The Iron Ore Company of Canada has made cuts to its offices in St.John’s, Montreal, Labrador City and Sept Iles, according to the weekly newspaper Le Nord-Cotier.
The company would not confirm how many positions were eliminated or how many people were affected.
IOC spokesperson Natalie Rouleau told the newspaper that the positions were redundancies and affected permanent staff, temporary employees and contract employees.
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That big, ginormous phone-banging-up, trade dispute thingy with evil Ottawa?
So not happening any more.
"We seem to be back on track. We have alignment," Premier Kathy Dunderdale told reporters on Tuesday at an event announcing fitness grants to community groups.
All the talk the past week or so about negotiations between the crowd in Confederation Building and the crowd in Ottawa brought out the conventional wisdom about premiers using fights with the feds for political purposes.
The coincidence of a talk on nationalism the week before linked the two ideas together neatly for some people. Kathy Dunderdale was having a row with Ottawa, possibly to boost her polling and maybe as a show of nationalist fervour that we all love.
Yeah, maybe that’s true.
And then again, maybe it just isn’t.
Critics of the Muskrat Falls development pointed out over 18 months ago that the project would have problems meeting its electricity commitments.
Nalcor disputed that.
But this weekend, CBC’s Paul Withers told On Point host David Cochrane that Nalcor has refused to commit in writing to supply Nova Scotia with electricity beyond the original block of free electricity Emera will get as part of the basic deal.
That’s interesting.
Very interesting.
The original term sheet and the final capacity agreement basically commit the parties to work it out in the future on two conditions. First, Nova Scotia has to want the power for the long term. Second, Nalcor has to agree to supply it.
In the future.
If Nalcor had electricity to sell and Nova Scotia wanted it, then Nalcor should be locking them down and taking their cash. After all, a long-term power purchase agreement for an export customer is exactly what the Lower Churchill was supposed to be about.
Instead, Nalcor has decided to force local ratepayers in Newfoundland to cover the full cost, plus profit and ship electricity to Emera in Nova Scotia, effectively for nothing.
What’s more, if they sell any electricity from the project to industrial customers in Labrador, Nalcor will sell the power at a huge discount. According to Nalcor’s plan, everyone will get the benefit of Muskrat Falls except the people who will pay for it.
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David Cochrane called it right the other day in the scrum with Kathy Dunderdale. He asked if she was laying the groundwork for a failure at the trade talks, a failure of her personal position.
Dunderdale denied it in the scrum, but her latest claim – full of the same vague and largely unsubstantiated claims as on Monday – sounds like someone who is trying to blame someone else before the talks finish and the end result doesn’t match what she’s been personally staking out as a position.
Russell Wangersky is a fine writer with a keen and insightful mind.
He is also an editor at the province’s largest circulation daily.
That’s the same place where former fisheries minister Trevor Taylor has been scribbling a column every week.
Premier Kathy Dunderdale (via NTV):
We’re looking for a ‘carve-out’ on the minimum processing regulations … so they’ll be exempted, and we want access to the European market on a number of our fish lines…
Carve out.
Hideous jargon for “not going to trade away” minimum processing regulations.
Period.
Fisheries minister Derrick Dalley (via the Telegram):
Fisheries Minister Derrick Dalley was at a media event in St. John’s Tuesday, where he assured reporters that the provincial government is not going to give away minimum processing requirements unless it’s a good deal.
Not going to trade away minimum processing requirements.
Oh wait.
There’s more.
So after a teaser column in the Telegram last week that was more creative fiction than serious history or memoir, John Crosbie explained why he loves the Muskrat Falls project in this Saturday’s instalment of Geriatric Townie Pass-times.
It’s really simple.
The project will be splendiferous.
Phantasmagorical.
Amazingly, marvellously, Keebler-elves-kinda-magical.
If you are still mulling over the British Columbia election result and the polls, take a look at this post by Eric Grenier at threehundredeight.com. It includes a link to his piece in the Globe on Wednesday on the same topic.
Pollsters tend to weight their samples to match the population as a whole. Problem: that isn’t the same as the demographic profile of voters.voters.
Grenier shows how Ipsos, for example, weighted a poll equally across three age groupings. In the 2013 election, those age groupings didn’t turn out equally. The over-55s made up half the total voter turn-out, not one third.
All this talk of Senator Beth Marshall and her hefty annual stipend for chairing a committee that has met once in two years brings to mind the good senator’s role in the House of Assembly patronage scam, a.k.a. the spending scandal.
Marshall is credited with first sniffing something was amiss when she went hunting for Paul Dick’s expenses in 2001-ish. She was barred from the House by the legislature’s internal economy commission. The members were Liberals and Tories and, as accounts have it, they unanimously wanted to keep Beth’s nose out of their files.
