  producers' and workers' cooperatives, credit unions and commun­
  ity-based development corporations.

2. Work closely with other orders of government to remove barriers to entrepreneurship, such as changing land-use regulations and the tax system; and implement changes to programs, policies and regulations under its control in order to promote and attract investment for small, medium and large-scale enterprises.

3. Develop and maintain comprehensive data bases on product requirements in various key markets (Canada, U.S., Europe, Asia) and make such data more easily available to the private sector.

4. Develop and deliver, in close cooperation with the private sector, a campaign which establishes the Province nationally and internationally as a supplier of top-quality goods and services, especially its broad range of marine-related and derived products.

5. Establish a Trade Development Council to improve private and public sector capability in international trade and marketing, and to provide advice to Government on trade-related issues.

6. Immediately institute a program to upgrade Government employee skills and knowledge of trade development to facilitate a significant new thrust in trade development services; where possible, Government will use secondments and exchanges to supplement in-house capabilities.

7. Assess its full range of financial support instruments for business to determine if they are inappropriately sustaining industries or enterprises which are not economically viable, and to redirect their use to support the priorities of this strategic plan. Where appropriate, efforts will be made to direct financial assistance programs away from loan guarantees and grants, and toward equity investments which give businesses a better opportunity to succeed.

8. Use its financial assistance programs to ensure that businesses receiving assistance have the necessary management and marketing skills to operate successfully, that quality assurance and control are integral aspects of production, and that productivity through training and upgrading of workers is emphasized.

9. Accelerate programs and activities which facilitate joint ventures, technology licensing, co-manufacturing and other forms of industrial cooperation and investment.

10. Undertake a long-term promotional campaign to educate Canadians about the positive attributes of our Province's economy, work ethic, culture, lifestyle and geography, and to promote the Province's business opportunities in key investment markets in Canada and throughout the world. Government will also improve awareness of Newfoundland and Labrador in key Canadian foreign posts and enlist their pro-active participation in our investment promotion activities.

-srbp-

Change and Challenge: Chapter 4(2)

The Dead Parrot of Graduate Studies

“This parrot is no more. It has ceased to be. It's expired and gone to meet its maker.

This is a late parrot. 

It's a stiff. 

Bereft of life, it rests in peace. If you hadn't nailed him to the perch he’d be pushing up the daisies.  

Its metabolic processes are of interest only to historians. 

It's hopped the twig. 

It's shuffled off this mortal coil. 

It's run down the curtain and joined the Choir Invisible! 

This.... is an ex-parrot.”

One could pity Noreen Golfman, Ph.d.

Theoretically, that is.

One could  - entirely in the abstract, mind you - actually manage to find some measure of sympathy for the good professor as she copes with the crisis besetting her academic charge, the School of Graduate Studies at Memorial University.

But that sympathy could only exist in the absence of the facts.

You see the university administration froze the grad studies budget for new students.  Starting this fall new graduate students won’t get any fellowship cash from the university.  According to Golfman, about half the university’s masters and doctoral students rely on the estimated $12,000 to $15,000 to help pay for their studies.

Grad Studies is facing a budget shortfall of about $2.0 million a year.  Supposedly the shortfall is the result of a 60% increase in enrolment within the past year.

Note the word:  enrolment.

That is slightly different from the words that appear in the Telegram story on the mess where the word “application” is used. A 60% increase in applications wouldn’t matter since those applications could be turned down in the absence of funds.

A problem exists because someone – maybe Noreen Golfman as dean of graduate studies – or some group of someones allowed enrolment to increase at such an insane rate in a single year.

Freezing spending is not, as Golfman claimed, “sending the right signal about being fiscally responsible.” Rather it sends a signal that someone or some group of someones was so utterly incompetent that they let the situation develop in the first place. The university administration had to freeze the thing in place or face catastrophe. 

As an aside:  what are the odds, incidentally, that Golfman didn’t make this decision all by her lonesome?

The implications are far more serious for the university than the mere inconvenience to a few thousand students. 

"It means that it will be very difficult to attract graduate students to the university this coming year because when you're a graduate student you apply to different universities and see who is going to offer you the best package," [faculty association president Ross] Klein says. "It affects the stature of the university because the graduate programs are one of the things that raise the stature."

You can tell Golfman understands the magnitude of the shag up because she has been bullshitting so heavily in the Telegram and to other media like the CBC:

“We will get control of our budget and hope to move forward with more support, but we couldn't in conscience go forward at the growth rate we are without knowing if we've got the money to do it.”

