The future of rural Newfoundland

Craig Westcott's latest commentary for CBC radio [ram file] and Merv Wiseman's reaction. [ram file].

Westcott was his usual bold self. He called for government to stop paying lip service to problems, to stop "conning people" into believing that some bureaucratic plan built on a theatre festival will save things.

He notes that the salvation of rural Newfoundland would be creating a pool of skilled workers. Out of those educated young people will come the source of new ideas or people who can change and adapt more readily than their forebears.

Wiseman is an excellent proponent of the reactionary approach, rooted in the old rural development movement that infiltrated the economic development boards and turned them, in too many cases, from producers of results based on local opportunities to producers of government grant applications for further studies into the magical properties of another blueberry festival or golf course.

Wiseman essentially spouts buzzwords like innovation as if throwing up a few whalebones and calling it a museum actually gets at the core of the issue. He misses entirely the educational and demographic challenges that are already here in many parts of the province.

A clue to his headspace? Wiseman refers to the consequences of Newfoundland dieing, not rural Newfoundland but Newfoundland, as if what was in the mythical idyllic past is all that ever was and ever can be.

His major thrust was that Westcott was being too negative. That's it. Too negative. As if smiling and denying would suffice for anything except convincing people that you were in need of therapy.

There was nothing in Wiseman's comments to deal with the substance of the issue, namely the changes that will come - some inevitably - in the mythical entity Wiseman and Westcott call rural Newfoundland.

At least Westcott did that with his comments on education. Rather than seeking to hang on to as much of what was and is, Westcott talked about the simple foundation for adaptability. He pointed correctly to the value of education in building successful economies - and societies - in a host of places from Iceland to Asia.

Education was a key idea component in development ideas 15 years ago. More scholar for the dollar, as then education minister Phil Warren called it. Education reform in the early 1990s was about giving our young people the tools they need to build their own lives and with that their province and the future.

By the late 1990s though, and continuing today, education decisions were often about keeping schools in communities with fewer an fewer children as a symbol of the community's future. Keeping more and more teachers teaching fewer and fewer children with resource spread around such that the overall quality of education stayed about the same.

More dollar. Less scholar.

And Merv Wiseman? Well, he never really had any concrete, positive actions to show what is going on.

If they are out there and Wiseman had talked about them, he'd have been far more convincing than accusing Westcott of patronizing people.

Patronizing them is what the old rural development crowd do all the time with their talk. And if that's all they have, then Newfoundland and Labrador generally, not just the rural bits, is doomed.

Facts do matter

Except to this man, apparently.

From federal finance minister Jim Flaherty's latest Equalization news release:

To do so [not to alter two federal-provincial agreements unilaterally] would give Newfoundland and Labrador access to Equalization payments above all the other Equalization provinces even though its fiscal capacity is higher than Ontario's and British Columbia's, which receive no Equalization payments.

If Newfoundland and Labrador's own-source fiscal capacity exceeds the national standard for Equalization, then the province doesn't qualify for either Equalization or for Equalization offsets contained in the 2005 agreement between Prime Minister Paul Martin and Premier Danny Williams:

5. If in any fiscal year in the period 2006-07 to 2011-12 the province does not qualify for receipt of an Equalization payment, no additional offset payment in respect of clause 4 will be made for that fiscal year beyond the payment specified in the existing Atlantic Accord.

The federal Equalization formula currently used and the O'Brien formula contained in Flaherty's 2007 budget set the standard used to determine if a province qualifies for Equalization.

That standard in both cases is below the fiscal capacity of Ontario (the lowest non-recipient province) by several hundred dollars per person.

Yes, facts do matter, Jim.

They just don't matter to the current federal administration.

Obviously.

That was then. This is now.

Then, federal foreign affairs minister Peter MacKay said:

"It is important to note that if Nova Scotia opts for the new system, it doesn't have to give up its Accord–in fact, the Accord will be fully respected and continue to provide benefits to Nova Scotia," said Minister MacKay. The Accord provided Nova Scotia with $830 million immediately upon signing.

Then - a mere few days ago - federal fish minister Loyola Hearn told reporters much the same thing:

Hearn insists the Atlantic Accord, which the province and Nova Scotia negotiated with the former Liberal government in 2005, is safe.

"Are we going to get screwed? The answer is no, we're not," Hearn told reporters Friday.

"Are we going to be disadvantaged … by a billion dollars or by a dollar? The answer to that is no, because the government of Canada committed that we would not be disadvantaged."

Then, Prime Minister Stephen Harper told the House of Commons:

"The Premier of Newfoundland and Labrador asked repeatedly that this government reject the recommendation of the O'Brien commission that would have put a cap on the equalization benefits of the Atlantic accord," Harper said to the House.

"The Atlantic Accord is preserved in this budget and is preserved due to the good work of the minister of fisheries and oceans and of course other members of our Newfoundland and Labrador caucus. Promise made and promise kept."

