Policy confusion does no one any good #nlpoli

Last week, the Liberal governments in Ottawa and St. John’s unleashed a bold new innovation in political announcements.

Fridays used to be the day when governments buried announcements, they didn’t want anyone to notice.  They’d take out the trash, as the day came to be known, by slipping out a news release without any fanfare.

Not anymore.

A gigantic news conference featuring both the Premier and the provincial representative in the federal cabinet unleashed a pair of significant announcements.

Problem was there wasn’t enough detail for many people to make sense of it all.

Hence, the new concept:

For-Fuck-Sake Friday.

Because it left observers shouting, “For Fuck Sake!” in either bewilderment or exasperation as they tried to figure out what was going on.

Well, fear not, faithful readers.

As we have done for the past decade and a half, SRBP will blow away all the clouds of confusion furrowing brows across Newfoundland and Labrador and tell you what it all means.

No duff.

No guff.

The importance of what we care about #nlpoli

When we do not talk about the most vulnerable people in our society – sex workers and people in homeless shelters to name just two groups – we tell the world that our community does not care about them.  Last week’s spectacle in the House of Assembly showed the world that the 40 people who Newfoundlanders and Labradorians elected to represent them and run the province do not care about very much at all.

Alison Coffin and Ches Crosbie
talk to reporters on Friday about Gerry Byrne.
(Not exactly as illustrated)

A 23-year-old man lay on the pavement in downtown St. John’s last Tuesday night, the blood running out of him and mingling with the rain on the cold pavement.

He died outside a shelter for homeless people. The community learned very quickly that it was a shelter, that it was a rental property, and that police frequently visited the place to deal with disturbances among the people who came and went from the house with great frequency.

We learned that information because neighbours put it on social media, where the local conventional media – newspaper, television, and radio - picked it up and repeated it.  Before anyone knew who the young man was, or what had gone on, they had decided what the issues were in the story.

That morning, in the House of Assembly,  the opposition parties asked for the Premier’s opinion on the fact that provinces in Canada received transfer payments from the federal government because they  - unlike Newfoundland and Labrador – didn’t make enough money on their own to meet the national minimum government income standard.  There were questions about flooding in a district on the west coast, a couple of questions about specific constituents who needed government money, and about the deaths of a couple of million salmon in a fish farm a couple of months before.

There was only one question thread - about ferry service to northern Labrador - that stood out for its consistency and seriousness - and the only question about homelessness was about people with high paying jobs in western Labrador who had to couch surf.

The morning after the death,  the few questions related to the murder were generic:  “’What plan does the government have’  to deal with crime and homeless in St. John’s?” opposition leader Ches Crosbie led with.  His second question was about a growth in payments to temporary shelters run by landlords, not not-for-profits.  That story had been in the local media before and brought back because of the assumed connection in media reports between the for-profit shelters and the murder.

Attention then turned to a general discussion of health care.  By the time the official opposition was done, the New Democrat leader Alison Coffin’s question about homelessness was also generic: 

“APEC reports that despite growth in the oil industry, our province is struggling. Homelessness, addictions, cost of living, bankruptcies, gangs, unemployment, electricity rates, out-migration are all on the rise.

“I ask the Premier: Will Advance 2030 address these pressing issues, or will we continue to stumble forward?”

That was the lone NDP question before her colleague got back to the dead salmon.

Restoring Power: The Section 92A Option #nlpoli

One of the potentially most valuable revenue sources would be a new tax on electricity production that could yield upwards of $450 million a year. The bulk of the tax would be paid by Emera and Hydro-Quebec, both of which currently profit from free or near-free electricity through two patently unfair agreements. 

The basic problem of the Lower Churchill was always how to pay for it. 

Everyone who tried to build it before wanted people outside the province to use the electricity and pay for the whole project, with the profit flowing to the people of Newfoundland and Labrador.  When they couldn't get that to work, they simply didn't pursue the project. 

The politicians and bureaucrats behind what became Muskrat Falls were smarter.  They decided in a meeting at The Rooms in April 2010 they would force the people of Newfoundland and Labrador to pay for the entire project through their electricity rates, even though they would use very little of it. The benefits would flow outside Newfoundland and Labrador. 

