23 March 2007

For the record: Danny Williams on federal provincial relations

It's amazing how times change.

Danny Williams used to believe that vicious personal attacks are no use.

From 2003, before he got elected, Danny Williams sang a very different tune from the one that has him branded today:

____________________________________________

Williams touts national trek: Similar Grimes' trip failed because premier 'didn't do his homework'

By: Barb Sweet
The Telegram (St. John's)
Saturday, October 11, 2003
Page: A1

If Tory Leader Danny Williams were premier, he would massage provincial-federal relations. But if that didn't work, he'd launch a national marketing campaign and try to get other premiers to back Newfoundland and Labrador's cause.

"If they're not going to be fair to us, then I would basically launch a national marketing campaign to let people know exactly what the story is in Newfoundland and Labrador, how there is unfairness and I would lobby the premiers right across the country," the election front-runner said in an interview this week.

SOUNDS FAMILIAR

But wait -- isn't that what Premier Roger Grimes tried and failed to do this past summer with his cross-Canada trek, trying to sell the province's case to his fellow premiers? Hasn't the province been there and done that?

Angered by the latest fisheries closure, Grimes vowed to push for a constitutional amendment to allow joint federal-provincial management of the fishery.

But it fizzled when the other premiers didn't seem all that interested and he agreed to work jointly on a "rebuilding and recovery" program for the cod, which fell short of his goal for joint management of fisheries in waters adjacent to the coast of Newfoundland and Labrador.

Williams said in an interview this week that Grimes' problem was he took the wrong tack.

"Roger Grimes didn't do his homework. He picked up and said 'I'm going to go and see if I can't get constitutional reform.' What I would be doing is I would be talking to (Prince Edward Island Premier) Pat Binns and (Nova Scotia Premier) John Hamm and (New Brunswick Premier) Bernard Lord and (Ontario Premier) Dalton McGuinty and (Alberta Premier Ralph) Klein and say 'Look now, here's our situation, here's our case.' And I'd have the homework done in advance," Williams said.

"These are all premiers, they advocate for their own provinces, but I think they're fair and they can understand. It's easy for the federal government to stand back and take the Mother Ottawa approach and say 'Well, I'm going to be good to Ontario, I'm going to be good to Quebec and all the rest don't count.'"

But before he'd do all that, Williams is counting on a new regime under Paul Martin, Prime Minister Jean Chretien's uncrowned successor, to help smooth the waters. He's also planning on fostering a more congenial relationship with Ottawa and said he won't fight with the federal MPs from the province, regardless of their political stripe. [Emphasis added]

The Tory platform promises a Newfoundland and Labrador office of provincial-federal relations to be set up in Ottawa.

Williams blames Grimes for taking a hostile approach, waging war with MPs -- even his own Liberal counterparts like, federal cabinet minister Gerry Byrne -- as well as with Ottawa. [Emphasis added]

Williams would only go to war if Ottawa doesn't play ball.

"The politics of the personal attack doesn't work. I'm going to nurture -- if an MP happens to be a Tory or a Liberal or an NDP -- it's not going to make any difference to me. They're Newfoundlander and Labradorian representatives and we need to work together," Williams said. [Emphasis added]

He points to the all-party committee on the fishery, saying Grimes broke ranks and that's why the province didn't get Ottawa to change its mind on closing the Gulf and the northeast coast fishery.

Williams insists he's a better negotiator and would have gotten a better deal on the province's resources, such as oil, Voisey's Bay and the yet-to-be-completed Lower Churchill negotiations.

Williams' comments came in an interview about his infrastructure platform.

He's embarking on a lofty crusade to improve rural infrastructure, including roads, ferries, Internet and air links, the province's highways and sewage and drinking-water systems. The platform also calls for a fixed link across the Straight of Belle Isle. He also proposes to grapple with mounting school and hospital infrastructure woes that get placed on the backburner due to a system already taxed by program and service delivery demands.

Recent stories on hospital and school board submissions for capital repairs and upgrades revealed schools boards need $60 million to patch leaky roofs, repair rotting floors and cure air-quality problems. That list is getting compounded every year. In this fiscal year's budget, the province allocated a $3.5-million contingency fund for school maintenance and repairs and $3.3 million for capital construction.