Now, finance minister Jim Flaherty admits that his budget caps Equalization offset payments in both the 1985 Atlantic Accord and a supplementary deal in 2005:

The province will also have the right to opt permanently into the new, improved, Canada-wide Equalization system. This choice provides the province with flexibility for the future and improves Newfoundland and Labrador's chance of qualifying for an extension beyond the existing system. If the province chooses the new Equalization system, it is only fair that the whole package would apply, including the fiscal capacity cap, to ensure fairness. In this case, it would not be just to other provinces if only Newfoundland and Labrador is allowed to double-dip or cherry-pick only those parts of the new Equalization program that will benefit the province.

To do so would give Newfoundland and Labrador access to Equalization payments above all the other Equalization provinces even though its fiscal capacity is higher than Ontario's and British Columbia's, which receive no Equalization payments. [Emphasis added]

To apply the cap, the Government of Canada is unilaterally amending both the 1985 Atlantic Accord signed by Prime Minister Brian Mulroney and Premier Brian Peckford and the 2005 deal between Prime Minister Paul Martin and Premier Danny Williams.

Forget a broken election promise.

Harper and his cabinet can't even stick to the same commitment over the course of four weeks.

To see the full impact of this latest revelation, compare Wade Locke's original analysis and the one based on capping what they said wasn't capped.

If the provincial government had waited until the evidence was amassed, the impact of this Conservative perfidy would hav been plain for all to see.

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Connies write off three NL ridings

A news release like this one virtually guarantees the seven seats in Newfoundland and Labrador will represented by someone other than a Conservative after the next federal election.

It confirms that federal government will be altering the 1985 and 2005 offshore agreements if and when the Newfoundland and Labrador government adopts the new Equalization program, something they never mentioned until caught at it last week.

How many times have the federal Conservatives said there were or would be no caps on the Atlantic Accord?

Surprise.

It isn't a cap.

It's a hood.

Around Bond Papers, we've been callin' 'em Connies for a couple of years.

Seems they are Connies.

Trying to con people into giving them votes.

Danny Williams must be especially rotted, seeing as he threw his lot in with these guys, even though it was painfully obvious at the time what the result would be.

Danny Williams even attributed things to Harper that Harper never even said, all in an effort to get Harper a few seats.

Wow.

That's gotta hurt.

-30-

Update: Among the others like Danny Williams smarting at the latest Harper political shaft must be the local talk show maven who sometimes calls herself Hydroqueen.

She spent a lot of time shilling for Steve Harper and his local candidates during the last federal election.

She even invented bizarre political theories to bolster her argument. Hydroqueen was wrong in the theory and, as it turns out, in the practice as well.

Maybe we need to start a special Homer Simpson gallery of people who backed Harper in 2005, lambasted any Liberal in sight on a purely partisan basis, and who today are feeling just a wee bit used.

Update Update: Yet another person who fell for the Connie job. Well, "fell" doesn't accurately describe someone who actually reworked reality in an effort to back his cause, but let's be generous.

NL town suffers second major landslide

The first was last fall.

The second was this past weekend and it continues on Monday.

Odd that only last month, the provincial government stopped paying assistance to people thrown out of their homes by the last emergency. The province also refused any financial assistance to people who could not return to their homes because of safety concerns.

Lucky for them, their houses have now fallen into the ocean.

Jack Byrne, the provincial municipal affairs minister, is now talking about getting the feds to compensate the homeowners.

Goodale calls Harper move "betrayal" of NL and NS

From Canadian Press.

"The worst betrayal of all was the barefaced failure to tell the truth on the issue of equalization and the Atlantic accord," he told Liberal MP Geoff Regan's nomination meeting.

Vote early. Vote often

Angus Reid's on-line survey.

Sign up.

Get to vote on questions like "Is Andy Wells doing a good job as mayor?".

Watch the results currently answering that question in the negative, 55% to 45%.

Mario Dumont: a constitutional fantasyland

From ctv.ca:

Quebec's new Opposition leader says he's ready to begin major talks that would facilitate the signing of the 1982 Canadian Constitution.

Is Quebec now in some sort of constitutional limbo?

M. Dumont peddles the same old fantasies that others have tried before. It would seem his version of something he calls autonomism is just the same old stuff we have heard before the Parti Quebecois and others.

Perhaps we should call it automatonism since that is what the federal government would likely be reduced to, a mindless follower of the dictates of one or all the provincial premiers.

And purely for local automatonists, a flashback to Morningside and a 38 minute discussion during the last effort to foist on the country the mythology of Quebec being outside the constitution.

The change Locke found

In Wade Locke's original analysis, he used the assumption that Equalization offsets provided for in the 2005 offshore revenue agreement and enabled by the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act, S.C. 2005, c. 30, c. 85, would continue as originally intended.

Under that Act as it currently stands, the additional offset is calculated based on the difference between what the provincial government received in Equalization under the formula in use at the time.

The Equalization changes contained in the 2007 budget gave the Government of Newfoundland and Labrador an option of which Equalization formula would apply.

However, s.84 of the budget implementation Act (C-52) makes a significant change to the 2005 implementation Act by imposing a definition of the Equalization system in use at the time to mean the O'Brien formula.

