Budget accuracy: NL consistently strong results

One of the great unfacts that has crept into political dialogue in Newfoundland and Labrador is that fiscal accountability and sound management suddenly arrived in October 2003.

This report by the CD How Institute shows that over the past 10 years, the Government of Newfoundland and Labrador has been consistently accurate in its budget forecasting. The province showed a mean variation in spending changes off just 0.99%, ranking second in accuracy to Quebec.

Some of the biggest variation in forecasting revenues has been in the past two years - FY2005 and FY 2006 - with variations of 5.8% and 15% respectively.

Prior to that the largest variation was 1997-98 when the provincial budget underestimated revenues by slightly more than 10%, and 1998-99 when the provincial governments revenue actually declined. The difference between forecast and actual was -6.32%.

According to the Howe study, the Government of Newfoundland and Labrador is forecasting a 10% growth in spending in FY 2007. That's double the growth in the federal budget and five times the growth in the Ontario government.

Spending growth of 10% is also more than two and a half times the projected real growth in gross domestic product, according to a recent report by Scotia Economics.

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There is a conspiracy

Expect the local nationalists to be up-in-arms about these two announcements, both of which are surely evidence of the great conspiracy to favour Nova Scotia over Newfoundland and Labrador.

The first is ecclesiastical, but they are all mainlanders under their vestments, obviously.

The second is yet more federal pork for Halifax.

Never mind that the Port of Halifax has a major problem with smuggling.

That anti-smuggling job should be in Buchans.

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Scotia Economics projects top to bottom of pack for NL

Scotia Economics joins all the other forecasters in projecting that Newfoundland and Labrador will lead the country in economic growth in 2007.

Like everyone else, Scotia also projects the province's economy will trail the country in2008.

The update report - released on May 3 - turned up on vocm.com today.

The original report, released in March, was covered by Bond Papers at the time.

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Separatists Across Canada: Unite!

You have nothing to lose but the idea you are alone.

Old news: Harvey quits, Kent to seek Tory nod

You read it first here and here.

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Oil companies oppose Alberta royalty hikes

From Oilweek:

In a written submission to a provincial royalty review panel, the Canadian Association of Petroleum Producers says oilsands projects have a lot of major obstacles to overcome before producing even a barrel of crude. This includes multi-billion dollar up-front cash layouts, long lead times and swirling cost pressures for both material and labour.

"Looking at royalties per barrel in the early years of a project is like looking at a child from age three to six and then saying, 'they will never amount to anything important over their lifetime,' " CAPP said in its submission.

The oilpatch lobby group said oilsands developments are among the most expensive energy projects in the world to build.

Years of unprecedented high commodity prices and a string of record profits from Canada‘s big energy companies has triggered an undercurrent in Alberta that the oilpatch is not paying the province enough.

Under the current structure, companies pay just one per cent of gross revenues until all construction costs are recouped.

The rate then climbs to 25 per cent of net royalties.

The complete CAPP presentation can be found at capp.ca. It describes the oilsands resource, the existing royalty regime and some details of how the oilsands have been performing financially:

There is also a general public perception that royalties have not kept pace with increased commodity prices. But, as noted above, oil sands royalties and lease payments have increased 16 fold in the past five years — from $250 million to $4 billion — to become a major contributor to the provincial surplus.

As of December 2006, 34 of 66 projects covered by the Generic Regime are now in post-payout phases and more are reaching payout quickly. But just looking at the number of projects does not show that just 10 projects make up 88 per cent of the oil sands production. Th is means that about 75 per cent of oil sands projects by volume are paying the 25 per cent post-payout royalty.

In many cases, these projects have achieved full royalty payments ahead of schedule, precisely because the regime is instantly responsive to commodity prices. As prices have risen, so too have gross revenues, thus increasing both the amount of the gross royalty and increasing the fl ow of funds to pay down capital costs and move the project to post-payout royalty payments. In a high-commodity-price environment, projects pay out faster — and then pay higher royalties sooner. If prices decline, royalties automatically adjust to support project economics.

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One for Chuck

Apparently Russian strongman Vladimir Putin is one of the "leading lights" of our time.

Who'd a thought Putin could make such an impression on a former politician in this province? Check out "20 Questions" from yesterday's Sunday Telegram if you think anybody is making this stuff up.

Anyway, here's a suggestion to the guys looking ahead to the Tory ad campaign this fall.

Forget the "Morning in America" thing you might be kicking around. It's so 20th century.

Go for this one: a local version of Takogo kak Putin.

That whole local strongman thing really rocks some people in the province. Take on the oil companies. Battle anyone. The only one to fight for the Motherland.

Sure, it's Euro-dance crap, but so what?

A bit corny, a bit patronizing to women but hey, if it works for the crowd that call Bill and Randy to sing the glories of your guy, then this would work too.

Just look at that last paragraph.

It screams "Rowdy Revolution", maitres chez nous and every other hoary cliche you can think of it.

My boyfriend got into trouble again,
Got into fights, got drunk on something.
He made me so mad that I chased him away,
And now I want someone Putin.

Someone like Putin - full of strength,
Someone like Putin - who wouldn't drink,
Someone like Putin - who wouldn't insult me,
Someone like Putin - who wouldn't run off.

I saw him on the news yesterday,
He was saying that the world is at the crossroads,
With someone like him it's easy at home or when visiting,
And now I want someone like Putin.

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How rigged was my rally?

Was the non-partisan rally really a non-partisan rally after all?

Was Danny Williams appearance a coincidence, as most assumed?

Not if you take some of the implications from Craig Westcott's commentary on CBC Radio's St. John's Morning Show.

The audio will be posted later on Monday.

Food for thought.

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Update: For those who can't access the facebook shots, there are some others here, at Kim Goodyear's photography site.

How big was my rally?

Geoff Meeker asks the question: how big was the rally?

He notes the widely varying reports in local media on the size of the crowd attending the Friday Rally for Danny.

It's a good question. Initial reports were several hundred. Then the number 1500 was tossed around. The organizers claimed 3000 and one of the organizers subsequently claimed between 3500 and 4000 people showed up.

Well, the only photos that have turned up so far are these. There's no way of knowing exactly when they were taken but given the various shoots in this group, the number of people looks more like 1500 or less rather than double that.

Estimating groups like this is a bit of a mugs game.

Unless someone did a head count or had a means of tallying people as they showed up there's no way of knowing.

But here's a simple question: does the size of the crowd matter?

