Uncomfortable thoughts

One of the little stories that seemed to sail past most people was a report that three of the province’s four regional health authorities will finish the year with balanced budgets.

"The light bill goes up, the phone bill goes up, the oil bill goes up — that type thing," said Western Health finance committee member Tom O'Brien. "We submitted that to the government and [government] approved our budget with those inflationary numbers in it. So we'll have a balanced budget for 2009-2010.

The only one that wouldn’t is Eastern Health but given some of the issues involved, that’s understandable.

But Labrador-Grenfell,  Western and Central expect to balance their books by year end.

Last spring, Labrador-Grenfell Health estimated it would end its fiscal year with a $2-million deficit, but officials said Wednesday that's no longer the case.

"We have had a greater success in recruiting staff, with a greater number of nurses on staff that actually cuts down on our cost of providing services," CEO Boyd Rowe said. "When we don't have adequate numbers of staff, we end up paying a considerable amount of overtime."

How odd then that earlier this month health minister Paul Oram announced that government had decided to cut laboratory and x-ray service in Flower’s Cove and Lewisporte. he claimed the government needed to save money and that the cuts had been recommended by the health authorities involved.

Sure those two ideas were among dozens tossed out by all four regional health authorities back in February as possible cuts when they were asked  - hypothetically – what they could do to balance their budgets if they got funding frozen at 2008 levels.

But if the books are balanced the cuts weren’t necessary.

And if there was a problem with the government health budget generally, then surely it would have made more sense to do some serious thinking and announce a wide range of options with the new budget in the spring.  There was no rush to chop in September if things were okay and certainly there’d be no reason to cut only two.

That’s what one would expect from a government that generally practices sound financial management based on a genuinely strategic approach. That was the logical implication when Oram acknowledged what many have known for some time, namely that the current administration has been spending wildly, spending public money in a way that – in Oram’s word was “unsustainable.”

Such a government would not engage in seemingly capricious, apparently ill-considered and curious, bizarre cuts that seem to bear no connection to anything. Heck they aren’t even connected to a review of laboratory and x-ray service which isn’t even completed yet.

Such decisions would seem driven by something other than sound reasoning, logic, and a firm grasp of the whole picture.  They’d seem panicky.  They’d seem irrational, perchance even stupid given the political fall-out that’s resulted across the northern coast of Newfoundland.

And it would seem even more irrational, capricious, certainly foolishly stubborn  and – yes maybe even stupid – to persist in the irrational and apparently unnecessary cuts on those two communities once the backlash started  and the overall financial picture was shown to be something other than dire.

Events of the past couple of weeks make you wonder what is really going on inside the provincial government.  What is the real story behind the Flower’s Cove and Lewisporte cuts.

Was there more to Trevor’s departure than meets the eye? Was there something to be found in his comment to Randy Simms the other morning that we are facing the worst economic crisis since the Great Depression?  Taylor was known to speak bluntly and he certainly never spouted the “we are living in a bubble” rhetoric.

Once upon a time, not so very long ago, the good people of Newfoundland and Labrador would look on another administration and wonder what was going on.  Things sometimes didn’t make sense. 

The good people would stare in bewilderment since the leader was known to be a political mastermind.  Surely there had to be some Mensa answer they would rationalize, an idea incomprehensible to mere mortals as to why such bizarre things were occurring. 

Even went things looked insane they figured there had to be a plan behind it all. No one had to tell them that at a board of trade speech;  they knew it already.

Yet, despite their faith, they remained perplexed.

Uneasy.

Unsettled.

Disquieted.

Your humble e-scribbler would suggest to these people that they think about the issue again, and about their conclusion, with one tiny difference:

Merely look on events without the assumption that there was some inscrutable genius at work.

Then look again at the conclusion they reached.

Invariably, inevitably, predictably, at the point they reached a conclusion once again – devoid of the assumed secret and unknown brilliance – their faces turned ashen.

And they would go very quiet.

Quiet isn’t a word you’d use these days in some parts of Newfoundland and Labrador, is it?  Places where the Great Tory Revolution supposedly started.

That must be a very uncomfortable thought for some people.

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Trevor’s greatest hit

In honour of Trevor Taylor’s departure from politics, here’s a link to a post on what he said is his proudest accomplishment in politics.