Hospitals need $20 million for similar problems and that's just for this year. Each board, however, is getting just a handful of items on its list approved -- a fraction of what's needed.

Adequate infrastructure, Williams said, is key to bringing businesses and industry to Newfoundland, particularly rural Newfoundland.

"This government and the previous governments over the last 10-15 years have allowed our infrastructure to deteriorate to the point now where the job's getting much bigger to do," Williams said.

Like the Liberals, he's talking about using the provincial fuel tax to fix roads. But Williams is also counting on hammering out a new federal-provincial roads agreement and achieving a better equalization formula and an end to clawbacks from Ottawa to help fund the improvements. He would promise Martin if the clawback on the province's increasing revenues was eliminated, the funds would go directly into infrastructure.

"In other words, 'Paul Martin, if you can give us those funds, we'll put them directly into infrastructure. We won't put them into tax cuts, we won't put them into anything else. We will make a commitment to you and guarantee you that's where they'll go.'"

Other premiers have tried and failed to negotiate a better fiscal deal with Ottawa.

"If they don't accept the rational approach, based on planning and fairness, then we have to consider whether or not they're our true partners in Confederation, whether they are our friends, whether they are being reasonable with us," Williams said.

NS joins Harper Equalization plan

The Nova Scotia government has opted to accept the Harper Equalization plan.

However this CBC story contains a glaring factual error that needs to be corrected.
This means the province will no longer have control of offshore oil profits, but it said it chose the short-term federal funding to avoid tax increases and program cuts.
Sheer bunk. The Nova Scotia government sets and collects its own offshore revenues. It controls them now and it will continue to control them as long as its accord with Ottawa (from the 1980s) remains in place.

The feds have given Nova Scotia a one year grace period in which to take the Equalization option that gives the province the greatest return.

Meanwhile in Newfoundland and Labrador, the provincial government continues to moan about the whole Equalization business without demonstrating that the province has lost anything at all. The radio call-ins shows are full of complaints and talk of separation but not a single caller so far - including the Premier's parliamentary secretary and several cabinet ministers - could make any factual statements.

22 March 2007

Danny Williams: the problem of being known

[Update: See note below and crosslink on the movie Secret Nation.]

Responsible Government League
's Liam O'Brien is one turned off Conservative.

If anyone wants to understand the extent of dissatisfaction in some quarters with Premier Danny Williams, take a gander at Liam's posts here and here.

For a guy who is as patriotic as anyone else, Danny Williams' claim that anyone backing the current federal government is betraying his or her province, well, let's just say that as soon as those words were broadcast, you could tell there would be some cheesed off locals.

Liam already staked his position on the budget in another post.

This outburst from Liam dovetails nicely with some comments offered by CBC's provincial affairs reporter David Cochrane on Thursday edition of the political panel. Cochrane said that Danny Williams is persona non grata [Bond words, not Cochrane's] in Ottawa these days.

No surprise for Bond readers since that point has been made here repeatedly. As much as Danny Williams has been trying to change his messaging - or at least was toning down the rhetoric right before the budget - the damage has been done.

That's what makes comments from another CBC reporter, radio's legislative reporter Mike Rossiter a bit odd. In Mike's debrief on the Thursday Morning Show, Rossiter talked about comments by an unnamed person or persons that Ottawa simply doesn't understand Danny Williams' economic goals and his nationalism.

Rossiter also referred to the whole fallow field legislation idea which the Prime Minister rejected flatly. According to Rossiter it fell to people like John Fitzgerald, Williams' ambassador to the Prime Minister's waiting room, to explain what Williams was after.

To be frank, that sounds like something we'd hear from the Premier's personal emissary in Ottawa, the highly expensive but apparently ineffectual position Williams created two years ago. While Rossiter is too good a reporter to let slip his sources, his comments sound like they are straight from the lips of the guy whose master's thesis apparently inspired the highly entertaining but highly fictitious movie Secret Nation. [See the correction here. The movie predated the MA thesis so obviously, the later one couldn't inspire the former.]

There are a couple of problems with this view. First of all, if Fitz did such a fine job of translating Danny-speak into something that the ears of federal officials could understand, the whole fallow field issue would have been resolved, wouldn't it?

