The Sir Robert Bond Papers

21 November 2010

Lower Churchill opinion: and then, like magic…

[Note: This was originally written on Saturday night and time-delayed until Sunday morning. However, as events overnight changed the story, here it is with a new post to update is on the way.]

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The poll goosing army got its act together.

A little over 12 hours after your humble e-scribbler pointed out that the Old Man’s retirement scheme wasn’t polling too well at voice of the cabinet minister, things changed.

From a little over 7200 votes on Saturday morning there were an astonishing 25,413 votes later on. Suddenly 70% of the universe is loving the retirement idea.

Here’s what the results were at about 10:30 Saturday morning:

This is a just a reminder that someone in the province’s reform-based Conservative Party pays way to much attention to this sort of trivial stuff.

No one has documented the whole foolish business as consistently as labradore. In January 2008, for example, labradore noted the gigantic number of votes on question of the day polls that were important to the Premier (or mentioned him by name) versus some other topics.

In October 2009, he noted the same trend with the new VOCM website even though some technical changes made it harder for some dork to sit at a computer and mouse click his way to premature carpal tunnel all to make the Old Man look better.

Now that one is interesting because it makes it pretty clear that the vote total earlier on Saturday was actually higher than the average already. The late night total was more in line with the ludicrous numbers from the old-style VOCM website.

Meeker on Media has also done a few posts on it. One titled “Vote fixing” appeared in 2008. It’s been re-dated as a result of the recent switch to a new layout at the Telegram website.

After Meeker blogged about one technique for rigging the poll, someone must have tried it. The resulting click duel wound up crashing the VOCM poll system. Meeker’s comments at the time are worth repeating because they show a similar pattern of insane click counts as we’ve seen so far on November 20:

I saw some irony in the question. I also noticed that, at the time (about 12:30 pm), there were almost 2,000 votes at the site, with 63 per cent disagreeing.

My prediction was that, if the Yes votes made a sudden resurgence, the Trained Monkeys would immediately start clicking No and the voting numbers would go into the tens of thousands (they usually like to maintain a 70 per cent share of the vote).

And my prediction was correct. People did want to play this game. Within an hour, the number of votes had doubled, and the Yes side was out in front. At 2:30 pm, I had to go to a meeting, and at that point the Yes side was still leading, with 55 per cent of 10,000 votes cast.

That's right, ten thousand! It was wild.

When I got home later in the evening, the No side was winning. Votes at that point were around 25,000, and they were back around 60 per cent.

While I was talking live on the radio with Linda Swain, the number of votes was actually increasing by the thousand, as the minutes went by. The last tally I saw was 53,000 votes, with No holding at about 60 per cent.

This poll question will be up all weekend. It’s going to be fun watching to see what happens by Monday morning when the VOCM will likely change the question.

In the meantime, as you look at this an laugh, just recall that someone has obviously been organizing this intense idiocy for the past seven years.

And then Danny Williams complains about what he could get done if he wasn’t distracted. Well some of us have been saying that for years.

When this sort of foolishness turns up again, you have to wonder how much could have been accomplished if all the rest of his Fan Club actually did real work instead of obsessing with this sort of trivia to the point they spend an unhealthy chunk of a November Saturday making sure VOCM news told the right story in its QOTD report on Monday

Incidentally, just for fun watch and see if the comments section of this post starts turning into a laundry basket full of Conservative sock puppets (right, not exactly as illustrated).

Odds are good it will happen just like they all turned up on the earlier one about poll goosing.

- srbp -

20 November 2010

Offshore board announces results of bid call

From the Canada-Newfoundland and Labrador Offshore Petroleum Board (19 Nov 10):

“The Canada-Newfoundland and Labrador Offshore Petroleum Board
(C-NLOPB) announced today the results of the 2010 Call for Bids NL10-01 (Jeanne d’Arc Basin )for exploration rights in the Newfoundland and Labrador Offshore Area. Bidding closed on November 17, 2010 and successful bids were received on both parcels offered totalling $16,300,000.

The bids represent the expenditures which the bidders commit to make in exploring the respective parcels during Period I. If companies discover significant quantities of petroleum resources as a result of the exploration work, they may then seek a Significant Discovery Licence from the C-NLOPB. Any significant discovery licences issued in respect of lands resulting from these exploration licences will be subject to rentals which will escalate over time.

The following bids have been accepted:

Call for Bids NL10-01 (Jeanne D’Arc Basin)

Parcel 1 (139,617 ha)
Husky Oil Operations Limited (67%)
Repsol E & P Canada Ltd. (33%)
$1,150,000

Parcel 2 (29,783 ha)
Husky Oil Operations Limited (50%)
Statoil Canada Ltd. (50%)
$15,150,000

Subject to the bidders satisfying the requirements specified in the Call for Bids and Ministerial approval, the Board will issue an exploration licence for both parcels in January 2011. The licences will be for a term of nine years, with an initial period of five years.”

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Falling down on the job – Lower Churchill opinion

Not so very long ago, the Reform-based Conservative Party had an army who spent their time clicking madly to make that any question of the day on the VOCM website went the way the Premier would like.

It was all part of the machinery designed to maintain an illusion that the regime du jour is wildly popular. Incidentally, November is one of the four months of the year when the entire poll goosing apparatus usually goes into high gear.

How times have changed.

At 10:30 AM on Saturday, the VO question of the day results looked like this:

Only one third of the respondents – out of a hefty 7207 - like the Premier’s Lower Churchill deal. Almost half did not like it and, curiously enough, another 21% were not sure about it.

Not sure?

Perhaps someone is falling down on the job.

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World of Tomorrow: media studies ph.d, Ver. 2.0

In 1969, the province’s major daily newspaper proudly declared that the contract to develop Churchill Falls was a good thing:

Fears that Newfoundland came out on the short end of the stick in the agreement to develop Churchill Falls appear to be unfounded.

In fact, Newfoundland fares quite well, although it may appear otherwise on the surface.

At the same time, the paper’s John Carter did acknowledge that the “$950 million project in Labrador… probably would have come earlier had it not been for Premier J.R. Smallwood's uncontrolled outbursts of provincialism...”.

Fast forward four decades and it is clear that, to paraphrase Premier Danny Williams from Thursday’s dog and pony show, the experience of that disastrous contract has surely taught everyone in the province a few lessons on what not to do the next time.

Over at the Telegram, they learned their lesson very well about waiting until they had an actual agreement to study before heaping on the praise. Friday’s editorial begins with these sober and cautious words:

Lower Churchill is no longer a dream. It’s a reality.

Uh huh.

Right.

And the editorial accepts every single statement by every single government official from Thursday without question at all.

Lesson learned, indeed.

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Sky Captain and the Traffic of Tomorrow, November 15 - 19

Good boy, Dex.

People are loving the deal that wasn’t.

Here are the top 10 posts at Bond Papers for the past week, as determined by what the visitors are reading.