As Golfman knows, though, she and her colleagues did "go forward at the growth rate” knowing that they didn’t have the cash.  There isn't any indication anywhere that the funding levels were cut, tightened or otherwise altered until after the enrolment part of this fiscal fiasco.  Make no mistake, though: if there is a mess,  Golfman made it.

That isn't what you will see her acknowledge anywhere, though.  Nowhere does the bullshit about this flow more heavily than on Golfman’s own weekly blog Postcards from the edge. 

Golfman tries blaming the media for the current flap:

A freeze by any other name would not be a freeze. That’s of course why the media love to use the word: it signals exactly what freezes are, an act that seizes everything up.

She tries a minor play for sympathy:

“Forgive me, but I am somewhat preoccupied with the word freeze right now…”.

She tries to obfuscate by relying on the extracts from the Standard Book of Bureaucratic Bullshit:

Our staggering growth in the last couple of years has outrun our more limited capacity to support it, and so we are doing some intense focusing on how best to move ahead while staying committed to both the university’s Strategic Plan and the many students who are currently in our programs and require reasonable, long-term funding through the healthy front ends of their programs.

There is a mysteriously capitalised pair of phrases that seem as if they were cut and pasted whole from someone’s hastily typed notes on how to torque the whole shite-pile:

NOT SUCH A BIG DEAL, REALLY. IT’S CALLED GOOD FISCAL MANAGEMENT.

She tries to blame the media – slow news week – and then turns the whole thing into a commentary on “how basic communication works in our society”:

In a world of tweets and twerps, you know just how quickly the facts can be distorted. Just put a few nouns and verbs out there and watch how suddenly the message gets transformed into something quite different from its original meaning and context.

Ah yes, the ever popular “I was misquoted”, not by the usual culprits the news media but by the faceless crowds on facebook and other social media.

Golfman only accepts responsibility for a poor choice of words:  “I admit the memo used the phrase ‘temporary freeze,’ and if I had my time back I’d trade the word in for something softer, like ‘temporary hold’ on fellowship support for new, incoming students.” 

However in her bass-ackwards version her mistake was for telling things as they were – it really is a freeze – rather than employ the sort of mind-numbing drivel one used to find in news releases from Eastern Health about breast cancer testing.

And of course, Golfman would be remiss if she didn’t resort to the old academic stand-by, the supposed ignorance of those who have not been exposed to the rarefied intellectual environment of the average graduate school:

The whole world of graduate studies, as is the domain of research, is also a bit mystifying to the general public who, if they haven’t done a graduate degree, understandably find the whole notion of giving students money to study a little odd.

Only someone with the unadulterated arrogance to believe that could also try the extensive line of sheer foolishness Golfman has been peddling the past day or so in an effort to deflect attention from the rather obviously unsound fiscal management that led to this fiasco in the first place.

Golfman, of course, is the only one who has been avoiding facts, let alone distorting them. Her efforts to massage the message have been so amateurish, so lame, so pathetic that anyone with the IQ of a cup of warm spit – let alone the crowd at the university – could see what is actually going on.

The only thing Golfman succeeds at doing is giving the people of Newfoundland and Labrador a textbook example of how to bungle.   If she didn’t cause the problem in the first place – and she shouldn’t be off the hook for that one yet -  then she has certainly buggered the response to the crisis. 

But what is perhaps the most unforgivable sin in a string of Golfman’s unforgiveables is her mangling of the sacred canon of Monty Python:

(I am starting to feel like John Cleese defending his not-so-dead parrot, but I digress, again.)

Fans of the show will appreciate that while Golfman may like to think she’s playing Cleese’s part, she’s auditioning  - rather badly - to replace Michael Palin.  Cleese was the customer who;d be sold a bill of goods.  Michael Palin was the shopkeeper who tried every manner of deflection and bullshit to dodge responsibility for the fraud.

Oh yes, and the parrot was, unmistakably, and without question, dead.

One can only hope someone in the university administration will step in, like The Colonel, and put an end to Golfman’s miserable efforts at sketch comedy before more damage is done to the university.

-srbp-

Norwegian Blue bonus:

The audio of the dead parrot sketch from the Live at Drury Lane album.  Those with a penchant for trivia and other things will note the sketch originally appeared in a Python episode titled “Full frontal nudity”. [dead link deleted]

Revised 27 April 2017 to correct typos,  clarify sentences,  and to advise that,  after the Grad Studies Fiasco, Golfman won a lovely promotion.