84. The definition “fiscal equalization payment” in section 18 of the Act is replaced by
the following:

“fiscal equalization payment” means (a) for the purposes of section 22, the fiscal equalization payment that would be received by the Province for a fiscal year if the amount of that payment were determined in accordance with section 3.2 of the Federal-Provincial Fiscal Arrangements Act, without regard to section 3.4 of that Act; and,

(b) for the purposes of sections 24 to 26, the fiscal equalization payment that would be received by the Province for a fiscal year under Part I of the Federal-Provincial Fiscal Arrangements Act if the Province’s total per capita fiscal capacity were the amount determined by the formula

A + B + (C / F)

where

A, B, C and F have the same meaning as in the definition "total per capita fiscal capacity" in subsection 3.5(1) of that Act.

As a result, even in a year in which the province used the existing Equalization system (100% of resource revenues included), the additional offsets would be reduced since the O'Brien formula already offsets half of resource revenues.

Additionally, the use of the O'Brien formula, which includes a cap on payments, the proposed changes in the budget implementation legislation would change the meaning of s. 22 of the 2005 implementation Act. Under the current meaning of that legislation, no additional offset payment would be received if the provincial government did not receive an Equalization payment.

In the operation of the Equalization system and the offsets agreements as currently in effect, no payment would be paid if the province did not qualify for Equalization. However, under the O'Brien formula, the province may qualify for Equalization, but receive no payment in years where a combination of all revenues (own source plus Equalization plus Equalization offsets) exceeds the per capita fiscal capacity of the lowest non-recipient province.

Given the amendments contained in Bill C-52, Newfoundland and Labrador would actually receive no offsets at all in any year where its Equalization payment were reduced to zero as a result of the O'Brien cap.

There is no obvious reason for making this change. If the federal government wanted to give effect to both the 2005 agreement and the 2007 budget - allowing for choices - Bill C-52 would necessitate only modest changes, if any, to the implementation acts for 1985 Atlantic Accord and the 2005 agreement.

National Poetry month

A few suggestions:

1. The Poems of Ewan McTeagle.

2. Wilfred Owen

3. Celia, Celia, by Adrian Mitchell:

When I am sad and weary
When I think all hope has gone
When I walk along High Holborn
I think of you with nothing on

4. Healy Willan, Canadian composer, organist and devoted limerick afficionado:

There once was a man from East Sheen
Whose musical ear was not keen.
He said, "It is odd,
But I cannot tell 'God
Save the Weasel' from 'Pop! Goes the Queen'"

Soldiering on

An unidentified soldier salutes the remains of two comrades as they are loaded on Canadian Forces aircraft bringing them back to Canada.

The soldier is from an unspecified community in Conception Bay, Newfoundland.

Evolution's bitch

Scientists have discovered similarities between Tyrannosaurus Rex DNA and that of a modern chicken.

From world-dominating predator to a lunch meat for kids all in a few million years.

T. Rex: Darwin's bitch.

Darwin's other bitches?

Guys who fancy themselves the next Mike Holmes just because they saw it on television.

Upping rates better than less for longer

A panel reviewing parental and maternity benefits is recommending that the claim period be extended.

How about just changing the amount paid instead?

Currently parental and maternity benefits under the Employment Insurance program are pegged at the same rate as EI, that is 55% of previous salary.

The panel also recommended changing the rates. Good for them.

That's a simple initiative most parents would readily accept, even if the benefit period remained limited to one year.

Premature gasket-blowing

From Tom Marshall, minister of finance:

The Honourable Tom Marshall, Minister of Finance and President of Treasury Board, today confirmed that the federal government has misled the Provincial Government and the people of Newfoundland and Labrador regarding the true implications of the new equalization program as outlined in its 2007 Budget.

However, as Simon Lono points out at Offal News, there is something odd about Marshall's release in that it provides no provincial government calculations. Indeed, the provincial government has thus far provided not a shred of information or analysis to back its original contentions on Equalization. Ditto for the federal government, represented in this case by federal fish minister Loyola Hearn.

As Offal puts it:

You would think the Hearn would release numbers of his own to defend the federal position. He does not. Instead he's reduced to a weak claim that no province will be harmed.

But does he actually have any real idea whether the province will be harmed? Apparently not.

As for Marshall, he's definitely on the warpath now. And you can expect the Premier to be leading the barbarians at the federal gate as soon as he gets home.

But didn't Marshall already know that Locke's numbers were off in the first place?

Apparently not.

Wade Locke's latest analysis is interesting for two reasons.

First, it suggests that there is an interpretation of eligibility for Equalization offsets which is different from the one used in his original presentation. More will follow on that in a separate post.

Specifically, Locke quotes this section of an e-mail from an unnamed senior federal finance official:

In effect, NL would be eligible to receive Equalization and offsets as long as long its own-source per capita fiscal capacity (including non-resource yields and 100% of resource revenues) is not equal to or greater than the own-source per capita fiscal capacity of the non-receiving province with the lowest per capita fiscal capacity. [Italics in original]

On the face of it, this section does not contradict what appears to be the intention of the 2005 offshore deal or the 2007 federal budget as announced.

What Locke has done here is identified a potential issue. It is far from proven conclusively. As well, the provincial government appears to have blown a gasket before conducting its own review. Tom Marshall stated in a number of interviews that his officials were still seeking clarification on the issue, he had endeavoured to have the issue clarified with his federal counterpart and that provincial justice officials were reviewing the federal legislation. In one interview it appeared that Marshall was entirely unaware of this issue until Locke brought it to his attention sometime before Locke's news release today.