But if you go back and look, you’ll have a hard time finding any indication Beth thought something else was on the go. While we didn’t know it at the time, subsequent information confirmed that members had been handing out public cash pretty generously by that point. Yet Marshall has never, ever indicated she felt something more than a few wine and art purchases might have been amiss.
That’s important because of Marshall’s record once she got into the House herself as a member in 2003.
For the first day back after a long weekend, here are some short snappers on some issues swirling around these days at the national scene.
As it turns out, Harris-Decima used household income not individual income for weighting the poll they did for NAPE. Keith Dunne, NAPE’s communications co-ordinator tweeted the correct information on Thursday morning.
Your humble e-scribbler thought it was individual income and therefore concluded – wrongly – that there was a skew in the poll toward higher income urbanites. That didn’t invalidate the survey results but it might have explained the strength of the rejection of the provincial government’s budget. The Tories might have had a chance to bounce back politically, especially among the lower income types out there.
Turns out that hope was pretty much dashed.
Two thirds of tax filers in Newfoundland and Labrador report incomes of less than $35,000 per year.
The Harris-Decima poll released by the Newfoundland and labrador Association of Public Employees on Wednesday has only 27% of the sample with an income less than $40,000 per year.
Still, the results show that the provincial government either didn’t have a communications strategy or whatever strategy they had failed miserably.
In fact, it was a stunning, utter, complete, abject failure of their entire communications effort.
Premier Kathy Dunderdale said on Tuesday that the province will have problems now that it doesn’t have a federal cabinet minister from this province.
As CBC quoted her from a scrum outside the House of Assembly, Kathy said:
“It always makes it more difficult when you don't have somebody inside the tent,…”
This is not just a difficult position, it is a stupid position, but it is exactly the stupid policy that Kathy Dunderdale advocated.
While an official with Corner Brook’s municipal government understandably has to say wonderful things about the economy in the west coast city, a look at some numbers shows the city is feeling the effects of a larger problem in the province.
SRBP took a look at newsprint production levels and the value of newsprint exports from 2003 to 2012. The numbers are all from the annual editions of the budget document called The Economy.
The picture is not pretty.
You can add another five changes to the record of senior executive appointments cabinet has made since the beginning of the year, according to orders-in-council posted to the provincial government’s website.
That brings the total for Calendar Year 2013 to 20.
Six the 20 are acting appointments, meaning that cabinet will either have to confirm the appointment or put someone new in the job.
Cabinet remains on track to make 60 such appointments in 2013, setting an all-time record for changes in the 121 deputy minister and assistant deputy minister positions in the provincial government.
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In the wake of the tragic death last week of Joseph Riche, it shouldn’t be surprising that some people, including some politicians, are blaming the tragedy on the Department of National Defence.
That’s what politicians do in this province. Blame Ottawa is a time-honoured political strategy even if it is usually a political lie.
As with the Burton Winters tragedy, these provincial politicians are aiming public concern in the wrong direction.
The Kremlinology post on Trevor Taylor, Paul Oram and the apparent policy disagreement in cabinet in 2008/09 generated two contacts (a tweet and an e-mail) that are worth discussing.
Let’s take them one at a time.
Trevor Taylor left politics in 2009 in an unseemly hurry.
One minute he was there.
Next minute? Gone from cabinet and the House of Assembly.
Then right on his heels went Paul Oram, who muttered something about unsound financial management by the Conservatives as he ran from the Confederation Building.
A very big clue to what was going on at the time turned up on Tuesday in Trevor Taylor’s column in the Telegram.
Tom Marshall used to be the finance minister.
He’s the guy who consistently, year after year, spent more than the people of the province could afford. Tom didn’t do it by himself: he had the support of all his colleagues in cabinet.
And since 2009, Tom and his colleagues have admitted that they mismanaged the provincial government accounts by overspending.
Deliberately.
Along the way, Tom has claimed some things that aren’t true. Like saying that he and his colleagues lowered the provincial debt when they didn’t.
So now that he is natural resources minister, Tom Marshall is still telling people things that aren’t true. This time it is about the glories of the 2008 expropriation.
What Tom says.
The truth.
Two different things.
Last week SRBP noted that the provincial cabinet seems to be having some difficulty getting legislation into the House for debate.
Normally, we’d see upwards of 30 bills handled in the spring session. In 2011 they had almost all the bills introduced by the early part of May. In 2012, the provincial government had more than twice as many bills on the go as they do this year.
Well on Monday, finance minister Jerome Kennedy gave notice he has one more bill to add: an amendment to the Revenue Administration Act. He called it amendment number three.
Except it isn’t.
New Democratic Party leader Lorraine Michael asked natural resources minister Tom Marshall in the House of Assembly on Monday about Husky’s plans for natural gas development offshore Newfoundland and Labrador.