The politics and challenges of education reform in post-Confederation Newfoundland and Labrador (Part III)

by Philip J. Warren

The 1990s – Reforming the Denominational System

For those who don't recall, let me provide a little more detail about the denominational system. When Newfoundland joined Confederation, the Province had the most denominational school system in the Country, a system that had its beginnings over a century earlier. Five separate church systems -- Roman Catholic, Anglican, United Church, Salvation Army, and Seventh Day Adventist – had emerged, four with representatives in the Department of Education. In addition, there was a relatively small Amalgamated system, largely non-Catholic. Individual denominations had the constitutional right to have their own school boards and schools, to hire and fire teachers, to receive provincial funding on a non-discriminatory basis, and to have denominational colleges. Pentecostal schools were officially recognized in 1954.

After Confederation, the system became the subject of growing criticism. Increasing enrolments, fiscal restraint, and demands for improved programs, facilities, and services highlighted the problems of duplication inherent in the system. One result was a further increase in the number of Amalgamated schools and the integration of five denominations mentioned earlier. The Integrated system served nearly 60 per cent of the Province's enrolment. After that, Integrated, Roman Catholic, and Pentecostal school boards established a number of shared or joint services, in an attempt to further improve the efficiency and effectiveness of the system.

A new Government was elected in 1989, with a caucus that included several political activists (Hubert Kitchen, Rex Gibbons, Chris Decker, Pat Cowan, Roger Grimes, myself, and later Ed Roberts). After considering all the options for improving education (and we did consider every option), the Government decided to establish another royal commission, to study, among other things, the denominational system. The Commission's main recommendation was the establishment of a single interdenominational system as the most cost-efficient and effective way of dealing with the demographic changes and educational challenges confronting the schools, while retaining many of the benefits of denominationalism,

The Commission also recommended that, where numbers warranted, children should be provided with opportunities for religious activities and instruction in their own faith; that the 27 denominational school boards be replaced by nine publicly-elected boards; that the three denominational education councils be dissolved; and that school councils be established at the local level to encourage local, collaborative decision-making and site-based management. If implemented, these recommendations would, in effect, end the denominational system as it had existed since the mid-1800s.

In what may have been a bit of wishful thinking, the Commission pointed out that, just as, in 1969, five churches joined together voluntarily to form a single Integrated system, now, in 1992, it was possible for all churches to create a new system which would preserve the valued Christian character of schooling, and, at the same time, recognize the educational, economic, and social advantages of participating in a fully co-operative venture. The churches strongly rejected these denominational recommendations.

For six years, following the release of the Report in 1992, there was extensive lobbying, long periods of negotiations, periods of stalemate, two provincial referendums, a provincial election, a change of Premiers, several court cases, and political threats and counter-threats. In 1998, legislation was finally adopted in the House of Assembly, leading to the abolition of the denominational system. The story of that period in our history is a most interesting one.

Forces Influencing the Reforms of the 1990s

There were many interrelated forces that influenced the denominational reforms of the 1990s. Four of the most important were: (1) the growth of secularization and the declining credibility of the churches, (2) the influence of special interest groups and the media, (3) the Royal Commission, and (4) sustained political leadership.

The Growth of Secularization and the Declining Credibility of the Churches

The reform of the denominational system in the 1990s was influenced by a major ideological transition in the Province – the growth of secularization. Secularization is the process by which traditional religion and religious rituals lose their influence over society as a whole, and other institutions take over their functions. In Newfoundland, religion once permeated all aspects of our way of life, even athletic activities, the selection of many government employees, and even the appointment of cabinet ministers.

While in the early 1990s, many citizens considered themselves religious, and identified with a particular denomination or religion, the extent to which religion influenced their lives had declined. This was reflected in the decline in church attendance in most denominations, the difficulty of raising funds for church use, the shortage of students for the priesthood and the ministry, the significant growth of interfaith marriages, and the unwillingness of an increasing number of people to see the church as the preeminent ethical and moral authority in their daily lives.

This growth of secularization, of course, was associated with urbanization, industrialization, and a higher level of formal education. It was also associated with the controversies surrounding abortion, pre-marital sex, homosexuality, and the role of women in the churches. More important was the impact of the highly-publicized sexual abuse cases involving priests and other clergy, and the subsequent hearings and reports of the Winter Commission and the Hughes Inquiry. Some say that, at that time, the churches lost their moral authority, in a province in which, until the 1960s, they had retained power almost unknown elsewhere in Canada, even in Quebec.