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Adding seats to Commons, feds should reform senate too

Proposed changes to representation in the House of Commons will more fairly represent Canadians across the country, irrespective of where they live.

The move is designed to avert regional tensions in the country, according to the Globe's Brian Laghi.

Well, senate reform is long overdue. Creating a senate comprising representatives elected in equal numbers from each of the provinces would restore a balance to the national parliament as a whole. represent the population fairly in the Commons. Represent the provinces - i.e the regions where Canadians live - in a new senate.

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A tightening labour market

A recent Syncrude job fair in St. John's didn't turn out very many prospects, according to the National Post.

They [the recruiters] are well aware of the challenge. Even in St. John's, where the unemployment rate, at about 15%, is the highest in the country and disposable income the lowest, the turnout is poor relative to what had been expected.

Only about 20 people trickle in for the Friday evening session. Another15 come for one on Saturday morning. Hundreds of expectant seats are empty. Organizers and others wonder if this market is tapped out. "Almost every week there is someone here," said Paul Barnes, Atlantic Canada manager for the Canadian Association of Petroleum Producers.

It's not just oil sands employers, he notes. Alberta's service sector, from Wal-Mart to Swiss Chalet, is also recruiting, offering transportation to Alberta and signing bonuses.

The hollowing out of the local labour market is one result of both the Hebron failure and the pull of a booming economy in Alberta.

As the Post notes, many workers have become trans-continental commuters, leaving family in Newfoundland to work for weeks at a time and flying home for brief rest periods.

Skilled workers from Abitibi's Stephenville operation are doing that, for example. Many, though, are near retirement age and once they hit the magic age, they'll be shutting down and retiring in Stephenville. Many in the formerly bustling mill town on Newfoundland's west coast are contented for now. Others wonder what happens when the retirees come flooding home if there is no new employer to replace Abitibi.

The labour crunch was one of the major considerations in trying to move Hebron forward last year. Oil industry insiders were acutely aware of the challenges in finding workers for a major industrial project as Alberta continues to draw more and more from all parts of the country.

"If Hebron went ahead tomorrow, we'd have a hard time finding staff," said Tony Goobie, a former chairman of the Newfoundland Ocean Industries Association, and the general manager of Eastern Valve & Control Specialties.

A smelter/refinery complex being built by Inco at Long Harbour and the prospect of Lower Churchill construction beginning in 2009 will stretch the local labour market to the point where the province will have no choice but permit companies to import skilled trades workers from anywhere they can find them. Many may well be Newfoundlanders and Labradorians who have moved to Alberta but who will commute in the opposite direction for the sporadic work on major construction jobs likely to occur in Newfoundland and Labrador over the next decade and a half.

The provincial government is moving ahead with new programs designed to produce skilled workers. The province has already announced a reciprocal agreement with Alberta that would recognize work experience in Alberta for skills certification in Newfoundland and Labrador. The catch is that workers need to maintain permanent residence in this province.

But in the absence of local work on major projects, many may wind up heading to Alberta and elsewhere and staying there. Greg Locke is a Newfoundland photojournalist who recently left the province to take up a management position with a weekly newspaper chain in Alberta. Locke's already noted that among ex-pat Newfoundlanders and Labradorians he's met so far, he hasn't found one genuinely pining to return home. Once settled in Alberta, workers tend to stay.

Remittance work is nothing new in Newfoundland and Labrador. Offal News' Simon Lono discussed the idea in February of workers who ship cash back home from foreign countries. It's a well-established idea in the developing world and to some it may be shocking to appreciate that the idea thrives within Canada.

Locally, though, the remittance economy has been booming in recent years. The provincial government's work programs actually encourage the remittance economy in its commuting variety, especially since the migrant labourers taxes go to the provincial treasury and their heads count toward the federal government's Equalization income support program for provincial governments.

Remittances are inconvenient for this government because they represent a policy failure: people who have taken the initiative and have left the province for work rather than heed empty government assurances that something will be done for them and their communities.

Before Confederation, remittances were a way of life. A 1931 book by Joe Smallwood, written to introduce Americans to the easternmost part of the continent - then an independent country - put it this way:

Back in the early part of this decade [Smallwood actually mean the 1920s], when the flow of emigration to the United States and Canada was at its height, somebody facetiously declared that our principal exports were "codfish and men". There was a tragic vein of truth in it. At all events, even away from Newfoundland, many of these natives sons are contributing importantly to-day [sic] to the upkeep of the country. The money orders paid within Newfoundland from the United States and Canada in the past three years for example, were as follows...

Smallwood then listed a total of $2,081,232 from the United States between 1927 and 1929 and another $712, 054 from Canadian sources in the same period. [Source: J.R. Smallwood, The new Newfoundland, (New York: MacMillan, 1931), pp. 111-112].

Neither Statistics Canada nor the Government of Newfoundland and Labrador have investigated the scope of the remittance economy.

The labour market reality in Newfoundland and Labrador is garnering some attention from government. Programs may help generate workers, but in the absence of major industrial development, there is little to keep workers in the province any more than there may have been in the heady days of independence.

Workers will look outside Newfoundland and Labrador to earn a living. So too will an increasing number of companies in the oil and gas sector, among other sectors.

Promises of a rowdy revolution or of a return to independence, built on little more than myth and superheated rhetoric seem to be little more than a fatuous diversion from a meaningful discussion of public policy.

After all, is more income support for the provincial government any replacement for local economic development?

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h/t to Greg Locke.

Quebec Cartier eyes Wabush Mines

No English-language reports yet, but here is the Quebec report, from lesaffaires.com:

Les Mines Wabush, situées à Sept-Îles, est dans la mire de Québec Cartier pour qui elle a accepté dernièrement d’ouvrir ses livres afin que cette dernière puisse examiner d’un peu plus près la santé de l’entreprise minière.

Québec Cartier pourra donc faire une étude comptable de Mines Wabush mais n’a pas encore donné de date en ce qui a trait au dépôt d’une offre officielle d’achat. Des échanges ont toutefois eu lieu entre les deux entreprises et des experts de Québec Cartier sont venus visiter les infrastructures de la mine.

Québec Cartier appartient maintenant au groupe européen Arcelor Mittal et ce rapprochement avec Mines Wabush pourrait très bien s’inscrire dans le cadre de son plan minier qui s’étend jusqu’en 2026.