The story appeared in upstreamonline.com on May 3 and SRBP told you about it the same day.
Here’s what Marshall said about the article:
I have not had the opportunity to read the particular article that which she is referring to, but I would also be happy to have a discussion with the company.
Check out the 2012 Hydro-Quebec annual report and you will find a lovely chart showing trends in energy prices in northeastern North America.
“After reaching a historic peak in 2008, natural gas and electricity prices in northeastern North America dropped sharply in 2009, then rose slightly in 2010 only to fall again, such that prices in 2012 were at their lowest in 10 years.” (page 11)
From an historic peak to the lowest prices in a decade a mere four years later.
Last week, the federal Auditor General pointed out many serious problems with the state of offshore search and rescue.
Last week, the usual gang grabbed any microphone they could find to call - yet again - for everything from a provincial public inquiry into the state of search and rescue in the province to a new agency to regulate safety in the offshore oil industry.
The idea that we had to split safety from other aspects came up during the offshore helicopter inquiry. The idea is popular. Helicopter safety inquiry commissioner Robert Wells included it as one of his recommendations in volume one.
But here’s the thing: what is a so-called separate safety agency supposed to do that we aren’t doing now or couldn’t accomplish any other way?
Husky Energy is sizing up the potential of developing natural gas offshore Newfoundland and Labrador within the next decade, according to the leading petroleum industry news source upstreamonline.com.
First exports could begin in 2025, if enough resources can be certified, according to upstream. The likely export destination would be western Europe, a market very close to Newfoundland and Labrador and where prices are considerably stronger than they are in North America.
upstream’s story notes that the provincial government “quashed” any idea of using local natural gas in place of Muskrat falls, but reports that since then the “the idea of LNG exports appears to now have more traction, suggested one source…”. upstream reported that “Husky is said to be taking a fresh look at known and potential gas resources to see if their scale would justify, technically and commercially, building a liquefaction plant.”
upstream reports that Husky commissioned a report from IntecSea to explore potential development of the 4.2 trillion cubic feet of natural gas offshore Labrador.
Industry sources suggested a potential timeline towards first LNG exports could see pre-front-end engineering and design studies taking place in 2016-2017.
Front-end engineering and design would take place through to 2019 in advance of a firm decision, according to upstream.
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As of May 2, there are a mere six pieces of legislation on the list of bills currently set for debate in the House of Assembly. It seems to be up to date because on Thursday they added links to a couple of the bills that are ready to start debate.
But they didn’t add any to the six listed there.
Former premier Tom Rideout has an accent typical of the northeast coast of Newfoundland. in his days as a cabinet minister after 2003, Rideout often used the word “northern”. It came out in his pronunciation as “no-durn” or “know-durn”.
Tom’s legacy leaves on, even inadvertently. Four years or so after Rideout got fed up and left provincial politics, Labrador affairs minister Nick McGrath confirmed recently that the Northern Strategic Plan the provincial Conservatives talk about so much doesn’t exist.
There’s no durn plan.
Natural resources minister Tom Marshall announced in the House of Assembly on Tuesday that the provincial government had settled with the last of a string of private companies victimised by a 2008 asset grab of hydro-electric generating facilities by the provincial government.
Taxpayers will cover a $54 million debt owed by Fortis, one of the partners in the Exploits Partnership, as well as pay the company an additional $18 million. Taxpayers have already paid more than $4 million according to media reports, bringing the total to about $76 million for the Fortis asset swipe alone.
In 2011, the provincial government took responsibility for a $40 million loan owed on Star Lake, another part of the 2008 hydro asset expropriation. The government also paid $32.8 million to Enel one of the partners in the project.
The provincial government seized the hydro assets in an extraordinary expropriation bill that government original touted as being aimed at Abitibi in punishment for closing a paper mill in the central Newfoundland town of Grand Falls-Windsor.
Information subsequently came to light that confirmed the government’s real target in the expropriation were the lucrative hydro-electric generating assets owned by Abitibi, Enel, and Fortis in two separate partnerships. The provincial government turned over the assets free of charge to the Crown-owned Nalcor Energy.
Nalcor will now use the generating stations to help meet its commitments to provide Emera with free electricity for 35 years under the Muskrat Falls deal.
For now, though, taxpayers are being forced to pay for the seizure and for the electricity Nalcor makes at the seized plants. Under a cabinet order dated April 4, 2013, Nalcor sells electricity from the Exploits plant to its subsidiary Newfoundland and Labrador Hydro for the fixed price of four cents per kilowatt hour. Hydro sells the power to consumers at much higher rates, thereby pocketing a sizeable profit entirely at public expense.