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19 November 2010

AbitibiBowater announces pensions agreement

Issued by AbitibiBowater on Friday, November 19:

“MONTREAL, Nov. 19 /CNW Telbec/ - AbitibiBowater announced today that, as part of its restructuring process, it had entered into agreements with the Government of Ontario related to funding relief in respect of the material aggregate solvency deficits in the registered pension plans the Company sponsors in Ontario and Quebec. The agreements will enable the Company to seek the waiver of the conditions, as detailed in its restructuring plans, regarding the adoption of funding relief regulations. On September 14, the Government of Quebec announced an agreement between the Company and the Régie des rentes du Québec for similar relief measures. The agreements finalized with the provinces of Ontario and Quebec provide, among other things, that the Company will meet its future pension obligations in full to the beneficiaries.

"The best way to ensure pension benefits continue to be paid out is to ensure a company stays in business. We are pleased that AbitibiBowater will continue to operate, that thousands of Ontarians will continue to be employed, and that existing pensioners will continue to receive their benefits," stated Dwight Duncan, Ontario Minister of Finance.

In addition, an agreement for the next five years has been entered into by the Government of Ontario and what will become one of AbitibiBowater's Canadian subsidiaries post emergence, AbiBow Canada, regarding its pulp and paper operations in the province. AbiBow Canada has agreed to apply specific measures regarding its governance and investment levels as well as the sustainability of its operations in Ontario.

"The agreement affects thousands of workers, retirees and families in Ontario and allows the Company to move towards the finalization of its emergence from creditor protection. We are all very pleased to see AbitibiBowater get back on its feet, and I am especially appreciative of the support of my colleague at the Ministry of Finance, Minister Dwight Duncan, for making this happen," said Michael Gravelle, Ontario Minister of Northern Development, Mines and Forestry.

This agreement will become effective as of the time of AbitibiBowater's emergence from creditor protection. Moreover, the parties have agreed to re-evaluate the covenants of the agreement at the end of the initial five-year term in light of the Company's situation, the conditions affecting the pulp and paper industry as a whole and the solvency of its pension plans.

"We have signed today an agreement that is a significant step toward our emergence. We are convinced we have obtained the best deal possible for all our employees and retirees in Canada, and we would like to thank the Government of Ontario for its ongoing support," stated David J. Paterson, President and Chief Executive Officer of AbitibiBowater.

The Company directly employs approximately 8,500 workers and has in the order of 20,000 pensioners in Ontario and Quebec. These agreements are subject to AbitibiBowater's and its subsidiaries' emergence from creditor protection, which is expected to occur this fall, and is subject to confirmation of its U.S. plan of reorganization.

AbitibiBowater produces a wide range of newsprint, commercial printing and packaging papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 19 pulp and paper facilities and 24 wood products facilities located in the United States, Canada and South Korea. Marketing its products in more than 70 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ.

For further information:

Investors
Duane Owens
Vice President, Finance
864 282-9488
Media and Others
Pierre Choquette
Director, Public Affairs - Canada
514 394-2178
pierre.choquette@abitibibowater.com

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Aboriginal land claims remain substantial barrier to Williams’ legacy plan

Innu leader Joseph Roche may have been at the news conference announcing something or other about Muskrat Falls but, as he told the invite-only audience, the whole thing isn’t going anywhere until the Innu land claims issues are settled.

"One of the key outstanding issues now is the consent of our Innu people," Riche said.

"But we cannot do that yet, we need the federal government to resolve outstanding issues for our land rights agreement … it has been thirty years in the making and we have lost many of our elders and leaders in that time. Without this, the Lower Churchill project can not proceed." [cbc.ca/nl]

Riche was one of the invitees and the provincial government distributed a backgrounder on Innu issues. But, as Premier Danny Williams knows already, the New Dawn agreement is stone cold dead. Riche reportedly put a damper on the excitement at the hotel news conference when he reminded people this thing wasn’t close to being a deal as far as Innu were concerned.

Chief Riche was talking about issues with the federal government, a key player the provincial government left out of the talks to this point. That’s just one of the problems. There is a substantial opposition within the Innu community to the project self and they aren’t interested in seeking anything happen on the river, period, full-stop, end of story, do-not-pass go and forget about the two hundred bucks.

And for those who missed it, someone seems to think that by selecting Muskrat falls as the first site, that will outflank the Innu opposition. Elizabeth Penashue’s annual walk to Gull island doesn’t mean that Muskrat Falls isn’t as important.

The Innu aren’t the only aboriginal group with a claim that needs attention.

So far the provincial government has ignored the Metis of Labrador even though the Lower Churchill dams would be within the Metis claim area. What’s worse for Williams is that the Metis are still smarting over his broken election promise from 2003 or his comment in 2009 that the project needed the Innu but not the Metis.

Other Premiers have long under-estimated the challenges of aboriginal land claims issues. At the time he announced a memorandum of understanding to do way more that Danny Williams proposed, Premier Brian Tobin boasted he could finish a land claims deal with the Innu in 12 weeks.

That was 12 years ago.

And Tobin’s proposal had a far more substantial basis for agreement than a terms sheet.

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Loyola off to Dublin

As your humble e-scribbler told you on August 13, Loyola Hearn is Canada’s new ambassador to Dublin.

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The World of Tomorrow: media studies ph.d edition

When there is so much official bullshit flying around, it shouldn’t be surprising that conventional news media wind up piling it higher and deeper on their own.

From the only newspaper Newfoundland nationalists care about comes a comment that ties Shawn McCarthy with the Ceeb’s Vic Adopia for most ludicrous assertion of the day by a reporter:

He has been battling Quebec Premier Jean Charest for years over Hydro-Québec’s refusal to transmit power from the Lower Churchill project through its existing transmission grid to markets in Ontario and the United States.

Hydro-Quebec hasn’t refused to wheel Lower Churchill power. NALCOR energy has refused to option space on the grid or start talks to build any needed extra transmission capacity.

But it gets better.

Since April 2009, NALCOR has been wheeling Churchill Falls power through Quebec to Emera at the New York border. That deal – which came long after the Lower Churchill transmission requests involved in recent Regie decisions – prompted Danny Williams to state proudly that Labrador power was no longer stranded:

This is truly a historic and momentous occasion for the people of our province, as never before have we been granted access through the province of Quebec with our own power.

But what is really amazing about the Globe piece is that Danny Williams actually spent five years trying to get Hydro-Quebec to take an ownership stake in the Lower Churchill without redress for the 1969 deal set to one side.

Oh, and just for fun, here’s what Danny Williams said in St. John’s on Thursday about whatever it was he announced with Darrell Dexter:

This is a day of great historic significance to Newfoundland and Labrador as we move forward with development of the Lower Churchill project, on our own terms and free of the geographic stranglehold of Quebec which has for too long determined the fate of the most attractive clean energy project in North America.

Historic agreement with Quebec.

Historic agreement with someone else because Quebec wouldn’t agree.

Which is it?

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The World of Tomorrow: Basic Math

Muskrat Falls: 824 megawatts with an estimated capital cost of $6.2 billion. That works out to about $7.5 million per installed megawatt.