Une autre grande compagnie minière, Consolidated Tompson, s’était montrée intéressée par la mine de Sept-Îles à l’automne dernier. Elle a toutefois choisi de se concentrer sur un projet d’usine pilote de réduction du manganèse, d’une valeur de 1M$, qui assurerait la survie de la mine Scully de Mines Wabush au moins jusqu’en 2021.

Essentially, Quebec Cartier is conducting a financial assessment of Wabush Mines with an eye to making an offer on the company.

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Alaska gets tough on pipeline bill

From the Anchorage Daily News:

JUNEAU -- Gov. Sarah Palin's gas pipeline bill sailed through both houses of the Legislature on Friday as last-minute opposition pushed by the state's big oil producers melted away.

Passage of the bill kicks off a competitive bidding process for the right to build a multi-billion dollar North Slope gas line. Palin refused to compromise with opponents in the Legislature's closing weeks, saying her bill would get a pipeline built on terms favorable to the state.

Complaint a vendetta says Armoyan

Geroge Armoyan is calling it a vendetta.

That's the complaint by the Government of Newfoundland and Labrador that Armoyan engaged in insider trading when he sold off shares in Fishery Products International.

"It's just ridiculous -- everything I did was within the law," Armoyan said in an interview. "There is no doubt this is a politically motivated strategy by the government. Anybody who says something negative about the government, they try to create problems for them. It's an abuse of power."

Note to CanWest fact checkers:

Check facts.

This statement is completely false:

The Newfoundland and Labrador government won the power to approve the sale of company assets when St. John's-based FPI was restructured two years ago.

FPI is controlled through an act of the provincial legislature. In 2006 - not 2005 as this sentence suggests - the legislature amended the FPI Act to give cabinet the authority to approve any say of FPI assets. Prior to that any sale of assets would have required approval of the legislature.

Further, the company was not restructured in 2005.

Note as well to Globe fact checkers: the complaint isn't with the Ontario Securities Commission. Fish minister Tom Rideout, seen at right at an anti-FPI rally held in February 2006, made the complaint to the Newfoundland and Labrador securities watchdog.

There is no indication Ontario regulatory authorities have taken any action nor is there any public indication Armoyan failed to abide by existing securities laws.

As reported, Rideout's accusation suggests criminal activity. There is no evidence of criminal activity.

As Rideout described it to reporters on Friday, his concerns focus on the possibility Armoyan violated an FPI board directive banning directors from trading in FPI shares during the sell-off talks.

There is no public record of such a directive.

Rideout is also concerned that some unnamed individual or company has acquired more than 15% of FPI's shares, the limit set in the FPI Act.

In that situation, Rideout's complaint would be with the purchaser, not the seller and the situation would not involve any form of insider activity.

Rideout is the province's attorney general.

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More than one use for a hakapik, apparently

From the Chronicle Herald, Stephen Maher's interview with Danny Williams:

DANNY WILLIAMS is offering Stephen Harper nothing but pain: scorched earth and poisoned wells, the flaming sword of the offshore petro-jihad.

This is something new. It is guerrilla [sic] politics, and what’s strange about it is that it does not leave any compromise open to Mr. Harper.

...

This time, the Nova Scotians are not sharing information, likely because that’s how Mr. Harper wants it.

After acting Nova Scotia Finance Minister Angus MacIsaac met with federal Finance Minister Jim Flaherty at the Stanfield airport to discuss the accord, Mr. Williams called Mr. MacDonald and reminded him of how things used to work with Mr. Hamm.

"I phoned Premier MacDonald and said, you know, we stood together before, on the 2005 economic accord, and we expect you to stand shoulder to shoulder to us on this one," he said. "And I stated our position very clearly was we want a fulfilment of the promise, and he agrees."

But Mr. Williams is worried that Nova Scotia will accept something less than the accords — some compromise that isolates Newfoundland.

"Obviously, they’re treating both our provinces with disdain, trying to court Nova Scotia and see if they can draw them into some lesser agreement to embarrass us into accepting something less. That couldn’t happen and I don’t believe it will happen."

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Come again?

Wannabe federal Liberal candidate Peter Whittle and organizer of the Rally for Danny, quoted in the Telegram:

"People realize you have to stand with your feet to get a message out there … and not always leave the politicians to do the talking."

Presumably he said that before the politicians - including the Premier - spoke at the supposedly non-partisan rally.

Speakers at the rally included union leaders, none of who apparently had to campaign for election to their posts.

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How times change, Part 3

From January 6, 2006:

Doyle Pleased With Harper's Letter

Norman Doyle, Conservative incumbent in St. Johns East, is pleased that Stephen Harpers' letter to Premier Williams contains a number of significant commitments to this Province.

In his letter, said Doyle, Stephen Harper made commitments on federal financial support for the Trans Labrador Highway and the Military Base at Goose Bay. He also committed the federal government to providing financial guarantees with regard to the Lower Churchill Project.

Doyle noted that Harper also committed to setting up a Territorial Defence Battalion, composed of 100 regular and 400 reserve soldiers, in the St. Johns area.

Mr. Harper also reiterated his willingness to invoke fisheries custodial management out side the 200 mile limit, said Doyle, and to exempt all non-renewable resource revenues from the ravages of the Equalization clawback.

Doyle recalled that it was Stephen Harpers commitment on offshore revenues that forced Prime Minister Martins hand on the issue in the Federal Election of June, 2004.

Unlike the Liberals, said Doyle, we don't have to be forced to help build a stronger Newfoundland & Labrador.

The Conservative Party believes that a stronger Newfoundland & Labrador means a stronger Canada so many of our Partys policies are designed to give the provinces the tools to help build a stronger and more prosperous nation.

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Connie coalition on the rocks?

Some disgruntled federal Conservatives want to resurrect the Reform Party.

The Other Point of View, 1984

Premier called 'seriously misguided'
Michael Harris
The Globe and Mail
June 4, 1984
P.9

ST. JOHN'S - The top job of the Newfoundland Liberal Party, once a ticket to oblivion, is attracting some powerful personalities and generating the strongest criticism to date of the five-year-old Conservative Government of Premier Brian Peckford.

''Look, people in other parts of the country don't know but we won't be taking out our swords next and lopping off their ears,'' Clyde Wells, a perennial if reluctant darling of Liberals here, said in an interview. ''Given the attitude of this Government, any business would have to be out of its mind to want to come here.'' Mr. Wells, the 46-year-old St. John's lawyer who argued the federal Government's case on offshore jurisdiction and who also successfully prosecuted federal Liberal MP Roger Simmons for tax evasion, confirmed he has been approached to enter the race for the provincial Liberal leadership slated for this October. ''I can tell you there has been a lot of pressure from a number of directions. I'm not working for it, but the door is open a crack.''