In its original plan, government intended to skim off any valuable assets and leave Abitibi with any environmental liabilities. As it turned out, the expropriation seized one of the most polluted properties Abitibi held. The expropriation freed Abitibi of any liabilities since they went with the ownership.
There is no independent estimate available of the costs of the environmental clean-up of the seized facilities.
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One of the unreserved joys that comes from writing these scribbles is the moment when a post sparks something.
Like on Monday, when a simple post looking at change in the provincial gross domestic product prompted an exchange among a few of the provincial Twitterati (Twitteratini?) on the whole business. Was it useful? What did it mean? Wonderful stuff considering that the post was intended to provoke thought of just that sort, not reach any hard-and-fast conclusions.
A release on Friday from Statistics Canada showed that the provincial economy shrank by almost 5% in 2012. They even supplied a lovely chart to illustrate the GDP changes in each province as well as the national average.
This wasn’t just modest growth or even a modest drop. We are talking one of only two provinces with a drop in GDP and the biggest change – positive or negative – of any province or territory in Canada.
Alberta is even more dependent on commodities than Newfoundland and Labrador and it still managed to see gross domestic product grow by almost four percent.
Not so in the former Republic of Dannystan.
Down.
By almost five percent.
One of the great things about having orders in council readily available is that people can find information.
That’s exactly why the current administration has kept them as secret as possible since 2003 and continue to censor them, even though orders in council are entirely public documents.
But at least in the wake of the Bill 29 Freedom From Information measures, the Conservatives seem to have been shamed into opening the vault on their secrets a bit even if they still censor public documents.
One of the things we can now readily see, though, is the number of appointments made by cabinet in the first quarter of 2013 to deputy minister and assistant deputy minister jobs.
Ross Wiseman violated Gerry Roger’s rights as a member of the House of Assembly.
He did so, by his own initial ruling, with no evidence whatsoever that the member had committed any contempt of the House.
He thinks an apology is good enough.
Ross Wiseman is wrong again.
Here’s why.
First, slander is something defamatory that someone says.
Libel is what you call a defamatory comment that is printed. So a poster would be a libel since it is printed.
Second, the story on the VO website about a bunch of posters contains an editorial opinion, not a fact, when it says that the posters “slander” the Premier.
“Who wants Kathy Dunderdale as Premier?” is hardly defamatory. The last line on the poster is strong, saying that the Premier is a “source of shame for us all.”
Unless the bad words on the poster that you edited out for the website say something really awful, it sure doesn’t look like you have something defamatory. As it turns out, the words are reputedly “Liar, Bully, and Fool”.
Strong but it is still looking like an opinion and not a defamation.
Best thing for VOCM to do: leave the opinions to others, like say a lawyer or a judge, and stick to reporting the news.
Third, this poster seems to be something we could reasonably expect after last week’s events. That doesn’t mean it is right. It just means that the botched attack on Gerry Rogers and the Facebook group might just be getting some people a bit more riled up than they would be otherwise.
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What is it about the provincial Conservatives and income tax?
Kathy Dunderdale rabbited on about it last fall and again in January.
Last week, the provincial Conservatives were at it again, with a private members resolution in the House that praised the government for cutting taxes and for not raising them now that they’ve fallen on hard times.
The Premier’s daughter tweeted this comment last Wednesday night.
Few people consider the impact that political life has on the families of politicians and political staffers. Steve Paikin’s book The Dark Side deals with it, as SRBP noted in 2006.
That tweet is a reminder of that.
Here’s some advice for the Premier’s daughter from an old political hand.
As if the week hasn’t been going badly enough for her, Premier Kathy Dunderdale decided to make it all the worse on Thursday with her scrum about her Twitter account.
Here’s what we have learned:
What was the tragedy of the orchestrated political lynching of an innocent member of the House of Assembly by the provincial Conservatives has now turned to farce.
On Tuesday, Premier Kathy Dunderdale was on her high horse: Conservative members of the House of Assembly "understand very well how Facebook works," Dunderdale told reporters outside the House of Assembly, “and as an MHA, when you're on Facebook, when you're engaged in Twitter, then you have to have an obligation to pay attention."
Neither Dunderdale nor several of her colleagues apparently were paying attention.
The Conservatives in Newfoundland and Labrador are politically deaf. They only hear themselves.
Former fisheries minister Trevor Taylor used his Telegram column on Monday to issue a few hypocritical tut tuts about the state of public discussion in the province.
Too negative he whined, sounding for all the world like someone was holding a small dog turd under his nose as he typed. His political pals on da Twitter chimed in as they are programmed to do.
Shortly after 1:30, government house leader Darin King rose in the House on a point of order. He wanted the Speaker to suspend Gerry Rogers from the House of Assembly not for something Rogers said or even endorsed but merely because her name appeared on a group critical of government on which some moron had posted threats against the Premier.