These forces, among others, resulted in a change of public opinion about denominational schools. That change was reflected in many surveys, particularly those by Mark Graessar of Memorial University and my own studies. While the findings were sometimes ambiguous, and even contradictory, we found growing support for a single, interdenominational system, and almost unanimous support for interdenominational sharing, provided religious education was included. More and more people criticized the traditional system because, they believed, it resulted in too many small schools, the duplication of facilities and programs, excessive school busing, the discrimination of non-Christians and non-religious, and the discrimination of teachers in hiring and firing. These survey results were widely debated, as were publications such as Bill McKim's book entitled “The Vexed Question: Denominational Education in a Secular Age.”

The Impact of Special-Interest Groups and the Media

Many special-interest groups supported the school reform movement in the late 1980s and the 1990s. One such group was the Newfoundland Teachers Association (now the NLTA). With the publication of “Exploring New Pathways” in 1986, the Association launched the first major criticism of the denominational system since the 1964 Royal Commission Report. Roger Grimes was the President of the Association at that time. The criticism was based largely on efficiency and economic grounds, rather than ideological ones.

The fact that the NLTA supported the Government in the 1990s was important because the Association was made up of teachers of all denominations. While Pentecostal teachers had a separate voice within the Association, and sometimes disagreed with the Association's stand on denominational issues, such was not the case for other teachers, including Roman Catholics. I've done some research on why that was so, and will report accordingly in the future.

Another association that became increasingly involved in the debates of the 1980s and 1990s was the Newfoundland and Labrador Human Rights Association. During and after the entrenchment of the Charter of Rights and Freedoms, that Association strongly criticized the denominational system for limiting (1) the lifestyle rights of teachers, (2) the rights of non-adherents of the system, including non-Christians, and (3) the rights of non-adherent parents to run for election to school boards that educated their children.

Other groups, such as the business community and various coalitions of parents, also played an important role in supporting the reform. The St. John's Board of Trade, for example, echoed the views of the 1986 House Commission on Employment and Unemployment, linking education with economic growth and calling for the reform of denominational education. The NL Home and School Federation and the Education First Group, a diverse coalition containing persons of all religious and political persuasions, were very influential during the referendum campaigns. Change which tapped into that kind of public support was likely to be successful.

And, then, there was the influence of the media. For three or four decades after Confederation, few journalists criticized the denominational system, and those who did received little visible public support. That changed over time, for obvious reasons.

The media played a very significant role in the promotion of the work of the 1990 Royal Commission. They gave extensive coverage to the hearings, the recommendations, the negotiations, the referendums, and the court cases, often supporting the Government's position. Through newspapers, radio, television, and films, the media became a powerful influence on how people saw the denominational issue and how they responded. There was no doubt that they helped to set the reform agenda in education, greatly influencing policies, politics and values. Many supporters of denominational education believe, to this day, that they were unfairly treated by certain journalists and certain media outlets.

The 1990 Royal Commission

The Government believed that having a Royal Commission study the very sensitive denominational issue as part of a more comprehensive review would not only demonstrate the Government's commitment to providing a better education, but also its willingness to provide strong leadership in these challenging times. The Government knew that there were political risks associated with the Commission's appointment, but it was prepared to take that risk, knowing that when the report was completed, it could choose to take no action, some action, or accept the recommendations entirely.

Looking back, perhaps the most important contribution of the 1990 Royal Commission was that it provided, at a very important point in time, a vehicle for the public discussion of educational issues. In the process, the Commission captured a surprising amount of public attention and provoked the most lively debate in years. School boards, teachers, students, parents, and the general public were truly engaged. The Commission conducted a considerable amount of research and traveled widely to examine developments elsewhere. In addition to its recommendation on the denominational system, it made recommendations on improving the operation of school boards, the curriculum, instructional time, teacher education, the education of children with exceptional learning needs, and even the way we fund education. In the end, unfortunately, the implementation of many of these latter recommendations was overshadowed by the debate on reforming the system.

Sustained Political Leadership

With few exceptions, politicians and political parties in Newfoundland have been careful in their dealings with the churches. Even after Confederation, a political “understanding” between the churches and politicians remained in tact, where one seldom criticized the other. The churches often remained quiet on social and political issues about which they should have been concerned. And few politicians publicly questioned the authority of the churches.