Mr. Wells earned his political spurs in the 1960s as one of the bright young men of the Liberal government of Joseph Smallwood. Appointed to the cabinet at 28, Mr. Wells was labor minister and then minister without portfolio until 1970. He quit the cabinet - along with fellow minister and now federal Tory MP John Crosbie - after refusing to approve $5-million in bridge financing to John Shaheen for the construction of the Come-By- Chance oil refinery. ''I'm not soured on politics because of those years," Mr. Wells said recently. "I still believe politics can be principled,
honest and straightforward.'' Describing Mr. Peckford as well-intentioned but ''seriously misguided,'' Mr. Wells said that Newfoundland has been economically devastated by the attitudes of the provincial Government.

Despite Newfoundland's failure to win control of offshore resources from Ottawa, "I don't think very much has been lost. . . . In the long run, Newfoundland will get the same as other provinces under the federal system we have - no more, no less." But Newfoundland's abortive effort to get out of an agreement under which Quebec gets Labrador electricity at bargain prices "has seriously impaired our ability to properly solve that problem. It has also made us look like a banana republic.'' Mr. Wells said the Peckford Government's Water Reversion Act, passed in 1980 and recently struck down by the Supreme Court of Canada, was an attempt to expropriate all the assets of the Upper Churchill power installation without compensating Hydro-Quebec, a partner in the megaproject which nets Quebec $800-million a year.

The Government is within its rights to use expropriation in the public interest, Mr. Wells said, "but you have to pay just compensation." The philosophy of the Peckford Government has created a serious rift between Newfoundlanders and other Canadians, he said. ''Peckford has set Confederation back 20 years in the attitudes he has tried to foster here. . . . He talks about being oppressed by Ottawa and then brands anyone who criticizes him in Newfoundland unpatriotic.''

Almost as coy as Mr. Wells about his leadership aspirations, but for different reasons, is Leo Barry, a former Conservative energy minister and now Liberal energy critic. ''I shall decide once riding executives have been elected and I have had a chance to determine my support. Many people have urged me to run and I am interested,'' the 41-year-old lawyer said in an interview.

Mr. Barry has been in and out of politics since 1972, when he was first elected to the Newfoundland House of Assembly. After a brief stint as deputy speaker, he became minister of mines and energy, where he took the lead in developing Newfoundland's oil and gas regulations.

Defeated in the 1975 provincial election, Mr. Barry served as chairman of the Newfoundland Labor Relations Board for two years before becoming a lecturer at Dalhousie University's law school in Halifax.

In 1979, Mr. Barry returned to Newfoundland to contest the Tory leadership left vacant by the resignation of then premier Frank Moores, finishing second in a tough, emotional battle with Mr. Peckford. After the 1979 election, Mr. Barry became energy minister and minister of industrial development in the Peckford Cabinet.

In the fall of 1981, Mr. Barry resigned over a disagreement with the Premier on how negotiations on offshore resources with Ottawa should be conducted. And on Feb. 21, 1984, he crossed the floor to join the Liberal Party.

Although his critics say he may have to pay the price for being seen as a political changeling (he began his political life at Memorial University as a Liberal), Mr. Barry disagrees. ''I believe the record will show that I have been very consistent in my criticism of the Government's performance and that my criticisms have stood the test of time. Neither the offshore nor the Upper Churchill should have ended up in court for reasons that should now be obvious.'' Mr. Barry says the next government of Newfoundland will have to show a different face to the rest of the country. ''We've got to stop blaming other people for all our troubles, stop acting like St. John's is a foreign capital, and convince companies that are coming east that Newfoundland is a good place to locate.'' The third formidable prospect for the Liberal leadership race is Richard Cashin, a former Liberal MP and one-time heir apparent to Mr. Smallwood who now leads the powerful Newfoundland Fishermen's Union.

While Mr. Wells carefully weighs personal considerations against the rigors of public life, and Mr. Barry steps gingerly in Liberal circles to avoid being seen as a Johnny-come-lately with more ambition than party commitment, Mr. Cashin is using the single most explosive issue in Newfoundland politics to offer a carefully reasoned indictment of the Peckford Government and Ottawa.

Despite the work of a federal task force to rescue the troubled East Coast fishery, the inshore sector appears to be at the knife's edge once more. Because of huge inventories of unsold fish, some companies in Newfoundland have announced that they won't be buying cod for the time being, a turn of events that could ruin the small-boat fishermen here.

With widespread predictions in Newfoundland of a crash in the inshore fishery this summer, Mr. Cashin argues that the Peckford Government has had an unhealthy preoccupation with offshore oil to the exclusion of every other issue, particularly the fishery.

An intellectual with a flair for the bombastic, the union leader is the only major prospect for the Liberal leadership who has openly connected what he sees as the narrow, legalistic approach of the Peckford Government on the offshore to an underlying we-they attitude that ''really questions the basic decision of 1949.'' Mr. Cashin is also critical of the federal role in the recent restructuring of the fishery in Newfoundland. He says that although banks and large companies were financially assisted there was nothing in the new federal fisheries policy for primary producers ''whose financial crisis has been greater than that of the so-called big four deep-sea companies.'' Although Mr. Cashin hasn't declared he is running for the leadership, high-ranking Liberals here say he has told them he will be a candidate.

Meanwhile, present leader Stephen Neary is mildly amused at the combative talent that appears to be lining up for his job. ''We've gone through some pretty lean times, and this is quite a change. I'm looking forward to a knock 'em down, drag 'em out convention, a real fight.'' Asked whether it's true that he's headed for the Senate, Mr. Neary smiles and winks: ''Don't count on that. I may even run myself.''

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Newfoundland's offshore objectives, 1984

An advertisement placed by the Government of Newfoundland and Labrador in 1984 outlined the province's objectives in discussions on offshore oil and gas.

The 1985 Atlantic Accord exceeded Brian Peckford's goals as stated in the ad. Under the 1985 Atlantic Accord, the Government of Newfoundland and Labrador sets and collects all royalties from the offshore as if it were on land. The federal government receives no royalties.

That situation is not tied to income parity or any other similar measure. it exists without restriction or limitation.

As well, the provincial government collects Equalization and an Equalization offset until such time as the provincial government no longer qualifies for Equalization.

Click on the picture to enlarge:

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How times change, Part 1

From the Globe and Mail, after both the Supreme Court of Newfoundland and the Supreme Court of Canada ruled that the Government of Canada had jurisdiction over offshore oil and gas but before Brian Peckford and Brian Mulroney announced the 1984 agreement that led to the Atlantic Accord:

Peckford puts sweet reason up front in resource pitch
Ian Mulgrew
May 18, 1984
P.4


VANCOUVER - Brian Peckford, the Newfoundland Premier from Whitbourne, stabs an unlit cigar at a reporter and says he is just misunderstood, misrepresented and a victim of circumstances.

The national press maligns him, he laments, and Prime Minister Pierre Trudeau, ''in his Machiavellian way," tries to distort his positions.

If only Canadians could hear, the former English teacher adds, the facts would speak for themselves. ''Newfoundlanders aren't greedy and selfish, wanting all of the offshore resource wealth for themselves," he says, throwing out once again the moderate, reasonable pitch he has recently added to his repertoire.

It is an approach he has assumed since he began a cross-country tour to plead his ''moral case" and arouse public sympathy for Canada's youngest province in its battles with Quebec, over hydroelectric power generated in Labrador, and with Ottawa, over the Hibernia oil fields.

Scratch the veneer and you will find the same irascible, tough-talking politician who burst on the national scene in 1979, publicly agreeing with Rene Levesque and vociferously attacking Mr. Trudeau.

Asked why different versions of the cause of the breakdown in talks on offshore resources have come from him and federal Energy Minister Jean Chretien, Mr. Peckford shakes his head and blames Ottawa. ''In one scenario, the guy (Mr. Chretien) was just lying to us. He was devious and getting us into a pressure cooker and getting us in so far that it would be impossible for us to get out and we would sign a bad deal.

The other scenario is that he earnestly and sincerely came to the table . . . and the rug was hauled out from under him." Defeated in both the Supreme Court of Newfoundland and the Supreme Court of Canada, Mr. Peckford says he has decided to take his case to the court of public opinion. He may have lost the legal right to claim the resources, but he remains committed to achieving de facto ownership -
control of the development. ''It's time for the rest of Canada to get exercised and force Quebec and the federal Government to treat us fairly," he says in a shirt-sleeved interview in his hotel room.

The federal Government has given control of resource development in the North to aboriginal peoples, and Mr. Peckford says there is no reason the nearly 600,000 people of Newfoundland should be treated differently.

And here in the other bookend of the country, as he calls it, where unemployment is also in double digits, where the resource industries are struggling and where a similar offshore oil boom is talked about, he is preaching to the converted.

Radio hot-line shows open their lines and the response is inevitable: ''Way to go Brian. We should tie a bloody big noose around Ontario and Quebec and string them up." Mr. Peckford says people misunderstood Newfoundland's aspirations because they were being articulated when the country was embroiled in a bitter debate over the Constitution and when central Canadian fears were most palpable about losing control of the country to resource-rich provinces such as Alberta.

He says the size of the bounty discovered under the ocean also exacerbated concerns over a power shift.

As the central provinces were given large tracts of land and resources in 1912, and as Alberta was given jurisdiction over its resources in 1930, so Newfoundland should be given the Hibernia oil, he says. ''It's a myth that they have agreed to share revenues with us. That's a factual inaccuracy." Under the pact offered Newfoundland, he
says, the province would have a veto that could delay up to six months a federal decision. But the revenue-sharing provisions, Mr. Peckford says, would leave the province no better off. ''Every time you create a dollar (in oil revenue) you lose one in equalization (payments from Ottawa)." The province, he says, wants the federal Government to phase out equalization payments over a period of many years rather than stop them immediately.

It wants a management board with three federal representatives, three provincial members and an independent chairman. National self-sufficiency and security of supply would give the federal Government's wishes more weight, but once such priorities had been achieved, Newfoundland's management decisions would prevail.

The province also wants the equalization payments - which total some $500-million to $600-million a year, he says - maintained in addition to the offshore revenue. ''We need to catch up. We have 23 per cent unemployment, the lowest level of public services, the highest taxes." More money would flow to the province until services and conditions reached the Canadian average.

Comparing the country to a family, he sketches an analogy. The federal Government gives one person $500 in welfare, he begins. Later, that person has a chance to earn $300, but the federal Government says that if he does, then he will receive only $200 in welfare. ''You're still only getting $500 a year; you're no better off. So you say to yourself, 'Why . . . am I going through all this working in my back garden to bring in this $300 a year if I am still going to get the $500 if I don't?' " Questioned about the aptness of the analogy, Mr. Peckford says that, the way the equalization system works, ''we don't have any chance to put our people meaningfully to work and to create wealth the way the other provinces have done since 1867. ''Isn't it
realistic for a province to have the opportunity with resources that are close to them and that they brought to the country . . . to develop those resources and (direct) some of that wealth into an industrial infrastructure that therefore makes Canada better off?

''We brought them into the country, legal interpretation notwithstanding," he says, ignoring the Supreme and Newfoundland court decisions. ''The Canadian Government just gave 16,000 square miles to the people of the Western Arctic because they live closest to the resources and they should have some say, and they don't have provincial status and (have) no legal grounds for that land. Alberta had no legal jurisdiction over resources . . . (and) neither did Quebec or Ontario. . . . If you do it for one province, you should do it for another, salt water notwithstanding." And in case you missed the point, he insists on making it clear: ''We owned the resources before we joined Confederation. The Supreme Court of Canada has no business saying who owned the mineral resources of the continental shelf before Confederation. That is an adjudication for the International Court at The Hague." If Ottawa followed his plan, the Newfoundland Premier says the day would come when Newfoundland would become a have province and would contribute to the rest of the country. ''That's the reason for the tour. It's a campaign of understanding. . . Surely that's all common sense?"

-sbrp-

How times change, Part 2

Brian Peckford's letter to the editor, Globe and Mail:

Newfoundland's position
A. Brian Peckford
May 29, 1984
pg. P.6

St. John's -- Re the article by Ian Mulgrew, concerning my cross-country tour and Newfoundland's position on the offshore (Peckford Puts Sweet Reason Up Front In Resource Pitch - May 18): I must congratulate Mr. Mulgrew as being the first national reporter to report on the substance of Newfoundland's offer to the federal Government for the development of offshore resources. However, the article creates some confusion as to Newfoundland's position on equalization payments once oil revenue starts flowing.