Second of all, given that Danny Williams is supposedly the Great Negotiator (patent pending), it seems highly odd that a fellow who recently was reduced to sitting in a waiting room hoping to catch a PMO official on the way to a meeting could successfully explain fallow field when the Great Negotiator himself had a meeting with the Prime Minister himself.

If Danny couldn't explain himself to Stephen, it defies even the most fanciful brain to believe that Fitz could do better. Perhaps all that was needed was some appropriate anecdote about 19th century ecclesiastical history and Harper suddenly had a slap-head moment.

Perhaps Harper was convinced by a short recitation of the story linking renovations to the Basilica in the 1950s to Confederation and the Canadianization of Newfoundland and Labrador. ["Skinner consequently had to avoid inflaming anti-Catholic opinion, resurrecting Newfoundland nationalism, or upsetting politicians. If he was pro-Canadian or a 'confederate,' he kept it to himself. ... (The Basilica's interior) spoke more about Newfoundland’s dim Irish past than about its shiny Canadian future..."]

More substantively, though it would be difficult to sustain the argument that people don't understand Danny Williams' nationalism. Their understanding would be born of many things, not the least of which is a traditional townie view of Confederation and Canada. Williams has displayed it openly in many places. In his now famous June 2001 speech in Halifax, Williams took pains to describe the federal government in the most vicious of terms. He has made similar comments in the legislature, some of which, such as comments on the Churchill falls deal, are closer to the realm of fantasy than any matter of fact.

Williams' nationalism, though might well be clearly understood by those in Ottawa given who he appointed as his personal representative.

For those readers who aren't familiar with historian Fitzgerald's views, take this portion of a paper prepared for the Vic Young Airing of Grievances:
Accompanying this public discussion has been an academic debate over Newfoundland nationalism and the merits of Confederation. John Fitzgerald has been a prominent critic of the impact of the Terms of Union on Newfoundland. Invoking the weight of archival evidence -— in a published interview, Fitzgerald asserts that "History is incontrovertible on some of this stuff" -— he notes that [Craig] Dobbin and [former cabinet minister Walter] Noel raise legitimate points. Fitzgerald views the current reappraisal of Newfoundland's constitutional relationship with Canada as a positive development: "The one thing that is overwhelming in this is that I think people are starting to realize generally that Canada's best interests are not necessarily Newfoundland's best interests....And that's a good thing." His scholarly work makes three main arguments: the Terms of Union were negotiated through an extremely unfair and flawed political process; Confederation has not served the province's economic interests; and joining Canada marked the grievous loss of Newfoundland's nationhood. The popularity of this view was reflected during the special conference convened by the Newfoundland Historical Society to mark the fiftieth anniversary of Confederation, titled "Encounters with the Wolf."
Fitzgerald's views are not without criticism from other local historians. The above linked paper notes the views of one historian, namely Jeff Webb:

...Webb has debunked the conspiracy theory that the vote for Confederation was somehow rigged and outlines how nationalist historiography has perpetuated romantic myths rooted in an interpretation of Newfoundlanders as victims. Webb argues that these myths not only ignore the reality of Newfoundland's history, but also embrace a disturbing right-wing ideology which implicitly rejects the democratic rights Newfoundlanders freely exercised in 1949. In addition to this ideological component, nationalism draws on the wider cultural appeal that conspiracy theories enjoy in the present period of political malaise — in Newfoundland as elsewhere in North America — because they offer a fulfilling romantic fantasy:

For a generation that came of age under Smallwood, Moores or Peckford, creating a mythology about the idyllic communities before confederation is easy. Other critics will admit to the existence of poverty, but point to the value of the resources that might have made Newfoundlanders wealthy if Canada had not stolen them. While these resources had the theoretical potential to enrich Newfoundlanders, our experience, under several constitutional regimes, has been that the reality of capitalist exploitation of these resources did not benefit most Newfoundlanders very much. In fact, the most hardy perennial in Newfoundland has been the struggle to find a constitutional solution to economic problems."
Of course, if none of that were true, any doubts federal Conservatives had about the feisty Premier of the eastern province were dispelled in October by none other than the Premier's brother. Both the Prime Minister and the federal Conservative party president were given a fine welcome to what the other Williams apparently referred to as "Dannyland".