The fibre-optic deal may well prove to be the railway branch lines of the information superhighway.  It was also one of the finest examples of a government that can’t seem to figure out what it is doing or why it is doing it but it does know the public shouldn’t get any concrete information.

Just remember:  Trevor picked this as his own political monument.

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Kruger announces two week shut-down

Kruger announced Friday that Corner Brook Pulp and Paper Limited - the only paper mill left in the province - will idle the entire Corner Brook facility for two weeks starting October 12.

The company cites the high dollar and weak newsprint prices as the reason for the shut-down.

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Simple-minded indeed

The provincial government didn't "invest" money in Rolls-Royce at all.

It just handed over a half million in cash, no strings attached.

It wasn't a loan.

They didn't buy shares.

They just gifted the company with public money.

re:

- The Telegram - St. John's, NL: Business | Investment more than just money: premier (view on Google Sidewiki)

h/t to the anonymous comment suggesting sidewiki.

Danny of the Dead

Don’t be surprised if you start hearing more of Danny Dumaresque in the weeks ahead as the former Liberal politician tries to raise his profile in anticipation of a by-election in The Straits-White Bay North.

The Other Danny is reputedly planning to turn up in Flower’s Cove for the Big Protest. That’s Step Two.  Step One was calling local radio shows.

The Liberal Party’s answer to Jim Morgan last tried for a seat in the 2007 general election.  He was defeated in Torngat Mountains by Patty Pottle and a gazillion personal phone calls from The Danny Hisself.

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Another drop on the way?

Could be, at least if David Rosenberg is right.

Rosenberg, chief analyst at Glusken Sheff and Associates, thinks the current pricing in the markets is based on the false assumption that corporate profits and gross domestic product have already rebounded.

He basis his opinion, in part, on an analysis of the price to earnings ratio for stocks.

Furthermore, the stock rally is pricing in an employment rebound of 2.1 million and a rise in bank lending of 16.5% on average. But both employment and bank lending continue to decline.

At its current valuation, Mr. Rosenberg said the S&P 500 is priced for US$83 in operating earnings per share, which is nearly double from the most recent fourth quarter trend.

Meanwhile, consensus bottom-up estimates are predicting US$73 in operating earnings per share in 2010, with US$83 not likely until 2012.

Rosenberg’s analysis puts stocks overvalued by 20%.

In a similar way, oil has been over-valued considering the huge drop in American demand and corresponding high inventories. Prices have been dropping both for crude and refined products. NYMEX gasoline fell six cents per gallon and ICE Brent crude fell three dollars a barrel in the past 24 hours.

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Salty stories

Okay, so like all the Toronto media are worried about sodium in food.

The Grope has a story on it.

Ditto the national midnight Star.

And the mighty Ceeb! can’t be left out.

Lowering the sodium level in your diet is a good idea.

But if you really want a funny sodium story you have to look at anti-salt crusader Michael Bloomberg and his love affair with the shaker in NYC:

But Mr. Bloomberg, 67, likes his popcorn so salty that it burns others’ lips. (At Gracie Mansion, the cooks deliver it to him with a salt shaker.) He sprinkles so much salt on his morning bagel “that it’s like a pretzel,” said the manager at Viand, a Greek diner near Mr. Bloomberg’s Upper East Side town house.

Not even pizza is spared a coat of sodium. When the mayor sat down to eat a slice at Denino’s Pizzeria Tavern on Staten Island recently, this reporter spotted him applying six dashes of salt to it.

 

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To the good people of Straits-White Bay North: you can vote today to replace Trevor

Forget protest in the streets.

Protest where it hurts:  the ballot box.

Danny Williams campaigned in your district in 2001 and held out the Tory victory there and across the road for Wally Young as proof times were changing in the Tory favour.

Well, times have really changed.  

If you want to send a message to the government it will never, ever forget, then there is a simple way to send a message.

Vote today.

It’s called a special ballot.

Every person can request a special ballot including:

• an elector who has reason to believe that he/she will have difficulty voting on polling day perhaps due to work or personal commitments;

• a student who is in attendance at a recognized educational institution either inside or outside the Province;

• an elector temporarily residing outside the Province for a continuous period of less than 6 months who is unable to attend at either the advance or regular poll;

• an elector who is incarcerated in a correctional institution or in detention at the Waterford Hospital;

• a patient in hospital who will be unable to attend either the advance or regular poll.