Newfoundland believes equalization payments to the province should be phased out over time, according to a predetermined formula which would help Newfoundland catch up to the rest of Canada in terms of living standards. Newfoundland looks forward to the day when the province will not receive any equalization, to the day when, because of the resources on and adjacent to our shores, we have dropped our "have not" status and are in a position to make a larger contribution to Canada.

That is our objective, and we would not want it confused. Newfoundland does not want both oil revenues and equalization.

A. Brian Peckford
Premier of Newfoundland and Labrador
St. John's

-srbp-

Rally backs Danny

As CBC news reports, a crowd of several thousand (estimates vary between 1500 and 4000) rallied at the now ironically named Confederation Building to back Premier Danny Williams in his fight with the federal Conservatives and the nationalist rhetoric of the recent throne speech.

Included in the speakers at the rally today were Danny Williams and federal Liberal MP Scott Simms.

The rally was originally billed as a non-partisan event with a speakers list that did not include the Premier and his supporters from other parties.

-srbp-

Conference Board predicts big '07 for NL

But the year after?

Newfoundland and Labrador is forecast to post growth of 6.4 per cent this year, leading all provinces, the report said. This year's growth is fuelled primarily by increased mineral output, which is expected to fall off in 2008. As a result, real gross domestic product is forecast to grow by just 0.9 per cent next year, the report added.

-srbp-

Iraq could double production

Iraq could double its current oil production if violence in the country ended and the country's oil facilities could be fully repaired and upgraded.

That's the view of a Colorado energy consulting company being reported by the International Herald Tribune.

The report places Iraqi reserves at 116 billion barrels, while the western area of the country may hold as much as 100 billion barrels more that has yet to be discovered or delineated.

This report is consistent with a consensus in the analyst community that current world oil prices contain a substantial security premium caused by unrest in Africa, Venezuela and the Middle East. Removing those tensions could see a drop in oil prices from the current level of around US$60 to US$45 or less.

Increased Iraqi oil production would certainly lower oil prices and further increase the competitive pressure on small oil areas like offshore Newfoundland and Labrador.

-srbp-

Insider Trading: Rideout needs to study law again

In order to meet the test of insider trading someone would have to sell shares using information available only to a select few people.

The whole idea is that someone is taking advantage of special knowledge to take unfair advantage.

Like say, someone gets wind that a government report will be released in two days time criticising a company. Someone hearing that information sells off all his shares the day before the report is released.

Recovers cash. Had he or she waited two days, the stock price fell to have what it was.

Or....

Someone knows about a sale of a company days before it is announced publicly and suddenly buys up a raft of shares at a low price, knowing the sale price is higher.

In the case of FPI, the sale of the company was known publicly and, it appears all the stock transactions were properly recorded and done in the open.

By definition, it doesn't look like insider trading.

From the sound of David Cochrane's debrief on CBC Radio, this is just another scurrilous attempt by the current minister of fisheries to interfere in the operation of fishing companies.

Rideout seems to be vying for the designation: Hugo Chavez of the Newfoundland and Labrador fishing industry.

All Tom Rideout seem to be accomplishing, though, is demonstrating that his knowledge of securities law is on par with his own assessment of his business knowledge.

Res ipsa loquitor, Tommy.

-srbp-

Update: Psst Tom. There's always a blackout on insider trading. Rideout's quote to CBC makes it sound like the blackout was a special thing for just this circumstance.

Funny thing is even people who aren't lawyers know that when you send threatening letters to FPI management while the company is sorting through sales offers, that's unwarranted interference in a private sector company.

Even if it isn't illegal, it is highly improper.

Like shutting down a portion of a company's fish processing operation, a portion government knew was subsidizing the rest of the company's processing activities.

Would that ramp up the pressure on the company to sell off its assets?

The "Solidarity Reg" Rally

A few hundred people, maybe a few thousand people might turn out on Friday for a rally to support Premier Danny Williams in his latest racket with people no from Newfoundland and Labrador.

Well, that's what some will be doing.

Others - the ones who read the initial mission statement for the rally over at according2.ca - will be fighting for Newfoundland and Labrador's rightful place in the Canadian budgetary process.

In the revised version, the rally-goers will be there "to illustrate...that Newfoundlanders and Labradorians speak with one voice...to express our mutual disgust with Prime Minister Harper’s broken written commitment to exclude non-renewable natural resource revenues from the equalization formula."

Whatever the reason, people will show up. How many is a crap shoot.

But does every Newfoundlander and Labradorian actually want 100% exclusion of non-renewable resources?

That wasn't the policy of the provincial government in the much vaunted letters to the federal party leaders last year.

Interestingly enough, it also wasn't the recommendation made by a panel appointed by the Council of the Federation, of which Premier Danny Williams is the current chair.

Quoi? sez you.

Well, read on to find this recommendation found in all its glory on page 87 of the report (March 2006):

The Panel recommends that the Equalization program be based on a ten-province standard and comprehensive revenue coverage with inclusion of 100 percent of natural resource revenues.

Now this gets a bit odd when one considers that Premier Danny Williams himself endorsed the 100% inclusion of resource revenues in the Equalization formula. He is on the public record endorsing that position.

The Council paper linked above actually includes an estimate of the financial impacts in a given fiscal year of a variety of options ranging from zero percent inclusion all the way to 100% inclusion.

Yet, only a year later, Premier Danny Williams could tell Jeff Gilhooley that the Equalization formula with 50% inclusion of non-renewables with a cap was a case of federal bureaucrats convincing "weak-kneed" federal politicians to shaft Newfoundland and Labrador.

Hmmm.

Makes you wonder.

-srbp-

Reinventing Canada

Deborah Coyne is a lawyer, activist and candidate in the next federal election in the Toronto-Danforth riding.

Your humble e-scribbler first met Deborah over a decade ago when she was constitutional advisor to the Government of Newfoundland and your scribe was, as Deborah once put it, "one of four young assistants". Young must be a relative term, because Deborah is only slightly older than yours truly.

Anyway...

She was energetic to the point of being manic at times but she was always incredibly thoughtful and though-provoking. Time has not reduced her energy, apparently.

In March, she delivered a speech in the University of Toronto lecture series, entitled "Reinventing Canada for the 21st century". It's a pretty wide-ranging commentary, running in the print version some 35 pages.

For example, take her summary of the current national political situation:

It is unfortunate that when citizens are willing to contribute so much to the future of the country, we have a federal government offering so little national leadership. We have a federal government that is in the business of putting the government out of business, transferring significant fiscal power away from the federal government to the provincial governments, and talking about what divides us rather than what unites us in moving forward.

