How to say little in 34 slides #nlpoli

• Consultants have consistently reported that the Muskrat Falls project is well-managed and well-led.
• Despite that independent analysis, MFP has been dogged by significant cost over-runs, significant problems with performance on meeting project timelines, and chronic problems with communications/public disclosure.
• Review of Muskrat Falls project by a company called Independent Project Analysis.
• Consists of 34 slides
• Majority of slides (20) contain background information on project and contractor or bland statements of fact.
• No details on research specific to this assessment beyond reference to interviews.
• Remainder of slides (14) provide no evidence to support positive statements or indicate areas of concern...

Nalcor: Generations #nlpoli

Telegram editor Peter Jackson took a hard look this week at the implications of Nalcor’s effort this week to jack up electricity rates.

As part of the company’s rate application to the public utilities board,  Nalcor said a relatively dry season on the island had deleted its water reservoirs.  As a result it had to burn more oil to make electricity and therefore ratepayers needed to cover that cost.

Jackson notes that with Nalcor’s plan to scrap the Holyrood generating station, we’ll be left to rely on Muskrat Falls and its relatively small reservoir.  That small reservoir means the Muskrat Falls generators will depend on a water management arrangement with Churchill Falls.

And then Jackson puts everything in perspective:

Decision-Based Evidence-Making #nlpoli

The government’s “renewal initiative” is supposed to be guided by something called “evidence-based decision-making.”

It’s right there, right after “affordable and sustainable public services” as one of five principles listed in the colourful little hand-out the government has been using as part of its “engagement” exercise.

How odd then that so far the Liberal administration has failed to apply the principle of supporting decisions with evidence.

Up the harbour and down the shore, again #nlpoli

Today marks SRBP's anniversary.  The first post appeared on January 3, 2005.

Events of the past few weeks are a reminder of both how much has changed - we have a new government party - and at the same time, how little has changed.  Read on and you will see how little has changed.

Danny Williams and the Conservatives won the 2003 election promising to cure all the province's financial ills by "growing the economy."  Danny Williams said time and again that he was all about "jobs, jobs, jobs."   They'd attacked the Liberals over their poor financial management and promised to do things better.

In the middle of 2006,  CBC updated the world on Williams' progress. "These days," SRBP wrote, "the Premier is feeling a bit beleaguered, at least if a piece that aired recently on CBC is anything to go by.

The Premier's own take on things doesn't really have any evident shred of optimism. 

Rather the Premier appeared to be speaking defensively: gimme credit for saving the place from imminent bankruptcy. We have things going on that no one can control. In the meantime,we are working on planning to plant seeds for future growth. 

Interestingly enough, the province was never facing imminent bankruptcy: that was the Premier's fiction. The other factors he mentioned [in the interview] were specific to ... some companies in the fishery alone. The same factors - like Chinese competition and high exchange rates - don't affect other economic initiatives or don't affect other industries in the same way.  

The segments with the Premier were an interesting clue to Danny Williams' current state of mind. If March was manic, then June is borderline depressive.

That June 2006 post continued:

What was pretty clear in 2003 was the province could get out of its budget woes with some careful planning and with the continued economic growth coming from the offshore and Voisey's Bay. We all knew that growth was coming. Danny knew it too and that's why he ran the election on the up-note of growth. 

What no one knew was that oil would hit US$70 a barrel and the cash would be pouring in at a rate no one in the province had ever seen before. That allowed Danny Williams to avoid making a whole bunch of good decisions and to crank up spending to unprecedented and, and in light of the economic slowdowns, likely unsustainable heights. 

These days, though, there is no mistaking the point that the provincial government is in a hard spot. There are some factors in the economy that are beyond Williams' control. The stuff that is within his purview either foundered for one reason or another or simply have never existed. 

And that goes to the core point of this piece from shortly after the 2003 election: government needs to focus on what government does. 