The one thing that can be concluded from this entire episode over the past 24 hours is that federal-provincial relations are at an all time low state. Marshall's inflammatory news release, done with the full approval of the Premier presumably, will not help resolve this matter successfully.

Claiming to be misled is one thing, if you have evidence and can prove it. Flaming the federal government - or anyone, for that matter - without substantive evidence is grossly unprofessional.

Dr. Locke has provided an invaluable public service with his analysis. Would that the politicians acted with the same professionalism he has displayed.

Wade Locke's latest analysis

Wade Locke has graciously provided his latest news release, which is reproduced below in its entirety:

Updated Estimates of Newfoundland and Labrador Treasury Impacts for the Equalization Options Contained in Budget 2007

Table 1: Updated Estimates Based on Accord Eligibility Criterion Contained in the Budget Implementation Act for the Impacts of the Equalization Options on the NL Treasury from the 2007 Federal Budget - 2007/08 to 2019/20

	Status Quo	50% w Cap (original estimate)	50% w Cap (updated estimate)
Period 2007/08 – 2011/12
Oil Revenue	$7.30 B	$7.30 B	$7.30 B
Accord Payments	$2.51 B	$2.37 B	$1.72 B
Equalization	$0.59 B	$0.76 B	$0.76 B
Combined	$10.40 B	$10.43 B	$9.78 B
Period 2012/13 – 2019/20
Oil Revenue	$7.37 B	$7.37 B	$7.37 B
Accord Payments	$0.0 B	$4.96 B	$0.0 B
Equalization	$0.76 B	$0.0 B	$0.35 B
Combined	$8.13 B	$12.33 B	$7.72 B
Period 2007/08 – 2019/20
Oil Revenue	$14.67 B	$14.67 B	$14.67 B
Accord Payments	$2.51 B	$7.34 B	$1.72 B
Equalization	$1.35 B	$0.76 B	$1.11 B
Combined	$18.53 B	$22.76 B	$17.50 B

On Wednesday, April 4, 2007 at 7:00 pm a presentation was given by Dr. Wade Locke in St. John’s on the estimated impacts for the Newfoundland and Labrador treasury of the equalization options specified in Budget 2007 (Government of Canada). The purpose of this presentation was to provide an objective and unbiased assessment of the net revenue impacts (oil revenue, equalization payments and payments under the Atlantic Accords) for the Newfoundland and Labrador treasury. As well, it is important to appreciate that the intent of the presentation was to provide some clarity to a complicated issue and to facilitate a more focused and informed debate. Moreover, there was a conscious effort in the presentation, and since, to stay away from the politics of this sensitive issue and deal only with the numbers in a professional manner. Although I will continue to do deal with this in a professional, non-political manner, it is my intention that after explaining the contents of this press release to interested individuals, I will have nothing else to say on this particular issue nor will I be undertaking further analysis in this specific area. I will leave it to federal and provincial officials to inform the public.

Given the sensitivity and the emotion surrounding this particular issue, I feel it is important to document how things have evolved to this point. This should enable others to judge the credibility of the approach and the results derived there from.

In any empirical assessment, it is necessary to make assumptions about how elements of each province’s fiscal capacity are expected to evolve over time. The assumptions used in the Locke analysis are clearly specified in the original presentation and interested individuals are referred to www.arts.mun.ca/arts to view the original presentation. While different assumptions will yield different specific results, they are unlikely to change the basic finding listed in Table 1. However, I would encourage both officials in Finance Canada and the Department of Finance, Government of Newfoundland and Labrador to present their own simulations to test the robustness of the results presented above. If this provides more credible information that is appropriately explained and independently vetted, then the public should be in a better position to understand the specific impacts of each of the options on Newfoundland and Labrador. I would encourage both parties to release their own analyses and expose them to public scrutiny as I have done.

The crucial assumption utilized in the original presentation was the eligibility criterion for payments under the Atlantic Accord. Specifically, the original analysis assumed that, under the 50% option, Newfoundland and Labrador qualified for Accord payments so long as it qualified for equalization before the equalization cap was imposed. This assumption was based on the fact that it seemed reasonable to assume that pre-cap equalization was the eligibility criterion because pre-cap equalization was used to calculate the value of the Accord payments. But, more importantly, before finalizing my analysis, I consulted with provincial government officials who confirmed that the pre-cap equalization eligibility criterion was their assumption as well. In addition, I sent emails to two separate officials in Finance Canada on April 1, 2007 requesting clarification on the eligibility criterion to be used for the Accord. Based on the responses that I received from those officials on April 2, 2007, I finalized my assumption about the pre-cap equalization eligibility criterion. In particular, my reading of those emails in the context of the questions asked was that the pre-cap equalization was the appropriate criterion to employ in judging Newfoundland and Labrador’s eligibility for payments under the Atlantic Accord. Without attribution, I have reproduced both the questions and the responses to the emails to allow others to judge the reasonableness of my assumption on eligibility.

The specific questions asked and the responses received were:

Question #1: In calculating the accord under the new arrangement, is it the case that NL receives the accord if it qualifies for equalization on the new arrangement prior to the cap being imposed? In other words, while the cap can remove all equalization payments, but before that happens, the province could qualify to receive equalization pre-cap and as such be eligible to receive the accord. Is that correct?

