A document on the fibre optic deal, tabled in the House of Assembly this week contains largely generic information and potential savings for government telecommunications from the deal are based on a verbal suggestion by Persona Communications.
Bond Papers obtained a copy of the document. Following are excerpts from the document. Bond Papers observations are contained inside square brackets "[ ]".
The document, titled Report Excerpts, was prepared by EWA-Canada for the Department of Innovation, Trade and Rural Development. It contains portions of two tasks assigned by the provincial government.
In total, the document contains 25 pages. Of that, only nine contain concrete information and appear to be from an executive of the complete EWA report. Two pages are the title page and a contents listing. The balance - 14 pages - is a summary of impact assessments for expanded broadband service in other jurisdictions and four pages containing brief corporate profiles for the companies involved in the assessment. No specific cost/benefit analysis for the Persona proposal is included. Any references to specific numbers/costs were in the released document, in keeping with provisions of the provincial Access to Information and Protection of Privacy Act.
EWA was tasked to "review overall reasonableness of the proposal made by Persona Communications Inc. For Government to invest in a new fibre optic connection to North American communications networks". (p.2)
EWA recommended revisions to the proposal. It recommended:
- Persona be required to post a performance bond;
- that the provincial government share of fibre be increased to XX on land and sea versus XX "fully redundant" fibre suggested by Persona; [BP note: specific numbers deleted in government-released copy] and,
- future contracts should ensure "open and unencumbered access to infrastructure" in accordance with Canadian regulations and standards.
Summary and observations:
1. According to EWA, the Persona business case provides "internal rates of return" to Persona of XX% and unspecified net present value. This includes government's $15 million and the CDLI project. [BP note: CDLI = cross-island redundancy begun in 2005 with federal and provincial financing; numbers deleted in original).
2. The business case does not include "ancillary benefits to Persona from new connections and new services" as a result of the project. [BP note: This important since persona clearly stands to see an expansion of its own business from the installation of fibre optic capacity in Newfoundland and Labrador and Nova Scotia.]
3. "This project would require an interested equity partner who can derive some benefits other than immediate cash flows." (p.3) [BP note: This may mean that prospective commercial partners would not be prepared to accept losses or very low returns on investment. The only way the whole project becomes viable is with public money and with little or no expectation of a direct financial return.]
4. "Only limited approvals" in Nova Scotia had been received up to the time of the report (June 2006) for the installations on land in that province. Upwards of half the land distance of new cable is in Nova Scotia in order to connect to the nearest multi-fibre hub. (p.3)
5. Given the limited rates of return to Persona noted above, the project would require additional funding by one or more of the partners to cover cost over-runs resulting from issues such as unanticipated geographical challenges. (p.3)
6. At the time of the report, the provincial government did not have in mind a use for the fibre it would acquire other than as a safeguard against future monopolization in the telecom industry. (p.4) [BP note: This confirms that the provincial government has no telecommunications strategy, despite claims to the contrary, and that this project was not assessed in terms of potential benefit to government's own telecom requirements.]
7. At $15 million, government would be overpaying for the quantity of fibre contained in the original proposal. (p.4) [BP note: EWA recommended increasing the amount of fibre and location purchased by government.]
8. Benefits expected fall into general categories of more business opportunities and improved opportunities for research-related telecommunications. (p.5) [BP note: At no point does EWA provide an indication of concrete examples of cost reductions, actual business opportunities or any other benefits that can be quantified. This is due, in part, to the very tight time frames given to EWA to produce the report.]
9. One benefit is vague and almost incomprehensible as written: "Infrastructure conservation by permitting work to be done closer to home and reducing the Newfoundland diasporas [sic]." (p.5)
10. EWA states that it was not possible to quantify benefits in the limited time available. (p.5) [BP note: less than four weeks. On page C-9, the consultants refer to the theoretical or generally accepted benefits of broadband versus dial-up in terms of transmission capacity (1 gigabit per second versus 1 megabit per second). There is no discussion in the document of existing fibre capacity and data transmission rates for the province as a whole. As a result this comparison - which the Premier used in the House of Assembly - is virtually meaningless. The province already has broadband for the university and other users in major centres.
In the same section, the consultant speculates that the province may become attractive for projects involving large data transmission. The example cited is the digitization of the Library of Congress. No assessment is made of the existing competition for such services and what, if any, competitive advantages might exist for such work to be done in Newfoundland and Labrador. Again, it is an entirely fanciful example of a potential advantage. ]
11. With respect to overall financial benefits to the provincial government for its telecom costs, "Persona has verbally suggested a possible savings of 50% or $XXXXXX". (p.5) [BP note: While the Premier and others have referred to this figure, there appears to be no concrete evidence it is anything other than a ballpark estimate by Persona. As well, the savings appear to be related to provincial government telecoms expenditures. Some government comment makes it appear the savings estimate is for the province as a whole, i.e. government plus the consumer market.]
12. There is no reference to the anticipated benefits of $400 million over the expected 40 year lifespan of the fibre. This appears to be a calculation by government based on the unsubstantiated verbal claim by Persona referred to above.
13. No engineering appraisal was released at all. There is no examination in the released portion of the report of the implications of stringing the cables along telephone poles versus using buried cable as in the existing Aliant project.
14. The consultant recommended a formal process for assessing unsolicited proposals.
23 November 2006
Video "strong evidence": blogger trial judge
A video tape entered into evidence in the New Brunswick trial of a blogger charged with obstructing police is "strong evidence" that the accused was standing to one side of a demonstration taking pictures, according to the trial judge.
Judge William Carroll did not dismiss the Crown's case but noted that the video evidence also did not appear to show Charles LeBlanc resisting arrest, an offense he is also accused of committing.
In testimony, police admitted they visited LeBlanc's blog to gain further information about the protest and arrested LeBlanc because they did not consider him to be a legitimate journalist.
Police Sergeant John Carroll said LeBlanc looked too "scruffy" to be a journalist and was carrying an "un-professional"- looking digital camera. Parks admitted to deleting a picture of himself from LeBlanc's camera when LeBlanc was arrested.
Judge William Carroll did not dismiss the Crown's case but noted that the video evidence also did not appear to show Charles LeBlanc resisting arrest, an offense he is also accused of committing.
In testimony, police admitted they visited LeBlanc's blog to gain further information about the protest and arrested LeBlanc because they did not consider him to be a legitimate journalist.
Police Sergeant John Carroll said LeBlanc looked too "scruffy" to be a journalist and was carrying an "un-professional"- looking digital camera. Parks admitted to deleting a picture of himself from LeBlanc's camera when LeBlanc was arrested.
22 November 2006
Telecom cable or time machine?
Offal News has a new take on Danny Williams' latest fibre fiasco comments. As Lono notes, the Premier's claims are just too good to be true.Around here, the whole comment just seems like a cheap homage to Joe Smallwood's kingdom in the 1960s.
The time curtain parts...and suddenly two Premiers seem to merge as one, their words flowing together in defiance of all laws of physics. Words put together in the style of the older man seem to come straight from the mouth of the younger:
The benefits, the good, the boons that will flow from this sacrifice by such great men cannot be measured. The prosperity that they dare to inflict on every man and woman and child of this province, the wealth and the hope that will visit every bay and every village this cable touches cannot be sized by any means known in history. We shall have to invent a new way.
Science, technology ...all the ingenuity of men and women through the all the millenia of human civilization has not yet devised an instrument nor a measuring device nor even a concept of measure capable of determining the volume of benefit that will come from the selfless sacrifice to this province given by these two men.These men should not be criticized. It be a crime to even think of doubting them. They should not be asked to justify investing public money in such a deal of evident glory. We should be thanking them, we should be kissing their feet in humility at their generosity, their vision, their foresight.
The only people who criticise this deal are people with small minds and low motives. People who would forever condemn this magnificent island and its magnificent people to a life of servitude at the hands of foreign masters.
I wish I had a thousand more men like these two to develop this province.
What would Homer do?
A PR buddy of mine, long since promoted to awesome heights of responsibility in public relations, used to keep a folder in his desk drawer he called the Homer Simpson File.Every story he came across that illustrated a good teaching point went into the file for future use. As you might imagine, the stories were not examples of good practice; rather, each one had a moment in it when - like Homer Simpson - everyone would exclaim "D'oh!".
We've all been to lectures, workshops or other professional development sessions featuring tales of some manager or other or some corporation who led a team to victory or who single-handedly took a project to a stirring conclusions amid shouts of international adulation.
Homer Simpson File stories were illustrations of what happened when you forget the simple stuff. And the Homer stories were never examples of perfect hindsight or cases where you wondered why people never saw the train coming until it was too late.
Nope.
These were stories that sometimes amounted to PIBOs: penetrating insights into the bloody obvious.
These were cases where the people involved saw the train barreling toward them. They marvelled at the exciting noise, bright shiny lights and even the rumbling under their feet sometimes right up to the moment where the headlight on the engine was a couple of inches from their forehead.
So if it was, in fact, so bloody obvious, why did it happen?
And that's a clue to the value of a Homer Simpson moment.
Do a search for "pr blogs" or "pr measurement" and you'll come across a wealth of insightful discussion on ways of telling if this or that public relations tactic or campaign is effective. The former train spotters will tabulate all sorts of things, assign scores, create equations and emerge with what they believe is the definitive answer.
Sometimes, the most convincing measurement for a course of action is to figure what happens if you don't follow a recommended or - bleeding obvious - path.
The current kerfuffle over fibreoptic cables has a bunch of Homer Simpson moments in it. The one that stands out is the whole business of the Ken Marshall-Dean Macdonald-Danny Williams, political contributions, political appointments and The Deal.
Every single one of the Big Guys in this deal saw this one issue coming.
They went ahead anyway, convinced there was value in the project.
Fair enough.
But, as innovation minister Trevor Taylor stated several times, the whole deal was rejected by cabinet because of the Dean-Ken-Danny relationship.
Someone suggested putting out a call for proposals.
That idea got shot down supposedly because $1.0 million for the RFP process was too much to spend on to check that the price tag of $15 million was good. Bear in mind the provincial government hired an outside, out-of-province - and likely expensive - consultant to review the original proposal.
Deal gets approved. Deal gets announced.
Headlines scream across the country about allegations of deals among buddies and public money for private sector companies that didn't need it. And Danny Williams? After weeks of pounding largely over the complete public relations cock-up involved, the Premier is reduced to accusing people of smearing reputations.
Like he didn't see that one coming.
By his own admission, he saw it.
Twice.
D'oh!
Danny Williams' Booty Call
Yeah. It's a new show coming to Rogers Cable really soon.Actually, it's the result of Danny Williams threat to "sue the ass off" opposition leader Gerry Reid. Reid managed to get under the Premier's extremely thin-skin during the legislature's Question Period on Tuesday.
If CBC television reported the comment accurately, Reid was needling the Premier about one of several business deals Williams or Williams' companies cut with the Brian Tobin administration.
There have long been rumours about the sweetheart arrangements, but thus far nothing solid has popped up into the public domain.
Except for The Dan's exploding head.
That was a pretty good indicator that whatever Reid was talking about must strike just a little close to home for Danny's taste. There's no other reason for a smart operator like Danny Williams to threaten lawsuits in vulgar language over such a comment.
Nope, Danny, you protest too much. Way too much.
As for Danny Williams' irritation at being questioned, he should get used to it.
Any questions being raised about this cable deal among friends pales in comparison to Williams own scurrilous, unfounded and entirely personal attacks on anyone who opposed him since he entered politics in 2001.
If you can't take it, don't dish it out.
Don't try your usual tactic of bully-boy bluffing, either. When you threaten to sue someone's ass off - someone who likely has a nice stack of documents on the projects in his desk drawer - well maybe you better hope the guy you threaten doesn't call your bluff.
_______________
Addendum [0930 hrs]:
Just to be perfectly clear: rumours aren't facts and around St. John's, rumours are notoriously inaccurate. The only thing - the only thing - about the exchange in the legislature that drew attention to it was Williams strong reaction in vulgar language in the legislature.
From a public relations perspective, Reid's attack was surprisingly effective in getting the Premier off message. Message in this case would typically be about the merits of the deal and a factual rebuttal of criticism.
For Williams in this instance, though, the message has lately been about the supposed trashing of reputations of people who Williams rightly contends are respected business people. That's still a relatively weak portion of the whole argument, though, since the deal should stand on its own merits.
The people involved - as respected and able as they are - are irrelevent, or at least they should be irrelevent. If the opposition try and make it an issue, the Premier should be speaking to what should be the strongest argument in favour of what the government approved: the technical and financial benefits of the deal.