The Tories sealed the triple play when Speaker Ross Wiseman ruled that while there was no evidence on the face of it that Rogers was guilty of endorsing the threats, he would invent a reason to condemn her anyway.
They are blind, too.
The provincial Conservatives could haul in up to $7.7 million through a new tax on telephones to be introduced ostensibly to pay for province-wide 911 emergency service, municipal affairs minister Kevin “Fairity” O’Brien announced on Tuesday.
According to the official backgrounder, the provincial government will introduce a new tax of “less than one dollar per month” on every landline and cellular telephone in the province. At a news conference, O’Brien and fire and emergency services boss Mike Samson estimated there were upwards of 650,000 phones in the province.
Although the release describes the approach as a “cost-recovery” model, neither O’Brien nor Samson would estimate the annual cost of operating the system.
Other provinces use the same approach. PEI charges 70 cents per telephone or working line while Nova Scotia charges less than 50 cents. Quebec, Saskatchewan, Alberta, and New Brunswick also tax telephones to pay for 911 service.
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Cleaning out the home office has turned up a few forgotten gems.
One of them related to the political impact of open line shows in the province. Last week, your humble e-scribbler moderated a lunch-time talk by Professor Alex Marland and Randy Simms on just that topic. The pile of papers included a Canadian Press story that appeared some time in early May, 2008.
Headlined “Williams lashes out against accusations of tight message control”, the story was Danny Williams’; reactions to comments during the Cameron Inquiry by John Abbott, the former deputy minister of health and community services.
Newfoundland [sic] Premier Danny Williams says a former public servant made "offensive and stupid" remarks when he told a public inquiry that radio call-in shows influenced the government's handling of an emerging scandal involving flawed breast-cancer testing.
Even at the worst of their leadership feuding Jean Chretien and Paul Martin never frigged each other over the way Kathy Dunderdale and Jerome Kennedy did last week.
While Kennedy was trying to tell everyone that the justice reversal wasn’t going to happen to all the cuts, Dunderdale (right, poppy eyes and all) was on the open line shows and everywhere else someone had a microphone, telling us that if people could make “compelling arguments” she’d have another look at the budget cuts.
What is a “compelling argument”, you might ask?
No one knows.
We already knew that the provincial cabinet had abandoned their budget before the document had been debated in the House. That happened last week when the Premier ordered the justice minister and the attorney general to abandon the cabinet-approved cuts in the justice department.
Less than 12 hours after meeting with the same officials justice minister Darin King consulted before cabinet approved the cuts, King and attorney general Tom Marshall (right, not exactly as illustrated) told reporters that whatever those officials had said would now be the policy.
The change of policy is breathtaking enough. Not only will some of the laid-off court security officers be rehired, but cabinet has also lifted the hiring freeze to allow the High Sheriff to immediately hire more staff. Someone will also be appointed to conduct operational reviews of the three departments – High Sheriff, legal aid and Crown prosecution service – involved in the cabinet flip flop.
But that’s not the truly striking aspect of this abrupt change.
International Association of Business Communicators (Newfoundland and Labrador) presents a professional development luncheon:
According to Statistics Canada (2007), Newfoundlanders and Labradorians listen to more talk radio than any other provincial group of Canadians.
Is it a useful communications tool for community engagement and the sharing of local information or is it just bantering?
Join IABC NL for lunch and an interesting and interactive open panel discussion on Talk Radio in Newfoundland and Labrador.
Randy Simms, retired Open Line host, Dr. Alex Marland, Associate Professor (Political Science) Memorial University, and moderator Ed Hollett discuss the pros and cons of Talk Radio.
When: Thursday, April 11, 2013, 12:00 - 2:00 p.m.
Where: Capital Hotel, 208 Kenmount Rd., St John’sRegister: Online – http://iabcapril.eventbrite.com/
Email – eventsiabcnl@gmail.com$50.00 – IABC Members
$75.00 – non-members.
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Over at cbc.ca/nl, John Gushue has an excellent column on the recent prosperity, in particular the apparent contradiction between a supposedly booming economy and the government cuts or the sense some people have that they aren’t part of the boom.
Take some time and go read John’s observations, if you haven’t already. You will always be rewarded by John’s accessible style that reveals some very sharp insights.
For all that, though, there’s a sense that there’s something missing from Gushue’s column. The piece gets right up to the edge and then just doesn’t bring the thing to a satisfying conclusion.
Never fear.
The relentless labradore fills in the bit John missed.
Only a few days ago, natural resources minister Tom Marshall was telling us that the Premier was an Iron Lady. A compassionate one, mind you, but an Iron Lady, nonetheless.
Firm in her decisions.
Unyielding under pressure.