La Romaine: 1,550 megawatts for $6.5 billion. That works out to $4.1 million per installed megawatt.

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18 November 2010

The World of Tomorrow

Wow.

Seldom has an announcement of any kind been accompanied by such a litany of sheer bullshit.

CBC is claiming that this is a deal to build the Lower Churchill and that, oddly enough is what CBC already announced in January 2008. One mainland CBC reporter debriefed his mainland colleague with the ludicrous claim that in the Churchill Falls deal Newfoundland bore all the costs, and Quebec collects most of the revenue. The rest of his debrief was no better.

So what was announced?

Well, let’s just remind everyone that this morning your humble e-scribbler put it this way:

If this isn’t a concrete deal to start work soon, then Thursday’s announcement can all evaporate as easily as the others did.

This is not even a memorandum of understanding

Today, two companies signed something called a terms sheet. That’s not a deal, an agreement, an agreement in principle, a memorandum of understanding or a letter of intent.

A terms sheet is – in business parlance – nothing more than a general, non-binding set of instructions to negotiators to guide their future discussions. For all practical purposes, it has only slightly more value than an informal chat over a beer.

You can tell this is not a firm commitment by the companies to do much beyond keep talking because it has a time limit: November 30, 2011.

When Danny Williams announced a memorandum of understanding on Hebron, he could treat the thing as a fairly solid basis of agreement. There were details to work out and there was always the chance of things going sour. But there was no timeline. Everyone knew the lawyers would set to work to come up with a formal agreement, but they didn’t stick an expiry date on it.

That’s because they had a commitment to carry forward unless something dramatic intervened.

But this thing has an expiry date clearly stamped on it.

As exciting as some people would like Thursday’s announcement to be, the reality of the it is far different.

Heck, Danny Williams didn’t even get the date right.

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Contextual Update:

Ready for a better tomorrow: a May 2006 post that puts the political value of Labrador hydropower in a wider context. The post title was Brian Tobin’s 1996 provincial election campaign slogan.

More to follow…

Muskrat Love

To help you get ready for the splendiferous announcement later today, here are some things to keep an eye on. Undoubtedly, there’ll be more spin than a baton twirlers’ convention riding on the Mad Hatter’s Tea Party ride at Disneyworld.

Just keep your head and you won’t get nauseous.

1. Ready for a better tomorrow. Just remember that tomorrow is a day that never seems to get here.

There have been memoranda of understanding before that came to naught. Remember 1998? Brian Tobin and Lucien Bouchard dropped a half million to announce not only a Lower Churchill deal but a reworking of the Churchill Falls project as well. Result: Nada.

Then there was the memorandum of understanding to sell 200 megawatts of power to Rhode Island. That fell apart because NALCOR couldn’t deliver the power to Rhode Island at a price anyone could afford.

Don’t forget Frank Moores’ big explosions on either side of the Straits.

And as we look at a likely memorandum of understanding between NALCOR on one side and the Government of Nova Scotia and Emera on the other, let’s not forget that NALCOR already has one: signed in January 2008.

If this isn’t a concrete deal to start work soon, then Thursday’s announcement can all evaporate as easily as the others did.

2. Cost. The lower the number the less likely it is real. CBC’s David Cochrane mentioned a figure of $4.0 billion.

The line from Muskrat Falls to Soldier’s Pond, just outside St. John’s came with an estimated cost of $2.2 billion in 1998. That would be close to $3.0 billion today. There’s an estimate of the Nova Scotia line that runs between $800 million and $1.2 billion. Take the upper one just to be on the safe side since proponents tend to underestimate megaproject costs big time. So just the lines alone are likely to cost more than $4.0 billion.

A 900 megawatt project in British Columbia (Site C) is coming with a $6.6 billion price tag so it is safe to work with a cost estimate for this project of around the same amount.

The 70/30 debt-equity ratio NALCOR boss Ed Martin has mused about publicly would give you a borrowing requirement of around $4.0 billion. There’s David Cochrane’s number. The rest of the cash would come from NALCOR’s small equity stakes in three offshore projects, unless Emera is coming on board with an ownership stake.

3. How much is being exported? A couple of weeks ago 60% of the project’s estimated 800 megawatts would go to Nova Scotia. According to reports on Wednesday, 60% of the power is now coming to the island and – here’s the kicker – the island portion of the province doesn’t need it. However, NALCOR does need the captive market in Newfoundland to help underwrite the massive project.

Keep your eye on this one because it will tell you how expensive electricity will get in Newfoundland and Labrador. As it looks now, things are lining up to prove Danny Williams was right when he said last fall that “…good, cheap, competitively priced energy, can't be offered to that whole region.”

4. Environmental process Day Zero: As regular readers already know, this thing will have to go through an environmental review with a whole new section never before considered.

5. Holyrood. For some unfathomable reason, no one seems to want to believe NALCOR’s own words on Holyrood:

It is important to consider that whichever expansion scenario occurs, an isolated Island electrical system or interconnected to the Lower Churchill via HVDC link, Holyrood will be an integral and vital component of the electrical system for decades to come. In the isolated case Holyrood will continue to be a generating station; in the interconnected scenario its three generating units will operate as synchronous condensers, providing system stability, inertia and voltage control.

The diesel plant at Holyrood will not be shuttered, mothballed or otherwise displaced or taken offline. To the contrary, it will run 24/7/365 but at a reduced capacity. Holyrood will be an “integral and vital” component of the province’s electrical system.

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17 November 2010

Offshore board releases helicopter inquiry report

From the Canada-Newfoundland and Labrador Offshore Petroleum Board:

The Canada-Newfoundland and Labrador Offshore Petroleum Board
(C-NLOPB) received the Report of the Offshore Helicopter Safety Inquiry today and is releasing it to the public immediately.

"On behalf of the Board, I thank Commissioner Robert Wells, commission counsel and the staff of the commission for their work during the course of Phase I of the Inquiry and with respect to the completion of this report," said Max Ruelokke, Chair and CEO of the C-NLOPB.

"I would also like to extend our thanks and appreciation to those who testified during the Inquiry for their time, commitment and contributions."

The C-NLOPB will take up to 30 days to review the recommendations and move toward the development of an implementation plan. The Board will not be commenting on the report until it has completed its review.

To obtain a print copy of this report, please contact information@cnlopb.nl.ca with a full mailing address. The report will be sent within three business days. Persons wishing to pick-up the report are asked to state this in their request.

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Lower Churchill MOU – the invitation

Some people are getting them via e-mail.

Your humble e-scribbler wasn’t one of them, nor was Nova Scotia Premier Darrell Dexter.

Print this off and save it as a souvenir.

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Sky Captain got his wingman after all Update: Apparent Dex was just joshin’ Sounded like he just had bad talking points. Dex is on the way to tie his province to this very expensive version of the Lower Churchill.

Atta boy, Dex!