Response #1: Your assumption is correct; it is the pre-cap equalization amounts that are used in the Accord calculations.

Question #2: In calculating the accord under the new arrangement, it is my interpretation that the province is entitled to receive the accord so long as it qualifies for equalization before the cap is imposed, rather than after. Is that correct?

Response #2: The legislation before the House proposes that under the new arrangement, the test for determining whether or not NL qualifies for the 2005 Accord is whether or not it would receive Equalization payments under the base O’Brien formula – that is, 50% inclusion of resources plus the cap. If it receives EQ under that formula, then the next steps are taken to determine how much. In this case, the offsets are determined before the cap is applied.

On the afternoon of the presentation, at approximately 2:00 pm, I was contacted by telephone by officials from Finance Canada to explain that the eligibility criterion for the Atlantic Accord that was contained the Budget Implementation Act, 2007 was not pre-cap equalization as I had assumed in my presentation. As it turned out, the Budget Implementation Act, which contained relevant legislation on the eligibility criterion for the Accord, was tabled approximately one week prior to my presentation. As explained in a follow-up email at 4:40 pm on Wednesday afternoon, government policy, as outlined in the Budget Implementation Act, specified an eligibility criterion that was different than the pre-cap equalization criterion that was assumed in my presentation. The specific criterion that was identified in that email was:

In effect, NL would be eligible to receive Equalization and offsets as long as long its own-source per capita fiscal capacity (including non-resource yields and 100% of resource revenues) is not equal to or greater than the own-source per capita fiscal capacity of the non-receiving province with the lowest per capita fiscal capacity.

At that point, I had asked for the specific legislation so that I could review it myself. I received it the next day after my presentation and reviewed it on Easter weekend. However, between 4:40 pm (the time of the email) and 7:00 pm (the scheduled start of the presentation) it was impossible to re-analyze the data with the alternate eligibility assumption. Instead, I modified the original presentation to flag the crucial assumption about Accord eligibility. I, as well, indicated in the presentation that if the eligibility assumption was changed, then the estimates under the 50% option would have to be modified, not realizing the extent of the change that would be required.

After reviewing the legislation, it was clear that a new analysis was needed. This was completed on the weekend and sent with an accompanying email to Finance Canada officials on Monday at 5:00 pm NL time and followed-up on Wednesday with a conference call. It was in that call that all remaining technical issues were addressed as Finance Canada officials explained in great detail how the legislation worked. This enabled me to finalize the revised analysis on Thursday for release on Friday, April 12, 2007.

As is clear from Table 1, the impact on net revenues flowing to the provincial treasury, if the 50% option is invoked immediately, is $17.5 B. This is reduced from the $22.8 B estimated previously. The primary reason for the reduction in the estimated impact is that the Accord eligibility standard outlined in the Budget Implementation Act is more stringent than the pre-cap-equalization criterion utilized in the original analysis.

-30-

Economics: the dismal science

Wade Locke has adjusted his assumptions.

Now he says that what was originally a big gain for the province is in fact a loss.

Yes, the 50% exclusion now goes from being a six billion dollar gain for Newfoundland and Labrador over the status quo becomes a one billion net loss.

That's with a change in the assumptions, or more specifically, as CBC's David Cochrane described it, a reading of the budget implementation legislation. He referred to a "stricter" interpretation of what it would take for the province to qualify for Equalization in the future and there
fore how the offshore offsets deals would be affected.

Some quickie observations, before getting Locke's revised views:

1. Economics is a dismal science. After all, if adjusting some assumptions produces a variation of $7.0 billion - your entire Equalization and offsets work, incidentally - then you have some basic problems. Makes you wonder what it would take to have the Danny Williams option turn into a pig.

2. For all the big numbers, remove $14.7 billion. Locke includes offshore revenue in each of projections, for some inexplicable reason. Lop out that specific figure and you'll see the specific effects of Equalization changes and the offsets. That is assuming that Locke's assumptions on any given point are valid. That's not a sarcastic comment; it's a caveat.

3. The cap in the original 2005 deal obviously exists in one way or another. No matter how you look at it the cap built into the original deals - qualifying for Equalization or not - is still active. The real question Locke seems to be grappling with is when that cap cuts in.

4. Yes, there is a cap in the original deal. The offsets only flow as long as the province qualifies for the Equalization hand-out.

And for the record both for Mainland readers and the locals, Danny Williams' original goal in 2004 - not the one he settled for in January 2005 - was for a doubling of oil and gas revenues in perpetuity.

5. The original 2005 deal did not deliver as promised. Said it before. Say it again.

6. Wade Locke still hasn't assessed the other Harper option that still exists, i.e. 100% exclusion of non-renewables with a cap. Too bad Locke is apparently hauling ass out of the debate now that he's stirred it up. Maybe he got some angry phone calls from Florida or wherever the Premier is.

To be complete though, Locke should have assessed that variation since it is on the table.

And if 100% exclusion of non-renewables is such a good idea, then maybe applying the cap is better than what we have now.

At least according to the latest numbers, based on the latest assumptions.