Our national government, with some exceptions, continues to be consumed with petty politics, outdated ideologies, power plays to find the Holy Grail of a majority government, costly and useless opinion polls to gauge, not important matters, but merely the popularity of the government.

The preoccupation of our political class with manipulating power has discredited politics as a whole in this country, and must be abandoned if the values of democracy are to endure into the future. Our governments and political elites no longer seem to want or need publicly engaged citizens. The growth of the state into universal healthcare, public education, social security, portable pensions, immigrant settlement, and so forth means that too often we have sat back and wrongly taken for granted Medicare, employment insurance, public education, public pensions,
progressive taxation and the successful integration of the growing numbers of new Canadians. Public institutions seem to run on automatic pilot, with no need for our active engagement. Professional armed forces are available with no need for conscription.

Our leaders no longer appeal to a “public purpose”; only to the needs of customers, client-citizens. Some observers refer to this as an era of “personal democracy”. Conditioned as we are to be consumers, customers, shoppers, clients, we prefer to influence politics on our own terms.

The political party has thus been sidelined as an instrument of mass organization, despite attempts to “brand” itself to appeal to the individual “consumer”. In its place, we have a huge range of here-today gone tomorrow networked-based organizations, and celebrity-based populism.

Then there is this potent reminder that most provinces have higher trade betweens within Canada than there is internationally between Canada and other countries. The much-ballyhooed Council of the Federation has done nothing on this front of any consequence:

Until the path-breaking Alberta-British Columbia bilateral Trade, Investment and Labour Mobility Agreement in August 2006 (effective 2007), trucks used to have to unload their loads at the border and repack them according to the different regulations in the two provinces. Crossing to the state of Montana was easier. Now with the Alberta and British Columbia economies essentially open to each other, a gain of some $4.8 billion in national income is expected. Imagine what would happen if all provinces pursued open trade within Canada!

Speaking of the Council of the Federation, Deborah quotes Jeefrey Simpson's assessment. In light of recent events, it is amazing how perceptive this observation, from 2006, turned out to be:

At the same time as the federal government has weakened, the provincial and territorial leaders have increasingly organized themselves, most recently forming the Council of the Federation to try to arrogate to themselves more power. Journalist Jeffrey Simpson describes well how the annual meeting of premiers has "morphed into Canada’s equivalent of the Group of Eight Summit, with lavish banquets, superb entertainment, huge budgets, large retinues, security personnel everywhere, portentous and instantly forgotten communiqués and a ubiquitous aura of preening self-importance."

The speech is lengthy but it is well written and well worth taking the time to read.

-srbp-

Dawn without light

Herbert Pottle was born in 1907 in Carbonear.

Educated at Mount Allison and the University of Toronto, Pottle was an official of the Department of Education under the Newfoundland commission government from 1938 until 1947. in that year, he was appointed as one of three Newfoundland members of the commission.

He supported Confederation and spoke publicly in favour of Confederation during the referendum campaign in 1948. He was elected to the House of Assembly in 1949 and served as member for the district of Carbonear-Bay de Verde from 1949 to 1956. Pottle was appointed to cabinet in 1949 as minister of public welfare.

Pottle left politics in 1956 in a disagreement with Smallwood over economic development policy. The circumstance was described this way by the University of Toronto newsletter:

Pottle remembers it as a time of patronage and power; moral and fiscal responsibility seemed to be lacking, and there was a division between "promises and performance" and "words and works." He could not support a government that, in his view, had lost its integrity. In his resignation speech, he said that "the economic development programme of the government, in the broad sense, has spread itself too hastily. Time has not been taken to consolidate the programme step by step…. The Department of Economic Development is, in my view, inadequate to carry on the job it has to do, as far as its responsibility toward the 'new' industries is concerned … As I see it, the government has not given the leadership in these matters that ought properly to be expected of government...".

He worked with the United Church of Canada during which time he spent a one year term as a United Nations social welfare advisor in Libya. In 1963, Pottle began work for the Department of Health and Welfare. He retired in 1972.

In 1979, Pottle published Dawn without light, an account of his time as a commissioner and later cabinet minister. Pottle died in 2002, aged 95 years. His passing was noted by the Premier's Office with a simple news release that, frankly did not do justice to Dr. Pottle's contribution to the province.

He did do somewhat better than his former cabinet colleague and Confederate Harold Horwood. Horwood enjoyed a career as a nationally known author after an impressive career as a journalist. His death was completely ignored by the current administration.

An anti-Confederate who died around the same time was extensively eulogized. Such is the miserable attitude apparently taken to our history that even in death, appropriate respect cannot be paid to significant figures unless they fit into the current ideology.

The following extract is taken from Pottle's 1979 book. Recent political events - especially the notion that a certain politician has effectively revolutionized politics in the province - make some of Pottle's observations all the more striking.

Here's just one bit. Undoubtedly more will follow.

If Smallwood had been a revolutionary in the historical sense of the term, he would have exercised a directly decisive influence in changing the basic outlook of the Newfoundland people. If he had been responsibly radical, he would have been mainly instrumental in converting their life-values system. In fact, he did nothing of the kind. What he did was to capitalize on the gullibility of politically uneducated people and render them incredibly more gullible still. What he did was to take control of a dependent society that had always asked much of government and ordered it to ask for more. What he did was not to change the course of people’s expectations – he encouraged them to look for more of what they already had. He did not revolutionize his society – it can be more truly said that he parasitized it.

…

Newfoundland politics had always been notorious for the people’s chronic sense of dependence upon their political powers – a feeling which the powers did nothing effectively to dispel, but, in effect, had ingrained it by posing as their terrestrial saviours. In times of extreme adversity, this of course boomeranged, but Newfoundlanders have always been endowed with breasts of more than the normal capacity for the hope that springs eternal, so that a change of government was eternally tantamount to the prospect of a new saviourhood. For the benefit of the typical politician they have also been conveniently gifted with short political memory. If the time should ever arrive when Newfoundlanders had cause to look at their political estate in anything like creation’s light, and their political leadership was mature enough to feel no longer indispensable, then it could be well and truly said that the day of revolution had at last dawned.

Herbert L. Pottle, Newfoundland: Dawn Without Light; Politics, Power and the People in the Smallwood Era, pp. 166-7

-srbp-

Leo 2 A6s on video

For those interested in the new tanks Canada will be buying here is a youtube.com vid of four Leopard 2A6s in German service, moving across part of a German training area.