The Dwight Ball-Ches Crosbie rate mitigation scheme is still about having Newfoundlanders and Labradorians alone pay for Muskrat Falls with others reaping the benefit.  On top of that, the Ball-Crosbie approach includes money that doesn’t exist.  Their scheme also doesn’t address other problems with Muskrat Falls that are as troublesome as the problem of the government’s proposed scheme to have only one small group of people bear the whole cost.  So, it won't work.

Quebec appeals court decision on Churchill Falls contract no win for Newfoundland and Labrador #nlpoli

Media reports, political comments, and pundit opinions are wrong about the decision last week by the Quebec Court of Appeal in a case about the renewal clause of the 1969 Power Contract between Churchill Falls (Labrador) Corporation and Hydro-Quebec.

The Court decision leaves Hydro-Quebec with virtually all of the electricity produced from Churchill Falls and, most importantly, operational control of water flows on the river.  This will have an adverse impact on Muskrat Falls. As a result, CF(L)Co is likely to appeal the decision.

__________________________________________________

The Quebec Court of Appeal ruled last week that Hydro Quebec retained operational control of electricity production at Churchill Falls. It made a minor change to an earlier decision by the Quebec Superior Court in a decision from 2016.

That’s why Hydro-Quebec issued a statement that it was satisfied with the outcome of the decision.

In other words, English-language media reports and political commentary got it wrong when they claimed “Quebec's top court rules for N.L. in Churchill Falls dispute with Hydro-Québec” (Canadian Press) or “A Victory For NL In Long-Standing Legal Battle With Hydro-Quebec On Upper Churchill” (VOCM).

The English-language reports focused on the idea that Hydro-Quebec could only buy electricity from Churchill Falls up to a maximum each month under the terms of an automatic renewal to the 1969 power contract between Hydro-Quebec and Churchill Falls (Labrador) Corporation.  VOCM went a step further in the mistake department my making it sound like both Hydro-Quebec and Newfoundland and Labrador Hydro could sell electricity from Churchills Falls. 

The clue that something was amiss in the English-language coverage is the statement from Nalcor that said the Quebec Court of Appeal “had ruled substantially in favour” of CF(L)Co on the question of Continuous Energy.

Here’s why.

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

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

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

There's the problem, defined neatly.

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

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

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

Mitigating Muskrat Falls: Ron, Harry, and Hermione are still baffled #nlpoli

Mitigating the impacts Muskrat Falls will have on taxpayers of Newfoundland and Labrador remains the single biggest unanswered question in the province nine years after the project started and the politicians first started talking about how they might do it.

To mark the 14th anniversary of The Sir Robert Bond Papers,  here's the tale from 2010 to now.

Most people in Newfoundland and Labrador finally noticed the impact Muskrat Falls would have on electricity prices when Nalcor chief executive Stan Marshall confirmed that Muskrat Falls would double electricity prices in the province once it was finished in 2021. 

That was the middle of 2017.

The word “mitigates” - to make less severe or painful - became popular overnight.  Since Marshall’s comments, just about all that anyone in Newfoundland and Labrador has fretted about is how the government will make electricity prices not double because of Muskrat Falls.

But here’s the thing:  Muskrat Falls was always supposed to double your electricity prices. Right from the start – November 2010 – the provincial government talked about electricity prices of between 14 and 16 cents wholesale, which would have made the retail cost in this province about double what it was at the time.  No worries, people like Kathy Dunderdale said.  Oil prices will be so high and electricity prices will be so high by 2017, anyway, that you will never notice Muskrat Falls except that it will stop prices from climbing higher.

The PUB, Exemptions, and Muskrat Falls #nlpoli #cdnpoli

Here’s some background on the issue of Muskrat Falls and Public Utilities Board exemptions. 

At the end you should know what an exemption is all about, how the exemptions – there are more than one – came about – and what that means for now and in the future as far as electricity rates go.  We’ll deal with mitigation in another brief post next week.

The information here is based on material in the public record plus additional research and information accumulated over 30 years working on public policy issues in the province. That includes the 15 years of SRBP, much of which wound up being about the Lower Churchill project.

Let’s start with what an exemption is.