In largest measure, since 2003 Danny Williams has focused his considerable talents in areas where, as Premier, he simply can't have an impact. He has been trying to run in the business sector rather than applying his managerial skills to running a government that will in turn create an environment where the private sector will develop the economy.

If he wanted to create jobs, he should have stayed in the private sector and put together the deals to create jobs and generate wealth. Instead, we have wound up with a mismatch between Danny Williams' considerable skills and the challenges at hand. 

Worse still, the centralizing tendency of government bureaucracy merely reinforces the most pernicious attributes of Williams' own hands-on leadership style. This has slowed down government's processes such that many policies are done one at a time rather than in parallel.
 Government has slowed to the point where it has taken three full years to get even the vaguest idea of some policy areas - like widening Hydro's mandate - and others, like the role and impact of the Business department or Danny Williams' own economic development seeds still haven't been seen at all.

... 

Running government is like drinking from a four-inch firehose.
 The most important thing for an incoming administration is having a way of figuring out how much to drink so it can avoid getting drowned. An incoming administration has a list of the things it definitely wants to accomplish and sets to work on them right away. For everything else there is a framework that identifies what is important, what is not important and gives a guide that helps triage the stuff that pops up along the way. 

In a sense, we are looking at a Premier and a government, three years into its mandate, that is increasingly being driven on some major issues instead of doing the driving. It's a variation on the idea discussed in another "Outside the Box" column from early 2004.

Back then, it looked like those columns were just penetrating insights into the flipping obvious. In hindsight, the observations seemed to be all too relevant.

2006.

Government spending ramped up to unsustainable heights based on oil at US$70 a barrel.

Now here we are in 2016 with Danny Williams' legacy of unprecedented financial mismanagement staring us plainly in the face.

And just to show how timely a column your humble e-scribbler wrote for the old Independent in late 2003,  here's that column again for your anniversary reading pleasure.  Note the bit at the end.  That isn;t what Dwight Ball talks about when he refers to consultations, but it is the sort of thing that would change the way government operates in this province fundamentally.

---------------------------------

Up the harbour and down the shore 

If Danny Williams wants to solve the government deficit problem by producing new jobs, as he said he would, he will have to create something between 50, 000 and 100, 000 new jobs in the province over the next eight years. 

To put that in perspective, there are about 219, 000 full-time equivalent jobs in the province today according to the Economics and Statistics branch of the provincial government. Since 1996, the economy produced about 31, 000 new jobs. To meet his commitments, Danny Williams will have to produce twice or three times as many jobs in the next eight years as the province could create in the past eight. 

And he will have to do that while providing increased health services to an aging population, providing education, services, roads, water and sewer and all the other things people expect from the provincial government. And he can'’t lay off government employees or increase the deficit. 

Sounds impossible? 

It is. Just look at our collective experience in the province and you can see why making promises like "“Jobs, Jobs, Jobs" ” is nothing short of silly. Politicians seem to forget that whenever government tries to create jobs, it fails and fails miserably. 

Stupidity, someone once said, is doing the same thing over and over and hoping for a different outcome. To stop being stupid, politicians need to focus not on creating jobs - something they can'’t do - and focus on politics, something they can do. 

That'’s why, a decade ago, the provincial government decided to get out of the job-making business. It decided the best it could do is creating a climate where entrepreneurs - – people with ideas - – could focus on making jobs that last. There was a bit more to it, though. The regional economic boards were supposed to be a way to let people in the different areas of the province decide for themselves what they would do to develop their local economy. 

The boards were also part of a wider move toward more regional control over a number of things, including health care and education. After all, politics is about who decides. In a province as big as this one, with a very small population, the "“who"” who decides often shouldn'’t be someone hundreds or thousands of kilometres from the issue. One major problem is that it has been hard to wrestle power out of the hands of bureaucrats and politicians in St. John'’s who want to keep deciding just about everything, right down to who can and cannot ride the local school bus. 