Tom was telling us that Kathy Dunderdale and Margaret Thatcher were made of the same stuff.
What?
No.
Tom was not drunk.
No. He was not stoned, either.
And it was not April Fool’s.
Knock it off and keep reading.
Twice last week, provincial Conservative politicians offered unprompted endorsements of Kathy Dunderdale’s leadership.
Natural resources minister Tom Marshall praised her as a compassionate Iron Lady who had his full support. Here’s the story VOCM ran:
Natural Resources Minister Tom Marshall says the premier has his full and complete support. Kathy Dunderdale has come under fire for a tough, cost-cutting budget that includes widespread layoffs and funding cuts. On VOCM Open Line with Bill Rowe, Marshall used a label which came into prominence during the term of former British Prime Minister Margaret Thatcher. Thatcher came into power in the UK in 1970s and developed a reputation of being tough and uncompromising during a time of economic recession, earning the title "Iron Lady". Marshall says Dunderdale is also an Iron Lady, but one with compassion.
Meanwhile, Steve Kent – noteworthy in the past for his lack of Dunderlove – had this to say [via CBC and labradore]:
"Premier Dunderdale is a compassionate and principle-centered leader. I remain inspired by her vision and strength," Kent wrote.
…
Kent added that Dunderdale enjoys the full support of the PC caucus.
The SIDI simulation of government spending that we’ve run this past week might not be everyone’s cup of tea, but these sort of thought exercises are always useful.
The most striking thing is the amount of money from oil and mining that the provincial government has spent in the past seven years: $15.6 billion. That’s enough to wipe out the entire public debt plus the unfunded pension liability and have a couple of billion left over for an unprecedented capital works program.
It’s a staggering amount of money and the only thing more amazing than how much money there was is how easy it was to do something far more productive than just spending all the money, as the current provincial government has done.
The SIDI simulation included:
The only thing needed to make the simulation a reality was a political desire to do it. Had the provincial government done any one of the elements of the SIDI approach, then the provincial government could have either avoided the current crisis altogether or significantly altered the profile of the crisis and the prospects for coping with it.
The long-run target is to bring the province’s net per capita debt gradually down to the all-province level within ten years.Locke made it clear in another part of his March 25 memo to finance minister Jerome Kennedy that the purpose of any surpluses the provincial government achieves within the next decade will be to fund Muskrat Falls.
You don’t need drugs or alcohol to get the feeling of dizziness or stupor like you smacked your head with a hammer. Hard. Repeatedly.
Just listen to a representative of one of the special interest groups talking about the provincial budget and public spending. It doesn’t matter which one. As your humble e-scribbler was finishing off this post on Tuesday, a representative of the appropriately named St. John’s BOT was on television talking about how government had to cut public sector jobs and tear into public sector pension benefits because of the hideous unfunded pension liability.
Corporate lawyer Denis Mahoney even quoted the distorted, misleading government claim about the unfunded liability as a share of only a fraction of the public debt to bolster his position. He never mentioned the billions going to subsidize his members, of course.
In the process, Mahoney looked about as convincing as the labour mouthpieces like the Canadian Centre for Policy Alternatives who said in 2004 that the government wasn’t spending too much. It just didn’t have enough money. Of course, they never mentioned that the government was outspending just about every other province on a per capita basis.
Listen to this sort of mindless crap long enough and you don’t have to wonder why people wander around in a daze.
To clear your head, take a look at a chart showing the actual government spending from 2005 to 2012 (in blue) compared to the income from sources other than oil and minerals (in red).
The number is a hard one to wrap your mind around.
$15.6 billion.
That’s the amount of oil royalties and mining royalties the provincial government collected from 2005 to 2012.
Once you think you have that figure in your mind and understand what it means, think about this: with the exception of about $1.4 billion, the money is apparently gone.
Spent.
Never to come again.
If you want to understand how the provincial government got itself into the mess, just think about all that money. Newfoundland and Labrador is a “have” province with a government that is laying people off and cutting programs. Then realize that for all that cutting the government is still planning to spend upwards of a half a billion dollars a year more than it is taking in.
The idea is staggering.
Well, be prepared to be floored completely.
One of the greatest political frauds committed by the current administration and its supporters is the idea that they have lowered the public debt.
All the politicians say it.
Wade Locke, their tireless economist, talks about the same thing – net debt – in his soon-to-be-infamous memo to Jerome Kennedy.
Talk of the net debt, reducing net debt, and having a net debt reduction strategy is nothing but a monstrous deception of the public.
From the current issue of Canadian Business comes this little ad that is not an April Fool’s joke from energy company currently running the provincial government:
People following the sorry recent history of energy development in the province will instantly recognize the vicious, cruel joke inherent in Nalcor promoting itself as a company interested in developing wind energy.