Lower Churchill MOU - developing

1. CBC is reporting an announcement tomorrow on a memorandum of understanding involving Emera, NALCOR, the Government of Nova scotia and the Government of Newfoundland and Labrador to develop Muskrat falls (800 MW)

2. Nova Scotia Premier Darrell Dexter is denying the reports.

This story is developing. More will follow.

In the meantime, amuse yourself with:

Williams announces political exit plan

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The Fragile Economy: reversing the entrepreneurial drive

In a province that is so heavily dependent on public sector spending, it’s hard to imagine anyone would think that having the government play such a huge role in the provincial government in the economy would be a great idea.

Step forward the head of the St. John’s Board of Trade:

Chairman of the Board of Trade, Derek Sullivan said government contracts give a competitive advantage for local businesses and “can be a very powerful and reliable revenue stream.”

Talk about throwing the engine of economic development into complete reverse.

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16 November 2010

Food bank use up in Newfoundland and Labrador

Our poverty reduction strategy has been nationally acclaimed.

- Premier Danny Williams, National Post, August 2010*

Food bank use in Newfoundland and Labrador is higher in 2010 than it was a decade ago, according to a new report released on Tuesday by Food Banks Canada, the national organisation of community food support organizations.

Food banks across the province serve six percent of the population, the highest ratio of any province in Canada.

Food bank use in Newfoundland and Labrador is up 3% from 2009. According to the annual Hungercount, 71% of food bank users in the province receive provincial government income support, 14% receive employment insurance and 10% reported employment income. The Newfoundland and Labrador portion of the report was prepared by Eg Walters, head of the province’s Community Food Sharing Network.

For the third year in a row, we have seen an increase in the demand for
food bank services throughout Newfoundland & Labrador. While it may be argued that it is only a modest 3% increase, this, combined with previous years’ figures, shows a continued upward trend on the demand for food aid.

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* This is the same article in which Williams tied his own political philosophy to that of the Reform Party:

“On his own brand of Red Tory-ism We have a Reform-based Conservative Party which is probably ideologically more right-wing. I’m very fiscally conservative. What I wanted to do in Newfoundland and Labrador was get our fiscal situation under control. We were headed to bankruptcy six years ago. Now we’re a have-province. That’s the fiscally conservative side.

On the other side, I’m very socially conscious. Our poverty reduction strategy has been nationally acclaimed. We’ve doubled our health-care budget. We’ve put a lot of money into education. I felt our transportation and communication infrastructure was very important. I’m trying to give us all the basics to succeed after a non-renewable oil [resource] moves on.”

Hydro: different province, same political problem, same political solution

The province is different - Ontario, this time – but the raw politics underneath a pledge to cut electricity rates for all homeowners is pretty plain to see.

The government has already rolled out tax measures for residents of Northern Ontario as well as seniors to give them a break on their hydro bills. But amid worries that hydro rates will become an election issue, the government is under pressure to introduce measures covering a broader group of Ontarians.

Speculation was rampant throughout the energy industry that the government plans to tackle hydro rates. But energy sources said an across-the-board rate freeze is unlikely. Such a move would leave the Liberals in the unenviable position of following former Progressive Conservative premier Ernie Eves, who froze household and small-business electricity rates in 2002. A McGuinty government rate freeze would repudiate its assertions made in 2004 that consumers would have to pay the real cost of electricity, said energy consultant Tom Adams.

Freezing or cutting energy rates is pretty much the stock vote-buying method found in several provinces, including Newfoundland and Labrador.

And the arguments tossed out by the local New Democrats and the province’s Reform-based Conservatives are still energy policy bollocks.

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The Dismal Science: Debunking the “federal presence” fairy tale

Far from being hard done-by when it comes to federal jobs in the province, Newfoundland and Labrador is pretty much on par, according to a recent study conducted by the Frontier Centre for Public Policy, and reported by the National Post.

You can find a news release summarising the report here, while the full report is available in pdf format.

Some provinces - Prince Edward Island, New Brunswick, Nova Scotia and Manitoba – have significantly more than the national average number of federal jobs per 100,000 population. Quebec, Saskatchewan, British Columbia and Alberta have less.

Newfoundland and Labrador and Ontario are only slightly higher than the national average.

The study effectively refutes claims that this province is receiving something less than its “entitlement’ to federal pork spending. The comparative figures also demolish two reports released by Memorial University’s Harris Centre in 2005 and 2006. The provincial government has used those studies repeatedly to bolster its claims for increased federal transfers to the province to offset what turn out to be imaginary grievances.

The Frontier Centre study refers to these federal jobs as a form of “stealth” Equalization. That is, they contend that the federal jobs serve as a type of federal transfer to the local economy in each of the provinces. More importantly, though, the Frontier Centre contends that the transfer comes in addition to the formal Equalization program and is particularly heavy in the provinces it refers to as “major” have-provinces.

The study also notes that the have-not provinces with the highest ratio of federal government jobs also tend to have higher than average reliance on provincial public sector jobs generally. They compare provinces based on the number of public sector employers as a share of the total population. Newfoundland and Labrador is third highest on that scale, with Prince Edward Island and Manitoba coming, respectively, first and second.

Looking at the same information but as a share of the provincial labour force, Newfoundland and Labrador is by far the province with the largest dependence on the public sector. Almost 30% of the provincial labour force is employed by the federal, provincial or municipal government.

The Frontier Centre study puts the findings into a particular context, namely transfer payment reform:

The stealth equalization of unbalanced federal employment described in this paper is part of a much bigger problem —an approach to public policy in Canada that transfers money out of high-productivity regions into low-productivity regions.

Not only is this policy approach harmful to our productivity growth, it is also, quite simply, unsustainable. Historically, the taxpayers in three provinces—British Columbia, Alberta and Ontario, have paid most of the bill for high levels of public sector employment in the have-not provinces.

At the same time, the study does point to issues that are especially relevant to Newfoundland and Labrador, even if the report’s authors simply missed the poster child for their argument of unsustainable public spending and the dangers of reliance on what the author’s call “the state driven approach to economic development”.

Most residents of the recipient provinces are unaware of the extent to which their economies are state-driven and reliant on transfers. Beyond the official equalization money, massive amounts of revenue from elsewhere flow into these provinces from a number of different sources. Stealth equalization through federal employment is one important example—but there are others. Higher dependence on federal
government transfers to individuals and discrimination in ordinary operating programs in favour of the have-nots are two more examples of ways Canadian public policy transfers wealth into the have-nots.

Most residents of Newfoundland and Labrador are unaware of the extent to which the provincial economy is state-driven and reliant on federal transfers in addition to overall public sector spending.

They aren’t alone, of course. The current provincial administration operates as if going off Equalization was a tragedy of biblical proportions.

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Related:

Fragile Economy: staying the course
Fragile Economy: reductio ad argentum
Fragile Economy: The public sector
Fragile Economy: …and two steps back
Fragile Economy: …now three steps back and loving it

15 November 2010

Un-publishing

No, it isn’t like uncommunication.

The Canadian Association of Journalists has a new draft set of guidelines on correcting online information and dealing with requests to remove online material. CAJ handed the job of drafting the guidelines to an “unpublishing panel” of the CAJ ethics committee.