All you have to do is contact the Office of the Chief Electoral Officer, otherwise known as Elections Newfoundland and Labrador.

There’s a form to complete and send in.  You can find it in pdf format here.

They’ll send you back a voter kit which you can use to cast your vote right now.

But there’s no election yet, you may be thinking.

Doesn’t matter.

Under section 86(4) of the Elections Act, voters who meet those criteria above can ask for a special ballot no more than four weeks before an election or by-election is called.  Well, you and the rest of the world don’t know when the thing will be called but we know when the earliest date is that it could be called.

That would be October 2, the day Trevor said he is quitting the House of Assembly.  Any of you who knew Trevor was going could have already voted.  But since the rest of us found out today, you should be able to get a ballot and vote right now.

There is no legal reason for Paul Reynolds to refuse you the opportunity to vote under section 86(4).

And don’t worry about the fact there are no declared candidates.

Under section 86.4, you can write in the name of the political party you want to vote for instead of the name of a particular person.  Once a candidate is declared for that party, the candidate will get your vote. 

Voting is your right.

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Kremlinology 5: hard to swallow that

In other instalments in the Kremlinology series, we introduced you to Trevor Taylor. There were a couple of signs that things were not right with Trevor Taylor and his relationship with the current administration.

Until today he was a cabinet minister in the Danny Williams crew.  He’ll be resigning his seat in the legislature next week.

Taylor pulled pin unexpectedly Thursday, announcing he was off to a new gig with a not-for-profit interested in Arctic ecology.  According to Taylor, he is going for personal reasons.  He said he made the decision a month ago, told the Premier a week and a bit ago and dropped it on cabinet today.

There’s a new job waiting for him that will involve working with a not-for-profit on fisheries management in places like the Beaufort Sea.

The real reasons are likely contained in all the pre-emptive denials Trevor tossed out in his scrum:

• He still loves Danny
• No dissention or tension
• Not running federally
• Nothing to do with Flowers Cove

Politics is hard on the personal life and when things get tough on issues like Flowers Cove, forestry and the fishery – all big issues in Taylor’s neck of the woods -  family members often bear the brunt.   The fact that Taylor hasn’t been able to make any headway with his cabinet colleagues on those issues doesn’t help.

His tone during the scrum seems stressed.  This is  a guy who doesn’t appear to want to leave politics. If he has issues within his family, a job that will take him over North America and involve work at the opposite end of the country doesn’t sound like a recipe for spending more time with the kids, as the phrase goes.

For his part, the Premier praised Taylor and said it might take until next month to sort out a new cabinet arrangement. A permanent replacement for Taylor would take longer.   Taylor has carried a few stinky parcels for the current administration, including the fibre optic scheme. 

Maybe Taylor’s departure speaks to frustration at his inability to change certain minds in the Confederation Building.  He spoke about getting into politics to make decisions on certain things.  One of them was likely the fishery, interestingly a portfolio from which Taylor was ripped in favour of some old-fashioned thinking. 

Trevor Taylor is a relatively young man who – until today – seemed to have a bright political future ahead of him, especially in a post-Danny Williams Tory party.  The fact that he decided to pack it in, rather than stick it any longer, might be a sign that kremlinology sometimes works.

Any other cabinet ministers or back-benchers feeling political heat these days?

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Can’t tell the candidate’s party without a score-card

Last time your humble e-scribbler checked, education was an exclusively provincial responsibility under the constitution.

Yes, the feds drop money into post-secondary education, but how it gets spent is a thing for provincial government authorities.

So if any order of government has to prepare young people for the future and a global, competitive economy, it would be the provincial government.

Research and development?

Both orders of government should be spending money on that.  The provincial should not be giving gigantic breaks to its buddies in the oil business.

So what exactly is Siobhan Coady doing calling on the federal government to deal with issues where the provincial government is apparently dropping the ball?

Apparently following the time honoured local political tradition of talking about things other than what your elected position deals with.

If you are running for school board, complain about the roads. If you are running for municipal government, complain about the hospitals, schools, and the provincial government in general.  If you are running for provincial office - blame Ottawa.

Or is it the other local tradition of talking about the need for more federal hand-outs to cover the bills for being more “independent”?  If that’s the case she has good company from at least one current politician and one wannabe.

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Have not?

Forget all the talk about Newfoundland and Labrador being a have not province.  Figures from the federal finance department tell a different tale.

	2004	2005	2006	2007
NL	7792	8572	8994	9936
PE	7489	7671	7874	8594
NS	5966	6422	7014	7701
NB	6895	7349	7849	8476
QC	6324	6493	6787	7108
ON	5652	5979	6261	6848
MB	7510	8080	8154	9235
SK	6465	7179	7768	8058
AB	7363	8050	8562	9461
BC	6828	7316	7578	8054

Leaving out debt servicing , Newfoundland and Labrador topped every province in the country  in spending per person in 12 of the  21 years from 1986 to 2007.  The province has been in the top three in per person spending in all but three years in that period.

Even more surprisingly, Newfoundland and Labrador has been in the top spot in all but two years since 1994. 

And the gap isn’t a small one. 

In 2007, Newfoundland and Labrador outspent Alberta by $500 per person. 

In 2003, the last year of the Grimes administration, Newfoundland and Labrador spent about $1300 per person more than oil-soaked Alberta.

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Tom Marshall, Time Lord

Now that Tom Rideout is gone, another cabinet minister has been afflicted with the strange tendency to confuse time.

In this case, it is justice minister Tom Marshall and the confusion is over how long the Green bill was debated in the legislature.  Marshall issued a news release on Wednesday weighing into the controversy over an eight percent salary hike given to members of the province’s legislature in July.

Marshall said:

This compensation is clearly laid out in the act which was widely debated and reported upon by the media at the time of its passing.

Widely debated?

Try a portion of one day’s sitting right at the end of the spring session in 2007.  The thing was whipped through the House of Assembly so fast a great many details of it were not revealed to the public.

Like the fact that the spending limits and other provisions didn’t take effect until after the fall 2007 general election.

Neither aspect was discussed at the time, nor was there much public discussion of the appointment of the salary commission that was set to work holding public hearings while most people in the province were caught up with summer vacations and other such stuff.

Old habits die hard, and some  - like the inability to tell time – die even harder.

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More problems for NALCO power line

Objections are now coming about the proposed power line that would skirt Gros Morne Park.

Hikers and outfitters are concerned the power line will affect caribou and spoil hiking trails in the area.

"We've been working for the past four years in the Portland Creek and Parson's Pond watersheds, and we're hoping that Nalcor will be able to compromise and find a more suitable route further east and north than the proposed route," said Paul Wylezol, chairman of the International Appalachian Trail of Newfoundland and Labrador.

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Marine service facility in land-locked town gets free gift of taxpayers cash

Rolls-Royce marine is establishing what is touted  - by the provincial government but not the company - as a $10.5 million service centre in Mount Pearl.

Other Rolls-Royce marine service centres are located right next to the ocean, usually with wharf facilities as part of the complex, like the 40,000 square foot facility in Galveston, Texas or the 21,000 square foot plant  in Seattle, Washington.

Mount Pearl is land-locked.

Unlike the other Rolls-Royce service centres, the new one in Mount Pearl is actually quite far from the major shipping locales or construction yards where one might think it would be easier and cheaper to repair Rolls-Royce engines.

Of the great sea-faring cities of the world,  of all the great maritime cities of modern times, Mount Pearl isn’t a name that comes readily to mind.

So what exactly will these 36 employees be doing, one wonders.  Neither the news release from the company nor the one from its government benefactor gives any real indication.

Very odd.

But nothing is quite so odd as the idea of a multi-national company establishing a facility valued at 10 million bucks that needs a few hundred thousand – completely interest free – that they don’t even have to pay back to the public purse.  Supposedly this money will help defray the cost of equipment and training.

$500,000 against $10, 000,000.

Something doesn’t add up. 

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The Kings of Cuts

There’s something about Paul Oram that just seems so familiar.

Maybe it’s his similarities to the equally-perfectly coifed predecessor, Lloyd Matthews.

Yes the father of the Premier’s Chief Publicist occupied the health minister’s office until early 1997 when he was hastily shuffled out.  There was a massive revolt against the way government was handling health care. 

Take a second and read the old news releases from those days though, and you’ll find more than a few things that seem oddly familiar.  Stuff like reviewing health care in central Newfoundland with an eye to what could get “improved”:

Health Minister Lloyd Matthews will take the next 6-8 weeks to fully evaluate and consider the recommendations of the report into health services in Central Newfoundland. KPMG Management Consultants recently presented the final report to the minister following four months of consultation with individuals and organizations throughout the region.

"This review is a comprehensive analysis of current and future health needs for the entire Central Newfoundland region," said Mr. Matthews. "The report looks at the network of primary, secondary, chronic and community based care, and makes recommendations on how these services can be better organized and coordinated to meet existing health needs and to reflect the emerging health needs of residents in the region."

The minister stated he would now be presenting this report to Cabinet for consideration. "Once government has had an opportunity to consider the full report, I will be able to provide further details on health services contained in the report, as well as outline future directions for health services in Central Newfoundland," said Matthews.

The minister thanked all individuals who made presentations or submissions to the consultants during the period of review, for their interest in health service delivery.

Matthews released the review in March, 1997, after announcing it had been received in early January.  The project started the previous June.   It recommended a number of things, including renovations to North Haven Manor in Lewisporte to ensure it could provide service out to 2005.

There are a lot of things in Matthews’ ministerial past that seem oddly familiar to the current generation, as well as a few surprising differences.

Matthews didn’t have much money to play with either as minister or as a member of cabinet generally.  Paul Oram and his cabinet colleagues  - by stark contrast - have access to more cash than any cabinet in the province’s history.

Oram talks about health care cuts.

Matthews’ review of health care in central Newfoundland could note that since the creation of new health care boards (re-organized out of existence by Oram’s clan), day surgery had increased by 70% in Gander. Note, for example, the reference to demographic projections for 2005.

There’s a sense of planning and organization to the whole thing.  The re-organization started with a view to changing how health care money was spent so more could be pushed toward front-line service.   It may not have worked out exactly as intended, but there was a long-range goal based on the knowledge that by 2005ish, the population would be pretty much where it actually turned out to be.  That brought with it certain predictable consequences and government worked to organize a system that could provide needed care within the budget likely to exist.

Sometimes, the differences are startling.  Back in the 1990s, the health minister could commission a report, get it and then release it within six weeks.  When was the last time Oram and his colleagues managed to get a report on the street within six months of getting it in hand? 

Compare as well, Matthews’ language to that used in the past 48 hours or so.  The emphasis on changes in the 1990s was ensuring that the government could continue to meet health care needs despite limited funds and what was anticipated to be skyrocketing demand. 

There’s a decidedly less positive sound to the way Oram put it:

“Our government faces a difficult decision to make regarding the types of services we can offer in the long-term, how much we can continue to invest as a province and identifying how we can improve the quality in our programs and services across the province.”

Still through it all there are some common threads, ones that transcend the superficial nonsense Oram got on with the other day by referring to cuts in the 1990s. 

He might do well to check with some of his predecessors, people who had a real hard time running the department but who managed to get through it with their reputation intact.  Roger Grimes would likely give him a good pile of advice. So too would Herb Kitchen or Julie Bettney.   Lloyd Matthews wouldn’t:  if memory serves, he got into political hot water largely due to the way he presented himself publicly.

How Oram handles himself might determine who really gets remembers as being the Kings of Cuts: Danny Williams and his crew or the guy Danny used to call the King of Cuts.

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Meeker gets behind the ad that is driving ‘em bonkers on The Hill

Geoff Meeker is back from vacation and is lighting things up at his Telegram blog, “Meeker on Media”.

The latest post is the text of an interview with the people behind a series of ads that are keeping political controversy alive in central Newfoundland.

“The reaction from the area MHA's has been disappointing to say the least,” said the spokesperson. “Clearly there are larger influences at work here. Susan Sullivan, whose light was shining so brightly (new MHA, cabinet appointment) has probably dashed her re-election hopes due to her inaction and complicity. Clayton Forsey and Ray Hunter have also placed themselves in jeopardy. Many say that Ray Hunter has achieved his goal of a two-term pension, so does not care either way (his record clearly speaks to this). Municipal officials have been even more inept – Mayor Rex Barnes and his council have failed to grasp the magnitude of this, and have, in fact, been shameless in praising the scraps falling from the provincial government table.”

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Just bear in mind…

the guy who is trying to explain health care decisions is the same guy who is clued out about a bunch of other things.

He’s also gotten himself in hot water over conflict of interest and briefing books and he even briefly turned up with one of the infamous rings from the House of Assembly scandal.

Last summer, as markets were tanking, then-business minister Paul Oram talked about a booming local economy.  In January, he was talking about bright the future will be but with no talk of any big financial problems at home.  Thankfully, the guy has finally wised up, or so it seems when it comes to the unsound state of the provincial government finances.

All that coupled with the inherent contradictions between what Paul Oram has been saying, what the Premier has said publicly,  and what the record shows might just make this health care crisis bleed all over the local political landscape well into the fall.

That Oram-fuelled health issue is on top of the other problems on both the Northern Peninsula and in central Newfoundland related to forestry that just won’t go away no matter how much money the provincial government has been willing to toss at the two areas.

Of course, now Oram and the talk of unsustainable spending built on oil makes it look like it is money government doesn’t have.

It may ell be one of the most interesting fall seasons in a long while in this province’s politics.

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Public money coming for Rolls-Royce

Paul Oram may be having trouble paying the health care bills but his predecessor, Ross Wiseman, apparently has cash for what appears to be an outright give-away to one of the great international symbols of luxury.

Yes, Ross will hand out taxpayer cash to Rolls-Royce.

“Contribution” is the word the provincial government likes to use when it hands over cash to a private sector company, not as a loan with interest.

Let’s see if that’s what it turns out.

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Unsound financial management, the stunning Oram admission

In Budget 2009, we invested $2.6 billion in health and community services.  This is no doubt a significant amount.  This represents a billion dollar increase in the past five years.  While we would like to do everything and meet every demand, that investment is simply unsustainable.

Paul Oram, Minister of Health and Community Services, September 21, 2009 [video file]

Note the date.

Health minister Paul Oram admitted today that the provincial government’s financial management since 2003 has produced a level of government spending that is - in his words -  “unsustainable.”

That is not just Paul Oram’s word.

His remarks were approved at the highest level.

That word  - unsustainable - is the word that the Premier’s Office chose to describe the financial state of the provincial government.

Until now, the Williams administration has prided itself on exactly the opposite. This is a remarkable admission for the Williams administration, an administration that has prided itself on what it claimed was sound management of the public treasury.

Regular readers of Bond Papers have known it for some time.

The earliest use of the word “unsustainable” in connection with provincial government spending was 2006:

What no one knew was that oil would hit US$70 a barrel and the cash would be pouring in at a rate no one in the province had ever seen before. That allowed Danny Williams to avoid making a whole bunch of good decisions and to crank up spending to unprecedented and, and in light of the economic slowdowns, likely unsustainable, heights.

The word turned up again a few months later in a quick look at the 2007 budget:

The current and forecast spending increases are based on optimistic projections for the price of oil in the medium term. Any downward trend in commodity prices (oil, minerals etc) will quickly make the consistent spending increases since 2003 unsustainable. Fiscal reality in those circumstances - taking less money in than is flowing out - would require program cuts, job losses and/or tax increases to correct.

Take a second and go read that post.  You’ll find the “unsustainable” again:

That level of per capita spending [second only to Alberta] is unsustainable in the long run. As a recent Atlantic Institute for Market Studies assessment concluded:

“If the province fails to reign in its whopping per capita government spending (about $8800/person [in FY 2006]) and super-size me civil service (96 provincial government employees /1000 people) it will quickly erode any gains from increased energy revenues.”

That is exactly the situation Paul Oram described today.

Look through Bond Papers and you will see repeated warnings about the unsustainable growth in government spending since 2004/05. 

This is not an exercise in “I-told-you-so”;  let’s clear that out of the way at the start.

This is about something much more significant.

Point One:  The issues are not new and the implications of the issues aren’t new.

Go back further than 2006.

Go back to the early to mid 1990s and you will see forecasts that showed the demographics in the province for the time period we are currently in and that mapped out the implications for health care costs.  Some of those same ideas turned up here in several posts throughout 2007 and 2008 that discussed the very serious financial state facing the provincial government.