7. Danny Williams had numbers like the ones Locke released initially. On March 26, Danny told CBC radio's Jeff Gilhooley that in all likelihood the province would shift to the 50% exclusion option within a year or two, i.e. by 2009, based on the government's analysis.

When is a promise not a promise?

Well, according to the man at right, it all depends on who makes the promise.





When this man (left) - call him The Boss - makes a pledge, in writing no less, and on several occasions to reporters, it really shouldn't be taken at face value.

The Boss may be a lawyer and the legal issues involved - including longstanding provincial government policy - may be well known, but well, even if he says absolutely "I will do it", that really isn't something you can take to the bank.

And even in making the explanation that the promise made by The Boss really isn't a promise, the guy doing the Noddy impersonation manages to trip himself up.

The Boss did do a deal on trees, Noddy says. But he can't do what he appears to have committed to do in that typewritten thing that appears to contain a promise but in reality contains nothing at all.

Because somehow making a deal - entirely within provincial jurisdiction - on animals would somehow magically involve the federal government making a decision but at the same time making a deal on trees, also entirely within provincial jurisdiction, can somehow be done without involving people other than The Boss and his associate, Noddy.

Confused?

So is Noddy.

Obviously.

At least, Stephen Harper did something half-decent in place of what he promised.

The Boss hasn't even tried.

Excuses from a guy in a funny hat don't count.

From the Secret Nation

Video of a meeting of the Popular People's Front for the Defence of Newfoundland. Labrador,(Officials):

Names of latest fatalities released

The Canadian Forces has released the names of two Canadian soldiers killed in Afghanistan:

OTTAWA – The names of the two Canadian soldiers killed by a roadside bomb in Afghanistan on April 11, 2007 are as follows:

Master Corporal Allan Stewart, The Royal Canadian Dragoons, based in Petawawa, Ont.; and,

Trooper Patrick James Pentland, The Royal Canadian Dragoons, based in Petawawa, Ont.

These two soldiers were killed and two others were injured, one seriously, when a roadside bomb exploded near their vehicle earlier today. The incident occurred shortly before 8 p.m. Kandahar time, approximately 38 km west of Kandahar City. The soldiers had been assisting another vehicle that had been struck by a roadside bomb earlier in the day, one soldier suffered only minor injuries in this earlier attack.

This brings to eight the number of soldiers killed in the past four days by improvised explosive devices (IEDs). According to some news reports, there has been a noticeable increase in the number of IEDs.

"Starting about a week ago we have been finding IEDs on all the roads around here pretty much every single day," said Maj. Steve Graham of the Royal Canadian Dragoons.

"The fact there has been a spike of IEDs tells me that the places we are going and things we have been doing are starting to hit closer to the areas the Taliban have been working in."

Roadside bombs, random rocket attacks and suicide bombers are the main dangers Canadian troops face so far this year in their efforts to bring security to Kandahar province.

The job of finding and disposing of IEDs is dangerous as this story from the Globe attests.

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How much is enough? Part Two

St. John's mayor Andy Wells backs Premier Danny Williams unequivocally on whatever policies Williams espouses.

No surprise there, since Williams gave Wells the best part-time job he'll ever have.

Of course, Wells can't explain the Williams policies any better than the Premier can himself.

To wit:

Wells says a seat at the owners' table of major offshore projects is the only way to get an inside view of the industry.

"It's important that we have a presence at the table when the big decisions are being made."

Under the Atlantic Accord (1985), the Government of Newfoundland and Labrador has all the rights of the resource owner to set royalties and to approve or disapprove of projects.

The Government of Newfoundland and Labrador already has a seat at the table when the big decisions get made.

In fact, as the provincial government has demonstrated at Hebron and Hibernia South, there isn't anyone else sitting at the table.

Nobody else is even in the room.

That's because, under the 1985 Atlantic Accord, the provincial government sets royalties for the offshore. If it doesn't get the deal it wants, there's no project.

Similarly, as in Hibernia South, the government can simply sit back and veto a project, despite having failed to exercise any diligence in collecting information before a decision was required.

What is Mr. Wells talking about? He evidently doesn't know and therefore no one else can figure it out either.

"You've got to fundamentally establish your right to a reasonable measure of control over the industry. I want to see a situation where we do have the information and we do have the presence and we do have the right - that's what this is fundamentally all about."

Mr. Wells really does need to read the 1985 Accord, perhaps for the first time. He certainly needs to listen to the briefings offered up to board members at the offshore regulatory board.

The Accord establishes that the provincial government already has extensive control over the offshore. Some might even call it unreasonable control given that the provincial government can apparently neglect its responsibilities for over a year on Hibernia South and then simply veto the project on the flimsiest of excuses.

As for information, Mr. Wells could easily consult with the Newfoundlanders and Labradorians at the offshore board. They already know far more than Mr. Wells or his advisors could know about any aspect of the industry.

What's Mr. Wells talking about? It isn't clear again that even he knows.

"I consider it fundamental that this issue of equity - the 4.9 per cent - be satisfactorily addressed. I don't understand the companies' reluctance with respect to this issue, particularly considering the premier's not asking for it for free."

If Mr. Wells does not understand the position taken by the oil companies perhaps he might take some time to enlighten himself on the matter. It has been well-covered in the news media and company officials are quite willing to make their position known.

Bond Papers has discussed it extensively. It centres on a simple matter of conflict of interest.

But, let us assume that the cost of the thing was an issue.

The so-called equity position was described by the premier as having a total net value to the provincial treasury of a mere $1.5 billion over the 20 year anticipated lifespan of the project. Put that against the estimated provincial revenues of $10 billion.

The premier also said that the tax concessions sought by the companies had a total cost to the treasury of $400 million. Total. Not annual. Total.

The premier said this amount negated the value of the rest of the deal.

Aside from the problems with math evident in the premier's comments - $400 million is less than $1.5 billion - it is difficult to imagine how that sum could obliterate all the benefits of having what Mr. Wells describes as a seat at the table where the big decisions are made, of having information and a "reasonable" level of control.

Leaving even all that aside, though, perhaps Mr. Wells could explain to us how much the Premier offered to pay and how he proposed to pay for it, given that the provincial treasury is stretched a bit thin.

What is Mr. Wells talking about here? Again, one suspects that even he doesn't know.

If - by some chance - he does, then perhaps Mr. Wells would be good enough to enlighten the rest of us.

Otherwise, all we have in this Telegram story is another example of Mr. Wells saying one thing now, when he said something different before.

When the provincial government moved taxpayers out of his jurisdiction to other parts of the province, Mr. Wells thought the idea silly. The prospect of fat federal job s being transferred to his jurisdiction last year had him signing a different tune.

In 1997, six months engineering work was a monumental loss to the province. Now, the loss of innumerable high-paid jobs and the larger value of continuity resulting from the Hebron and Hibernia South projects, is simply the short-term pain for some undefined long-term gain.

What we actually have here is most likely the pain - short- and long-term from Williams' decisions and the equally large pain of Wells' vague comments.

-30-

An abuse of public money

Hiring a separatist to handle a dirty little partisan job speaks volumes about the administration that set up the latest witch-hunt.

This matter has been investigated thoroughly by an impartial and competent official.

What was announced today is an abuse of public funds.

Update: The federal public works minister apparently picked Daniel Paille from a list he drew up of people he considered qualified.

Qualified to do what, exactly, aside from do a dirty little job at public expense?

No competition.

Imagine.

Update Update: And just when it couldn't get worse for M. O'Brien and les autres Harperites - Paul Wells.

-30-

This just in...

Stronach's leaving politics.

In her statement today, Stronach reportedly said "I first met Liam O'Brien when I entered politics and he was a wannabe Louis Tully. I wasn't impressed then and I have grown less impressed over time. "

For his part, O'Brien just demonstrates yet again the ethically bankrupt - let alone sexist - nature of political commentary in some quarters.

Yep.

You guessed it.

He calls her a whore.

Incidentally, there's a comments section, in case you are in the mood.

The word you are thinking of has an "r" as the second letter.

QC or NL? Another one

In all important aspects of national politics, guile, compromise and a subtle kind of blackmail decided their course and determined their alliances. They appeared to discount all political or social ideologies, save nationalism. For the mass of the people the words Tory and Grit, Conservative and Liberal, referred neither to political ideologies nor to administrative techniques. They were regarded only as meaningless labels, affixed to alternatives whicb permitted the auctioneering of one's support; they had no more meaning than bleu or rouge, which eventually replaced them in popular speech. [They] on the whole never voted for political or economic ideologies, but only for the man or group which stood for their ethnic rights...

In such a mental climate, sound democratic politics could hardly be expected to prevail, even in strictly provincial or local affairs where racial issues were not involved....

Pierre Eliot Trudeau, "Some obstacles to democracy in Quebec",
in Federalism and the French Canadians, Toronto: Macmillan, 1968, p. 107.

Consider that description of Quebec politics not so very long ago in comparison to this and this.

The entire premise of the famous letters to the federal leaders through two successive federal elections was to determine which of the federal parties was prepared to promise the best deal for this province in exchange for local votes.

Leave aside for a moment that Danny Williams characterization of Stephen Harper's letter in 2006 was not consistent with the letter itself. Just consider that the entire premise of letter - just as with the Premier's comment's on the FPI income trust - was based on the "auctioneering of one's support."

In such a climate, sound democratic politics can hardly be expected to prevail.

Indeed.

-30-

Note to Stephane: Let's find Denis a new job

Denis Coderre needs a new job.

Creating a ghetto for aboriginal soldiers, sailors and airmen/women is not a good idea no matter how Denis tries to doll it up.

Aside from revealing a general ignorance of the Canadian Forces and how it operates, Coderre's suggest demonstrates an appalling ignorance of the diversity of Canada's First Nations people.

Two major gaffes since January suggest that Coderre is as gainfully employed as the guy whose ministry he is shadowing.

-30-

Change versus more of the same: Stronach on competitiveness

From the Tuesday National Post, Belinda Stronach [Photo:belinda.ca] writes

Being competitive globally involves education, job skills, infrastructure, innovation, technology and regulation. It is an integrated package. Competitiveness is the result of a political philosophy that sets the balance between government and the private sector.
...
Competitiveness, jobs and national prosperity need to be the principal ballot questions for the next federal election. Whoever can best ensure our quality of life through economic growth deserves to govern. We have the priorities backwards. Other issues such as government accountability, lowering the GST and same-sex marriage rights are secondary to making Canada competitive for the future. Without that, there won't be money for anything else.

They should be the major ballot questions in Newfoundland and Labrador this October.

Who really cares if a particular politician or party wins all the seats and scores high in the polls?

None of that is about "jobs, jobs, jobs".

Then again, it turned out that the last provincial election wasn't about "jobs, jobs, jobs" either.

It's time for a real change.

-30-

Chevron: Bay area company of the year

From the San Francisco Chronicle.

Chevron is devoting about 39 percent of its exploration and development budget to North America, which includes the gulf as well as projects in Alaska and the waters off Newfoundland. But the company also is betting heavily on offshore oil and gas fields near Angola, Australia and Thailand. About 25 percent of the company's exploration money goes to Africa, 19 percent to Asia and the Pacific.

Those areas all show great promise. They're also open to foreign investment. Much of the world isn't, at least not on terms Chevron and other international oil companies might like. Governments from Venezuela to Newfoundland have become more assertive about the deals they're willing to make with Big Oil, often demanding control over joint ventures and a far higher cut of the profit than they used to. National oil companies, such as Saudi Aramco or the National Iranian Oil Co., control the vast majority of the world's reserves, and they see less reason to seek Chevron's help in developing their resources.

________________________________

There's an interesting Chronicle podcast here.

Note the list of projects where Chevron is interested in developing the short- to medium-term. Gulf of Mexico, Thailand, Tenghiz, Australia, West Africa.

Hebron is not there.

Check the example of bringing a project on stream.

Tahiti, a major field in the Gulf of Mexico. From idea to production: 14 years. From discovery to production: six years.

Compare that to Hebron.

Actually it isn't bad considering that the field became commercially viable in the same time frame. The only thing that knocked Hebron off the rails - the only thing - was the provincial government.

Listen carefully to the discussion of economics of the oil business. More people in Newfoundland and Labrador - especially politicians - need to pay attention.

-30-

Change versus more of the same

While former Liberal cabinet minister Walter Noel does his part to support the victim mythology of Newfoundland nationalism, perhaps he should consider a new approach to economic development and Newfoundland and Labrador's economic place in the world.

Noel's problem appears to be with Newfoundland and Labrador's balance of trade.

He identifies the solution to a general economic problem as being more federal transfer payments. Right problem. Wrong solution.

All that Noel succeeds in doing is demonstrating how the current administration and the one Noel served in are fundamentally the same. Heck, the current administration offers the same answers that have never worked for administration after administration since Confederation.

Like that's worked.

The idea outlined in this op-ed piece from the Toronto Star is increased inter-provincial free trade. In other words, open up the opportunities for Newfoundland and Labrador companies to do business in the rest of Canada. Rather than building barriers, Newfoundland and Labrador needs to open the doors.

Since Confederation, Canadians have been hampered by an inter-provincial distrust of the power of free markets to produce economic and social benefits.

As a result, federalism has evolved into an inefficient system of provincial and municipal enclaves of economic autonomy. Provincial economic independence has created an interprovincial trading system that hampers productivity through barriers that curb the flow of goods and services.

These have impeded Canada's evolution from a middle to a modern power.

Canada cannot hope to compete globally when we have the kind of barriers to internal trade we have now.

There's a similar idea in this study by the Economist Intelligence Unit.

More of the same won't work.

It's time for Newfoundland and Labrador to change.

-30-

Caille as a Conservative candidate: interest and implications

Offal News hits apparently spiked Monday with a post on the possibility that former Hydro Quebec boss Andre Caille will run for the Conservatives in the next federal general election.

This prospect may have implications for Newfoundland and Labrador, as Simon Lono suggests. Some additional clues to the prospective candidacy may come from commentaries such as this one in l'actualite.

If nothing else, Lono has raised a provocative issue based on what appears to have been a passing reference by a noted Quebec journalist.

Laying the ground work for separation, one egg at a time

When he said anybody, Danny literally meant he'd take on anybody not acting in the best interests of Newfoundland and Labrador. [h/t to Offal News]

Headin' down the road, 2007 version

Greg Locke has been blogging his move to Alberta.

Find the latest entry here, which morphs quickly into a discussion about the high percentage of people leaving the province who hold university degrees and other specialized training. The chart, above, is from a slide presentation done in the mid 1990s. Note that university degree-holders have consistently been the largest proportion of migrants from Newfoundland and Labrador since the mid 1970s at least.

The slide was originally presented in this post on outmigration.

How much is enough?

1. Government of Newfoundland and Labrador, own source revenue, 1992: $1.7 billion
Government of Newfoundland and Labrador, own source revenue, 2006: $3.2 billion

2. Government of Canada transfers to Gov NL, 1992: $1.4 billion
Government of Canada transfers to Gov NL, 2006: $1.5 billion

3. Government of Newfoundland and Labrador, per capita expenditure, 1992: $5574
Government of Newfoundland and Labrador, per capita expenditure, 2006: $8675

Note: Population, 1991: 574,000
Population, 2006: 509,000