You can find an excellent summary of the issues involved at j-source.ca.

Here are the basic principles CAJ is proposing for how to handle requests to unpublish a particular post. Again, there is a more detailed discussion at j-source.ca along with an explanation of each point.

We [the online publisher] are in the publishing business and generally should not unpublish.
Ongoing accuracy is our responsibility.
Put a clear policy in place.
Unpublish for the right reasons.
It’s fair to be human.
Source remorse is not a right reason to unpublish.
Unpublish by consensus.
Explain your unpublishing policy.
Help sources understand the implications of digital publishing.
Consider the impact of publishing before publication.

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Let’s slap some study on that

This is a government that talks more and more about less and less.

The latest example:

a feasibility study of a single province-wide emergency telephone number.

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The politics of energy subsidies

From the Atlantic Institute for Market Studies comes a timely rejoinder to the policy in Prince Edward Island of subsidising energy prices out of tax dollars. The arguments in this post refer to the New Democratic Party policy of taxing tax off home heating prices but the concept is the same. The piece is also a timely one for Newfoundland and Labrador where Lorraine Michael recently embraced the policy.

The argument against the policy of cutting home heating taxes is simple:

It gave people with more than sufficient ability to pay a subsidy they did not need. It encouraged continued consumption at unsustainable levels and it helped the poor not by treating the problem (inefficient homes and too much consumption), but by treating the symptom (high electricity bills).

In Newfoundland and Labrador one suspects that political parties eager – or desperate – for votes in the coming year will lay this sort of policy on thickly to try and buy them up.

The ruling Conservatives, despite their supposed reform-based Conservative philosophy, are already trying to sell a future deal on the Lower Churchill as a guarantee of stable prices. They don’t talk about the huge subsidies the thing may well involve or that the whole thing will add enormously to the public debt. Incidentally, the likely reason the Premier has stopped referring to loan guarantees as loan guarantees is that he is acutely aware that any Lower Churchill project as he has proposed it will – inevitably – demolish once and for all any claims about the current Conservative administration’s performance in controlling the public debt and deficit.

It’s all bollocks of course. Energy prices in the province will stay stable anyways without the Lower Churchill. NALCOR’s own energy demand forecasts don’t support any such megaproject to supply juice to the island portion of the province. And with a bit of conservation and efficiency, what increased demand there is could go down.

That’s one of the reasons why this AIMS article is interesting: it specifically points to conservation as an economically sound policy:

the need for some electricity does not undermine the basic math that it is still cheaper and more efficient and, long term, more sustainable to reduce consumption.

At the same time, providing subsidies to allow everyone, but especially low and fixed income Newfoundlanders and Labradorians, to improve the energy efficiency of their homes would treat the problem of high heating bills rather than the symptom. At the same time, leaving the prices to reflect the cost of production would promote conservation and efficiency. The whole idea is progressive socially in addition to being economically and ecologically sound. It beggars the imagination to figure out why political parties would head down a road of subsidies they know is simply unsustainable.

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14 November 2010

A decade that changed the world

Talking Points Memo turned 10 this weekend.

Here’s the story of how it started, via The Atlantic.

Here’s how it looks now and here’s the column format that started it all.

And if you want to know why TPM is important, read the “About” bit from the website:

Talking Points Memo is one of the most innovative political news organizations in the country. Media watchers consider TPM the site to watch as the news business transforms from the old world of print to the online digital future. In March 2009 TPM topped TIME Magazine's list of 25 Best Blogs of 2009. "Talking Points," wrote Time's editors, "has become the prototype of what a successful Web-based news organization is likely to be in the future." And in September of 2009 The Atlantic listed founder Josh Marshall among the nation's 50 most influential commentators.

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13 November 2010

Small island syndrome

So get this.

The provincial government in Prince Edward Island is going to borrow a bunch of money and turn it over to a private sector company – a subsidiary of Fortis, no less – so that islanders can think they are getting cheaper electricity.

In reality, they’ll pay the loan back plus interest out of their tax dollars that should be going to things like health care, education and roads.

And Stan Marshall will laugh all the way to the bank.

Meanwhile in other news, the Premier of another small island continues to chase the latest version of his Get-Outta-Dodge legacy plan.

He promises to stay at the table – where and with whom we don’t know – trying to squeeze every penny out of the deal, as Faux News tells us, supposedly for the province. no word on subsidies, but count on having to pay them.

That’s what Bob Ghiz told taxpayers in PEI, too.

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Missile: Impossible 3

The Daily Show gives the Los Angeles Missile story the ending it deserves.

Turns out that the California missile was a passenger jet. The first clips looked like a missile. The heli pilot says he tracked the thing for 10 minutes, a point that Jon Stewart ridicules for the rather obvious clue it is. Makes you wonder if the gang at KCBS in Los Angeles is quite that stupid.

The news media – gotta love Fox News – and a few others blame the whole thing on the government for not knowing.

Sounds oddly familiar.

Aircraft misidentified, hysteria ensues fuelled by local news media speculation. Gotta love local Faux News. Even the Mother Corp went after the Faux News title on this one.

The truth is a lot less spectacular, of course.

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Traffic – November 7-12

The Top 10 Bond posts for the week, based on pageview activity:

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12 November 2010

Crude oil r’uh r’oh

From the Globe and Mail come some words of economic caution about the price of crude:

“The energy market has been the Johnny-come-lately to the overall commodity bubble,” said New York-based trader Stephen Schork. “What the market is doing is what it was doing in 2008: Selling the [U.S.] dollar and buying commodities with it. In 2008, it was primarily about energy but traders got their heads handed to them. Now energy is following rather reluctantly.”

He said a further deterioration in the U.S. dollar (USD/EUR-I0.73-0.001-0.19%) would re-ignite crude prices, while a recovery in the greenback would result in a more substantial pullback in commodities, including oil.

Mr. Schork said it is tough to justify $85 to $90 per barrel for crude on the strength of economic fundamentals. A $90 crude price translates into $3 per gallon for gasoline in the United States, and “that is not sustainable,” he said.

Not sustainable.

Those two words just won’t go away.

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How do you spell winner?

Alaska senator Lisa Murkowski seems likely to be re-elected in the first victory for a write-in candidate in an American federal election since 1954.

Murkowski lost the Republican nomination to Joe Miller, a challenger with backing from the Tea Party movement and former Alaska governor Sarah Palin. Murkowski decided to seek re-election but Alaskan election rules, voters would have to write her name on the ballot.

Double problem.

Although Murkowski she had been appointed to the senate by her father – governor Frank Murkowski – and although, she’d already won re-election in 2004, there was still a chance voters might not be able to spell her name correctly. In a two-way fight between a red Republican and a blue Democrat, voters could vote for colour or party and still get their choice regardless of how the candidate’s name looked on the ballot. A write-in candidacy could hinge on the accuracy with which voters rendered her name.