Bay du Nord and Equity #nlpoli

In a staged political event Thursday that was woefully short of basic details,  the provincial government and Equinor announced they will proceed with development of the Bay du Nord field in the Orphan Basin.  The news release for the event referred to a framework agreement only.

Bay du Nord is located approximately 500 kilometres east of St. John's,  in between 1.0 and 1.2 kilometres of water.  Equinor and its partner Husky Canada believe the field contains at least 300 million barrels of light crude.

The project will cost $6.8 billion to bring into production using a floating production storage and offloading vessel similar in concept to the FPSOs used for Terra Nova (1996)  and White Rose (2002).  The provincial government acquired 10% equity in the project in addition to royalties under the Offshore Oil  Royalty Regulations (2017).  The provincial government will therefore pay $90 million initially as well as $680 million during the construction phase.

Project sanction is expected in 2020 with first oil in 2025.

The following table shows a comparison of Terra Nova,  White Rose, and Bay du Nord, with all dollar amounts in 2018 dollars.

Plain language, power, and politics #nlpoli

In the midst of a political controversy over recent fishing quotas in Newfoundland and Labrador, two people are talking about the need for better communication about science and the fishing quotas.

Jacqueline Perry is the regional director of fisheries management for the fisheries and oceans department of the Government of Canada.  "This is difficult stuff,"  she said, referring to reductions in quotas that the decisions that flow from the scientific information on fish stocks will have an adverse impact on people in the fishing industry.

"We are doing the very, very best that we can with the information that our science colleagues are able to provide to us with the input of industry. Are we getting it 100 per cent right? I don't know if we will ever know [about the precise size of fish stocks]."

In related comments,  the head of the Marine Institute's fisheries science program told CBC that the "fact that there is so much controversy is indicative that communication is a necessary component … If we're going to find a way forward, we're going to have to keep talking."  Brett Favaro said the Marine Institute will include course work in the master's and doctoral programs aimed at teaching scientists how to communicate their research findings more effectively.

He's talking about plain language, among other things.  Plain language or Plain English establishes some simple rules about the way you use words and sentences in order to ensure the greatest number of people will understand what you are saying.

Actions and Words (2016) #nlpoli

The provincial cabinet has known since January - at least - that the powerhouse at Muskrat Falls is only 15% completed despite a huge payout to the contractor.

That's what Nalcor reported to the committee of provincial bureaucrats named by the Conservatives to get a report from Nalcor every now and again.  They can't do anything else except receive the reports and pass them on to cabinet.  They still do it under the Liberals.

The company hired by cabinet to conduct yetanother review of information supplied by Nalcor that government already had included a little table of progress on major components at Muskrat Falls.  The powerhouse is a major component.

But it isn't on EY's table, shown at right and released earlier this month.  It's lumped in with "spillway" and shows it is supposedly almost 40% complete.

There's a lot of difference between 15 and 40.

Mazel Tov Cocktails #nlpoli

Scottie Nell Hughes is one of the legion of ident-a-bots who turned up on news programs during the recent American election spouting lines from the Trump campaign. She's already famous as the one who gave us the mazel tov cocktail flub.  She grabbed some headlines last week for making the comment that there is no such thing as facts.

Specifically, Hughes said that "...one thing that has been interesting this entire campaign season to watch, is that people that say facts are facts—they're not really facts. Everybody has a way—it's kind of like looking at ratings, or looking at a glass of half-full water. Everybody has a way of interpreting them to be the truth, or not truth. There's no such thing, unfortunately, anymore as facts."

Not talking but talking about something #nlpoli

It took them a few days but the folks at Nalcor managed to put out a statement that addressed the possible talks with Hydro-Quebec about the Lower Churchill.

They didn't post it to the Nalcor website or anything but a few people were flicking it around on Tuesday.  They must have tweeted it out or something.*

Anyway, here is a picture of it.

Now we can see what it says, line by line.

Jerusalem, Eldorado, and Perdition #nlpoli

Part I:  The development of our country
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The Heritage Newfoundland and Labrador website "aims to provide school students and the general public with a wide range of authoritative information on the province's history, culture, and geography. It is based at the Memorial University of Newfoundland. Faculty, graduate students, and professional writers contribute articles, while undergraduate students provide support as research assistants."