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April 1, 2013 marks the 64th anniversary of Newfoundland’s confederation with Canada.
Here are a few older posts on the subject that stand the test of time:
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Earlier this year, our government projected a deficit for 2013-14 of $1.6 billion.
We are now forecasting that the deficit has been significantly reduced to $563.8 million – a billion-dollar improvement to our bottom line.That’s the way finance minister Jerome Kennedy started the 2013 budget speech in the House of Assembly on Tuesday. He said the dramatic change to two factors: more money coming in and “deliberate actions” by government to “rein in spending.”
Just over $301 million of the billion-dollar boost over recent projections is attributed to government cuts. Another $696 million came from improved expected revenues for the coming year.Take away the money the Telegram tallied up and you get about $440 million. The CBC story said that came from “…royalties or corporate taxes from oil and mining.” Another news report added in a windfall in HST money from Ottawa.
[Note – see below]
The throne speech promised that the same Conservative financial management that produced the current financial mess would continue and they delivered in Tuesday’s budget.
The strategic problem remains unchanged
The Conservatives will continue to spend billions in one-time cash from oil and minerals. That’s the structural deficit people have been talking about and the Conservatives have done nothing to change that.
Tuesday’s budget gave us the year-end cash figures for 2012 and the forecast for 2013. Here’s the chart from Monday’s post on deficits and surpluses that shows spending and the non-oil revenue. We’ve updated it to include the cash figures for 2012 (actual) and 2013 forecast from the 2013 Estimates. Remember that the Estimates are presented on a cash basis.
Monday’s throne speech was so bad that people started making fun of it almost immediately. On Twitter a few of us tried changing lines from famous John Kennedy speeches and giving them a local twist
You could find a variation on the moon speech: we will go into debt, not because it is hard but because it is easy. Another tried German: “Ich bin ein Bauliner!”
Or this one from the inaugural:
The debt has been passed to new generation, born in oil riches, untempered by profligacy, undisciplined by debt.
None could top the corrupted Kennedyism an actual speech by the Old Man, Hisself in 2006:
I say to Newfoundlanders and Labradorians: "Ask not what we can do for our country, because we have done enough. Let's ask our country what they can do for us."
The Newfoundland and Labrador Federation of Labour hired the Canadian Centre for Policy Alternatives to issue a report on the upcoming provincial budget that basically says all the things that labour federation boss Lana Payne has been tweeting for weeks.
Here’s what the report’s author said in a news release from CCPA:
“The province’s economic fundamentals are strong. The task for the government is to ensure it doesn’t rock the boat and damage the province’s economy and social fabric with spending cuts.”
Things are looking pretty good, in other words. The government has to be very careful because any big cuts would damage the economy.
As much as some people might think this is a challenge to the governing Conservatives, that’s not really the case.
Continued from Part A
Terry Lynn Karl is the author of The paradox of plenty: oil booms and petro-states., one of the best known books on the resource curse or rentierism. Karl described the essence of rentierism in an article she originally wrote in 2007 and revised in 2009:
Oil wealth produces greater spending on patronage that, in turn, weakens existing pressures for representation and accountability. In effect, popular acquiescence is achieved through the political distribution of rents. Oil states can buy political consensus, and their access to rents facilitates the cooptation of potential opponents or dissident voices. With basic needs met by an often generous welfare state, with the absence of taxation, and with little more than demands for quiescence and loyalty in return, populations tend to be politically inactive, relatively obedient and loyal and levels of protest remain low -- at least as long as the oil state can deliver.
In the extreme, oil wealth can disconnect a state from its population. By the same token, oil can disconnect politicians from the population, transforming them from representatives who must satisfy voters in order to get re-elected to bosses controlling subordinates.
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This is the third in a four part series on the current financial crisis the provincial government is facing. The first instalment – “The origins of rentierism in Newfoundland and Labrador” – appeared on Tuesday and the second – “Other People’s Money” - appeared on Wednesday. The third instalment – “Rentierism at the national and sub-national level” - appeared on Thursday.
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Finance minister Jerome Kennedy told the Telegram’s James McLeod on Wednesday that the provincial government had a structural deficit problem.
His proof was that government spent 60% or so of its total outlay each year on the social sector. That includes health, social services, justice, and education. If that’s what Jerome is worried about then he and his cabinet colleagues should know that in 2005, they spent 67% of their budget on the social sector. In 2003, the last year the Liberals ran the place, they spent about 64% of the budget on the social sector.
Before he goes all Grim Reaper, Jerome should know spending that kind of percentage on the social sector isn’t unusual for governments across Canada. That’s been pretty much the norm since the late 1960s when governments introduce publicly-funded health care. In Ontario in 2012, for example, all but about $30 billion of the government’s $126 billion budget went to social program spending.