Any problems Danny Williams is having in Ottawa do not arise from any misunderstanding about who he is and what he is striving for.

Rather, officials in Ottawa and more particularly, Conservative politicians understand Williams very well. His words and his actions have already branded him indelibly in their minds. How Williams might change that view and restore a productive relationship where none now exists, well, that is a matter for another post.

Loyola Hearn: nothing lost to Nl in budget

From the Globe, right at the end of the story, these comments from fish minister Loyola Hearn and his colleague Norm Doyle:
Some Tory MPs from other aggrieved provinces acknowledged that they're getting some heat over the budget from their constituents. But they predicted the anger will subside once voters understand the complicated details of the cash transfers.

“There's been some disgruntlement and I understand that,” said Newfoundland MP Norman Doyle.

But he said Newfoundlanders will “come to understand... that we're not losing any money at all.”

Fisheries Minister Loyola Hearn said “the original hype” surrounding the budget left Newfoundlanders thinking “we lost something.”

“We lost absolutely nothing from equalization or anything else.”

21 March 2007

2008 and the Internet

Hilary Clinton is on the receiving end of what some are describing as the first viral political spot of the 2008 American presidential race.

The spot uses Apple's classic 1984 Superbowl ad substituting Clinton for the image of Big Brother. Technically sophisticated, it ends with a multi-coloured letter "o" representing Clinton's main rival for the Democratic nod, Barak Obama.


The original video, titled "Vote Smart" has since been morphed by other users into a wide variety of others.

While this sort of video may not penetrate local Canadian elections, like the 2007 newfoundland and labrador general election, it may well become a feature of future federal elections. The technology and the ability exists. it will just be a question of time before we see what impact this sort of political expression will have on elections across North America.

Will Golfman smack this bunch next?

Of course, Pete Soucy doesn't have the profile Rick Mercer enjoys.

Williams discovers his inner basenji with Harper

Newfoundland and Labrador Premier Danny Williams is backing away from a confrontation with the federal government over Equalization.

Sure he's called it a betrayal and, sure, Williams has encouraged people not to vote Conservative in the next election.

But...

According to vocm.com, Williams will now turn his attention to dealing with serious issues in the province. Apparently he feels his few words over the past 24 hours is enough. vocm.com reports that Williams believes the province will survive without Ottawa.

Maybe that's just for now.

Maybe it's permanent.

Some time ago, Bond Papers noted the very different rhetoric Williams used with Harper compared to what the fiesty Premier used to unleash on Liberals.

Compare that to his description of the evil Liberals from a speech in Halifax in 2001:
The more that I see, the more nauseous and angry that I get. The way that our people and our region have been treated by one arrogant federal Liberal government after another is disgusting. The legacy that the late Prime Minister Trudeau and Jean Chrétien will leave in Atlantic Canada is one of dependence on Mother Ottawa, which has been orchestrated for political motives for the sole purpose of maintaining power.
Of course, Danny Williams has been noticeably less fiesty since his self-imposed media blackout a little while ago. One of Williams' repeated messages this past week has been that that he doesn't want to be perceived as fighting just for the sake of fighting.

That's a pretty big change for a guy who not long before promised to take on anyone, anywhere, anytime, if he felt it was in the best interest of Newfoundland and Labrador. Big oil, little blogger. Didn't matter.

Maybe Williams is taking advice from John Crosbie. Maybe he's realizing that he needs to stop spitting in the eye of anyone he takes a dislike to. It doesn't lead to healthy, productive professional relationships.

Maybe - most likely(?) - Williams has a poll that shows his constant combat turns people off. They are weary of it and instead of rallying behind him, people and walking away figuratively if not literally.

Maybe he understands that the reality of the position he is taking is one of fighting for greater dependence on federal handouts rather than promoting genuine self-sufficiency. There's no measure of irony that the guy who accused Liberals of promoting dependence on Mother Ottawa has focused his political energy these past three years on increasing dependence on Mopther Ottawa's handouts. Maybe he's figured that out.

Listening to Williams on Open Line - surprisingly ending his noticeable absence from the talk shows lately - he's also switching his messages about the province to positive ones. He's dropping the tales of always doing bad deals to speaking of the great things that have been and will be done in the province. Sure he's carrying on with the same misleading comments on Equalization and offshore revenues, but there is something noticeably softer in his remarks, overall.