But the logic remains. Take Eastport, for example, or other areas of the province where local fishermen have had a greater say in how the resources they depend on are managed. They make sensible decisions based on science, their own knowledge and their own interests. They virtually eliminate poaching. They close fishing in areas where it needs to be closed and develop new ways to improve the price they get for their product. 

Maybe it is time to take these ideas a step farther and create a form of regional government that promotes economic development and administers health care, municipal services, education and even social welfare programs. New regional councils, elected regularly, would sort out local priorities and make decisions on that basis. The provincial government can look after setting broad strategic goals, much like the federal government set down basic principles for Medicare and then lets the provinces actually deliver the services. But the decisions on where hospitals go, or indeed if a new hospital is actually the best way to deliver health care in that particular region are left to the people who will be directly affected. 

Transferring power for some decisions from St. John'’s to new regional governments wouldn'’t be a magical solution to job creation or anything else. It also won'’t guarantee equal success everywhere. What it will do is involve more people in deciding what the future will look like in Newfoundland and Labrador. In an odd way, a new approach of regional government -– a county system - might help people realize that the issues up the harbour are much the same as the ones down the shore or in the four distinct regions of Labrador. 

For the provincial government, those politicians can look at projects like Voisey'’s Bay or the offshore for the government revenues they generate, rather than the number of jobs. The deficit problem might just get sorted out by thinking outside the box for a change.

-srbp- 

Blind in one EY #nlpoli

The new Liberal administration is firmly, irrevocably committed to completing the Muskrat Falls project regardless of the final cost to the people of Newfoundland and Labrador.

We know the Liberals will build the MF project because Dwight Ball said precisely that several weeks ago. We cannot let it fail,  Ball told a CBC audience in September.

We know Ball is committed to building Muskrat Falls because he told reporters on Monday that “cancelling this project is not what this review is about.”

Ball and the Liberals have argued for some time now that the problem with Muskrat Falls was nothing more than bad management.  To prove this, Ball and natural resources minister Siobhan Coady announced on Monday that they would send an accounting firm back to do what the same firm just finished doing a few months ago.

Media Training 101: Truth and Credibility #nlpoli

Last Friday, CBC’s David Cochrane asked Ryan Cleary about information Cochrane had – apparently from NDP sources  - that Cleary had tried to run in a district where the New Democrats already had a candidate.

They asked him specifically about Virginia Park-Pleasantville, where the NDP had already announced lawyer Bob Buckingham would be the star candidate for the party.

Cleary replied:  “Absolutely not.”

That wasn’t true, as CBC’s Terry Roberts confirmed on Wednesday.

WTF?

There are times you read stuff and you just have to wonder what brought that on.

There’s Telegram editor Russell Wangersky explaining how newspapers are still relevant in the world today. He starts bitching the old bitch about how radio stations in town used to read Telegram stories on the air word-for-word without crediting the folks at the Telly who did the work.

Then he starts in on bloggers for some reason.  Russell tells us the “dirty little secret”, namely that “they depend on us more than anyone else. They couldn’t do without us. They are building their sometimes-flimsy logical constructions on the rock-solid work of front-line reporters. The bloggers aren’t working the phones or holding the digital recorders — as much as private radio used to, and still does, rip and read, online commenters grab and gab.”

Yes, b’y Russell and we all live in our parents’ basement, never get out of our pajamas, and rock and roll music is the spawn of Satan.

Muskrat Falls commercial power by Q2 2019 ? #nlpoli

The latest progress report shows that Nalcor had a productive summer, but an extrapolation by the researcher and writer  JM of information in the latest progress reports points to first power from Muskrat Falls in September 2018 and full commercial power by the middle of 2019.