21 November 2006
Electronic Warfare?
If someone needed secure communications systems, automated intelligence gathering or other things normally associated with the phrase "electronic warfare", it would logical to call on a company called Electronic Warfare Associates.
But if you needed someone to assess the financial viability and other similar aspects of a civilian fibre-optic cable network proposal, why would get a bunch of guys who are security experts?
It must make sense to Danny Williams but for the rest of us - including those of us familiar with defence and security issues - we are left scratching our heads. Editorial opinion seems to be curious about the Premier's logic as well. Here's an example from the hometown newspaper of the province's business minister.
Perhaps if the Premier posted the whole report to the government website, we might get a better idea of where his head is.
But if you needed someone to assess the financial viability and other similar aspects of a civilian fibre-optic cable network proposal, why would get a bunch of guys who are security experts?
It must make sense to Danny Williams but for the rest of us - including those of us familiar with defence and security issues - we are left scratching our heads. Editorial opinion seems to be curious about the Premier's logic as well. Here's an example from the hometown newspaper of the province's business minister.
Perhaps if the Premier posted the whole report to the government website, we might get a better idea of where his head is.
Blogger trial tests definition of journalist
New Brunswick blogger Charles LeBlanc, who describes himself as an Internet journalist, is on trial for obstructing police during a demonstration in Saint John last June.
LeBlanc's defence is based, in part, on his contention that he is a journalist legitimately entitled to cover the event. The issue is a new one for Canada where bloggers function in an admittedly grey area of the laws affecting reporters. In California, one judge ruled in 2005 that a blogger was not a journalist and therefore was obliged to reveal sources used for a posting.
LeBlanc was taking pictures for his blog when he was arrested. According to a CBC news story posted on LeBlanc's site, Police Sergeant John Parks testified he saw LeBlanc approach the officer from behind and considered him a protester since he wasn't dressed in business attire as were other journalists. Parks said he cautioned LeBlanc to leave the scene or risk arrest.
Park and police constable Tanya Lawlor arrested LeBlanc, despite LeBlanc's repeated statements at the time that he was reporting on the protest. Park seized LeBlanc's digital camera and deleted a photograph of the officer.
In June, LeBlanc was barred from attending at the New Brunswick legislature for allegedly unacceptable behaviour in the legislature precincts. LeBlanc subsequently interviewed New Brunwick Premier Shawn Graham following Graham's swearing in.
LeBlanc, who receives social assistance and uses a digital camera donated by an anonymous supporter, has become fixture at the New Brunswick legislature as he interviews politicians and senior bureaucrats for his blog.
LeBlanc's defence is based, in part, on his contention that he is a journalist legitimately entitled to cover the event. The issue is a new one for Canada where bloggers function in an admittedly grey area of the laws affecting reporters. In California, one judge ruled in 2005 that a blogger was not a journalist and therefore was obliged to reveal sources used for a posting.
LeBlanc was taking pictures for his blog when he was arrested. According to a CBC news story posted on LeBlanc's site, Police Sergeant John Parks testified he saw LeBlanc approach the officer from behind and considered him a protester since he wasn't dressed in business attire as were other journalists. Parks said he cautioned LeBlanc to leave the scene or risk arrest.
Park and police constable Tanya Lawlor arrested LeBlanc, despite LeBlanc's repeated statements at the time that he was reporting on the protest. Park seized LeBlanc's digital camera and deleted a photograph of the officer.
After the incident, Lawlor said she looked up LeBlanc's blog on the internet, and found pictures of herself brandishing a baton to ward off protesters, set to the song Kung Fu Fighting.Other witness, including journalists from mainstream media, contend LeBlanc was taking pictures at the time of his arrest.
She said it made her feel humiliated and demoralized.
In June, LeBlanc was barred from attending at the New Brunswick legislature for allegedly unacceptable behaviour in the legislature precincts. LeBlanc subsequently interviewed New Brunwick Premier Shawn Graham following Graham's swearing in.
LeBlanc, who receives social assistance and uses a digital camera donated by an anonymous supporter, has become fixture at the New Brunswick legislature as he interviews politicians and senior bureaucrats for his blog.
Quebec elections officer investigates political finance allegations
Quebec's chief electoral officer is investigating a complaint that a cabinet minister's senior aide solicited political donations on government time.
Diane Bougie has admitted to selling 25 $1,000 tickets to a fund-raising reception on behalf of her boss, health minister Philippe Couillard, while she worked for Couillard in 2003.
Diane Bougie has admitted to selling 25 $1,000 tickets to a fund-raising reception on behalf of her boss, health minister Philippe Couillard, while she worked for Couillard in 2003.
NS debates election finance reform
Nova Scotia New Democrats are filibustering a bill on election finance reform currently being debated in the Nova Scotia legislature.
Proposed reforms would limit donations to political parties to a maximum of $5, 000 per year for individuals and organizations. They would outlaw donations from outside the province.
Nova Scotia New Democrats are proposing a $1,000 per year cap, using the federal electoral finance laws as a model.
Proposed reforms would limit donations to political parties to a maximum of $5, 000 per year for individuals and organizations. They would outlaw donations from outside the province.
Nova Scotia New Democrats are proposing a $1,000 per year cap, using the federal electoral finance laws as a model.
20 November 2006
Poll alert
If past practice holds, Corporate Research Associates is currently in the field conducting its omnibus poll for the fourth quarter of 2006.
The Government of Newfoundland and Labrador is a CRA omnibus client and therefore knows the dates during which data is collected.
Since the House of Assembly began its fall sitting on Monday, 20 November, it will be difficult to separate normal government communications while the House is in session from any specific poll-goosing activity.
Last August, Bond Papers published a chart of polling periods and government news release activity. It shows a correlation between a spike in news release volume and polling periods.
The chart was included in a three part series on the provincial government and its apparent efforts to influnce poll outcomes.
The Government of Newfoundland and Labrador is a CRA omnibus client and therefore knows the dates during which data is collected.
Since the House of Assembly began its fall sitting on Monday, 20 November, it will be difficult to separate normal government communications while the House is in session from any specific poll-goosing activity.
Last August, Bond Papers published a chart of polling periods and government news release activity. It shows a correlation between a spike in news release volume and polling periods.The chart was included in a three part series on the provincial government and its apparent efforts to influnce poll outcomes.
Lobbyist registration
"We do have probably the best legislation in the country put in place in order to make sure things are done properly," Williams said.In the CBC story quoted above, Premier Danny Williams was talking about the provincial lobbyist registration legislation in the midst of accusations that representatives of Persona, Rogers and MTS Allstream should have registered as lobbyist in relation to the fibre deal.
The federal government and five provincial jurisdictions have legislation dealing with lobbyists, that is with people who communicate with government officials on behalf of clients or companies and organizations in order to influence government decisions.
All describe lobbyists and the act of lobbying in similar terms. It's pretty clear that representatives of those companies were engaged in lobbying the provincial government about the deal. Their activity fits any of the definitions of lobbying used in any jurisdiction.
The question comes around the requirement to register as a lobbyist and therefore make the lobbying activity a matter of public record.
Under the Newfoundland and Labrador law, an in-house lobbyist - someone employed full-time by a company - only has to register if 20% or more of his or her time is spent lobbying.
Think about it.
Someone working a 40 hour week could lobby, but he or she wouldn't have to register and thereby publicly disclose their activity unless they spent more than 8 hours a week lobbying. Someone could lobby government for up to a full day each week in perpetuity and never have to publicly disclose the lobbying. A senior executive working more hours could spend even more time each week lobbying and keep the whole thing from public scrutiny.
Of the six jurisdictions across Canada with lobbyist registration laws, only Newfoundland and Labrador makes it possible to lobby as though there was no legislation at all.
The companies and organizations that have registered their in-house lobbyists either exceed the 20% rule or they have opted to register in order to live up to the spirit and intention of the lobbyist registry. That is, they comply with the idea that people lobbying government should publicly disclose their activities.
Newfoundland and Labrador's lobbyist registration law ensures things are done properly.
The only question is what things we are talking about.
Certainly it doesn't necessarily mean that all lobbying is publicly registered, as it would be in just about all the five other provinces and the federal government that have laws governing lobbying.
All is right as right can be!
Our great Mikado, virtuous man,When he to rule our land began,
Resolved to try
A plan whereby
Young men might best be steadied.
So he decreed, in words succinct,
That all who flirted, leered or winked
(Unless connubially linked),
Should forthwith be beheaded,
Beheaded, beheaded,
Should forthwith be beheaded.
And I expect you'll all agree
That he was right to so decree.
And I am right,
And you are right,
And all is right as right can be!
19 November 2006
How many toes ya got left?
Kathy Goudie, the Tory member of the legislature for Humber Valley, is in a bit of political pickle.
Goudie, a registered nurse, has been working out of the province in order to retain her nursing license. Like many professionals, a registered nurse must practice her profession for a certain number of hours within a certain period of time in order to be considered actively practicing.
According to the Telegram, Goudie has been working - at least some of the time - at the Baffin regional hospital in Iqaluit. The Telegram also notes that Goudie was in the Northwest Territories legislature in Yellowknife on October 26. The Telegram knew she was out of the province because Goudie's presence in the visitors' gallery was recognized by the speaker of the territorial legislature.
Again, according to the Telegram, Goudie's absence from the province was noted in her district, in part because she participated in a meeting on the Nicholsville bridge by teleconference from somewhere the Great White North.
On the face of it, Goudie's explanation - that she was working to retain her professional license - is perfectly valid. No reasonable person would object. While the Telegram story notes the wage differential between this province and the Northwest Territories, and that there are casual nursing jobs available in her own district, there are convincing reasons for Goudie not to work in this province.
Her position as a member of the government caucus makes it extremely difficult if not impossible for her potential co-workers and patients to look past her political involvement as she practices her profession. To make it even more plain, consider that for most of the past three years, nurses have been in a wage dispute with the government administration Goudie supports.
Goudie's circumstances make it almost impossible for her to work anywhere in this province. She simply has too many potential problems that would affect her relationships with her co-workers, patients and hospital administrators. Any reasonable person would appreciate those circumstances and support her choice to work in another province for the limited number of hours needed to retain her professional credentials.
Unfortunately for Goudie, that wasn't the way she approached media inquires. When the telegram called her, she stated that what she did on her vacation time was her own business. She stonewalled. The Telegram quotes her as saying, "I'm sorry, when I go on my vacation, what I do on my vacation is my vacation. If and when I do go away and if and when I do go nursing, I'll call you."
This is a classic case of someone shooting himself or herself in the foot.
Goudie would have known or should have known that her working outside the province might be an issue for some people. At some point, the media were likely to get the story and ask her about it. Had she answered straightforwardly, they would have or should have reported - equally straightforwardly what her response was.
By stonewalling or obfuscating, Goudie aroused suspicion on the part of the reporter involved. He dug deeper and came with some other information. Now the whole thing looks pretty damaging for Goudie. Her response fueled suspicion and the subsequent media stories leave her in a spot where her explanation - once finally revealed - just isn't really as credible as it should be.
Goudie will likely be faced with some tough media questioning when the provincial legislature re-opens on Monday. She will certainly find herself criticized, and supported, on the province's talk radio shows. All of that makes her job as a member of the legislature difficult and it shouldn't be.
In short, Goudie shot herself in the foot on this one not by working outside the province but by giving a boneheaded media response that any public relations person - let alone an experienced, competent one - would have counseled her against.
All she can do now is tough it out, stick to her line and hope that the whole thing blows over. If she winds up with other details being disclosed, then she will lose another toe or toes.
And hey, it's not like the Telegram story is not without its own inconsistencies.
For example, the Baffin hospital is in Iqaluit, Nunavut. As the Telegram acknowledged, while they got through to a voice mail for a Kathy Goudie, they couldn't confirm they had the right person.
The Northwest Territories, though, is another region entirely with its own legislature. The Nunavut legislature opens on Tuesday. I know this because Offal New's Simon Lono is headed back to Baffin Island to edit and produce the territorial legislature's edition of Hansard. Linking the two places - Iqaluit and Yellowknife - is like saying Goudie worked in St. John's but she turned up in the Alberta legislature. Goudie may well have been in Yellowknife on other business.
The problem for Goudie, though, is that her initial response was to avoid answering even the simplest questions.
She's down one toe. Depending on how she handles the issue over the next couple of days, she might get off with a bandaid. But if the Telegram or other news media find out she has some major position in Iqaluit, the distance between Yellowknife and the Nunavut capital won't spare another toe or two from the self-inflicted shotgun blast to her credibility.