That's a big change.

Of course, there might not be a real change at all, just like his New Approach turned out to be policies lifted from Roger Grimes or Brian Peckford as appropriate.

Maybe Danny Williams just has too much on his plate with the departure of some of his most senior and able ministers to find the energy for a jihad right now. He's still able to take verbal pokes at Harper and Loyola Hearn, but there just doesn't seem to be any energy in Williams' remarks. Running the entire provincial government from the 8th floor is a demanding job.

Yes, it will be interesting to see what happens in the next few months.

That will all depend on whether Williams is just saving his energy for another time, whether he's genuinely changing his approach or if, as it might appear, Williams has discovered his inner basenji.

Hearn speaks

Loyola Hearn says he believes the federal Conservative's Equalization plan is the fairest way to deal with demands from all provinces.

Read the cbc.ca story for more.

A little perspective

From Paul Wells, who was not and is not a fan of Paul Martin as prime minister, some perspective for Danny Williams to consider:
Simple, obvious things that Danny Williams can't figure out

Apparently the premier of Newfoundland and Labrador is upset about the booty the recent budget delivers to his province. Here's what nobody seems to have explained to him.

Danny Williams made Paul Martin's life a screaming blue hell for most of a year and a half. Martin turned his government, his most senior staffers and bureaucratic helpers, and the entire tortured logic of Canadian fiscal federalism into pretzels to please Williams. Paul Martin wore himself into a sobbing heap to please Danny Williams.

And his reward was one fewer seat in NL than he had before he went to the trouble.

Why would any prime minister ever again lift a finger to appease Danny Williams?

Somebody should explain this to the premier.
Paul might well have added the effect peeing on the PM's shoes in public would have.

Like at a party's provincial convention after the Pm showed up by invitation from local Tories, while your brother is outside in the parking lot setting verbal fire to the national party president's underwear.

Williams cranks up anti-Harper rhetoric

He may be avoiding radio call-in shows since the end of his self-imposed media blackout in late February and early March, but Danny Williams isn't shy about tossing quotes at mainland reporters.

To be fair the quotes in this Stephen Maher story from the Wednesday Chronically Horrid aren't fresh but they still reflect Williams' anger over the federal government's Equalization changes.

The real meat in Maher's story is the reaction of local Connies to the attacks from their provincial Tory brethren. They are discovering how difficult it is to be on the government side sometimes.

Just ask John Efford, the guy local Connies and Tories attacked in the most vicious , personal way possible. He's laughing his backside off right now watching it all happen again, to someone else.

Meanwhile, even the Sun chain has to report on the mounting criticism of the Conservative budget. Apparently, the budget's been getting criticism in Alberta, as well, according to the Globe.

And from the Chronicle Herald, a column on the possibility Elizabeth May might actually beat Peter Mackay, DDS, the current foreign affairs minister, literally and possibly in more ways than one.

20 March 2007

Equalization criticism grows

1. From the Toronto Star, a Canadian Press story by Joan Bryden on growing criticism of the federal government's Equalization and fiscal imbalance announcements on Monday.

2. Another Canadian Press story from Halifax focussing on reaction in Atlantic Canada.

3. Federal finance minister Jim Flaherty, right, rolls back the rim to see if he won at a Tim Hortons in Whitby Ontario. [Photo: Canadian Press/Adrian Wyld]

That cup is a bit too clean, it seems.

4. From Radio Canada, an interview with Jean Charest in which Charest displays great confidence in his election success and recites his record of success on behalf of his province. His tax cut on the heels of the federal budget could cause considerable resentment in the rest of the country.

5. From Presse Canadienne, another story on Charest's reaction to the budget [Photo, left: Reuters]:
"Ce système (fédéral) est suffisamment flexible pour changer et s'adapter à nos besoins. Nous avons des résultats si nous faisons connaître les buts qu'on veut atteindre et qu'on agit avec détermination", a déclaré lundi soir M. Charest, alors qu'il commentait le budget fédéral devant les journalistes.
Rough translation: "The federal system is sufficiently flexible to change and adapt to our needs...We will have results if we know the goals we want to attain and act with determination..."