Point Two:  Fail to plan;  plan to fail.

The current situation is a direct result of a series of short-term decisions made by the current administration since 2003.  The short-term spending decisions took place in every aspect of spending;  health care just happens to be the one place in the budget where the demand for more spending is greatest and where the implications of spending are also proportionately great..

How do we know the decisions have been made on an ad hoc basis?

Well, the indicators are littered throughout the correspondence released today by the provincial government.

For starters, just look at the dates on the e-mails to the regions.  The provincial government only settled on its spending allocations in late February and even then, the decisions were preliminary.  

Since 2003, the budget process has slipped further and further back in time such that crucial decisions – like gross spending – are not made until a few weeks before the end of the fiscal year. The reality of these letters suggests that budget decisions were not made until well into the current fiscal year. 

Throughout the 1990s and into the early part of this century,  the big picture spending decisions were made before Christmas.  By the time late February rolled around, the individual line items had been settled such that there was very little to decide.  In those days, the only adjustments that came after February would be cuts based on any changes to federal spending.

But in a provincial government where cash hasn’t been an issue, there is really no reason why the annual budget process should be so far out of whack that major budget decisions are still not settled four weeks before the end of the fiscal year.

Secondly, notice that the direction from the department to the regions is simply to freeze spending at 2008 levels.  That’s a short-term decision if ever there was one, not the sign of a decision taken within the context of a longer-term plan.

Thirdly, take a look at the list of options offered up by the boards.  In Central, there is a wide and unconnected list.  On  the one hand there are major program shifts.  On the other, there is an inconsequential cancellation of a single position for a few thousand dollars.  In Western, the increased costs forecast include substantial amounts that have to be annualised.  That is, the initial amounts increase over time as with any program spending. 

None of this is a sign of planning either at the regional or provincial level.  Rather it suggests a series of ad hoc decisions being made in response to ad hoc direction from central authorities.  As can be seen particularly in the letter from Western region and Labrador-Grenfell, significant new projects were started in 2007 and 2008 which need to be continued.  Yet, in preparing for 2009, the long-term implications of these projects are called into question by a predicted downturn in the economy.

In truth, this inconsistent management situation matches up with what we have seen from the provincial government across the board.  Capital works projects take inordinately long times to get start.  Significant legislative measures get lost for upwards of two years and more before they are implemented.   All the delays cost money. 

Point Three:  The solution cannot be more of the same.

One of the most obvious implications of analysis done for the Strategic Social Plan approved by cabinet in December 1995 was that government needed to fundamentally change how it delivered some services if it was going to balance the demand with the ability to supply.

Unfortunately, one of the first acts of the Tobin administration in 1996 was to scrap the SSP and replace it with a pale imitation. Gone were the needed reforms.  What has occurred since 2003 has been a continuation of the situation post-1996, with predictable results.  Until now, the Williams administration has steadfastly refused to acknowledge it faced a very serious problem.

But acknowledging that a problem exists is the first step to setting things right.

With all that as the basis, the next few posts will lay out some ideas for producing fundamental changes aimed at providing a financially sound future for the province.

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The truth is out there…

It just ain’t coming from this Mulder.

labradore notes a curious commentary on Sean Cadigan’s recent history of Newfoundland and Labrador written by someone name Judith MacDonald Guy Mulder from Port Hope, Ontario.  The thing appeared in the weekend Telegram but isn’t online.

Ms. Mulder either did not read or did not understand Cadigan's book.  She mentions several things but does not present anything to rebut Cadigan other than merely to assert that he is just wrong. That is always persuasive.

With that said,  her major grievances appear to be that Cadigan :

1. does not accept the anti-Confederate orthodoxy now in vogue, and,
2. calls Danny Williams a "tycoon".

On the first of these he ought to be commended.

On the second, it is hard to fathom why she objects to calling Williams a word that means a powerful and wealthy businessman.

Isn't that what he is?

Cadigan’s book is worth taking the time to read if you have an open mind and can understand simple English.  The argument Cadigan offers is not complicated or hard to understand. Cadigan is a professional historian but his writing is, as the saying goes, “accessible” and the themes he weaves are equally easy to grasp. 

This is an exceptional overview of  Newfoundland and Labrador history that deserves to be read by more people.

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