The Republican primary and the narrow Tea Party victory also foreshadowed a tough legal challenge to a third candidate. Take this third party ad as a typical example of the anti-Murkowski war from the campaign:

Murkowski’s campaign used a simple television spot to push the spelling of her name and get across the reminder that she was the incumbent:

She campaign also used a 17 second video that showed how to vote for a write-in candidate. Her campaign uploaded 61 videos to her youtube account, most of them fairly simple productions with high production values. In other words, they weren’t expensive to make and told a simple story very effectively. Most noticeably they were positive. Even an ad that pointed to problems in her opponents finished on a positive note and let the other guy’s words tie a potential noose around his neck.

The same couldn’t be said for Joe Miller’s stuff. The music in an anti-Murkowski spot remains dark and foreboding even when discussing Miller’s positives. There are – of course – spots on Miller’s youtube account that touch on the media persecution message popular among some conservatives and a core part of the Tea Party’s messaging.

The Alaska Daily News account of one incident includes some video of a confrontation that appears to involve conventional news media and security hired by the Miller campaign. The episode would be familiar to anyone who watched the federal Conservative campaign in the 2005-2006 Canadian general election.

The write-in ballots are the last to be counted in an election that still hasn’t been declared for either of the three candidates. By some accounts, there are enough write-in ballots and enough of those for Murkowski to give her the election. Republican candidate Miller continues to battle hard by challenging the validity of individual ballots and accusing state officials of favouritism in the counting.

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11 November 2010

Remembrance Day 2010

At the going down of the Sun and in the morning, we shall remember them.

Pass the word

In Kingston, a new mess at Canadian Forces Base Kingston carries the name of a man who survived internment in a Japanese prisoner of war camp. His actions while a prisoner saved the lives of many of his fellow prisoners. he resisted all attempts to break him.

Two retired army colonels waged a private lobbying campaign to name the mess after Major Ron Routledge, DCM.

Colonel Peter Sutton put it aptly:

"Everybody should be conscious of what's gone before, and do everything you possibly can -- as Ron (Routledge) did with me -- to pass on the word."

Routledge set up a communication network between the Sham Shui Po prisoner of war Camp and British intelligence at Waichow through Chinese ration truck drivers. Without hesitation and fully aware of the dangers involved, Sergeant Routledge [his rank at the time] joined the ration party as the contact for the passage of messages to Chungking agents under the eyes of the Japanese guards.

The channel Routledge set up saved many lives through the supply of much needed medicine and valuable information. The Japanese discovered the system. They beat, starved and tortured Routledge mercilessly yet he refused to divulge any information that would jeopardize his comrades. A Japanese court martial sentenced Routledge to 15 years in a Hong Kong prison for espionage, a sentence that ended in 1945. Awarded the Distinguished Conduct Medal for his actions, the citation for that bravery decoration reads, in part, “The resolute courage of this [non-commissioned officer] NCO in spite of indescribable suffering and his devotion to duty provide an example of the highest tradition in the service.”

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10 November 2010

Lest we forget: forgotten edition

So innovation minister Shawn Skinner will be attending Remembrance Day ceremonies at the “St. John’s National War Memorial” on Thursday.

There are at least two problems with this particular news release:

First, the National War Memorial is in St. John’s but it is not the St. John’s memorial, as this release suggests. It’s the one erected in the Dominion of Newfoundland in the 1920s as its national war memorial, hence the name.

Second, Skinner isn’t just participating, he is representing the provincial government – officially – in the one ceremony that represents the entire province. Nice if the Premier could have made it, but evidently he had something else on.

Incidentally, it was good to see the Premier on Tuesday tossing around a few softballs with former journalist Peter Walsh over at Dannyvision. All that free television across the province is especially important in polling month.

Those two huge gaffes - what Skinner will be doing and where the event takes place - are enough to make a mockery of the sentiment expressed in the release that people ought to attend a Remembrance ceremony.

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Suzuki Foundation takes aim at Gulf drilling #oilspill

Kathy Dunderdale might not be too worried about the environmental impacts of an offshore oil spill.

Charlene Johnson might have trouble from day to day figuring out if the offshore is in her jurisdiction or not.

But make no mistake: David Suzuki has the Gulf of St. Lawrence firmly in his sights. The David Suzuki Foundation is encouraging its supporters to contact the federal government to get a halt to drilling and other exploration in the Gulf of St. Lawrence.

A big part of the campaign is simulations of the impact of a spill at Old Harry:

Each simulation illustrates what could happen if an spill of approximately 10,000 barrels of oil per day took place over a 10-day period in various seasons. The model demonstrates the direction of the flow of oil emanating from an instant or continuous spill. Forecasts indicate the location and concentration of surface and underground oil over time.

There’s a spring, summer, fall and winter version.

The spring spill hits Newfoundland very hard.

Summer is worse for western Newfoundland.

Fall nails the south coast as far away as the Burin Peninsula. St. Pierre would take it heavily in this scenario.

Winter hits five provinces but affects only a small portion of south western Newfoundland.

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Related:

NL offshore drilling bans rests with prov gov
Drill, baby! Drill!
Miles before they hit the shore (labradore)

09 November 2010

Mysterious missile off Los Angeles

The video - shot by a KCBS news helicopter - shows what seems to me a missile fired from the ocean offshore Los Angeles and heading out to sea.

But so far no one knows what it was.

The United States Air Force insists it didn’t launch anything from nearby Vandenberg air base and the United States Navy is also denying any launches.

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US labour board files complaint over Facebook firing

In the United States, the National Labor Relations Board is accusing a company of illegally firing an employee over a comment she made on Facebook.

From the New York Times:

The labor relations board announced last week that it had filed a complaint against an ambulance service, American Medical Response of Connecticut, that fired an emergency medical technician, accusing her, among other things, of violating a policy that bars employees from depicting the company “in any way” on Facebook or other social media sites in which they post pictures of themselves.

Lafe Solomon, the board’s acting general counsel, said, “This is a fairly straightforward case under the National Labor Relations Act — whether it takes place on Facebook or at the water cooler, it was employees talking jointly about working conditions, in this case about their supervisor, and they have a right to do that.”

According to NYT, this looks like a straightforward case of free speech, as protected by law.

However,

employees might cross the line into unprotected territory if they disparage supervisors over something unrelated to work — for instance, a supervisor’s sexual performance — or if their statements are disloyal.

Courts often view workers’ statements as disloyal when they are defamatory and are not supported by facts. Mr. Babson cited a case upholding the firing of airline workers who held signs saying their airline was unsafe. But, he said, if employees held signs accurately saying their airline or restaurant had been cited for dozens of safety violations, that would most likely be protected.

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Lower Churchill: US and NL taxpayers might help subsidize costly big hydro project

Premier Danny Williams is promising a Lower Churchill deal before the end of the year and one way he could finance the project is by offloading the cost onto American and Canadian taxpayers.

Some American politicians are trying to redefine state environmental subsidies that currently don’t include hydro megaprojects like the Lower Churchill. In Massachusetts, Republican gubernatorial candidate Charles Baker not only advocated for big hydro as part of the state’s energy future, he also favoured giving big hydro projects the “renewable” status that would make them eligible for state subsidies.