The stuff you come across

1. NTV's Toni Marie Wiseman, via youtube.com and one of her many fans.

2. NTV's Glen Carter in another incarnation. This one is a perpetual Bond Papers favourite.


3. Three Labour Party spots from the 2005 United Kingdom general election. The first is a party election broadcast demonstrating superb messaging and editing. The bloody thing is out of focus but try and ignore that - if you can - to get the feel for what was done in this longer piece.

The second is a devastating spot from Wales, attacking the Conservative Party using, among other things, the juxtaposition of images to support the text on the screen. Lesson One: Learn the bloody national anthem.

The last is a rather odd spot that runs over two minutes and likens politics to a relationship. There are plenty of inside jokes here, particularly the caricatures of British Conservative party supporters.



Flip this around and you get the way Ontarians felt the morning after electing Bob Rae.

Surreal life: Canadian politics edition

1. Newfoundland and Labrador Progressive Conservative Premier Danny Williams argues that he is entitled to his entitlements.

2. Quebec Liberal Premier Jean Charest takes an Equalization windfall from a Conservative government in Ottawa and uses it to cut income taxes in his province. As Paul Wells notes, so much for the argument about fiscal imbalance.

3. Meanwhile, the federal Conservative government expands the nanny state.

Betraying our own potential

Danny Williams is angry with Stephen Harper. Williams sees Harper not living up to a commitment, of "betraying" Newfoundland and Labrador.

Fair enough.

While his latest news release doesn't put a dollar value on the loss to this province, in the past he's said the province will receive $200 million less under the proposed Equalization changes each year compared with what it would be receiving. The cap on transfer payments included in the new Equalization formula is the key to Williams' ire since it supposedly limits how much money the provincial government can get.

The larger problem here is not a prime minister who says one thing before an election and then does something else later on once he's in office. That happens, sometimes for perfidy, sometimes because political and economic circumstances demand it.

The larger problem is that our provincial government - since at least 2001 - has become obsessed with maximizing federal hand-outs to our poor province, as the common description would put it.

Look at it another way.

Danny Williams is upset at the supposed loss of about $400 per capita per year. $200 million works out to be $400 for every person in our province of roughly 500,000 people.

Yes, there are numbers and math involved, but it is actually very simple to follow the logic.

The Hebron development was pegged by economist Wade Locke as offering $10 billion of revenue for the provincial government over the 20 year lifespan of the project. He gave a range of $8 billion to $10 billion, but for our purposes let's take the larger number. Let's allow for developing the whole thing as opposed to just one of the fields.

That works out to $1000 per capita over two decades.

Consider the Hibernia South development and its 300 million barrels of oil, virtually all of which would be extracted when provincial royalties are at 30%, as opposed to the 7% the provincial government currently makes.

If we allow for oil at an average of $45 per barrel over 15 years, that field development works out to bring $540 per capita into provincial coffers.

Put it together and we have almost $1600 per capita in provincial revenues, all of which flows untouched into the provincial bank account to be spent as the provincial government sees fit.

That's four times - that's right, four times - the amount Danny Williams is in a snit over.

That amount doesn't include other developments in the economy, like new mines in Labrador. It doesn't include any other economic development at all. It also doesn't include the spin-off benefits that would come, inevitably, from the new investment coming from a healthy, growing economy. Like renewed interest in exploring for oil offshore Newfoundland and developing gas resources off Labrador.

Success breeds success and moving two large industrial projects forward last year would have branded this province as a place to invest in.

That $1600 per capita would give Newfoundland and Labrador a fiscal capacity on par with Ontario. We might wind up losing Equalization hand-outs by 2012 when the fields would have been fully running, but in the meantime, extra cash - in addition to the $1600 per capita - would have flowed through the Equalization program and through the Atlantic Accord (1985) and the later deal.

Some will object that what is involved in this scenario is converting a non-renewable asset into cash. Once it's gone, it's gone.

Absolutely true.

But that is exactly what Norway and Alberta have done with great success.

Those governments have made a conscious decision to take some of their oil and gas revenues and put the cash in the bank. If that didn't happen, they paid down public debt or built long-term infrastructure. As their economies grew, they were able to do all three, in addition to spending money to provide day-to-day services.

There's no reason Newfoundland and Labrador couldn't do the same thing.