That statement of authority is one of the reasons why the introductory sentence to its section on the impact of Churchill Falls is so intriguing:

The Upper Churchill Falls hydroelectric project remains one of the most notorious ventures in Newfoundland and Labrador's resource-development history.   

There is no such thing as the "Upper Churchill Falls" project.  There is no upper Churchill Falls or, indeed, a lower one.  There is simply Churchill Falls.

Two for Friday #nlpoli

There's a long weekend coming up, so here is a simpler post.

There'll be an SRBP post on Monday but the biggie for the week should be Tuesday.  There's been so much talk about the Churchill Falls contract renewal on Thursday that we really need to take a look at Churchill Falls and compare and contrast the situation with Muskrat Falls.  Hopefully,  we can do that in one post.  If not, there'll be two back-to-back on Tuesday and Wednesday.

There are few more posts coming this fall that have been brewing for a while.  They are also related to one another, as it turns out,  although the connections might not seem obvious at first.

For those who wondered about it and who found the Zero-Based Governing post interesting,  there will be two more coming.  In the follow-up, we'll have a go at the Phase 2 part of the process for a couple of departments.  That's the more detailed functional analysis that will reveal the extent to which the number of departments as such is not an indicator of how big the government is.  After that,  a regular reader's experience in another province inspired a third post in that series that will look at the areas where federal and provincial jurisdictions overlap.

For today, though,  let's highlight some posts on other local political blogs.  labradore had a go at the electoral office on Thursday over the absolutely ludicrous amount of time they take to issue election reports.

When you've done with that,  Uncle Gnarley gnawed at Muskrat Falls and water management on Thursday as well.  Lots of detail.  Regular readers of Gnarley or here will find a lot of it very familiar but it is useful to bring it all back now and again, as Des does in fine style in this post.

-srbp-

Zero-based governing #nlpoli

The provincial government has been going through a spell of something called zero-based budgeting as part of its ongoing efforts to cope with the massive government financial problem.

ZBB, as it is known, examines the budget in detail, justifying each expenditure,  not just the changes from year to year that would be considered in the usual way of budgeting.  You started from a base of zero,  as the name implies.  If the government makes any changes in the budget this fall, they will be out of this ZBB approach.

When he chucked a few deputy ministers overboard a week or so ago,  Premier Dwight Ball said that these extremely small changes in the organisation of his administration came out of the realisation they had enough deputy ministers to run the Ontario government.

Quick aside:  This is a common Ball-splanation for his actions.  "We" have learned something.  They ditched Cathy Dornan as a communications advisor because "we" had learned enough so "we" didn't need her services any more.  "We can do it all in-house.  Changes in government organization:  "after seven or eight months in office,  "we" know more now than we "we" did earlier.  Just flag that whole idea in your mind.  There's an SRBP post coming on it just because it is a rather curious  - but revealing - way of looking at the world.

For our purposes, though,  let's just notice that what it obviously means is that Ball and his folks don't have anybody thinking about the basics of government organization.  They have a former ACOA boss running Government Renewal Initiative - called GRIM in-house - but whatever he is doing,  it seems to be largely an out-placement service for recently retired ACOA senior executives.

So if nobody else is doing any big picture thinking about government,  we should give it a try.

The Price of Revanchism #nlpoli

Churchill Falls occupies a unique place in Newfoundland and Labrador's political culture.

Most of what people believe about Churchill Falls is just sheer nonsense.  Made up.  Never true. Completely ludicrous.  But accepted as fact and unshakeable truth all the same.  And that's where things get weird. People use all that foolishness nonsense to make decisions in the real world.

One of the enduring legends is that Newfoundland wanted a corridor to wheel electricity through Quebec,  went to the federal government in the 1960s to look for one, couldn't get it, and thus wound up a slave to Hydro-Quebec in 1969.  It's been a popular story since the 1970s,  after the Newfoundland government nationalised BRINCO.

There's never been any evidence that Joe Smallwood ever put the question to Lester Pearson although lots of people will swear to it and swear by the story as evidence of how Newfoundland has been shagged by whatever version of the foreign boogie-man they favour.  

Danny Williams trotted the story out, indirectly, in November 2010 when he announced he had committed the provincial government to build Muskrat Falls.  Our electricity would never be stranded again.  We would never again be held hostage by Quebec.  The new, magnificent power corridor through Nova Scotia was the way that we would break Quebec's stranglehold over our magnificent future.

Yay!  Hooray! people screamed, including more than a few editors and columnists.

The only thing was that what Williams said wasn't true.

And he knew it.

Water Rights, Muskrat Falls, and the Muskrat Falls Disaster #nlpoli

Forget everything else that you know about Muskrat Falls.

The entire project hinged on Nalcor's ability to control water flows on the Churchill River.  Nalcor's internal assessments showed that without the ability to control water flows, Nalcor's Lower Churchill project would reliably produce only about 17% of its nameplate capacity.  That means that Muskrat Falls would have a firm generating capacity of about 140 megawatts,  which is less than the free block of power Nalcor guaranteed Emera and Nova Scotia.

Nalcor gambled on a dubious interpretation of the 1969 power contract and lost.

The impact on Muskrat Falls will be devastating.

Here's why.

A foundation of lies and deceit #nlpoli

You could feel the shock among the local media on Friday as Stan Marshall carefully dissected the insanity that is Muskrat Falls.

Didn't matter if you heard the voices on the radio,  watched them on television or read them online.   The reporters' emotional reaction transferred through whatever medium it was that conveyed their words.  Here it was laid out in stark detail:  billions over budget,  years behind schedule,  a financial burden for the province its people will be sorely pressed to bear and all of it built - in essence - on a series of false statements,  faulty assumptions, and anything but facts and reason.

Never mind that all of what Stan Marshall said was - in effect - already widely know and had been known for most of the preceding decade.  Here you had someone as rich or richer than Danny Williams telling them that Muskrat Falls was utter shite.  By the unspoken law of Newfoundland politics,  the poor benighted scribblers now had no choice but report it.

Six Rationalisations Pretending to Be Policy #nlpoli

Policy solves problems.

At it's simplest level,  policy answers a question.

Cancelling Muskrat Falls is a good example.  We are facing a financial crisis.  Muskrat Falls is a huge expense.  There's the problem.  Turn it into a question and it becomes whether or not we should cancel Muskrat Falls.

To answer the question, you'd have to look at other issues. Muskrat Falls  was supposed to be the answer to our power needs. We'd have to look at that issue:  do we need the power?  We'd have to look at finances:  can we afford it? What would it cost to take one course versus another?  We'd have to ask about legal implications:  what do our legal commitments say we must do?

Implicit in those questions is the idea of alternatives.  What choices do we have?

A written report on those questions would have some structure to it.  You'd expect it to start out with a clear statement of the question the author reviewed.  It might even be posed as three options: continuing as we are,  halting the project completely, or an intermediate options like slowing the project,  cancelling bits of it, and so on.

The paper would review the existing state of the project and then project ahead based on what we knew.  Then it would have to branch off from today to examine each of the answers to our string of questions.  Given the size of Muskrat Falls and the complexity of itl you'd imagine any serious discussion of cancelling the project would take months to prepare, would involve a great many people, and would certainly take more than 10 sheets of paper.  Just to make sure you appreciate the magnitude of what we are talking about, go back and look at just a tiny bit of the paperwork prepared for the public utilities board review of the project.  The Manitoba Hydro report was enormous.

Now read the 20% of a document prepared for Dwight Ball's cabinet released to CBC under the access to information law.This briefing note is apparently about the implications of cancelling the project.

Actions and words #nlpoli

The provincial cabinet has known since January - at least - that the powerhouse at Muskrat Falls is only 15% completed despite a huge payout to the contractor.

That's what Nalcor reported to the committee of provincial bureaucrats named by the Conservatives to get a report from Nalcor every now and again.  They can't do anything else except receive the reports and pass them on to cabinet.  They still do it under the Liberals.

The company hired by cabinet to conduct yet another review of information supplied by Nalcor that government already had included a little table of progress on major components at Muskrat Falls.  The powerhouse is a major component.

But it isn't on EY's table, shown at right and released earlier this month.  It's lumped in with "spillway" and shows it is supposedly almost 40% complete.

There's a lot of difference between 15 and 40.