In at post at Uncle Gnarley, JM described the challenge facing Nalcor in 2015:

As correctly noted in the March 2015 oversight report the productivity improvements in Q2 2015 are essential to meeting the final milestone schedule.  For the Muskrat Falls team, the summer of 2015 is really “make or break” for the project.  They need to get the project back on track before the construction schedule is hampered yet again by another Labrador winter. Winter begins earlier in Labrador than it does on the Island. The project team knows this.  The questions is this:  is the productivity improving at a pace where the schedule can be recovered? [sic]  If Nalcor have any hope for schedule recovery they must first start meeting their originally planned productivity targets.  In the July 2014 schedule, they planned to complete about 6.7% of the project in Q1-2015.  With all their mitigation measures, Nalcor should be looking for about 33% complete by the end of June.

New Englanders know you’re bullshitting ‘em, Paul #nlpoli

The New England governors and eastern Canadian premiers were in town on Monday for a quick meeting.

The only thing that seemed to make local news was talk about electricity sales.  This is old hat for regular readers, but it is worth going over again.

New England wants to buy electricity.  They can get lots of it very cheaply thanks to shale gas lately.  How cheaply, you may wonder?  Well, in August it was running around four to five cents a kilowatt hour wholesale, not including transportation.

To put that in Muskrat Falls perspective,  it is less than half the cost of making electricity according to the estimate five years ago.  Where the price is these days is anybody’s guess.

Always ready for a better tomorrow #nlpoli

Ontario and the faltering Conservative administration in Newfoundland and Labrador are talking about the possibility of developing Gull Island to supply Ontario with renewable energy. 

CBC’s online story on Monday said exactly that:

Ontario eyeing Lower Churchill hydroelectric power from Labrador.

But if you listen to what  grim-faced energy minister Derrick Dalley said to CBC’s David Cochrane during the supper hour news on Monday,  there is a lot less to the announcement than first appeared.

No equity? No surprise. #nlpoli

It didn’t take long for Paul Davis to get the comparison he was looking for last week.

The Telegram - not surprisingly – offered it up in the editorial on June 17:

“Premier Paul Davis pulled a Danny Williams Tuesday,”  the editorialist wrote.

Davis told the annual NOIA oil and gas industry conference that a deal to develop Bay du Nord was mere weeks away.  Never mind the complexity of the project:  500 kilometres offshore,  in very deep water,  very deep under ground.  Never mind the complexities of international law not fully resolved yet.  Never mind the project economics – whether it can be developed profitably -  are still unknown.

Never mind anything.

The goal was the comparison.

Newfoundland forcing Quebec's hand on Old Harry #nlpoli

The Bay du Nord field is far offshore and far from development, Paul Davis’ optimism notwithstanding.

It’s way the hell offshore (about 500 kilometres),  way the hell under water (more than two kilometres) and then way the heck under the sea bed  (about another two kilometres).  It’s not going to be easy and it sure as heck isn't going to happen in less than five years.

Premier Paul Davis likely talked up the prospect of an agreement  to develop Bay du Nord because he needed something to say at the annual offshore development conference this week.

What’s curious, though, is that he never mentioned a far more interesting project that is far easier to develop.

Owing it forward #nlpoli

The provincial government will balance its books this year by borrowing $2.1 billion.

Lots of people don’t know that,  as Michael Caine would say.

The government included in its budget plans this year a hike in the HST of two percent.

The tax hike will bring in $200 million.

That $200 million will just about cover the interest in one year on all the new debt the provincial government plans to add between now and 2021.

The $2.1 billion this year is the tip of a very big iceberg of new debt, you see. The new debt will go on top of the other $12 billion we already owe. The total cost just to pay the interest on that debt in 2021 will be $1.0 billion.

When people found out about the HST hike, they lost their minds.

Fast forward to 2017.

The Fourth Party #nlpoli

A Telegram editorial on Wednesday contained a curious comment.  

The subject was news that broke this week about the provincial government;s energy corporation.  Two senior corporate officials are refusing to testify in a court case in Quebec over contending interpretations of the 1969 power contract between Churchill Falls (Labrador) Corporation and Hydro-Quebec.

Nalcor is refusing to respond to the Quebec court’s order, insisting that the order must come from a court in this province.  Now the entire court case is extremely important because it is crucial to Nalcor’s entire scheme for Muskrat Falls.  The fact that Nalcor is thumbing its nose to a legal process that it is a party to, through its majority ownership of CFLCo is both troublesome and needlessly offensive.

But that’s not the curious point from the editorial.  Whoever wrote the commentary added this bit toward the end:

It’s possible they are simply mirroring the intransigence of their Quebec counterparts to co-operate with actions in this province — as, for example, Hydro-Québec did in refusing to participate in PUB hearings on the water management agreement.

The problem with the statement is that it simply is not true.

A legacy of secrecy and bad deals #nlpoli

In response to questioning in the House of Assembly last Tuesday and Wednesday, natural resources Minister Derrick Dalley confirmed that the provincial government is in secret talks with Norwegian oil giant Statoil to develop a new field offshore Newfoundland.

There’s was nothing in the local media about it until the end of the week when the Premier appeared to chance his position on the talks.

The Telegram’s James McLeod wrote:

Premier Paul Davis says that when he told his natural resources minister to wrap up a major offshore oil deal by the end of the year, he didn’t really mean exactly that.

 

Language Problems #nlpoli

“Increasing taxes is not about solving the deficit, it’s about maintaining our programs and services that we have.”

That’s what Labrador and aboriginal affairs minister Keith Russell told the handful of people who showed up for the government’s pre-budget consultation in Happy Valley-Goose Bay.

The Conservatives are perturbed that the turnout for these sessions has been small.  Part of the problem was the tight timeline:  they only announced the dates last week and started the first session on Monday.  Another part of the problem is that everyone knows that the things are a farce. They aren’t interested in wasting their time.

People should turn out to these things, though, if only for the entertainment they offer,  not to mention the practicality of it.

Bond Raters and other things to wonders about #nlpoli

Cast your mind back a couple of years and you will probably remember finance minister Jerome Kennedy told us a couple of things.

One was that he expected the government would run deficits for three years, totalling about $1.6 billion.

The other was that surplus would follow after that.

Well, here we are three years later and the latest finance minister – we’ve had four in three years – is now saying we can expect to see another  five years of deficits before maybe, possibly, getting the budget into surplus in Year Six ALE. 

That’s ALE as in “after the latest estimate.”

The 2018-2019 Offshore Review #nlpoli

In 2003,  the new Conservative administration set as its first task to renegotiate the Atlantic Accord.

They hadn’t campaigned on that issue.  The campaign election platform included a pledged to change the Equalization system in order to address the supposed claw-back of oil revenues.

Still, they started out in office wanting to renegotiate the Atlantic Accord.  That idea sent a few people familiar with the Accord into the horrors.

The market is closed, Ken. #nlpoli

Part of the problem the folks at Nalcor have had in trying to build support for on Muskrat Falls is that they never explain things completely, in plain English.

The result is that they look like they are hiding something .That is, they look like they are not being candid or sincere.  They often come across as if they are not telling you the whole story.

Take as a fine example, the war of words that is erupting between Nalcor board chair Ken Marshall on the one hand and David Vardy and Ron Penney on the other. Marshall had a lengthy op-ed piece one Saturday,  Vardy and Penney had a rebuttal on April 19 and now Marshall is back again.

Nalcor promising Boston cheap electricity courtesy of NL taxpayers #nlpoli

Muskrat Falls is over budget, big time. The latest estimate is $7.4 billion and climbing on a project that was forecast at $5.0 billion just four years ago.

The project will wind up behind schedule, most likely.

There’s a good chance Nalcor won’t have enough control over water flows on the Churchill River to meet its forecast firm generating capacity from the smaller dam let alone the theoretical project at Gull Island.

But that hasn’t stopped Nalcor from pitching Muskrat Falls and Gull Island to the good folks of Massachusetts with electricity at prices that would be – conservatively – about one third of what Nalcor’s owners will have to pay for electricity from Muskrat Falls.