The Governments of Premiers Wells and Tobin were responsible for providing leadership in the reform of the system. As a rationalist in policy development, Wells, like Trudeau, believed that the state should aggressively promote economic and social justice. He saw a modernized school system as the key to our future in a knowledge-based economy. That philosophy was reflected in the Government's newly-developed Strategic Economic Plan. To achieve the new order, the school system had to be made more efficient, more cost-effective, and more responsive to the needs of children.

While Wells preferred the single, unified, interdenominational system proposed by Williams, and wanted to reach a consensus with the recognized denominations, his Government negotiated what he considered a compromise Term 17 amendment, between what the Commission recommended and what the churches were demanding. That proposed Amendment provided for separate denominational schools where it could be demonstrated that such schools had sufficient numbers of students to provide quality education. Under the proposal, the Province would have both uni- and inter-denominational schools, operated by common school boards. The proposal was unacceptable to the churches.

While the constitutional amending formula did not require a referendum for approval of the compromise proposal, the Government decided to hold one in 1995 to give the public an opportunity to debate the issue and decide. Wells refused to aggressively campaign in the referendum. In the end, the proposed Amendment was approved by a narrow majority -- 53 to 47 per cent -- with a relatively low voter turnout. Much more could be said about the Wells Amendment and the referendum, but I'll leave that for another time.

The essence of political leadership is knowing when to think and act quickly and when not. Building on what Wells had accomplished, Tobin (with Minister Roger Grimes) acted quickly and decisively to complete the reform process. After the Barry court case in 1997, which halted the implementation of the Wells proposal, the Premier sensed that the political mood of the Province had changed, and support for the Government had increased. So, he called a second referendum on a fully public system, eliminating denominational rights entirely, with some provision for religious education.

While not being critical of Wells, Tobin sought to distance himself from the first referendum campaign. He presented a clear and straightforward question to the public, and campaigned aggressively, focusing not only on the inefficiency and ineffectiveness of the denominational system, but also the philosophical arguments on which it was based, particularly that Christians should be educated in separate schools. He claimed that the real issue was the correction of a “moral wrong” inherent in the system. By using this argument, he shifted the campaign from primarily economic grounds to the greater welfare of all students and society generally.

With the enthusiastic support of many special interest groups, and individuals of all religious and political persuasions, the referendum was successful, with 73 per cent voting in favour. The Government was assisted by the fact that, unlike the first referendum, the Roman Catholic campaign was not well organized, had few funds, and had lost some of its supporters and enthusiasm.

In my research, I've reviewed the political campaigns of the churches to preserve the system, and the Government to reform it. I will comment on these findings in the future, including the important debate concerning minority rights.

Part 4...

- -

Food for thought: the need for realism and statesmanship

Ever since it became self-governing in the mid-nineteeth century, political leadership in Newfoundland and Labrador has rotated between representatives of the dominant social class and populists who appeal directly to the "people" directly, with party labels meaning very little...

What Newfoundland and Labrador needs, however, is neither populist nor merchant. It needs a leader - or leadership if you include the whole of Cabinet [sic] - who can transcend both the exaggerated rhetoric of the populist and the restricted conservatism of the merchant. It needs men and women who exhibit statesmanship, by which I mean leadership that both transcends the interests of a single class and is grounded in a deep understanding of the issues, problems and potential rather than superficial rhetoric. [Italics in original]

J.D. [Doug] House, Against the tide: battling for economic renewal in Newfoundland and Labrador, (Toronto: University of Toronto Press, 1999), p. 239.

Doug House's account of his involvement in shaping government economic development policy in the period between 1986 and 1996 caused a stir in the local political community when it appeared toward the end of Brian Tobin's administration.

House had been appointed by the populist Brian Peckford to chair what emerged as a landmark economic policy task force the final report. It fell to Clyde Wells, whom House described as the epitome of the 'sensible' good government approach of the "official class leaders", to implement the task force report. As a testament to its soundness and to the sensibility of what House implemented as chair of the Wells' administrations' Economic Recovery Commission that Wells' 1992 Strategic Economic Plan remains the basis of government economic development policy through four subsequent administrations of two different political parties.

House's characterization of the alternating cycle of post-Confederation first ministers in Newfoundland and Labrador is both obvious and generally understood.

Danny Williams appointed House toa deputy minister position in his current administration.

The question for today is this: Does Danny Williams continue the alternating cycle of populist versus merchant or does he represent the statesmanship House proposed?