According to the Boston Globe, the subsidies in Massachusetts alone could be worth as much as six cents a kilowatt hour.

Incumbent Democratic governor Deval Patrick - who won re-election last week - opposed the idea:

“It does not make sense to give renewable energy incentives to a foreign-owned enterprise for something that needs no subsidy,’’ Patrick said in a statement to the [Boston] Globe. “It would amount to a windfall of hundreds of millions of dollars for Canadian ratepayers at the expense of Massachusetts customers.’’

That doesn’t mean the idea is dead in Massachusetts, though. Energy giant Hydro-Quebec is lobbying hard for the “renewable” status for its own projects. Earlier this year, the company won a battle in Vermont to make hydro eligible for subsidies. That’s all part of HQ’s push to take its share of the New England energy market from 8.5% to upwards of 12%.

Lowering the cost of Lower Churchill power by six cents a kilowatt hour could make Muskrat Falls financially viable, especially if NALCOR left the American marketing to a private sector partner and let that company keep the subsidies. NALCOR already sells power at the Quebec-New York border to Emera. Under a deal announced in 2009, the Newfoundland and Labrador company apparently gets about the same rate per kilowatt hour it got from a similar deal with Quebec that expired in 2009. Any other financial details, like profits from seasonal price fluctuations, seem to flow to the private sector. It’s hard to know for sure since details of the 2009 detail are confidential.

And while Danny Williams claimed last week he’d lay any development deal for the very expensive Muskrat Falls version of the project in front of the public, he hasn’t lived up to similar promises yet on other projects. Many of the key details of the 2007 Hebron deal remain shrouded in secrecy. Amendments to the province’s open records laws in 2008 shield the publicly owned NALCOR from disclosure of its financial dealings even though it receives public funds to run the company and its subsidiaries.

Foreign tax credits aren’t the only way NALCOR could subsidise the cost of building Muskrat Falls.

Under the most recent version of the Lower Churchill described recently by Premier Danny Williams, 40% of the power from Muskrat Falls would come to eastern Newfoundland. NALCOR’s environmental submissions on the project make it clear, however, that the island portion of the province doesn’t need the power now or in the foreseeable future. The company also plans to keep its diesel generators at Holyrood running even after it builds any new lines to the island from Labrador.

Shipping power to a part of the province that doesn’t need it would give the public utilities board the legal basis to offset any losses from sales to Nova Scotia or into Quebec by offloading them on local ratepayers. That’s because provincial laws require that the public utilities board to set rates that protect NALCOR’s financial position from its entire operations. But that rate-setting power only applies to domestic rates. PUB doesn’t regulate export prices. By using Lower Churchill power in the province – even when it isn’t needed - NALCOR could use local ratepayers to subsidise power exports.

Taxpayers could get hit another way on the deal as well. Any NALCOR debt for the project – likely to be at least $6.0 billion – will wind up on the balance sheet of the provincial government, one of the most indebted provincial governments in Canada on a per capita basis.

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08 November 2010

How to win without news media

Texas governor Rick Perry won re-election without relying on conventional news media.

Perry shunned editorial board meetings, for example. Those are sit-down sessions with the entire editorial staff. It’s a traditional way to garner an endorsement and that is traditionally seen as a key part of any major political campaign.

The reason is pretty simple politics:

Mike Baselice, Perry's highly skilled pollster, acknowledged Wednesday at a public forum sponsored by The Texas Tribune that the campaign asked primary voters in Texas whether a newspaper endorsement would make them more or less likely to vote for Perry. Only 6 percent said an endorsement would make them more likely to support Perry, while an eye-popping 37 percent said it would make them less likely (56 percent said it made no difference).

In other words, for all the energy conventional thinking would have you put into sucking up to editors, the average Texas voter didn’t really give a rat’s derriere one way or the other. And with almost 40% taking an endorsement as a bad thing, that pretty much clinched the deal.

Predictably the news media slagged Perry. That only increased his standing in the eyes of voters, especially the 37% who said they would look unfavourably on a candidate who had a news media endorsement of any kind.

Perry also didn’t do the usual things associated with a conventional campaign, like lawn signs or direct mail. Instead, his campaign used social media, paid television and “field operations” – face-to-face work by campaign volunteers.

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My own electoral grandpa: vote in an election that isn’t happening yet

Danny Williams is worried that local politics is being more like the American system.

Much like the more benighted souls in some parts of Eastern Europe, most of Africa and gigantic chunks of the Middle East, Newfoundlanders and Labradorians could only dream of such a thing.

You see, even though they live in one of the most civilised places in the world – Canada – they are subjected to electoral laws introduced since 2003 that make it possible for people to vote in elections that don’t actually exist. Talk about making a mockery of our democratic legacy.

News of the latest version of this farce came from ads in the local papers. in itself that is another reminder of the backward steps for democracy taken in this province since 2003. Where once the chief electoral officer was a non-partisan public servant, the last two have been partisans. One was a former Liberal cabinet minister.

The current one had to resign from his seat on a party organizing committee in order to take the job. The party, of course, is the province’s Reform-based Conservative Party, and the guy who currently serves as chief electoral officer used to be the president of that highly partisan crowd.

This is yet another one of those things you could not make up. You could not make it up because it is the most ridiculous idea imaginable in a democracy.

Yet it exists as the law in this province. It’s one of a package of “reforms” introduced by the governing Conservatives after 2003 that turned out to be more of a farce than not. Meanwhile, the meaningful reforms Danny Williams promised in 2003 - new campaign finance laws, for one - simply vanished as if they never existed. What was it he used to say about unkept promises?

And if you enjoyed this little tidbit of electoral idiocy, consider the version in 2007 when Williams called a by-election that never actually happened. This was the original version of “I am my own electoral grandpa”.

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Kremlinology 28: How will he go?

Gordon Campbell resigned suddenly last week as Premier of British Columbia. Campbell’s been under considerable political pressure resulting fro introduction of the harmonized sales tax in the province.

The Globe this weekend is taking a look at the impact not only of Campbell’s departure but the abrupt way he left the political stage. The quote Bob Plecas, a former Campbell advisor:

Any serious contender to replace Mr. Campbell, whose unpopular harmonized sales tax has crippled the party, would have to be free to differentiate himself or herself from the current policies, he added.

“But what he’s asking them to do is stay on the Titanic and keep rowing,” Mr. Plecas said.

It’s not exactly the same situation at the other end of the country. Campbell left suddenly and pretty much unexpectedly. Danny Williams, by contrast, has already made it abundantly clear he’s in the later stages of his political career in this province.

In fact, Williams first talked about quitting politics in late 2006. Not surprisingly, one of the things he was moaning about at the time was the weight of the office he volunteered for. The backstory on his winter and spring full of discontent, at the time, probably had much more to do with the collapse of Hebron talks and revelations about gross overspending and criminal activity in the House of Assembly, some of which continued until 2006, rather than any real annoyance with the life in the political goldfish bowl.