Given the amount of money flowing from those developments, the provincial government could easily devote $400 per capita - 25% of the total - to debt reduction, for example.

After 20 years, the provincial direct debt would be half of what it is right now. As debt reduces, the cost of servicing that debt would reduce, thereby freeing up more cash for infrastructure, savings or whatever else we need to spend the money on.

Success - and some responsible government policy - would breed success. Success and sound policy would turn an asset into other assets.

There's no reason not to follow this scenario, except that provincial politicians of all stripes just don't get the logic. They are trapped in political rhetoric from before Confederation that looks like it works. Actually, it doesn't do anything in the long haul except to ensure that the problems of today remain the problems of the future.

Some will reject this sort of proposition because no one else is saying it. Well, the truth is that many politicians and other opinion leaders are not saying anything even close to it. That doesn't make their version true; it just means they prefer the simplistic rhetoric over simple logic and basic economics.

Others will reject the idea because they don't trust the numbers. It can't be that simple and obvious, they claim. The numbers are real. One recently elected politician questioned Bond Papers' numbers for just that reason. And it that obvious.

Part of the larger problem with the rhetoric coming from this administration and previous administrations of other political stripes is that is focuses on the negative. People start to accept that the people of the province are always hard done by. They see betrayal in everything done by others. They accept that "we cannot sign good deals."

The evidence to the contrary is all around us both in past economic deals like the offshore and Voisey's Bay. It's also found in the private sector in a raft of small and medium sized manufacturing companies. It can be seen easily in a company like Fortis.

The real betrayal here is the betrayal of our own potential that comes from the corrosive messages our own leaders tell us about the state of our province and its future.

We focus on the 25% and ignore the 75%.

We focus on the limitations of the cap if we stay on federal hand-outs and ignore the unlimited potential if we take another path.

All it takes to change is to change our thinking.

We just need to look at the problem another way.

Jim and Danny head-to-head

When is a fight not a fight?

When it's a fight.

Lono hits it on the head

Offal News does another fine job of dissecting the Equalization issue, with a post titled "Williams spits nickels".

Yet this Williams administration would rather fight for more equalisation than make the moves necessary to generate income from the resources we have. Hebron, just as one very small example, has been estimated to provide government revenues of $400-500million per year and thousands of jobs across this province. Out of pique, this government continues to refuse to go back to the negotiating table and to make a deal.

And now Premier Williams expects the rest of this country to subsidize his colossal error in judgment and his failure to close this, or any other, economic development deal. Out of pride, he says.

That's a definition of pride to which I have difficulty subscribing.
Amen, brother.

Amen.

Harper jams Williams

Forget what you heard Jim Flaherty say yesterday about a revised Equalization system that was formula-based and fair and really forget the criticisms the federal Conservatives made of Equalization side deals and caps.

Prime Minister Stephen Harper did all that yesterday.

Overnight, it's been confirmed that Newfoundland and Labrador and Nova Scotia will be getting an Equalization side deal. Both provinces will have the choice of contuing under the old Equalization program - five provinces, 100% resource revenues plus the offshore deals on oil and gas royalties - or opt into a system they have rejected.

Either way, there is a functional limit on how much cash they get through Equalization.

Under the side deal, the cap consists of the limited number of provinces used to calculate the average plus the offshore offsets deals only cover royalties, not all revenues from the source.

Under the new version of Equalization, the cap is explicitly in place.

This approach is mentioned in the background document issued yesterday but until the PM's letter, it wasn't something that leaped out.
To respect the Offshore Accords, Nova Scotia and Newfoundland and Labrador may continue to operate under the previous Equalization system until their existing offshore agreements expire.


Turns out Danny is screwed and blued. The only thing left is to get out the ink and needles.

Harper signals side deal with Williams?

The Prime Minister issued a news release this evening that describes a letter to Premier Danny Williams about the federal budget.

In the release, there is an odd statement:
Newfoundland and Labrador will continue to receive the full benefits provided under its offshore Accord, without a cap, while keeping the Equalization regime it had when it signed those Accords.
The first part of that sentence is fine, since the federal budget does not alter the wording of the bilateral agreement signed in either 1985 or in 2005.

But...