How she comes out of it all politically is down to a simple matter of how quickly she discloses all the relevant information...
or how many toes she has left.
Goudie, a registered nurse, has been working out of the province in order to retain her nursing license. Like many professionals, a registered nurse must practice her profession for a certain number of hours within a certain period of time in order to be considered actively practicing.
According to the Telegram, Goudie has been working - at least some of the time - at the Baffin regional hospital in Iqaluit. The Telegram also notes that Goudie was in the Northwest Territories legislature in Yellowknife on October 26. The Telegram knew she was out of the province because Goudie's presence in the visitors' gallery was recognized by the speaker of the territorial legislature.
Again, according to the Telegram, Goudie's absence from the province was noted in her district, in part because she participated in a meeting on the Nicholsville bridge by teleconference from somewhere the Great White North.
On the face of it, Goudie's explanation - that she was working to retain her professional license - is perfectly valid. No reasonable person would object. While the Telegram story notes the wage differential between this province and the Northwest Territories, and that there are casual nursing jobs available in her own district, there are convincing reasons for Goudie not to work in this province.
Her position as a member of the government caucus makes it extremely difficult if not impossible for her potential co-workers and patients to look past her political involvement as she practices her profession. To make it even more plain, consider that for most of the past three years, nurses have been in a wage dispute with the government administration Goudie supports.
Goudie's circumstances make it almost impossible for her to work anywhere in this province. She simply has too many potential problems that would affect her relationships with her co-workers, patients and hospital administrators. Any reasonable person would appreciate those circumstances and support her choice to work in another province for the limited number of hours needed to retain her professional credentials.
Unfortunately for Goudie, that wasn't the way she approached media inquires. When the telegram called her, she stated that what she did on her vacation time was her own business. She stonewalled. The Telegram quotes her as saying, "I'm sorry, when I go on my vacation, what I do on my vacation is my vacation. If and when I do go away and if and when I do go nursing, I'll call you."
This is a classic case of someone shooting himself or herself in the foot.
Goudie would have known or should have known that her working outside the province might be an issue for some people. At some point, the media were likely to get the story and ask her about it. Had she answered straightforwardly, they would have or should have reported - equally straightforwardly what her response was.
By stonewalling or obfuscating, Goudie aroused suspicion on the part of the reporter involved. He dug deeper and came with some other information. Now the whole thing looks pretty damaging for Goudie. Her response fueled suspicion and the subsequent media stories leave her in a spot where her explanation - once finally revealed - just isn't really as credible as it should be.
Goudie will likely be faced with some tough media questioning when the provincial legislature re-opens on Monday. She will certainly find herself criticized, and supported, on the province's talk radio shows. All of that makes her job as a member of the legislature difficult and it shouldn't be.
In short, Goudie shot herself in the foot on this one not by working outside the province but by giving a boneheaded media response that any public relations person - let alone an experienced, competent one - would have counseled her against.
All she can do now is tough it out, stick to her line and hope that the whole thing blows over. If she winds up with other details being disclosed, then she will lose another toe or toes.
And hey, it's not like the Telegram story is not without its own inconsistencies.
For example, the Baffin hospital is in Iqaluit, Nunavut. As the Telegram acknowledged, while they got through to a voice mail for a Kathy Goudie, they couldn't confirm they had the right person.
The Northwest Territories, though, is another region entirely with its own legislature. The Nunavut legislature opens on Tuesday. I know this because Offal New's Simon Lono is headed back to Baffin Island to edit and produce the territorial legislature's edition of Hansard. Linking the two places - Iqaluit and Yellowknife - is like saying Goudie worked in St. John's but she turned up in the Alberta legislature. Goudie may well have been in Yellowknife on other business.
The problem for Goudie, though, is that her initial response was to avoid answering even the simplest questions.
She's down one toe. Depending on how she handles the issue over the next couple of days, she might get off with a bandaid. But if the Telegram or other news media find out she has some major position in Iqaluit, the distance between Yellowknife and the Nunavut capital won't spare another toe or two from the self-inflicted shotgun blast to her credibility.
How she comes out of it all politically is down to a simple matter of how quickly she discloses all the relevant information...
or how many toes she has left.
18 November 2006
Too cute by half
Dean MacDonald's defence of his lobbying to gain a $15 million government buy-in for his cable deal doesn't hold water.
Here's the Offal News take on it.
Here's the Offal News take on it.
17 November 2006
When is lobbying not lobbying?
Apparently Premier Danny Williams does not consider that representatives of Persona, Rogers (TSX:RCI) and MTS Allstream were engaged in lobbying the provincial government on what ultimately became the GRAP fibre deal.
For the record, here are some extracts from Danny Williams' own Lobbyist Registration Act:
2 (1)...
(c) "lobby" means to communicate with a public-office holder for remuneration or other gain, reward or benefit, in an attempt to influence
(i) the development of any legislative proposal by the government of the province or by a member of the House of Assembly,
(ii) the introduction of any bill or resolution in the House of Assembly or the passage, defeat or amendment of any bill or resolution that is before the House of Assembly,
(iii) the making, amendment or repeal of any subordinate legislation as defined in the Statutes and Subordinate Legislation Act ,
(iv) the development, amendment or termination of any policy or program of the government of the province,
(v) a decision by the Executive Council to transfer from the Crown for consideration all or part of, or any interest in or asset of, any business, enterprise or institution that provides goods or services to the Crown or to the public,
(vi) a decision by the Executive Council, a committee of the Executive Council or a minister of the Crown to have the private sector instead of the Crown provide goods or services to the Crown,
(vii) the awarding of any grant, contribution or other financial benefit by or on behalf of the Crown,
(viii) the awarding of any contract by or on behalf of the Crown,
(ix) arranging a meeting between a public-office holder and any other person,
(x) public-office holders relating to the procurement of goods and services,
(xi) public-office holders relating to the terms of a tender or request for proposals or other procurement solicitation prior to the awarding of that tender or the acceptance of the request for proposals or other procurement solicitation,
(xii) public-office holders relating to the terms of a contract, the choice of a contractor, or the administration, implementation or enforcement of a contract, or
(xiii) the appointment of any public official;
For the record, here are some extracts from Danny Williams' own Lobbyist Registration Act:
2 (1)...
(c) "lobby" means to communicate with a public-office holder for remuneration or other gain, reward or benefit, in an attempt to influence
(i) the development of any legislative proposal by the government of the province or by a member of the House of Assembly,
(ii) the introduction of any bill or resolution in the House of Assembly or the passage, defeat or amendment of any bill or resolution that is before the House of Assembly,
(iii) the making, amendment or repeal of any subordinate legislation as defined in the Statutes and Subordinate Legislation Act ,
(iv) the development, amendment or termination of any policy or program of the government of the province,
(v) a decision by the Executive Council to transfer from the Crown for consideration all or part of, or any interest in or asset of, any business, enterprise or institution that provides goods or services to the Crown or to the public,
(vi) a decision by the Executive Council, a committee of the Executive Council or a minister of the Crown to have the private sector instead of the Crown provide goods or services to the Crown,
(vii) the awarding of any grant, contribution or other financial benefit by or on behalf of the Crown,
(viii) the awarding of any contract by or on behalf of the Crown,
(ix) arranging a meeting between a public-office holder and any other person,
(x) public-office holders relating to the procurement of goods and services,
(xi) public-office holders relating to the terms of a tender or request for proposals or other procurement solicitation prior to the awarding of that tender or the acceptance of the request for proposals or other procurement solicitation,
(xii) public-office holders relating to the terms of a contract, the choice of a contractor, or the administration, implementation or enforcement of a contract, or
(xiii) the appointment of any public official;
Husky reserves boosted
Husky Energy (TSX:HSE) announced Thursday the discovery of an additional 190 million barrels of recoverable crude in the White Rose field.
Memorial University economist Wade Locke told a Harris Centre symposium on Wednesday, White Rose was the cheapest of the three fields to bring on stream. Early pay off of development costs will move the White Rose field to a higher royalty tier for the provincial government than it current receives.
Husky's announcement effectively prolongs the period in which the Government of Newfoundland and Labrador will receive the higher tier - 30% - royalties on each barrel of crude produced.
Memorial University economist Wade Locke told a Harris Centre symposium on Wednesday, White Rose was the cheapest of the three fields to bring on stream. Early pay off of development costs will move the White Rose field to a higher royalty tier for the provincial government than it current receives.
Husky's announcement effectively prolongs the period in which the Government of Newfoundland and Labrador will receive the higher tier - 30% - royalties on each barrel of crude produced.
Ok. We told ya so.
A day after announcing a potential deficit of $39.8 million, finance minister Loyola "Rain Man" Sullivan admits the province's current account budget will likely be in the black come the spring.
Don't say Bond Papers didn't cast doubts about Sullivan's little announcement here and here.
In the meantime, ponder as well the complete collapse of provincial government communications.
First, there was the anti-Aliant tirades by Danny Williams trying to defend the GRAP fibre fiasco.
Now we have a finance minister talking about puny deficitt and then at the same time saying that in six months the whole deficit will probably be gone.
Rather than planning legislation to outlaw government budget deficits, Sullivan should consider passing a law requiring finance ministers to be straight with the people of the province about how he is managing their money.
Oh wait. There's already accountability and transparency legislation.
Perhaps we should start calling Sullivan "Mr. Bumble".
After all, both seem to think the law is a ass.
Don't say Bond Papers didn't cast doubts about Sullivan's little announcement here and here.
In the meantime, ponder as well the complete collapse of provincial government communications.
First, there was the anti-Aliant tirades by Danny Williams trying to defend the GRAP fibre fiasco.
Now we have a finance minister talking about puny deficitt and then at the same time saying that in six months the whole deficit will probably be gone.
Rather than planning legislation to outlaw government budget deficits, Sullivan should consider passing a law requiring finance ministers to be straight with the people of the province about how he is managing their money.
Oh wait. There's already accountability and transparency legislation.
Perhaps we should start calling Sullivan "Mr. Bumble".After all, both seem to think the law is a ass.
Isn't it ironic?
Which company sponsored Danny Williams' speech to the Empire Club in Toronto last year in which the Premier celebrated his triumph over the federal government?
Would the same company do it again knowing that with Danny Williams and all things cable...this time, it's personal.
Heck, what am I saying?
With Danny, it's always personal.
The guy who took his lunch money in Grade Three is likely in for a s**t-knocking any day now. Teams have been out searching for the guy for years.
Those British snobs who looked down on him at Oxford as being just another knobby little colonial who got into the school on a rich man's favour, rather than his ability?
One day, buddy. One day. You mark my words. When you least expect it.
Nigel. Nigel you little limey f**k.
He knows where live.
Watch your back, buddy.
'Til the cows come home.
Make The Troubles look like a celebration.
Oh yeah.
Would the same company do it again knowing that with Danny Williams and all things cable...this time, it's personal.
Heck, what am I saying?
With Danny, it's always personal.
The guy who took his lunch money in Grade Three is likely in for a s**t-knocking any day now. Teams have been out searching for the guy for years.
Those British snobs who looked down on him at Oxford as being just another knobby little colonial who got into the school on a rich man's favour, rather than his ability?
One day, buddy. One day. You mark my words. When you least expect it.
Nigel. Nigel you little limey f**k.
He knows where live.
Watch your back, buddy.
'Til the cows come home.
Make The Troubles look like a celebration.
Oh yeah.
16 November 2006
Not quite we told ya so...
but close.
The current account deficit morphed from $90 million [a high mentioned by CBC's Here and Now on Thursday] down to $60 million and was officially announced at:
$39.8 million.
Bond Papers called the whole mid-year update an effort in political demand management.
We still predict the provincial government will be in the black on current and capital account by year-end.
After all, by the same standard Loyola Sullivan used in Thursday announcement, he finished up last year with a surplus of $524 million.
Find someone else who has consistently reported that, Sullivan included.
The current account deficit morphed from $90 million [a high mentioned by CBC's Here and Now on Thursday] down to $60 million and was officially announced at:
$39.8 million.
Bond Papers called the whole mid-year update an effort in political demand management.
We still predict the provincial government will be in the black on current and capital account by year-end.
After all, by the same standard Loyola Sullivan used in Thursday announcement, he finished up last year with a surplus of $524 million.
Find someone else who has consistently reported that, Sullivan included.
Spy detained
Canadian authorities arrested a man in Montreal yesterday using the identity Paul William Hampel and detained him under a security certificate.