Fast forward four years.

Williams’ most recent version of the 12 minute rant at every Goldstein he could think of seemed to be much more about his frustration with the Lower Churchill, the budget and other matters than about liberals and the media. After all, he finished up by urging people not to pay attention to the “bullshit”. That would be, of course, the same “bullshit” he just spent 12 minutes obsessing about.

Doesn’t make sense, does it?

Not really.

Then again, it seldom does.

Maybe he was offering excuses for failure.

“Imagine how much I could do…” or whatever the exact words were. Your humble e-scribbler has made the same point many times before. Maybe a lot more would get done if only the current administration didn’t spend so much time - and public money - manipulating public opinion or obsessing about the three people in a coffee shop in Deer Lake who muttered misdemeanour words about the Old Man.

Maybe Williams was just venting his considerable frustration - yet again - again with the job he volunteered for and that no one is forcing him to keep. It’s just that those outbursts seem to be coming a bit more frequently lately. His last Great Whine Session was in August, the last polling period.

As these bitch sessions seem to come closer and closer together, it seems appropriate to wonder how and when exactly Williams will finally give us all the wave from the Cessna door as he heads off to Florida more or less permanently.

Will he go before October 2011 or has his caucus roped him into one last kick at the cat? What happens if the polls shift and it looks like he won’t reclaim the seats he has right now let alone score all of them? Danny Williams hardly seems like the kind of guy who would stick around and settle for being in exactly the same spot again. He needs to go for something bigger. But what happens if he couldn’t hope to sweep all 48 seats in the House?

Will he struggle along and wait until 2013 or 2014 before pulling pin? Will he give plenty of lead time and hang around while his successors duke it out or will he pull a Campbell and walk out one fine January afternoon?

No matter what happens, we know that Danny Williams is in the final stages of his political career. Go back to April and you can see a list of some of the contenders and pretenders to the throne who are already campaigning for his job. Maybe it’s time to think now about how he will finally slide out of his current job and when.

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Crude up, but what does it mean?

Crude oil finished the week on a high, with Brent coming closer to US$90 a barrel than at any time since October 2008.

That’s good.

Right?

Well, maybe.

Certainly, in the short run it brings in some extra cash. The provincial government low-balled production estimates in the spring budget but the actual production level only offset prices below the forecast average of US$83. in the end, the forecast oil revenue will likely not be far off the actual budget projection of $2.1 billion.

Don’t be surprised if it is more like $2.5 billion. if that’s the case, then the current budget is the first one in a long while where the provincial government gave figures that were close to the actuals.

Unfortunately, the budget forecast a cash deficit of around $900 million.

Two things will help bring that number down. First, production at Voisey’s Bay – even allowing for a strike – might start pushing government’s mining royalty back up to where it was before the recession.

Second, and perhaps most likely, the provincial government could be way off in its capital works spending. This is – you will recall – a government that has a real problem getting the job done. If someone could come up with a little blue pill for it, these guys would buy it by the container load. We are talking projects announced in one year, forecast to end in a couple and they only get around to tendering the thing at the end of the two years. Delays and massive cost over-runs are routine.

Things would be a lot clearer if the provincial finance minister issued a mid-year financial update in September as he should. That’s halfway through the fiscal year. As it is, he will say something in December. If last year is any indication, he’ll toss a load of sheer bullshit into the public mix in the hopes of keeping people lined up at the counter spending cash for Christmas.

The we just have to keep an eye on crude prices. Oil is still the biggest revenue source the provincial government has. Things are fine as long as oil stays where it is now. But when the markets can show an eight dollar a barrel increase in as many days, they can equally show a drop if the factors come together in the right way.

If the provincial government plans to unleash a year of election spending at the same time as the markets start to sort themselves out, this could prove to be a very interesting year indeed, right up to the next provincial election.

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07 November 2010

Some loveable turncoats

‘In Newfoundland politics,” wrote Bill Rowe, “you haven’t lost your political virginity unless you’ve knifed your own party in the back and crossed the floor of the House of Assembly at least once.”

At the time he wrote that – 1984 – Rowe was a lawyer, columnist, radio show host and the author of the splendidly titled Clapp’s Rock and The Temptation of Victor Gallanti. he was also the former leader of the provincial Liberals, a job he lost in the wake of a political scandal involving leaked police reports.

In 1985, Rowe tried to run for Brian Peckford’s Conservatives. He lost the nomination fight.

In 1993, he carried the Liberal banner in the provincial general election and got a solid drubbing by the local Conservative candidate.

Fast forward a decade. Conservative Danny Williams tried to lure Rowe back into politics as a Conservative. Rowe held out for an appointment to a job as Williams’ personal ambassador to Hy’s. He took up the job in 2004 and held it for a few months before packing it in to return to St. John’s.

Rowe is now touring the country, incidentally, flogging what is purported to be an insider’s account of things he was outside the room for during that brief sojourn on the Rideau. According to reports, the mainlanders are lapping it up. The softcover book has hit the Globe and Mail’s hardcover best-seller list.

You could not make this stuff up if you tried.

One of his regular talk show callers these past few years has been a decent fellow named George Murphy. He has garnered some local notoriety for his ability to forecast retail gasoline prices with some accuracy. Murphy is a staunch supporter of the government’s gas price-fixing scheme, among other things.

Murphy’s gained some extra notoriety lately by being the latest local politician to carry on the fine tradition of crossing the floor to the other side. Murphy very loudly and very publicly renounced the Liberal party and headed for the New Democrats. Murphy was cross that the Liberals did not hire him for a job, picking instead Craig Westcott, a journalist of some considerable experience who did a bit of work for the provincial Conservatives and whose only foray as a candidate was for the Harper Conservatives in opposition to Danny Williams’ Family Feud in 2008.

So far only one local journalist - Telegram editor Brian Jones - has accurately captured the essence of former Liberal Murphy’s current position, that of New Democratic candidate in a by-election likely to be called next week for a seat formerly held by the Conservatives:

…Murphy didn’t like it that a Tory became a Grit, so he bolted. Murphy, a former Liberal, is now an NDPer.

He is seeking support from NDP members to win the party’s candidacy in the upcoming byelection in the district of Conception Bay East-Bell Island.

But by Murphy’s own logic, NDP rank-and-filers should be aghast. A former Liberal is tainting their pure gene pool, as it were.

Perhaps Murphy knows something the rest of us don’t — that changing parties is unacceptable for some people, i.e., Westcott, but entirely acceptable for others, i.e., himself.

Maybe I’m missing something, but I’ve read that Telegram story three times and I’m still left thinking, let me get this straight…

You could not make this stuff up if you tried.

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06 November 2010

The Traffic Report, November 1 - 5

No, folks, this is not a summary of Cecil Haire’s morning traffic reports on CBC Radio.

But something is going on all the same. Traffic in the past couple of weeks is up. It’s currently running at 18% higher than the same time last month.

Here are the Top 10 stories, as determined by what people are reading: