More on the bulls***

As an astute reader and likely future Queen's Counsel pointed out via e-mail, both the 1985 and 2005 offshore agreements contain clauses that say a pretty simple thing.

If any province gets a better deal on resources or payments covered by the agreements, the Newfoundland and Labrador gets it too.

If Ottawa cuts a new deal with Nova Scotia related to its offshore Accords, then odds are pretty good the same deals would apply here.

It's an interesting idea and if it is correct just gives even more evidence as to why the current racket is purely for the cameras. Steve and Danny appearing to fight while each actually helps out the other.

Not a conspiracy but just hysterically funny if either side was trying to do damage to the other and instead wound up being his best friend.

-SRBP-

coughbullshitcough

This story on Equalization contains two ludicrous premises for the price of one.

Newfoundland Premier Danny Williams says negotiations to give Nova Scotia more time to decide whether it should opt into a new equalization formula may be an attempt by Ottawa to pit the two provinces against each other.

First, it assumes that there is some value for the federal Conservatives in "splitting" Nova Scotia and Newfoundland and Labrador over the Equalization ruckus.

They aren't really together to be split, for one thing.

But really, the comment assumes that Newfoundland and Labrador is so important to the current federal administration that they would actually invest time and energy in developing a "split" strategy. (Danny Williams isn't really that important either. No provincial Premier ever is. But I digress)

They don't need a strategy.

The provinces were already following different tracks on this issue...

Which leads us to the second premise, namely that there is something going on here other than a bit of political theatre for the benefit of the people in Newfoundland and Labrador.

Under the status quo, Newfoundland and Labrador will become a "have" province - i.e. make too much money to qualify for Equalization without any caps - somewhere around 2009.

Nova Scotia?

When's Toronto gonna win the Cup again?

So basically, extending the period of choice for Newfoundland and Labrador wouldn't matter a row of beans.

The provincial government knew generally speaking what was going to happen on Equalization about a year ago when it was first reported publicly.

The Premier knew the 100% option was definitely off the table likely before he laced into Steve Harper last October.

He almost certainly knew what was going on (give or take a few details) last December when Loyola Sullivan came back from a finance minister's meeting and had to attend a news scrum with the Premier standing by his side.

What played out from March onwards has been pure political theatre designed to get people in Newfoundland and Labrador agitated about something 99% of Canadians don't understand.

In the end, the Premier will just do what he planned to do once the feds announced exactly what they were going to do in march: flip from one plan to the other to maximize the cash flows.

There's no way the Prem can lose cash. Under every likely scenario, the provincial government continues to make more. It was only just a matter of how much more. look at the 2005 deal. he settled for way less than he started out looking for. In the end - as he admitted himself - it came down to what the cash advance amount was going to be.

He's a smart guy. That's why he places the angles on the cash and plays the public like a violin.

Why else has he all but given up on the 100% option? He knows it's impossible to get.

Why isn't he looking to get the caps removed from the Accords? That's the part that maximizes the cash to the province. Likely because his administration already consented to amending the 1985 deal and therefore doesn't have a leg to stand on.

There really isn't any other explanation for his using the weak "Steve lied" argument instead of taking down the feds with an iron-clad example of perfidy.

In the end, there'll be some extra cash in the provincial treasury and no one will recall the current racket six months after the last polls close.

Playing to the galleries always works in the theatre of Newfoundland politics. That's why so many politicians do it. Danny Williams just does it better than just about any thespian we've elected to the office.

Sadly, though, treating politics like a sordid little melodrama is why the financial ending is always the same.

-SRBP-

Update: The other part of the political theatre here would be any federal official who actually said this:

One source said Ottawa wants to reward Premier Rodney MacDonald for taking a softer line in the dispute.

The federal government knows the same thing the provincial governments know. What the federal government may well be doing is a bit of theatrics of its own to capitalize on popular discomfort with the 2005 offshore deals. The deals are particularly unpopular in some segments of vote-rich Ontario.

That sort of thing may be what SES Research's Nik Nanos meant by a "reverse Williams" in a comment on an earlier Bond Papers' post. In other words, the federal Conservatives may be counting on Danny Williams to polarize the electorate in key segments and earn them some political support for appearing to stand up to the guy who ripped down Canadian flags and now evokes Quebec sovereignist slogans to bolster his cause.

What some commentators seem to miss is that outside Quebec, sovereignist/nationalist posturing doesn't earn a great deal of support among Canadians. Pulling down flags - a tactic ripped from the Parti Quebecois playbook - doesn't actually engender warm feelings in Canadians. It didn't work in 2004/05 for Newfoundland and Labrador. It likely won't work in the future.

But here's the thing: for the current federal administration, playing the margins is how they think of politics. They don't need big numbers; they just need to pick up a few here and there to win. Danny Williams might just wind up being the best friend Steve Harper has.

Recycling news

The Williams administration announced a $200 million waste management strategy today that will be fully implemented by 2020.

The strategy will establish a waste diversion program, establish waste management regions, develop modern standards and technology, maximize economic and employment opportunities, and assist with a public education program.

Bravo.

On April 10, 2002, then-environment minister Kevin Aylward announced a waste management strategy for the province.

The Provincial Waste Management Strategy is premised on five primary actions: increase waste diversion, establish waste management regions, develop modern standards and technology, maximize the economic and employment opportunities associated with waste management, and public education. The ultimate goal is to have full province-wide modern waste management by 2010, with some components of the strategy to be implemented this year.

Nice to see the provincial government is practicing what it preaches by recycling old news.

Now stop and think about this for a second.

This is exactly the same strategy that was announced over five years ago. In those 60-odd months, the implementation of the plan went from nine years to 13 years.

Rather than implement the plan by 2010, the same plan will now be completely implemented a full decade later.

Stay tuned. Next week, the minister of agriculture will be announcing an innovative plan to grow cucumbers in a large plastic-covered warehouse in Mount Pearl.

To return to a serious note, though, one has to wonder why it took three years for this plan to be completely re-announced. If the former crowd had merely shagged around and done nothing with a perfectly good idea, there's no reason why the new guys taking office in 2003 just didn't get on with it.

They could have spent the last three years hammering the old crowd for their laziness and ineptitude.

Instead, we get this bumpf.

Compare the two releases and look at the amount of material that appears to be cut and pasted. Recycled communications staff from the former administration must be happy they can dig into their old files and breathe new life into stuff they got paid for years ago, only to get paid for it yet again.

It really makes you wonder if that cucumber joke might wind up being closer to reality than we'd dare to believe.

Has Tom Rideout been hunting for Greg Stamp?

-SRBP-

Boisclair pulls pin

From the Gazette.

Then there's the Big Oil thing...

From the Financial Post, another article by Calgary bureau chief Claudia Cattaneo based in part on her recent trip to the province:

Yet what is becoming increasingly obvious is that control of Newfoundland's future is slipping into the hands of Alberta, largely because of Mr. Williams' unrealistic expectations and the market's dispassionate behaviour.

Canada's two top oil-producing economies are developing such a strong symmetry they are becoming either/or situations in a skills-challenged reality, to the point it may take a big downturn in Alberta for Newfoundland to get a shot at benefiting from its offshore riches in the future.

[Paragraphing added for clarity] Three reasons: - Oil is badly needed, but labour and brains to produce it are now needed even more. Newfoundland's people and oil services companies are moving to Alberta in large numbers. The exodus is so large that Newfoundland's business community fears the province no longer has the workforce to build a new project, even if one were announced tomorrow. It also worries it cannot compete with Alberta wages, making any attempt to lure its people back futile.

Cattaneo offers an assessment of the proposed energy plan, based as much as anything else on feedback she got from the local business community and what she is hearing from the oil companies. An equity stake for the provincial government's Hydro corporation, a high level of local investment by oil companies and a super-royalty regime.

She's also comparing the local policy approach to the Alberta one and the contrast is striking:

In addition, the fiscal terms would make Newfoundland uncompetitive with Alberta, where the government has not owned a piece of the oil industry since it sold Alberta Energy Co. (the predecessor of EnCana Corp.) 20 years ago; its royalty rates, while under review, do not escalate with higher commodity prices; and there is no requirement to invest locally, other than a preference by the government to keep as much heavy oil upgrading in the province as possible.

[Paragraphing added for clarity] - Most companies with interests in Newfoundland's offshore now have ambitious oil sands plans. In fact, those plans have escalated since Hebron talks failed, making a return to the East Coast a hard task: ExxonMobil Corp. is a partner in the Kearl Lake project and has taken a larger role in the management of the Syncrude mining consortium; Petro-Canada is priming its Fort Hills project for takeoff in the summer; Chevron Corp. is a partner in the Athabasca Oil Sands Project, which is expanding aggressively; ConocoPhillips has its hands full with a major oilsands partnership with EnCana and interests in two other oilsands projects; Husky Energy Inc. just bought a major refinery in the United States as part of its own oilsands strategy. Even Norsk Hydro, the Norwegian oil company that has been taken over by Statoil ASA, made a big leap in the oilsands two weeks ago when it purchased North American Oil Sands Corp. and now plans to become one of its largest operators.

The energy plan may be released by June. Then again, if past patterns hold, the plan will be pushed off by one or another crisis in government or by another project that is ahead of it in the serial government pipeline.

If Cattaneo's assessment is correct - and local chatter suggests the oil companies have already squawked about the revised royalty regimes - then expect the plan to be pushed off until the fall election.

Then it will become the centrepiece of the Autonomy Campaign. With the controversy it will surely generate, the government Progressive Conservatives will contrast their approach with those they will undoubtedly accuse of caving in to Big Oil and possessing the weakest of weak knees.

The caricature of Hugo Chavez will be readily apparent to those who see it. The Premier will point to his relationship with Husky as evidence he isn't all that bad. maybe he's right, but then again, Husky won't be affected by the energy plan the way other companies - the ones with new projects - would be as they look to invest in offshore oil and gas. Newfoundland and Labrador needs capital to develop the offshore, but that isn't as important as the need for political capital that comes from creating foreign demons that must be fought for the good of the local collective.

All great political theatre.

It just won't matter for the development of a local oil industry.

The energy plan would have then become a tool for politics, not a tool for long-term economic development, just as with virtually every previous administration and every other major economic prospect.

-SRBP-

Another view of The Crusade

From Richard Gwyn in the Toronto Star:

Newfoundland and Labrador Premier Danny Williams has a point in his brawl with Prime Minister Stephen Harper. It's not, though, the one that Williams is making by demanding extra equalization payments for Newfoundland.

Williams is insisting that Harper enact to the last "i" and "t" a promise on equalization payments to Newfoundland he made during the last election.

In fact, Newfoundland is doing fine out of the equalization program as it now stands.

And election promises aren't carved on tablets of stone. Harper, thus, was quite right to break his promise not to tax income trusts.

Instead, the point that Williams is making that touches a nerve has to do with Harper himself.

This point got blurred in Williams' roundhouse attack.

He called Harper "untrustworthy," "shameful," "dishonest," and "opportunistic" – all of which had about them the air of attention-gathering substitutes for his last performance when he pulled down the Maple Leaf flag.

That gimmick worked: Then-prime minister Paul Martin promptly gave Williams everything he wanted.

The point remains: What Williams is saying – when he's not shouting – is that Harper doesn't understand his own country.

And about that he's right.

Quite clearly, Canadians already sense this, and the effect of Williams' diatribe will merely sharpen their perception.

Like all columnists, Gwyn gets a certain by if he reinvents some details to make his point. The flag thing for example. Gwyn's perception is his perception but there is no sign the flag flap did anything but undermine Newfoundland and Labrador's position.

Compare what the Premier went looking for and what he settled for and you'll see the point.

Nonetheless, Gwyn offers food for thought.

-SRBP-

The King of Specious Reasoning

Specious.

Specious Reasoning.

Truth is Clyde Wells would never have made such a dubious appointment in the first place.

He understood fully the need for unquestioned impartiality in the position of Chief Electoral Officer.

Then again, his supporters never wandered around poking people in the chest reminding everyone they now lived in Clyde-stan.

-SRBP-

Federal Connie numbers dip

SES says so and they oughta know.

And guess what?

Danny Williams had no impact on federal Conservative support, regardless of what some mainland pundits say.

It's obvious but it needed to be said.

Afghanistan. Much bigger impact.

But hey, what say we put the question to Nik Nanos, the pollster himself?

-SRBP-

Rio Tinto ripe for takeover

Mining giant Rio Tinto may be ripe for a takeover bid according to an analyst for Citigroup.

The de-rating of Rio Tinto for example, has opened up a value arbitrage and is now "well into leveraged buyout territory," according to Citigroup analyst Heath Jansen.

"Rio stands out as a potential acquisition candidate, either by private equity or the incumbent mining companies," he said in a note to clients.

Rio Tinto stock traded down in Australia despite the speculation.

Unidentified analysts have also speculated that ExxonMobil and Royal Dutch Shell may be possible buyers of the Australian mine operator.

Rio Tinto's North American operations includes Iron Ore Company of Canada in Labrador.

ExxonMobil is the largest operator in the Newfoundland and Labrador offshore oil industry.

-SRBP-

Where are they now?

Alex Archila, former head of Chevron Canada has been running Madagascar Oil since July 2006.

Hebron failure fallout?

Probably not. They likely just wanted to "move it, move it."

Madagascar's oil and gas reserves may be larger than those offshore Newfoundland and Labrador.

-SRBP-

Chevron looking to Singapore for possible expansion

Chevron, one of the largest integrated energy companies in the world, may be looking at plans to further expand its business in Singapore.

-SRBP-

India looks to attract "Big Oil"

While some parts of the world are making it harder for oil companies to explore and develop, India is changing its regulatory policy to attract Big Oil and its capital for investment.

"An open acreage policy will be much more attractive to us as we can choose the time of entering India’s exploration sector, and also choose the blocks we want to explore," a senior Shell official said.

Shell, like British Petroleum, Chevron, Exxon, Petrobras and Total, did not bid for exploration blocks in earlier NELP rounds.

The timing, to offer the auction of exploration blocks in India in June or July, does not suit most oil companies as they have already put in their capital expenditure on exploration into other areas across the world, the Shell official said.

"By July, we have already put in our annual planned expenditure for exploration in projects. That is one of the reasons why we are not able to bid in the auction in India," said an official of British Gas, which won one exploration block in NELP VI, in partnership with ONGC.

Government officials say the launch of the OALP is slated to take place soon. "We are working towards offering the open acreage policy together with NELP VII. However, that would involve lot of work as data for areas across the country have to be collected," an official at the Directorate General of Hydrocarbons said.

-SRBP-

CF in Afghanistan to get new mine protected vehicles

The Canadian Forces will be taking delivery of 10 Buffalo and Coyote mine protected vehicles.

The Buffalo is an engineering vehicle equipped with a remotely controlled arm for inspecting and detonating improvised explosives of the type that killed eight Canadian soldiers in separate incidents over the past two months.

What makes news?

Some people's travel, according to vocm.com.

One thing: the Council of the federation met for one day on Monday, not the whole week as vocm.com's story states.

So what was DW doing with the rest of his week in Toronto?

-SRBP-

More fibre math

Ok.

How much is this fibre optic thing worth?

The proponents and the provincial innovation minister have referred to $82 million.

The deal announced last fall which includes the second link across the Gulf to Nova Scotia was supposedly worth $52 million. It's also been described as $37 million, but let's take the higher number since it seems to fit.

The only way to get the $82 million figure is to include a federal/provincial initiative announced in 2005 totalling $29.9 which included a total of $10 million split equally between St. John's and Ottawa with Persona tossing in $19.9 million of its own.

Ok. Following so far?

The provincial involvement in the deal last fall was pegged at $15 million.

Add to that the $5.0 million from the earlier project and you get a total of $20 million in provincial cash on a total cost of $82 million.

That gives the provincial involvement of 24% of the cost of the whole schmeer. If you look at the initiative last fall, the provincial government has a 28.8% stake (15/52 = 28.8).

Persona has previously stated that it's commitment in the whole enterprise is about $30 million. (presumably including the $19.9 from the earlier venture).

That puts Persona's involvement in the whole schmeer at 30%. If everything else follows, its share of the $52 million second project appears to be about $10 million, or 19%.

Maybe, just maybe the provincial government would consider providing a simple and straightforward accounting of the whole venture.

At the same time, maybe innovation minister Trevor Taylor would consider making a most obvious argument that so far he has avoided. We can call it innovative if that helps him see the point.

Federal de-regulation of telephone markets may give an unfair advantage to existing dominant players in small markets like Newfoundland and Labrador. Developing new infrastructure to which all potential new competitors can have access (Bell Aliant already owns its own) forestalls the prospect of creating an unfair competitive climate.

It's good for the market as a whole and, if the provincial government can acquire assets for its own emergency purposes in the process, then there is ample justification for a government investment in developing added infrastructure.

Maybe the bleeding obvious - like the s.60 argument for the Equalization racket - doesn't have enough of a fresh-from-the-package smell to attract the attention of people who want everything they've touched to be, well, new.

Sometimes, though, innovation would actually be stating the plainly obvious.

-SRBP-

FPI deal possible, but no quotas for Rideout

After a weekend meeting with the principals, federal fish minister Loyola Hearn is still optimistic a deal can be done.

There just won't be any quotas under the control of the provincial government and Tom Rideout, right.

-SRBP-

On the horns of a nationalist dilemma

Meanwhile, things in Newfoundland cannot be going too well, if columnists not normally given to doubting the Premier find themselves doing just that.

Williams had a genuine desire to lift Newfoundland out of its second-class morass when he was first elected. Having encountered all the usual obstacles along the way, however, he has become increasingly volatile. This is regrettable, since it gives the ever-present gallery of negative nellies ample opportunity to shift focus away from the issues and onto the person.

There are those of us who would contend that the volatile and hostile rhetoric has been present from the outset. As for the personal, well, that's what the man himself chooses to make the focus of everything. Those who have criticised him personally simply fall into the trap of the Premier's own rhetoric, which is calculated to avoid a discussion of the issues themselves and more particularly whether or not the Premier's approach is the appropriate one.

-SRBP-

Update: Once you've finished with Peter's dilemma, above, consider the silliness offered up as a self-described "brilliant" suggestion from Bill Rowe. For those who don't know, Bill is a non-practising lawyer who recently received his Q.C. and for a brief period was Danny Williams' personal emissary to Hy's.

Rowe suggests in his most recent column that Danny Williams should take a shot at becoming leader of the federal Liberals.

This is funny - fall-down laughing funny - for the following reasons:

1. The job of leading the federal Liberal Party is already taken, by a federalist. Williams' autonomist ideas wouldn't really fit.

2. Williams himself has made savage attacks on the Liberal Party in the past and continues to do so as circumstances warrant. Witness his recent speech in Toronto and the completely fictitious account of the Churchill Falls deal he gave.

3. This is the same Bill Rowe who, not so long ago, seriously proposed that Newfoundland and Labrador should abandon federal Canada and instead merge with an independent Quebec. Rowe didn't think the new state would be federal.

Nope.

Bill thinks it's a brilliant idea to have Newfoundland and Labrador ruled from Quebec City in a unitary state, undoubtedly in which French was the only official language.

Rowe's French is passable but apparently prevented him from reading a biography of Trudeau before writing a column on it. Thank goodness a Globe columnist printed her views two days before Rowe's appeared in print. Otherwise, all we'd have gotten was Rowe's personal reminiscences of the 1968 federal Liberal leadership convention.

Of course that was before Williams became a Progressive Conservative. Odd that Rowe didn't see fit to suggest Williams should revive the old PC party on a national basis. That's something well within the Premier's grasp and, ya know, there might even be a seat for Rowe to run in, if that's what he wanted to do.

It might be nice to see the two Rhodes amigos running as a tag-team of sorts.

Trudeau favours multi-lingualism over bilingualism

Justin Trudeau told an audience of 2,000 teachers that he did not favour bilingualism, favouring instead trilingualism and quadrilingualism.

He also compared separatists to schoolchildren, yelling to get attention.

Predictably, some people find this characterization of separatists upsetting.

-SRBP-

High flight

Conservative cabinet minister Jean-Pierre Blackburn spent almost $150,000 on aircraft charters, yet filed expense claims showing no airfares for these trips.

Mais, bien sur.

Blackburn has merely slipped the surly bonds of earthly accountability for expenses.

In fact, the majority of the flights on privately hired planes don't show up anywhere in Mr. Blackburn's public disclosure of ministerial travel and were only revealed through an Access to Information request by NDP researchers.

-SRBP-

FP backgrounder on the local oil and gas industry

From the Financial Post's Claudia Cattaneo, a feature piece on the local oil and gas industry over a year after the Hebron failure.

Your humble e-scribbler is quoted in the piece.

Even as people leave the province in large numbers to make a living they can't find locally, they support his bashing of outside interests, whether its big oil companies or the federal government, because he stands up for Newfoundland. They buy into Mr. Williams' claim that the government negotiated a bad deal on Hibernia and now must ensure the government takes a fair cut from future projects.

Mr. Gibbons, who signed the Hibernia deal nearly 17 years ago in an environment of low oil prices and greater risk, said it was a huge leap for the province.

"It's the deal that gave us the industry that we have today," he said.

After a decade with Jacques Whitford, Mr. Gibbons retired yesterday, but his interest in a thriving offshore hasn't diminished.

"Please, get at the table and negotiate, and let's get on with the next projects," he pleaded.

"We are going to lose the skilled people that are required even for the construction part. Today, they are flying to Alberta and flying back home. But in five years' time, they may move the spouse and the kids will do their education there. Then they might never come back."

As an interesting addition to that comment, check out Greg Locke's most recent blog entry. Locke is a professional photographer and journalist - as well as an avowed Newfoundland nationalist - who recently left the province to take up a management job with a string of Alberta weeklies.

His reports from Alberta on the real attitudes of ex-pats living there may give a clue to why people like Gibbons are so concerned:

Of my conversations so far with the Newfoundlanders, I'm hearing the "politically correct" phrases about returning to but it's not said with much enthusiasm. No mourning or homesickness to be heard. It's lacking that convincing little flutter in the voice. Indeed, those who have a decent paying job here are looking pretty happy. The flags may be flying proud but they are not ready to sacrifice their livelihoods or future to return to Newfoundland .

Locke's also got some observations on the Alberta government's royalty regime and its tax policy for those in this province who harbour more than a few delusions about how this province supposedly has signed bad oil development deals in the past or how this province is treated unfairly compared to Alberta.

-30-