Note especially the Leo 1 Bergepanzer that winds up joing the the Leo 2s.

The Bergepanzer is carrying what appears to be a captured Taliban command post.

NS offshore association weighs into Equalization debate

From the Nova Scotia Business Journal:

While lucrative, the offshore industry still needs the support of the provincial government to advertise the region and to implement the programs and processes that make the industry function. Unless the terms of the 2007 Budget are changed to offset the fiscal loss for the value of its offshore resources, the province’s financial incentive to invest in the industry is compromised, thus threatening the entire industry.

The visit to Halifax from Federal Finance Minister Jim Flaherty last week shows that there is a dialogue taking place between the federal and provincial governments. This should be all that is needed to resolve the matter, as Mr. Flaherty’s own party, energetically led by then Opposition Leader Stephen Harper, had supported the terms of the 2005 New Offshore Agreement. Until the introduction of the 2007 Federal Budget, not a word of the Agreement’s legislation had been changed.

-srbp-

Rutter lands hobble

Rutter Inc. (TSX: RUT) will be supplying 23 shelters to Persona, Rogers and MTS Allstream as part of the provincial government's controversial fibre-optic deal.

The shelters cost a total of CDN$1.7 million.

For Rutter, this would count as a small piece of work, or in local parlance, a hobble.

-srbp-

High flight, part deux

First it was Jean-Pierre Blackburn.

Now Transportation minister Lawrence Cannon has been ding-ed for six flights on a government-owned executive jet that cannon didn't list on his expense disclosure statements.

Cannon's press secretary said the trips weren't listed in the proactive disclosure since the travel wasn't paid by Cannon's budget and treasury board guidelines didn't require disclosure under those circumstances.

-srbp-

Trawlers damage seabed

Total shocker.

cough.

cough.

"Divers have filmed this mud before," said Mr. Pauly, who in 1998 wrote a seminal research paper that coined the term "fishing down the food web" to describe how commercial fishing is depleting the world's oceans.

"What was not known before was that you could see these mud trails from space. I was flabbergasted by it."

Mr. Pauly said Mr. Van Houtan had found the pictures by looking at images shot from a QuickBird satellite, owned by DigitalGlobe.

"He wanted to know what we were seeing in these pictures," said Mr. Pauly.

-srbp-

Homer Taylor

Two days.

Two news releases from innovation minister Trevor Taylor accusing the opposition of misinforming the people of Newfoundland and Labrador about the $20 million fibreoptic deal Taylor announced last fall on behalf of the provincial government.

Check the first one and the second one both accusing the opposition of selectively releasing information.

What's wrong with this picture?

Disclosure of information on a government project in his department rests entirely with Taylor. If information is being released in bits and pieces, Taylor has the ability to fix that situation pretty quickly. It's just plain silly for a cabinet minister to be on the defensive like this.

And that's really where the problem with this whole mess rests: with Taylor and his boss.

The provincial government has made an absolute mess of the comms on this deal from the outset. Rather than provide simple, straightforward explanations of the deal, Taylor, former finance minister Loyola Sullivan and later the Premier have tried a bunch of different stories about the deal and its details.

At one point, the province was purchasing an equity stake in the consortium. Then it bought a few strands of fibre instead. The various people who've spoken on this deal - either from government or the consortium - can't even agree on the total cost of the project and the level of public money involved.

Now usually with a story like this - where there are allegations of favouring political and personal buddies - a government that trumpets its high standards of accountability would push information forward.

Putting tons of factual information in public kills off speculation and makes it virtually impossible for anyone to make an accusation that will stick.

In fact, over the past couple of days, Taylor has returned to this accountability theme.

Unfortunately for Taylor, everyone knows that, in addition to its fumbled explanations at the front end of the story, the provincial government has delayed and delayed and delayed releasing information about the project. The Premier even stonewalled the Auditor General's investigation which he supposedly supported. Danny Williams insisted up and down that The Law prevented disclosure of cabinet documents to the AG and by jingo, there was no way this Premier would break the law.

Then - under continuous pressure - Williams suddenly caved in, admitting all along that cabinet had the prerogative to decide if cabinet documents could be released. So Williams would give the Auditor the documents he wanted to see. And The Law? Well, it turns out that while the law isn't an ass, Williams previous explanations were at least a donkey.

At one point, Taylor even criticized reporters for covering the story. He even accused the opposition of focusing on the relationship between the Premier and two of the major players in the deal. Well, that's pretty obvious, so obvious in fact, that, as Taylor admitted cabinet rejected the deal twice because the optics were bad.

The documents Taylor is referring to were a series of e-mails released in the House of Assembly by the premier. The Opposition spent some time going through them and found a few examples of public servants questioning the deal. They did so in the course of exercising their professional responsibilities and, to be frank, that's all the opposition has noted: public officials had problems with the deal.

It raises the spectre of the infamous Sprung greenhouse. Some $22 million of public money spent by a previous administration - and here's the key part - over the objection of provincial public servants. The opposition hasn't made that connection but they are almost certainly headed there.

That's what the story looks like today.

And it looks that way because Trevor Taylor and his boss have failed not once, not twice, not thrice, but on every single occasion to do what anyone with half a clue knows they should do: release the information without delay.

Taylor needs to tell the story himself, from start to finish with documentation. Make an overhead slide show. Do that and the story goes away in a heartbeat.

It's not too late to do that.

That is, unless there is some substance to the various criticisms that have cropped up about this deal.

That is, unless the provincial government had good reason to reject this deal, not once but twice, as Taylor himself has acknowledged.

If either of those is true, then the unnamed communications officer's e-mail released this week gave a clue to what government has been trying to do all along, namely spin the story.

Ask any competent public relations professional about spin.

They'll tell you that's what comes out of the back end of a burro.

And so far?

That's what the provincial government's explanations of this Sprung-sized investment have been worth.

-srbp-

The editorial reaction continues

From the Ottawa Citizen, as reprinted in Regina.

But as with other professional polemicists, Mr. Williams is occasionally the victim of his own hyperbole. Canadians are witnessing one such episode today.

...

If there is merit in Newfoundland's position, then the premier should communicate it properly. Indeed, many people agree with him that revenues from non-renewable resources should not be in the formula. But the politics of insult won't help him or his fellow Newfoundlanders very much.

Outrage plays well with the voters back home, but in Ottawa's Langevin Block, the home of the prime minister's office, it only registers as a rude noise.

-srbp-

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-