Hampel was using a time-honoured espionage technique of planting agents under the identities of real people. Hampel will likely turn out to be the name of someone who is approximately the same age general description as the individual under arrest. The real Hampel likely died as a child. In espionage jargon, Hampel would be described as an "illegal".
Illegals were a favourite technique of the Komitet Gosudarstvennoi Bezopasnosti [KGB; Committee for State Security] and its successor, the Sluzhba Vneshney Razvedki [SVR; Foreign Intelligence Service]. Sometimes, the illegals try to enter a country legally after being caught.
During the Cold War, KGB sometimes used St. John's as a port to insert illegals.
Hampel was using a time-honoured espionage technique of planting agents under the identities of real people. Hampel will likely turn out to be the name of someone who is approximately the same age general description as the individual under arrest. The real Hampel likely died as a child. In espionage jargon, Hampel would be described as an "illegal".
Illegals were a favourite technique of the Komitet Gosudarstvennoi Bezopasnosti [KGB; Committee for State Security] and its successor, the Sluzhba Vneshney Razvedki [SVR; Foreign Intelligence Service]. Sometimes, the illegals try to enter a country legally after being caught.
During the Cold War, KGB sometimes used St. John's as a port to insert illegals.
Despair for civilization itself
Ponder the fate of society as the glorious language of Shakespeare is translated for a modern generation...here.
15 November 2006
Separated at birth
Shawn Skinner [left], parliamentary secretary to Premier Danny Williams and vice-chairman of the House of Assembly's Public Accounts Committee needs a lesson in parliamentary procudre.Less than 24 hours after Premier Williams said he would welcome a review of the GRAP fibreoptics deal by the PAC and the Auditor General, Skinner and the three other government members on the committee voted down a motion by the Liberals on the committee to do just that.
Skinner's explanation is that the Liberals added the public hearings at the last minute.
As vocm.com put it: "Skinner says that's not the way things work...".
Well, it's not the way if Skinner hopes to turn his current position into a cabinet seat.
If the government members, who make up the PAC majority, had simply amended the motion, the whole thing would have carried on consistent with the Premier's stated commitment. The entire affair would have proceeded according to what Skinner says is the route: AG report first and then hearings if necessary.
Instead, Skinner led his fellow Tories into handing the opposition a gift richer than their wildest dreams: the Premier's assistant in the legislature doing exactly opposite to what the Premier himself said publicly he would welcome.
Only Homer Simpson could have killed his own career with greater aplomb.
Monge
The French naval vessel Monge [left] is in port in St. John's.The large white vessel with its array of antennae has attracted public attention, but there seems to be some confusion over what the ship does.
The Monge is a missile-instrumentation vessel.
It is used to collect data on missile test launches related to the development of France's nuclear force de dissuasion.
Own goal!
At the end of his usual guest stint on CBC ratio's Radio Noon, Carl Wells teased Premier Danny Williams' appearance on Here and Now on Tuesday talking about the fibreoptic deal controversy.
That plus a little analysis of Williams' usual media behaviour suggested that the controversy was something Williams felt was so serious he had to make an effort to head to the studios he doesn't usually visit personally.
Little could anyone expect that Williams' defense of the highly controversial deal would not only repeat the same hollow rationales but also add a few new wrinkles to the story.
Williams' appearance - both on NTV and CBC - was a bit of an own goal. That's the phrase security forces in Northern Ireland used to use during The Troubles to describe a plan that backfired. Like the IRA bombmaker who liked to store nitrogen-based fertilizer on the concrete floor of his garage and shift it around with a metal shovel.
They never did find the bomber.
or the shovel.
or most of the garage, for that matter.
Now Williams didn't blow himself to smithereens, but he failed to demolish the criticisms of the deal.
The fundamental problems in the government's justification of the deal are well known by now.
They include:
1. A failure to explain the reason why public money is invested in the project.
2. A failure to explain - in any detail - the value to the provincial government of acquiring fibreoptic cables. The provincial government is supposed to have a telecom strategy that will, among other things, see government's purchasing power as the largest telecom customer in the province to lower the cost of government-related telecom to the taxpayer.
3. The contradictions between versions of the story at different times.
4. Questions about the relationship between Danny and the proponents of the deal.
What the Premier did was:
1. Continue the vague benefit claims with words like "tremendous" but nothing in the way of concrete examples. Saying that third parties like Memorial University were spending between 10 and 100 times more than if they were located on the mainland doesn't give specific examples. Newfoundlanders and Labradorians are used to paying more for goods and services because, after all, they live on an island with a population of 500,000 people. Paying more ain't a surprise.
2. Refer vaguely to potential government savings - considering health care, educational and other services - that "could be" as much as $500 million over time.
Again with the vagueness. If the business plan accompanying the deal gave examples, government would use them. Concrete examples are the easiest way to persuade people
of a position: do this and this specific good thing will result.
Savings that "could be" $500 million over an unspecified time period, could also be monumental losses over the same time frame or a shorter one.
Danny's vagueness suggests that there is fact was no business plan, nor was there a detailed cost/benefit analysis.
After all, if a $15 million investment would reduce government telecom costs by a measurable amount each year for 10 years and would produce a measurable drop in research bandwidth, they could use those numbers. It's how businesses make decisions. It's called return on investment. Spend $100 bucks and save $10 bucks a year for 10 years. Spend $100 bucks and boost sales by $1000 bucks. Either one makes sense and even the most dense Rain Man in radio land can see the sense in simple numbers explained simply.
Williams' vagueness reinforces the facetious suggestion this deal was done on the golf course and that rest has been an exercise in finding excuses and rationalizations. There was no business plan. There is no case. Danny is making it up as he goes along.
It's hard to come to any other conclusion.
3. Continued contradictions and lame arguments. Williams now claims credit for rejecting the proposal the first time out of concerns about perceptions. Later he said the thing is "squeaky clean". These two thoughts can live in the same space and they remain one of the basic contradictions in the entire story.
If the deal smelled a bit at the outset, it was not rendered less stinky by waiting.
The whole thing remains clouded by suspicion especially when the Premier tells the NTV audience that Dean Macdonald and Ken Marshall "worked for me before". That little piece of half-truth has already been demolished but that the Premier keeps going back to such a weak position suggests he simply doesn't have a stronger one.
As if that wasn't enough, though Danny Williams compared this deal to a recent investment with Cooke Aquaculture adding that the whole controversy in the fibre deal seems to be a case of "attacking our own".
That's even lamer than some of the other positions.
For starters, the provincial government dropped $10 million into the Cooke project against the private sector investment of $135 million - about 7.5%. The GRAP deal involves government spending 28% on one portion of the project and dropping provincial cash in another phase of the same overall project.
Then there's the difference between the Cooke enterprise and the proponents of the recent deal. The one involving proportionately more government cash involves the Premier's former business partners and two people he appointed to the board of the provincial hydro corporation.
And if you are still paying attention, Cooke Aquaculture is a New Brunswick-based, family-owned operation. Rogers and MTS Allstream are just like Aliant: big companies with deep pockets, headquartered far, far west of Port aux Basques. [Revised: persona headquarters is in St. John's.]
Need we go on?
From a public relations perspective, announcing a deal like this should be very simple. You simply walk through the decision-making rationale, in summary. Here's the situation; these are the issues. Here's the decision. We had a problem with one aspect; here's how we tackled it according to our values of openness and transparency.
That should form a logical sequence. Since the argument persuaded the organization to take this or that action, a summary version of the same thing should persuade others.
When someone uses vague language, contradictory arguments and irrelevant side issues, people don't find that inherently persuasive. In fact, they start to look on the whole exercise a bit like the guy moving fertilizer around on a concrete floor with a metal shovel.
It might not have blown up in his face this time, but odds are good there will be a big bang sometime very soon.
Rather than support the endeavour, people are more apt to move to a safe distance. They can still see the show to come, but not be harmed by it themselves.
That plus a little analysis of Williams' usual media behaviour suggested that the controversy was something Williams felt was so serious he had to make an effort to head to the studios he doesn't usually visit personally.
Little could anyone expect that Williams' defense of the highly controversial deal would not only repeat the same hollow rationales but also add a few new wrinkles to the story.
Williams' appearance - both on NTV and CBC - was a bit of an own goal. That's the phrase security forces in Northern Ireland used to use during The Troubles to describe a plan that backfired. Like the IRA bombmaker who liked to store nitrogen-based fertilizer on the concrete floor of his garage and shift it around with a metal shovel.
They never did find the bomber.
or the shovel.
or most of the garage, for that matter.
Now Williams didn't blow himself to smithereens, but he failed to demolish the criticisms of the deal.
The fundamental problems in the government's justification of the deal are well known by now.
They include:
1. A failure to explain the reason why public money is invested in the project.
2. A failure to explain - in any detail - the value to the provincial government of acquiring fibreoptic cables. The provincial government is supposed to have a telecom strategy that will, among other things, see government's purchasing power as the largest telecom customer in the province to lower the cost of government-related telecom to the taxpayer.
3. The contradictions between versions of the story at different times.
4. Questions about the relationship between Danny and the proponents of the deal.
What the Premier did was:
1. Continue the vague benefit claims with words like "tremendous" but nothing in the way of concrete examples. Saying that third parties like Memorial University were spending between 10 and 100 times more than if they were located on the mainland doesn't give specific examples. Newfoundlanders and Labradorians are used to paying more for goods and services because, after all, they live on an island with a population of 500,000 people. Paying more ain't a surprise.
2. Refer vaguely to potential government savings - considering health care, educational and other services - that "could be" as much as $500 million over time.
Again with the vagueness. If the business plan accompanying the deal gave examples, government would use them. Concrete examples are the easiest way to persuade people
of a position: do this and this specific good thing will result.
Savings that "could be" $500 million over an unspecified time period, could also be monumental losses over the same time frame or a shorter one.
Danny's vagueness suggests that there is fact was no business plan, nor was there a detailed cost/benefit analysis.
After all, if a $15 million investment would reduce government telecom costs by a measurable amount each year for 10 years and would produce a measurable drop in research bandwidth, they could use those numbers. It's how businesses make decisions. It's called return on investment. Spend $100 bucks and save $10 bucks a year for 10 years. Spend $100 bucks and boost sales by $1000 bucks. Either one makes sense and even the most dense Rain Man in radio land can see the sense in simple numbers explained simply.
Williams' vagueness reinforces the facetious suggestion this deal was done on the golf course and that rest has been an exercise in finding excuses and rationalizations. There was no business plan. There is no case. Danny is making it up as he goes along.
It's hard to come to any other conclusion.
3. Continued contradictions and lame arguments. Williams now claims credit for rejecting the proposal the first time out of concerns about perceptions. Later he said the thing is "squeaky clean". These two thoughts can live in the same space and they remain one of the basic contradictions in the entire story.
If the deal smelled a bit at the outset, it was not rendered less stinky by waiting.
The whole thing remains clouded by suspicion especially when the Premier tells the NTV audience that Dean Macdonald and Ken Marshall "worked for me before". That little piece of half-truth has already been demolished but that the Premier keeps going back to such a weak position suggests he simply doesn't have a stronger one.
As if that wasn't enough, though Danny Williams compared this deal to a recent investment with Cooke Aquaculture adding that the whole controversy in the fibre deal seems to be a case of "attacking our own".
That's even lamer than some of the other positions.
For starters, the provincial government dropped $10 million into the Cooke project against the private sector investment of $135 million - about 7.5%. The GRAP deal involves government spending 28% on one portion of the project and dropping provincial cash in another phase of the same overall project.
Then there's the difference between the Cooke enterprise and the proponents of the recent deal. The one involving proportionately more government cash involves the Premier's former business partners and two people he appointed to the board of the provincial hydro corporation.
And if you are still paying attention, Cooke Aquaculture is a New Brunswick-based, family-owned operation. Rogers and MTS Allstream are just like Aliant: big companies with deep pockets, headquartered far, far west of Port aux Basques. [Revised: persona headquarters is in St. John's.]
Need we go on?
From a public relations perspective, announcing a deal like this should be very simple. You simply walk through the decision-making rationale, in summary. Here's the situation; these are the issues. Here's the decision. We had a problem with one aspect; here's how we tackled it according to our values of openness and transparency.
That should form a logical sequence. Since the argument persuaded the organization to take this or that action, a summary version of the same thing should persuade others.
When someone uses vague language, contradictory arguments and irrelevant side issues, people don't find that inherently persuasive. In fact, they start to look on the whole exercise a bit like the guy moving fertilizer around on a concrete floor with a metal shovel.
It might not have blown up in his face this time, but odds are good there will be a big bang sometime very soon.
Rather than support the endeavour, people are more apt to move to a safe distance. They can still see the show to come, but not be harmed by it themselves.
14 November 2006
Demand management
CBC television's David Cochrane gave some highlights of what he believes will be in finance minister Loyola "Rain Man" Sullivan's financial update due on Thursday.
Halfway through its fiscal year, the provincial government apparently expects a deficit - presumably on current account - of about $60 million. The shortfall is apparently due to the production shutdown at Terra Nova being longer than planned. The floating production and storage offloading ship (FPSO) was due to be out of service for three months; that turned into six months.
[Left: Finance minister Loyola Sullivan grimaces during last November's mid-year financial update. Photo: Greg Locke.]
Cochrane noted that there is a possibility this projection will disappear since the provincial budget was based on assumption that oil prices would run at an average of US $55 per barrel. It is current trading at US$56 but has been considerably higher than that for most of the year.
The most striking thing about Cochrane's figure is that it is low. A $60 million shortfall is nothing for the Newfoundland and Labrador government. It is nothing in the context of a budget that calls for spending $5.3 billion. That's a 1% variance.
Whoopee ding.
The figure is also low when one considers the problems and setbacks in the economy:
- Terra Nova: In June, Sullivan predicted the anticipated downtime would cost the province $200 million in deferred revenue. It isn't really a loss since the oil that would have been pumped in June will be pumped later at whatever the price is at the time.
- Stephenville: The budget obviously took into account the loss of jobs and business taxes resulting from the closure.
- No Hebron. The provincial budget was decided around the time the negotiations were in their last stages. There doesn't appear to have been any allowance for Hebron but the financial picture would have been considerably rosier if Hebron was underway.
- Fishery fiasco: The fishery is in the slings. Exports are down and Fishery Products International's processing facilities are not working, or certainly aren't working at capacity. That means there is a measurable difference in government revenue from people collecting employment insurance who ordinarily would collecting a paycheque.
Cochrane attributed the small deficit to oil and that's the surest thing anyone can say. The provincial government is raking in so much money from oil exports that it really doesn't need to blink over a mere $60.
[Right: Provincial budget officials rework spending and revenue projections for the FY 2006 during a recent lunch meeting in the West Block cafeteria. Calculations later showed the deficit would be about $100.]
To be frank, though, given Sullivan's horrendous record of budget predictions this $60 million could be a surplus 10 times larger than his projected shortfall.
Sullivan projected a $6 million surplus when he tabled the budget last spring. The year before he wound up with a surplus $76.2 million in Fiscal Year 2005 having predicted a deficit of $492 million.
But wait, that really isn't what happened either.
The so-called cash statement released in August, showed the government's performance in handling its annual operating budget: the current and capital spending. That figure is the one to notice since it reflects the actual annual performance of government itself.
The numbers Sullivan usually bandies around are accrual numbers and contain all manner of debts and theoretical liabilities. The "cash" statements, usually released in November as part of the audited public accounts were released in August during the poll-goosing period since they purported showed the provincial government had a modest surplus of sixty-odd million more than projected.
But even that wasn't a straightforward statement of the cash performance. Sullivan's Budget 2006 showed that capital and current accounts were in deficit by about $62 million.
By August, the revised figures showed the provincial government finished FY 2005 (year end 31 March 2006) with a surplus of...wait for it...
$524 million.
That's right and it's there in black and white on page three. Now Sullivan doesn't call it a surplus; instead it's a cash "contribution".
But it's there.
Those variations are matched by every single budget Sullivan has introduced. He has predicted horrendous deficits in some years and wound up in surplus by almost the same amount.
However, 2005 was a record year, even for Sullivan. Incidentally, the current account was in surplus by over $700 million. By the time he accounted for a deficit in the capital account spending, the thing came down to half a billion dollars.
At no point has Sullivan indicated whether that was just a paper surplus, i.e. money budgeted but not spent or if it was real, as in cash he had sitting in the bank to roll over into the current fiscal year.
Fundamentally, Loyola Sullivan's track record as finance minister has been spotty when it comes to predictions. It's also bordering on the deceptive in the way he has switched from talking about "cash" accounts and accrual accounts. He talks about "cash" when he wants good news to goose a poll, for example and even then he very carefully chooses his words - "$60 million more than expected" versus $524 million - so people have a hard time seeing what actually occurred.
But at other times, Sullivan trots out a deficit - on an accrual basis - when he wants to tamp down expectations. Far from being genuinely transparent and accountable, Sullivan engages in the same verbal gymnastics of some of his predecessors, tossing out figures in mesmerising detail to suit his political purposes.
These days Sullivan has to tamp down expectations. Pharmacists are clamouring for more money. Bridges need to be replaced, roads paved and ferries built. If people knew exactly what the financial state of the province was, they might actually expect cabinet to spend some money.
If all that wasn't bad enough, the cabinet has been taking a hammering in its ethical standards with announcement of public money for a private sector cable deal.
And so, despite having announced budget consultations well in advance, Sullivan suddenly postponed them for an "update" and, as one might sometimes expect a leaked set of figures to reporter.
The political goal of the leak and Sullivan's Thursday statement is two-fold.
First, Sullivan wants to shut down demands for spending. It's that simple.
Second, he wants people to start focusing on possible budget cuts, he wants them to keep feeling the province's finances are shaky, so they will stop thinking about the cable controversy. In political circles, that's called wagging the dog or changing the channel.
Fundamentally, though, Sullivan knows that his prediction of a deficit - accompanied with his usual dour delivery - is just a diversion to suit a transitory purpose.
Sullivan knows the true financial picture isn't anything as bad as he says it is.
Sullivan knows his own abysmal record of fiscal accountability better than anyone else.
Halfway through its fiscal year, the provincial government apparently expects a deficit - presumably on current account - of about $60 million. The shortfall is apparently due to the production shutdown at Terra Nova being longer than planned. The floating production and storage offloading ship (FPSO) was due to be out of service for three months; that turned into six months.
[Left: Finance minister Loyola Sullivan grimaces during last November's mid-year financial update. Photo: Greg Locke.] Cochrane noted that there is a possibility this projection will disappear since the provincial budget was based on assumption that oil prices would run at an average of US $55 per barrel. It is current trading at US$56 but has been considerably higher than that for most of the year.
The most striking thing about Cochrane's figure is that it is low. A $60 million shortfall is nothing for the Newfoundland and Labrador government. It is nothing in the context of a budget that calls for spending $5.3 billion. That's a 1% variance.
Whoopee ding.
The figure is also low when one considers the problems and setbacks in the economy:
- Terra Nova: In June, Sullivan predicted the anticipated downtime would cost the province $200 million in deferred revenue. It isn't really a loss since the oil that would have been pumped in June will be pumped later at whatever the price is at the time.
- Stephenville: The budget obviously took into account the loss of jobs and business taxes resulting from the closure.
- No Hebron. The provincial budget was decided around the time the negotiations were in their last stages. There doesn't appear to have been any allowance for Hebron but the financial picture would have been considerably rosier if Hebron was underway.
- Fishery fiasco: The fishery is in the slings. Exports are down and Fishery Products International's processing facilities are not working, or certainly aren't working at capacity. That means there is a measurable difference in government revenue from people collecting employment insurance who ordinarily would collecting a paycheque.
Cochrane attributed the small deficit to oil and that's the surest thing anyone can say. The provincial government is raking in so much money from oil exports that it really doesn't need to blink over a mere $60.
[Right: Provincial budget officials rework spending and revenue projections for the FY 2006 during a recent lunch meeting in the West Block cafeteria. Calculations later showed the deficit would be about $100.]To be frank, though, given Sullivan's horrendous record of budget predictions this $60 million could be a surplus 10 times larger than his projected shortfall.
Sullivan projected a $6 million surplus when he tabled the budget last spring. The year before he wound up with a surplus $76.2 million in Fiscal Year 2005 having predicted a deficit of $492 million.
But wait, that really isn't what happened either.
The so-called cash statement released in August, showed the government's performance in handling its annual operating budget: the current and capital spending. That figure is the one to notice since it reflects the actual annual performance of government itself.
The numbers Sullivan usually bandies around are accrual numbers and contain all manner of debts and theoretical liabilities. The "cash" statements, usually released in November as part of the audited public accounts were released in August during the poll-goosing period since they purported showed the provincial government had a modest surplus of sixty-odd million more than projected.
But even that wasn't a straightforward statement of the cash performance. Sullivan's Budget 2006 showed that capital and current accounts were in deficit by about $62 million.
By August, the revised figures showed the provincial government finished FY 2005 (year end 31 March 2006) with a surplus of...wait for it...
$524 million.
That's right and it's there in black and white on page three. Now Sullivan doesn't call it a surplus; instead it's a cash "contribution".
But it's there.
Those variations are matched by every single budget Sullivan has introduced. He has predicted horrendous deficits in some years and wound up in surplus by almost the same amount.
However, 2005 was a record year, even for Sullivan. Incidentally, the current account was in surplus by over $700 million. By the time he accounted for a deficit in the capital account spending, the thing came down to half a billion dollars.
At no point has Sullivan indicated whether that was just a paper surplus, i.e. money budgeted but not spent or if it was real, as in cash he had sitting in the bank to roll over into the current fiscal year.
Fundamentally, Loyola Sullivan's track record as finance minister has been spotty when it comes to predictions. It's also bordering on the deceptive in the way he has switched from talking about "cash" accounts and accrual accounts. He talks about "cash" when he wants good news to goose a poll, for example and even then he very carefully chooses his words - "$60 million more than expected" versus $524 million - so people have a hard time seeing what actually occurred.
But at other times, Sullivan trots out a deficit - on an accrual basis - when he wants to tamp down expectations. Far from being genuinely transparent and accountable, Sullivan engages in the same verbal gymnastics of some of his predecessors, tossing out figures in mesmerising detail to suit his political purposes.
These days Sullivan has to tamp down expectations. Pharmacists are clamouring for more money. Bridges need to be replaced, roads paved and ferries built. If people knew exactly what the financial state of the province was, they might actually expect cabinet to spend some money.
If all that wasn't bad enough, the cabinet has been taking a hammering in its ethical standards with announcement of public money for a private sector cable deal.
And so, despite having announced budget consultations well in advance, Sullivan suddenly postponed them for an "update" and, as one might sometimes expect a leaked set of figures to reporter.
The political goal of the leak and Sullivan's Thursday statement is two-fold.
First, Sullivan wants to shut down demands for spending. It's that simple.
Second, he wants people to start focusing on possible budget cuts, he wants them to keep feeling the province's finances are shaky, so they will stop thinking about the cable controversy. In political circles, that's called wagging the dog or changing the channel.
Fundamentally, though, Sullivan knows that his prediction of a deficit - accompanied with his usual dour delivery - is just a diversion to suit a transitory purpose.
Sullivan knows the true financial picture isn't anything as bad as he says it is.
Sullivan knows his own abysmal record of fiscal accountability better than anyone else.
Lawyers critical of Toews appointments changes
The Canadian Bar Association is criticising federal justice minister Vic Toews planned changes to the panels that nominate federally-appointed judges in Canada.
The Justice Minister proposes to increase his at-large appointments from three to four and disallow the judge'’s vote -— potentially giving the at-large appointees the majority of votes on the committee. This perception would undermine the independence of the committee and the credibility of the appointment process.
"The CBA believes that the decisions of these committees should continue to be reached by consensus," said [CBA president J. Duncan] MacCarthy. "But if a vote is required, these changes would potentially 'stack the deck' in favour of the Minister's at-large appointees. These changes could give the at-large appointments virtual veto power."
It's good to be da king
Premier Danny Williams with Alice Panikian, Miss Universe Canada 2006 at the Canadian Idol finale, September 14th.
He's back
And it must be serious.
Premier Danny Williams is back in the province for the first time since early November when his innovation minister announced that the provincial government was buying fibreoptic cables as part of a new broadband initiative.
Williams has been out of the province, at an undisclosed location. Chatter on the street is that it was a trip to Florida where he has been known to spend considerable amounts of time. That's really beside the point.
The Premier is on damage control for the GRAP fibre deal.
He's doing media interviews.
Unlike his usual habit of giving a one-on-one to NTV (biggest TV audience in the province) and calling talk radio (biggest radio audience) and handling everyone else in a scrum, the Premier is heading to CBC studios for a sit-down there as well.
That means the story is serious.
CBC television has a relatively small share of the market and that seems to have influenced his past decisions. In this case, Williams is willing to give CBC the time and it will be interesting to see the questions and his responses.
Someone will have to remind us of the last time Danny Williams traveled to CBC television studios for a sit-down interview; my memory isn't that good.
Whenever a Premier changes his behaviour, it's a good idea to take notice.
Something's up and it must be serious for him.
Premier Danny Williams is back in the province for the first time since early November when his innovation minister announced that the provincial government was buying fibreoptic cables as part of a new broadband initiative.
Williams has been out of the province, at an undisclosed location. Chatter on the street is that it was a trip to Florida where he has been known to spend considerable amounts of time. That's really beside the point.
The Premier is on damage control for the GRAP fibre deal.
He's doing media interviews.
Unlike his usual habit of giving a one-on-one to NTV (biggest TV audience in the province) and calling talk radio (biggest radio audience) and handling everyone else in a scrum, the Premier is heading to CBC studios for a sit-down there as well.
That means the story is serious.
CBC television has a relatively small share of the market and that seems to have influenced his past decisions. In this case, Williams is willing to give CBC the time and it will be interesting to see the questions and his responses.
Someone will have to remind us of the last time Danny Williams traveled to CBC television studios for a sit-down interview; my memory isn't that good.
Whenever a Premier changes his behaviour, it's a good idea to take notice.
Something's up and it must be serious for him.
Et maintenant, Lysiane
Yet more on the idea of "nation", again from Andrew Coyne, but this time featuring large chunks of Lysiane Gagnon's recent Globe column.
Oil rig security gains national attention
Possible national security threats to offshore oil installations is prompting the federal natural resources department to legislation governing the offshore, according to the Ottawa Citizen. The changes would give greater say in offshore physical security to the two joint federal-provincial regulatory boards.
Bond Papers reported in April 2006 on the offshore security issue. At the time, the commander of Canadian Forces in the Atlantic region said DND was making the security issue a top priority. A former chief of strategic planning for the Canadian Security Intelligence Service (CSIS) also described the offshore rigs as a potentially "high value target" for terrorists. Attacking the rigs could cause severe environmental harm and disrupt local economies.
While the military has already conducted several exercises related to offshore oil rigs and possible attack scenarios (See April's Bond Papers), the threat to the rigs is considered low according to the Ottawa Citizen.
The Titan missile scare in 2005 highlighted chronic, serious shortcomings in the provincial government's ability to deal with national security issues generally. Premier Danny Williams public comments on the matter made it plain that provincial officials could not make even the most rudimentary assessments of security threats and it became apparent that relations between the federal and provincial governments at the highest level did not routinely address security issues.
Even today, no provincial government officials in Newfoundland and Labrador hold federal security clearances. A provincial government team sent to Dartmouth for meetings with Government Canada and American officials was excluded from a briefing on the Titan launch because they did not hold recognized security clearances.
It appears that few if any of the officials and board members at the offshore regulatory authorities in Atlantic Canada have experience dealing with defence-related issues. Newly appointed CNLOPB chairman and chief executive officer Max Ruelokke is a former army reserve engineer officer. Ruelokke's experience would give him contacts within National Defence and a familiarity with DND and its overall operations that would prove important in an actual emergency.
However, the changes described by the Citizen would not give the offshore boards any responsibility for directing security operations. The story says:
_____________________________________
Disclosure: The author is a former army reserve public affairs officer, with an academic and work background in defence, security and intelligence.
Bond Papers reported in April 2006 on the offshore security issue. At the time, the commander of Canadian Forces in the Atlantic region said DND was making the security issue a top priority. A former chief of strategic planning for the Canadian Security Intelligence Service (CSIS) also described the offshore rigs as a potentially "high value target" for terrorists. Attacking the rigs could cause severe environmental harm and disrupt local economies.
While the military has already conducted several exercises related to offshore oil rigs and possible attack scenarios (See April's Bond Papers), the threat to the rigs is considered low according to the Ottawa Citizen.
The Titan missile scare in 2005 highlighted chronic, serious shortcomings in the provincial government's ability to deal with national security issues generally. Premier Danny Williams public comments on the matter made it plain that provincial officials could not make even the most rudimentary assessments of security threats and it became apparent that relations between the federal and provincial governments at the highest level did not routinely address security issues.
Even today, no provincial government officials in Newfoundland and Labrador hold federal security clearances. A provincial government team sent to Dartmouth for meetings with Government Canada and American officials was excluded from a briefing on the Titan launch because they did not hold recognized security clearances.
It appears that few if any of the officials and board members at the offshore regulatory authorities in Atlantic Canada have experience dealing with defence-related issues. Newly appointed CNLOPB chairman and chief executive officer Max Ruelokke is a former army reserve engineer officer. Ruelokke's experience would give him contacts within National Defence and a familiarity with DND and its overall operations that would prove important in an actual emergency.
However, the changes described by the Citizen would not give the offshore boards any responsibility for directing security operations. The story says:
[t]he amendments being considered would allow the agencies to issue security-related orders to rig operators and conduct security audits, said Felix Kwamena, director of Natural Resources Canada's critical energy-infrastructure protection division.For its part, the Canadian Association of Petroleum Producers is emphasizing a single point of contact on physical security matters. This would a sensible approach since too many layers of authority can hamper effective response in emergencies. One of the issues that emerged from the Titan missile fiasco was a question about jurisdiction.
_____________________________________
Disclosure: The author is a former army reserve public affairs officer, with an academic and work background in defence, security and intelligence.
13 November 2006
Public money for private sector: good or bad
Atlantic Business Magazine has a new online feature, a question and answer focused on a new topic each week.
Simon Lono is the guest columnist this week under the headline: "Simon Lono to Atlantic governments: Stop gambling with the public purse."
As Lono puts it:
Check it out.
Simon Lono is the guest columnist this week under the headline: "Simon Lono to Atlantic governments: Stop gambling with the public purse."
As Lono puts it:
Every government thinks it's smarter and better able to judge economic winners than any government that preceded it even while history shows that's nothing but unwarranted political hubris and questionable public administration.There's a link at the end to post a comment. ABM will review the comments and post some of them with Lono's reply.
Check it out.
The math is simple
PR = reputation.
Reputation = credibility.
Credibility = honesty.
Honesty = consistency.
Get it?
Obviously a whole bunch of really important people don't.
Read on:
1. If security of consumer telecom service was an issue...why would you string cable on poles in Newfoundland? Persona chief operating officer and former Cable Atlantic exec Paul Hatcher told the Telegram on Saturday that the land portion of the GRAP deal is carried along Newfoundland Power poles.
Ice and sleet storms that interrupt telephone and power service are a common feature of life in eastern Newfoundland. Persona and Rogers customers - including the provincial government - can expect the odd problem with getting signal, that is unless Persona, Rogers and the Manitoba telephone company buy back-up service from Aliant.
Aliant's cables are buried underground.
2. Does the government have equity or fibre? Finance minister Loyola "Rainman" Sullivan described the province's $15 million expenditure as gaining "equity", as in ownership of an interest in the telecom project. Innovation minister Trevor Taylor said we are buying fibre.
Which is it?
There is a difference even if business minister Kevin O'Brien - yes, the business minister - doesn't know what it is without a briefing note.
3. And while we are at it... Why would Trevor Taylor tell NTV's Issues and Answers that the provincial government is buying fibre but could sell it to recover the investment?
Surely, the provincial government has done a comprehensive examination of how its own telecom cost are going to drop as a result of buying fibre strung along poles on the island portion of the province.
Surely, it has a business plan.
4. There was no RFP but there was talk of one. Early on someone asked why no request for proposals had been issued on this project. Innovation minister Trevor Taylor insisted there had not been one because it was an unsolicited proposal.
But on NTV's Issues and Answers confirmed that the provincial government had looked at seeking proposals. Cabinet decided not to issue an RFP since there was only one company likely to respond that hadn't - namely Aliant - and the cost of the process would be $1.0 million.
Ok.
So now we learn more details that lead us to doubt earlier answers. So much for early disclosure instilling confidence.
But then logically, we must also wonder:
5. Would the RFP have been about providing a cheap sub-sea link or would it have been to provide the provincial government with its own fibre?
Persona's Paul Hatcher already said the provincial money was needed to build the connection to Nova Scotia.
6. Since Aliant has surplus capacity in its system, why didn't cabinet think it was a good idea to encourage competition for its business? After all, the provincial government justified its expenditure of $15 million on the grounds that increased competition will lower costs.
It doesn't help credibility if you contradict your own explanations in the process of providing explanations.
7. $1.0 million is hardly a hefty price-tag when the provincial government is the largest telecom customer in the province. The Tories know this since they proposed in their Blue Book to use government purchasing power to drive down telecom cost. So rather than spend $1.0 million to ensure the $15 million was indeed the lowest cost, government decided to shave off the tiny amount and instead just drop the $15 million anyway.
So much for sound fiscal management in a government run by a Great Negotiator (patent pending).
8. There are two deals here. One is the stand-alone Persona landline, already underway and scheduled to be completed very soon. The other is the sea connection involving a group of cable companies.
Which one has the provincial government's cables in it? Since the deal was announced in relation to the sub-sea cable, presumably government's telecom is running on that one.
Presumably not.
Presumably.
9. Did anybody consider the impact of taking the provincial government's telecom service out of the marketplace?
One of the big issues in the Blue Print is using government's purchasing power to lower its own telecom costs. By purchasing its own dedicated fibreoptic capacity, the provincial government is effectively going into the telecom business for itself. More importantly, it is actually leaving the commercial telecom industry - suddenly - which will have a dramatic drop in business as a result.
Drops in business aren't good for consumer prices since the few customers remaining have to pay for all the surplus capacity that is being added to the telecom system.
That is, unless the provincial government is going to either subsidize the telecom companies - like it did with the paper companies recently - or overspend on telecom by keeping an outside telecom provider it doesn't really need.
Of course, that means the cost of this deal is a lot more than $15 million.
A lot.
At least for you and me, the people who are supposed to benefit from the deal.
10. Pull the other one...
Trevor Taylor needs to understand that no one - and I mean no one - believes that the the Dean/Ken/Danny/Paul relationship is one that happened six years ago, and by implication ended back then, as Taylor tried to tell the audience for Issues and Answers.
Even the Pitcher Plants know that Ken Marshall and Dean Macdonald have established and ongoing relationships with a whole bunch of people in government, today.
Especially the Premier.
Denying the obvious suggests you have no respect for your audience's intelligence, don't understand what is the core ethical issue and well...that you aren't telling the truth.
11. If cabinet was worried at least twice about alleged appearances of conflicts of interest over a deal involving the provincial government buying fibreoptic cables...
- why would such a beneficial idea have aroused any suspicions? After all, by one version of Trevor Taylor's story the provincial government is supposed to be piggybacking on a project for its own purposes, not meeting the needs - wink, wink, Paul Hatcher - of rich private telecom companies.
- what changed? The Bell Aliant fire didn't materially alter the project. It seems as though cabinet thought by fanning some of the smoke from the fire, they could sneak a project by everyone that otherwise they had no confidence in.
That really doesn't look good.
Heck, the whole thing doesn't look good.
And the provincial government can only blame itself.
Reputation = credibility.
Credibility = honesty.
Honesty = consistency.
Get it?
Obviously a whole bunch of really important people don't.
Read on:
1. If security of consumer telecom service was an issue...why would you string cable on poles in Newfoundland? Persona chief operating officer and former Cable Atlantic exec Paul Hatcher told the Telegram on Saturday that the land portion of the GRAP deal is carried along Newfoundland Power poles.
Ice and sleet storms that interrupt telephone and power service are a common feature of life in eastern Newfoundland. Persona and Rogers customers - including the provincial government - can expect the odd problem with getting signal, that is unless Persona, Rogers and the Manitoba telephone company buy back-up service from Aliant.
Aliant's cables are buried underground.
2. Does the government have equity or fibre? Finance minister Loyola "Rainman" Sullivan described the province's $15 million expenditure as gaining "equity", as in ownership of an interest in the telecom project. Innovation minister Trevor Taylor said we are buying fibre.
Which is it?
There is a difference even if business minister Kevin O'Brien - yes, the business minister - doesn't know what it is without a briefing note.
3. And while we are at it... Why would Trevor Taylor tell NTV's Issues and Answers that the provincial government is buying fibre but could sell it to recover the investment?
Surely, the provincial government has done a comprehensive examination of how its own telecom cost are going to drop as a result of buying fibre strung along poles on the island portion of the province.
Surely, it has a business plan.
4. There was no RFP but there was talk of one. Early on someone asked why no request for proposals had been issued on this project. Innovation minister Trevor Taylor insisted there had not been one because it was an unsolicited proposal.
But on NTV's Issues and Answers confirmed that the provincial government had looked at seeking proposals. Cabinet decided not to issue an RFP since there was only one company likely to respond that hadn't - namely Aliant - and the cost of the process would be $1.0 million.
Ok.
So now we learn more details that lead us to doubt earlier answers. So much for early disclosure instilling confidence.
But then logically, we must also wonder:
5. Would the RFP have been about providing a cheap sub-sea link or would it have been to provide the provincial government with its own fibre?
Persona's Paul Hatcher already said the provincial money was needed to build the connection to Nova Scotia.
6. Since Aliant has surplus capacity in its system, why didn't cabinet think it was a good idea to encourage competition for its business? After all, the provincial government justified its expenditure of $15 million on the grounds that increased competition will lower costs.
It doesn't help credibility if you contradict your own explanations in the process of providing explanations.
7. $1.0 million is hardly a hefty price-tag when the provincial government is the largest telecom customer in the province. The Tories know this since they proposed in their Blue Book to use government purchasing power to drive down telecom cost. So rather than spend $1.0 million to ensure the $15 million was indeed the lowest cost, government decided to shave off the tiny amount and instead just drop the $15 million anyway.
So much for sound fiscal management in a government run by a Great Negotiator (patent pending).
8. There are two deals here. One is the stand-alone Persona landline, already underway and scheduled to be completed very soon. The other is the sea connection involving a group of cable companies.
Which one has the provincial government's cables in it? Since the deal was announced in relation to the sub-sea cable, presumably government's telecom is running on that one.
Presumably not.
Presumably.
9. Did anybody consider the impact of taking the provincial government's telecom service out of the marketplace?
One of the big issues in the Blue Print is using government's purchasing power to lower its own telecom costs. By purchasing its own dedicated fibreoptic capacity, the provincial government is effectively going into the telecom business for itself. More importantly, it is actually leaving the commercial telecom industry - suddenly - which will have a dramatic drop in business as a result.
Drops in business aren't good for consumer prices since the few customers remaining have to pay for all the surplus capacity that is being added to the telecom system.
That is, unless the provincial government is going to either subsidize the telecom companies - like it did with the paper companies recently - or overspend on telecom by keeping an outside telecom provider it doesn't really need.
Of course, that means the cost of this deal is a lot more than $15 million.
A lot.
At least for you and me, the people who are supposed to benefit from the deal.
10. Pull the other one...
Trevor Taylor needs to understand that no one - and I mean no one - believes that the the Dean/Ken/Danny/Paul relationship is one that happened six years ago, and by implication ended back then, as Taylor tried to tell the audience for Issues and Answers.
Even the Pitcher Plants know that Ken Marshall and Dean Macdonald have established and ongoing relationships with a whole bunch of people in government, today.
Especially the Premier.
Denying the obvious suggests you have no respect for your audience's intelligence, don't understand what is the core ethical issue and well...that you aren't telling the truth.
11. If cabinet was worried at least twice about alleged appearances of conflicts of interest over a deal involving the provincial government buying fibreoptic cables...
- why would such a beneficial idea have aroused any suspicions? After all, by one version of Trevor Taylor's story the provincial government is supposed to be piggybacking on a project for its own purposes, not meeting the needs - wink, wink, Paul Hatcher - of rich private telecom companies.
- what changed? The Bell Aliant fire didn't materially alter the project. It seems as though cabinet thought by fanning some of the smoke from the fire, they could sneak a project by everyone that otherwise they had no confidence in.
That really doesn't look good.
Heck, the whole thing doesn't look good.
And the provincial government can only blame itself.
For want of a telephone call
For the want of a nail, the shoe was lost; for the want of a shoe the horse was lost; and for the want of a horse the rider was lost, being overtaken and slain by the enemy, all for the want of care about a horseshoe nail.
- Benjamin Franklin
For if the trumpet give an uncertain sound, who shall prepare himself to the battle?
- 1 Corinthians 14:8
_________________________________________________
Consider the irony.
Four telecom companies in Newfoundland and Labrador - Persona Communications, Bell Aliant (TSX: BA.UN-T), Rogers (TSX: RCI), and MTS Allstream (TSX: MBT) - are embroiled in a controversy involving a government deal that will likely affect their corporate bottom lines and all because the companies involved neglected two words:
Public relations.
Here's how.
Public relations is about connecting a company with the public interest. It is about gaining and maintaining public support by developing awareness, information, attitudes and behaviour.
Public relations these days is very much about an organization's reputation: attitudes over time.
And time is the key element.
Public relations professionals will you that in order to gain and maintain support, people have to know. The only way they know if you tell them.
None of the companies involved told what needed to be told in a timely way. The companies involved with government in laying new fibre-optic cables across the province waited until the end of the process - once the deal was done with the provincial government - to tell people that a deal was even in the works.
Naturally, public interest was peaked. Spending public money gets their attention anyway. And when two of the three companies behind the deal are headed by individuals with a long-standing business and personal relationship with the Premier, they are bound to wonder what's up.
The information the companies and the provincial government gave initially was limited and confusing. One company spokesperson - Paul Hatcher of Persona - described an $82 million project already underway with no mention of the federal and provincial government money involved. The government announcement added up to only $52 million.
Public comments by business and political leaders in the wake of a fire at Bell Aliant's St. John's headquarters seemed to smooth the ground for the government announcement. But, a week later, as the full scope of the project slowly seeped in the public domain, questions mounted. A week after the announcement, news stories spread across the country alleging that the public money actually came as a result of a deal among buddies rather than something that was actually in the wider public interest. [For a telecom industry/business view, see here.]
The controversy will likely be fueled in the second week by bumbling comments by the finance and business ministers as well as contradictory comments by innovation minister Trevor Taylor and Persona's chief operating officer Paul Hatcher, another Cable Atlantic alumnus.
In an interview with NTV's Issues and Answers, Taylor played up the government's purchase of fibre-optic strands for $15 million. Hatcher told the Telegram that the provincial government cash was needed to fund the expensive portion of the project, namely the sub-sea connection into Nova Scotia.
As the Telegram story put it:
More than a year ago, the consortium pitched the undersea cable to the province - they had $37 million and asked the province to make up the shortfall.To make matters worse, while concerns about public safety were raised by the Premier himself as the deal was being approved, Taylor said this weekend that province-wide 911 service is being examined. The cost and technical feasibility of expanding broadband to Labrador will also be studied with no commitments being made at this point.
Underneath the whole controversy are allegations of unfair dealings of a government with companies headed by individuals who hold appointments to the province's hydroelectric corporation, both of whom are the Premier's former business partners.
As easy as it is to decry suspicion of politics and politicians, Trevor Taylor gave credence to this aspect of the affair by confirming that the proposal had been reviewed by cabinet at least twice in the past year and rejected on both occasions out of concern of a perceived conflict of interest. Ordinary residents of the province can hardly be faulted for wondering why a single incident suddenly erased the concerns if the politicians were worried about real or perceived conflict of interest twice before. If the deal was good now, it was good then.
To a public relations professional, that sort of suspicion - even if based on appearance rather than fact - is the most damaging. Releasing information when the proposal was first made would ensure awareness and accurate information. Tackling head-on the questions about conflict of interest at the outset would have sent reassuring messages about government and corporate sensitivity to ethics questions. Early and complete disclosure instills confidence.
For Bell Aliant's part, the issue is more one of opportunity lost. The company simply has missed every chance to deal frankly with its telecom service to the province. Its competitors have relentlessly pointed to the supposedly exorbitant cost of leasing space on Aliant's fibre-optic cables. They have pointed to increased service to the public. Aliant has been silent on the existing surplus capacity in the system and the likelihood that consumer prices will drop anyway as a result of deregulation of the nation's telecom industry.
This deal has put Bell Aliant is in a hard competitive spot anyway. It will hardly lose anything by speaking more forthrightly about how this project will affect them and their customers. On the face of it, would speaking publicly about the controversial deal make it less likely that Aliant can get the government account back or that it can win any other telecom contracts?
Bell Aliant can deal authoritatively with technical issues. The company can speak frankly about its service, costs and long-term telecom issues. By speaking openly and frankly, the company will give its consumers the chance to see - if they don't already - a company that is interested in more than the customer's bank account.
But look at it this way, as well: if early and complete disclosure instills confidence, then silence is taken as consent. Every negative comment made by Aliant's competitors about Aliant's costs and service is left unchallenged. To the ordinary consumer, that looks like an admission of guilt or fault.
To be sure, each of the companies involved has first-rate marketers handling corporate advertising. The bigger companies - like Rogers and Aliant - have competent public relations professionals on the payroll. Persona uses a well-connected and creative advertising firm in St. John's. Nothing said here is a slight to them and their competence.
What seems to be missing in this controversy is an understanding in the corporate headshed that there is more to public relations than issuing a happy-faced news release supporting the latest marketing venture. If the in-house team of general public relations practitioners lacks the specialized skills - and they are specialized - to handle a controversial government relations and media relations issue, then there are plenty of practitioners who can lend a hand.
If all you have is a marketer, understand that advertising is built on image. PR handles your reputation and a competent PR professional will make sure that your media appearances are considerably more successful than Dean Macdonald's recent foray to the local open line shows or a short-lived trip into another corporation's boardroom. [See here, here and here.]
The business landscape in Newfoundland and Labrador is littered with the carcasses of good projects that have foundered for want of some straightforward public relations support. The failures affect the bottom line, either in lost opportunities, unrecovered expenditures, or added expenses from delays. For publicly traded companies, the impact on share price - even if marginal - is still an impact that could be avoided. For all, the impact on their reputation is easy to figure out.
It might be difficult sometimes for managers to see the return on a public relations investment. But ask Fishery Products International, the Hebron consortium, IOC, INCO, Fortis and its Belize dam and now the Telecom Four about the cost of not investing in building awareness, understanding, of influencing attitudes and behaviour.
Few projects are lost irretrievably. Even if the public relations efforts were left out or botched, there is always a chance to sort out the mess.
All it takes is a phone call.
12 November 2006
Coyne on Dion and the nation issue
Commended for your reading enjoyment and intellectual stimulation, Andrew Coyne as he delivers his usual insights into:
1. Stephane Dion as a political leader; and,
2. Michael Ignatieff on the question of Quebec as a nation.
1. Stephane Dion as a political leader; and,
2. Michael Ignatieff on the question of Quebec as a nation.
The net of gross fallacy
Newfoundland nationalists are a funny lot.
They thrive largely on myth and fantasy, not the least example of which is the complete nonsense that Newfoundland and Labrador has been losing out on a multi-billion boondoggle in the fees collected by NavCanada for aircraft using Canadian airspace.
There's a replay of the argument in the Sunday Telegram [not available online but reprinted below], in the form of an opinion piece by David Fox. Living now in Halifax, Fox is retired and has been championing the cause of having the provincial government collect some sort of air space usage tax.
Fox calls it his:
Oddly enough, the Telly printed Fox's submission but neglected to note they had carried a story on the provincial assessment. The two side-by-side would have been amusing especially since Fox notes the number of times he has raised the issue (gross) but neglects to point out the one time where a factual assessment shot his entire argument out of the sky (net).
Let's dispose of this nonsense as quickly as possible.
Firstly, there is no constitutional basis for the provincial government to levy any form of tax on aviation. The entire matter is the jurisdiction of the federal government, as established in the Terms of Union.
Secondly, there is no cash windfall nor is there any debt, as Fox argues. The fees charged are used to provide air navigation services. That operation is currently carried on by NavCanada, a non-for-profit corporation. Even if by some miracle, someone could manage to get control of aviation handed to the provincial legislature, the money collected would and could only go to sustain air traffic control and related services. There is no boondoggle waiting be had.
While Fox may be right that 57 years worth of fees adds up to billions, he is talking about gross revenues. What he needs to look at is net, namely what's left after the costs of providing air navigation services are taken into account. As we can see from this 1999 story, the net is pretty small. Considering that it reflects the net from all air activity in Canada - not just over Newfoundland and Labrador - there really isn't any cash here to be had even if we could figure out how to get it.
In other words, the net of Fox's gross fallacy is naught.
'nuff said.
_____________________________
Reprint begins:
Province losing revenue in air-space fees
Most of us are aware "timing" in politics is all-important if one wishes to get an important item approved by government that is in the best interest of the party pushing it.
Such is the case with creating a provincial royalty fee protocol for air-space users applicable to all aircraft users (both commercial and military) flying over 500,000 square kilometres of Newfoundland and Labrador land area to a height of 90 kilometres.
To date, this provincial air-space resource (legally defined the same as land ownership), is now being used by private, national and international airline companies along with all world military aircraft users, headquartered and administered outside the province. And the province, in return, is getting absolutely nothing for this in terms of a royalty which should be collected if there were an existing agreement with Ottawa.
This situation has been ongoing since 1949. To date, no proposed fee protocol has been discussed, let alone signed off between Ottawa and our provincial government which, if it were approved by both governments, would have given the province its rightful compensation.
To put it in a more fundamental and financial perspective, after some 57 years following Confederation to October (at least by my calculations), the province has lost about $8.532 billion (including interest on the unpaid yearly balance owed), with Transport Canada owing some $6.373 billion from 1949 to 1996 and NavCan owing about $2.158 billion from 1997 to October.
Losing millions annually
Included in these lost revenues are the revenue and interest contributions by the national and international commercial airline users at about $6.315 billion and all the national and international military aircraft users at about $2.216 billion due to all parties daily 1,000-plus aircraft overflights through our provincial skies.
Such losses since 1949 (by my calculations) now add up to an average annual air-space revenue loss to the province of about $147,104,000 per year to October.
Every time you see an aircraft, you can easily figure the province is losing about $0.40 per air kilometre traveled.
Since going public with my idea of an "air-space revenue theory" being a "rightful revenue stream" for the province, as outlined in my paper submitted to the royal commission in December 2002 and followed up with my letters in your newspaper in January 2004 and February 2005, you can bet there are folks in Transport Canada, the Department of National Defence and NavCan Ottawa and elsewhere who have already digested and calculated, with sombre thought, I might add, the "dollar consequences" of this subject, just in case this air-space fee charge idea is in fact proven constitutionally correct and in the favour of the province. Regardless of what is now written in the already signed- off Terms of Union document of 1949, we know nothing today is "written in stone."
I only hope the premier and his intergovernmental committee will present this idea to Ottawa for approval and not let our neighbours from Quebec from the Party Quebecois beat Newfoundland to the punch with this same fee.
David J. Fox
Halifax, N.S.
They thrive largely on myth and fantasy, not the least example of which is the complete nonsense that Newfoundland and Labrador has been losing out on a multi-billion boondoggle in the fees collected by NavCanada for aircraft using Canadian airspace.
There's a replay of the argument in the Sunday Telegram [not available online but reprinted below], in the form of an opinion piece by David Fox. Living now in Halifax, Fox is retired and has been championing the cause of having the provincial government collect some sort of air space usage tax.
Fox calls it his:
"air-space revenue theory" being a "rightful revenue stream" for the province...While obviously wants to believe this idea is still open for discussion by the provincial government, let's recall that it has already been examined recently as two years ago [if memory serves]. The conclusion, in a rough paraphrase, is that the entire argument is foolish.
Oddly enough, the Telly printed Fox's submission but neglected to note they had carried a story on the provincial assessment. The two side-by-side would have been amusing especially since Fox notes the number of times he has raised the issue (gross) but neglects to point out the one time where a factual assessment shot his entire argument out of the sky (net).
Let's dispose of this nonsense as quickly as possible.
Firstly, there is no constitutional basis for the provincial government to levy any form of tax on aviation. The entire matter is the jurisdiction of the federal government, as established in the Terms of Union.
Secondly, there is no cash windfall nor is there any debt, as Fox argues. The fees charged are used to provide air navigation services. That operation is currently carried on by NavCanada, a non-for-profit corporation. Even if by some miracle, someone could manage to get control of aviation handed to the provincial legislature, the money collected would and could only go to sustain air traffic control and related services. There is no boondoggle waiting be had.
While Fox may be right that 57 years worth of fees adds up to billions, he is talking about gross revenues. What he needs to look at is net, namely what's left after the costs of providing air navigation services are taken into account. As we can see from this 1999 story, the net is pretty small. Considering that it reflects the net from all air activity in Canada - not just over Newfoundland and Labrador - there really isn't any cash here to be had even if we could figure out how to get it.
In other words, the net of Fox's gross fallacy is naught.
'nuff said.
_____________________________
Reprint begins:
Province losing revenue in air-space fees
Most of us are aware "timing" in politics is all-important if one wishes to get an important item approved by government that is in the best interest of the party pushing it.
Such is the case with creating a provincial royalty fee protocol for air-space users applicable to all aircraft users (both commercial and military) flying over 500,000 square kilometres of Newfoundland and Labrador land area to a height of 90 kilometres.
To date, this provincial air-space resource (legally defined the same as land ownership), is now being used by private, national and international airline companies along with all world military aircraft users, headquartered and administered outside the province. And the province, in return, is getting absolutely nothing for this in terms of a royalty which should be collected if there were an existing agreement with Ottawa.
This situation has been ongoing since 1949. To date, no proposed fee protocol has been discussed, let alone signed off between Ottawa and our provincial government which, if it were approved by both governments, would have given the province its rightful compensation.
To put it in a more fundamental and financial perspective, after some 57 years following Confederation to October (at least by my calculations), the province has lost about $8.532 billion (including interest on the unpaid yearly balance owed), with Transport Canada owing some $6.373 billion from 1949 to 1996 and NavCan owing about $2.158 billion from 1997 to October.
Losing millions annually
Included in these lost revenues are the revenue and interest contributions by the national and international commercial airline users at about $6.315 billion and all the national and international military aircraft users at about $2.216 billion due to all parties daily 1,000-plus aircraft overflights through our provincial skies.
Such losses since 1949 (by my calculations) now add up to an average annual air-space revenue loss to the province of about $147,104,000 per year to October.
Every time you see an aircraft, you can easily figure the province is losing about $0.40 per air kilometre traveled.
Since going public with my idea of an "air-space revenue theory" being a "rightful revenue stream" for the province, as outlined in my paper submitted to the royal commission in December 2002 and followed up with my letters in your newspaper in January 2004 and February 2005, you can bet there are folks in Transport Canada, the Department of National Defence and NavCan Ottawa and elsewhere who have already digested and calculated, with sombre thought, I might add, the "dollar consequences" of this subject, just in case this air-space fee charge idea is in fact proven constitutionally correct and in the favour of the province. Regardless of what is now written in the already signed- off Terms of Union document of 1949, we know nothing today is "written in stone."
I only hope the premier and his intergovernmental committee will present this idea to Ottawa for approval and not let our neighbours from Quebec from the Party Quebecois beat Newfoundland to the punch with this same fee.
David J. Fox
Halifax, N.S.
11 November 2006
Rule changes could make telecom deal unnecessary
The commission regulating Canada's telecommunications industry is reviewing current rules with an eye to leveling the playing field between the big and smaller players.
MTS is one of the partners in a consortium laying new fibreoptic lines in Newfoundland and Labrador. The project is being promoted on the grounds that the companies with smaller shares of the Newfoundland and Labrador marketplace can lower prices and compete more successfully with Bell Aliant if they were not required to pay Bell Aliant for use of infrastructure laid by the major telecom company in the mid 1990s.
Deregulating the telecom industry could mean that the provincial government's contribution of $15 million towards the project is unnecessary.
More to follow.
Because smaller companies such as Manitoba Telecom Services Inc. are allowed to piggyback on existing Bell and Telus lines and equipment, the Canadian Radio-television and Telecommunications Commission regulates how much the big companies must provide them with help, and at what price.
MTS is one of the partners in a consortium laying new fibreoptic lines in Newfoundland and Labrador. The project is being promoted on the grounds that the companies with smaller shares of the Newfoundland and Labrador marketplace can lower prices and compete more successfully with Bell Aliant if they were not required to pay Bell Aliant for use of infrastructure laid by the major telecom company in the mid 1990s.
Deregulating the telecom industry could mean that the provincial government's contribution of $15 million towards the project is unnecessary.
More to follow.
Teaser: 4 AD
What do all these things have in common?
1. Finance minister Loyola "Rainman" Sullivan has postponed pre-budget consultations next week so he can release an updated financial statement on the provincial government for FY 2006.
2. Labour minister Paul Shelley is talking about holding a job fair to attract workers into Newfoundland and Labrador.
3. Demographic projections done for the provincial government over a decade ago have proven accurate.
Check the Bond Papers for observations on the state of the provincial government and economy four years after Danny Williams came to power.
1. Finance minister Loyola "Rainman" Sullivan has postponed pre-budget consultations next week so he can release an updated financial statement on the provincial government for FY 2006.
2. Labour minister Paul Shelley is talking about holding a job fair to attract workers into Newfoundland and Labrador.
3. Demographic projections done for the provincial government over a decade ago have proven accurate.
Check the Bond Papers for observations on the state of the provincial government and economy four years after Danny Williams came to power.
Stand by - GRAP fibre deal: more information, less filling
For those following the recent government decision to investment $15 million in a fibreoptic cable deal with three private sector companies, some recent public comments by the business minister, his development colleague and the companies involved have changed dramatically the amount of information in the public domain on the original announcement.
Things have changed and comments in earlier posts will have to be amended as a result.
For example, we now have a better perspective on the scope and cost of the project. We also have a much better idea of what government is getting and not getting from the deal.
We can also see just exactly how far government has strayed from its own stated intentions only last year.
Stand-by. Bond Papers will offer a more detailed commentary - including a summary of the information as it currently stands - over the next 24 hours.
Things have changed and comments in earlier posts will have to be amended as a result.
For example, we now have a better perspective on the scope and cost of the project. We also have a much better idea of what government is getting and not getting from the deal.
We can also see just exactly how far government has strayed from its own stated intentions only last year.
Stand-by. Bond Papers will offer a more detailed commentary - including a summary of the information as it currently stands - over the next 24 hours.
10 November 2006
Blog impact
From a survey of Europeans:
Ipsos MORI found a direct link between blogs, or user-generated content, and people's intentions to buy goods or services.
Any company that fails to come up to standard should beware. The blog is replacing word of mouth for endorsing or condemning a product or service.
About a third of those Europeans questioned said they had been put off making a purchase after reading negative comments on the Internet from customers or other web-users, while 52 percent said they had been persuaded to buy after a positive review on a blog.
Get it right, and blogs could be a boost to companies and even save on their advertising and marketing budgets.
Blogs, or weblogs, are a more trusted source of information (24 percent) than television advertising (17 percent) and email marketing (14 percent), the survey commissioned by Hotwire, a technology public relations consultancy, said.
Technovation!
Now you can subscribe to Bond Papers - free of charge - and receive an e-mail notifying you when new material is posted.
check out the box at the top of the right column.
check out the box at the top of the right column.
Promise made. Promise ...well...you know.
Some choice bits from the now infamous Blue Print:
The provincial government is the largest telecom customer in the province.
The provincial government will call tenders for telecom work.
How does that promote open and effective competition?
During its first mandate, a Progressive Conservative government will make it illegal for government to spend money without prior legislative approval when the House of Assembly is in session, and restrict spending by Special Warrant to a specific emergency that occurs when the House is not in session.In a recent radio appearance, finance minister Loyola Sullivan admitted some of the money spent on the logo came from special warrants. Does that Little Shop of Horrors thing count as a "specific emergency"?
Limit political contributions by a person, corporation, or union in any year, including an election year, to a total of $10,000 to a registered political party and a total of $5,000 to one or more district associations of a registered party or one or more candidates in a provincial election in relation to their candidacy, by way of cash, cheque, money order, credit card or goods and services, but excluding the purchase of tickets or passes and donations in kind to fundraising events sponsored by a registered political party or district association of a registered party.Put that one in the "yeah, right" category.
Set and publish content rules for government advertising that will stop the use of public funds for political advertising.Check newspapers in the province and see yet further examples of personal advertising by the Premier using public money. He isn't alone. Everyone is doing it. The practice was banned in 1989, but in 1996 the old system returned apparently to stay.
Newfoundlanders and Labradorians have grown tired of the flurry of closed-door, invitation-only consultations in recent years that were little more than "telling and selling" exercises.Newfoundlanders and Labradorians have grown tired of them. Unfortunately, politicians in power love to restrict access. Try getting into a fisheries consultation without an invitation to the closed-door session.
A Progressive Conservative government will base policies and regulations for the procurement of goods and services and capital works on the following principles:So explain how this works again. The provincial government is the majority shareholder in a telecom consortium with Persona, Rogers and the Manitoba phone company.
* Open and effective competition.
The provincial government is the largest telecom customer in the province.
The provincial government will call tenders for telecom work.
How does that promote open and effective competition?
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