There is no way for Newfoundland and Labrador to keep the Equalization scheme that existed in 2005 without the current federal administration signing a side deal with Newfoundland and Labrador to make it happen or for the federal government to create an Equalization system that works one way for nine provinces and another way for Newfoundland and Labrador.

In other words, Harper's release would have Newfoundland and Labrador's Equalization entitlement calculated under a five province standard with 100% of resource revenues included. The offsets deals then cut in to figure out Equalization without oil revenues but based on a five province standard, not the 10 province one to be used under the Flaherty 2007 budget.

The 2005 agreement specifically states that the provincial Equalization offset will be calculated using the formula in existence at the time, i.e. the year of the Equalization payment, not the year the deal was signed.

Simply put: Harper can't reform Equalization as proposed in today's budget, i.e. create a formula driven system that is fair and equitable to all, and at the same time create what amounts to a side deal with one province.

Most likely answer: someone in the PMO comms office needs a quick lesson in the English language not to mention Equalization.

Outside possibility: Harper is really trying to jam Danny into a corner.

19 March 2007

Equalization changes in summary

The federal budget contains few, if any, surprises when it comes to dealing with the so-called fiscal imbalance.

The Flaherty budget will make the following changes to Equalization:

- Reintroduce a formula based on all 10 provinces. That will have the effect of raising the amount of money in the system overall. The current system, in place since 1982 uses five provinces to determine the standard.

- Reduce the formula from 33 bases to a mere five. That will make the system much easier to figure out.

- Exclude 50% of resource revenues from the calculations. That's not what Harper promised for two elections in a row but it is exactly what an expert panel recommended. Right now 100% of all resource revenues are included in calculating Equalization entitlements. That's the system Danny Williams wanted to continue when he wrote his letter to the federal party leaders during the last election.

- Provinces can opt to take whichever is greater of the 50% exclusion or the 100% exclusion of non-renewable revenues only. Again, that isn't what they promised but that option is specifically designed to deal with Nova Scotia and Newfoundland and Labrador. Note the last sentence in the paragraph below. It is clearly designed to have the provinces opt into Equalization and abandon the offshore deals.
Fulfilling the Commitment to Respect the Offshore Accords

To respect the Offshore Accords, Nova Scotia and Newfoundland and Labrador may continue to operate under the previous Equalization system until their existing offshore agreements expire. This fulfills and builds upon the Government’s commitment to respect the Offshore Accords and ensures that these provinces will continue to receive the full benefit that they are entitled to under the previous system. These provinces can permanently opt into the new Equalization system at any point in the future. [Emphasis added]
- Cap transfers such that no province can have a fiscal capacity in excess of Ontario. Equalization is intended to give all provinces in the country comparable fiscal capacity and thereby ensure that all Canadians have access to similar levels of service no matter where they live. One of the complaints from non-recipient provinces has been that the combination of federal transfers can actually produce a situation where recipient provinces - like Newfoundland and Labrador - have a greater capacity than most non-recipient provinces.

The combination of all federal transfers - Equalization, health, post-secondary, social transfer and infrastructure - will give Newfoundland and Labrador about $1.5 billion in federal transfers over four years. Specifically, the amounts are as follows:

2005: $1.554 billion
2006: $1.453 billion
2007: $1.529 billion
2008: $1.554 billion

Links for Liam

Just for the resident anti-Castro crusader, some links to live by.

Or live for, since apparently anything vaguely positive about Cuba induces a form of apoplexy seen only in Cuban immigrants in Dade county.

1. Granma, official organ of the Cuban communist party. Keep up to date on the latest news from Cuba. Perfect gift for the rant-inclined.

2. Che lives! A website devoted to all things Ernesto.

3. Some facts on Canada-Cuba cooperation. From the Government of Canada. The one currently run by Liam's favourite national party. Your humble e-scribbler never knew the name of the cow praised by Granma and The Muse in 1982. Until now, that is.

4. A 1998 news release from the provincial government heralding economic ties between Newfoundland and Cuba. Undoubtedly, proof of the Liberal plot.

5. Waiting for Fidel. The landmark 1974 laugh riot starring Joe Smallwood, Fidel Castro and Erich Honecker, right, and introducing starlet Geoff Sterling in his first big screen role.

Cuba-Ireland connections? Let's leave those for another time. There are so many they need a post of their own.