That doesn’t mean the provincial government doesn’t have a huge financial problem. They do. It just means that Jerome is looking in the wrong place to find a sign of it.
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This is the third in a four part series on the current financial crisis the provincial government is facing. The first instalment – “The origins of rentierism in Newfoundland and Labrador” – appeared on Tuesday and the second – “Other People’s Money” - appeared on Wednesday.
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A rentier is a person who lives off the income from property and investments. That distinguishes a rentier from a person who earns income through labour.
For the past 40 years or so some political scientists and economists have studied something called a rentier state. In simplest terms, a rentier state is one that derives a significant portion of its national government income from the money they get from oil and other high-value, but volatile commodities. [FN 1]
For our purposes, we’ll rely on a definition of “significant portion” as being 40% or more of government income. [FN 2] We’ll also focus the discussion on states that derive most of their income from oil.
What we are talking about here goes by several names including the Dutch Disease or even the resource curse. Jeffrey Frankel of the Kennedy School of Government put it this way:
It has been observed for some decades that the possession of oil, natural gas, or other valuable mineral deposits or natural resources does not necessarily confer economic success. Many African countries such as Angola, Nigeria, Sudan, and the Congo are rich in oil, diamonds, or other minerals, and yet their peoples continue to experience low per capita income and low quality of life. Meanwhile, the East Asian economies Japan, Korea, Taiwan, Singapore and Hong Kong have achieved western-level standards of living despite being rocky islands (or peninsulas) with virtually no exportable natural resources. Auty (1993, 2001) is apparently the one who coined the phrase “natural resource curse” to describe this puzzling phenomenon. …
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This is the second in a four part series that offers an interpretation of the current financial crisis the provincial government is facing. The first instalment – “The origins of rentierism in Newfoundland and Labrador” – appeared on Tuesday.
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As much as people imagine a great difference between the Confederate and anti-Confederate forces during the National Convention, the two agreed on one thing: someone else would have to pay for Newfoundland’s return to responsible government.
The London delegation asked the British government to provide the erstwhile country with money. The British balked, pleading their own financial hardship after a long and costly war. That refusal is largely what prompted Peter Cashin to claim that the British were trying to sell the country the Canadians. As many words that have been spilled and as many books sold trying to prove the conspiracy existed, there’s never been a shred of proof that such a plot ever existed outside Cashin’s frustration.
The Ottawa delegation found wealthy Canada more receptive to the Newfoundlanders expectations and after a first referendum and a run-off vote, Newfoundlanders and Labradorians voted to become part of Canada. For Labradorians the moment was especially sweet. The National Convention and the referenda were the first time any residents of the mainland part of the country had ever been allowed to vote.
Is the government facing a structural or cyclical deficit?
Good question. Their economist says it is a structural problem but his comments to the Telegram on March 13 suggest he is approaching the problem as if it would sort itself out.
The whole structural versus cyclical question hinges in part on the question of government revenue when the economy is working at full output versus when it isn;t. Well, in Newfoundland and Labrador, that is a bit hard to figure, especially when the government claims that locally everything is great but that it doesn’t have any money.
People get confused.
Well, one way to start getting a handle on this is to look at the 2011 and 2012 budgets and the related income and spending.
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Over the next four days, SRBP will offer an interpretation of the political underpinnings of the current financial crisis. This series goes beyond the immediate to place recent events in both historical and comparative, international perspective.
The first two instalments briefly describe some characteristics of the political system and Newfoundland political history before 1934 and from 1949 to about 1990. The third post will look at the concept of the rentier state and the relationship between dependence on primary resource extraction and politics at the subnational level (states and provinces). The fourth post will place recent developments in Newfoundland and Labrador in the larger context.
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Before 1949, the Newfoundland government’s main source of income was taxation of imports and exports. The Amulree Commission reported, for example, that the government brought in around $8.0 million dollars in the fiscal year ending in 1933. Of that, 71% - $5.7 million - came from customs and excise duties. The next largest amount was $700,000 (about 9% of total) that came from income tax while the third largest source of income was postal and telegraph charges totalling slightly more than $587,000.
Newfoundland also had almost no experience of local government before the Commission Government in 1934. St. John’s was the only incorporated municipality and the city council was quasi-independent of the national government.
Beyond the capital city, the national government “managed a highly centralized system through the stipendiary magistrates stationed in each electoral district, “in the words of historian James Hiller in his recent note on the Trinity Bay controverted election trial in 1895(FN 1). The central government also appointed the members of some local boards to manage education and roads. The money for all of it came from accounts controlled by St. John’s.
The members of the House of Assembly had enormous control over government and that public money.
The provincial Conservatives love to spend public money.
That doesn’t sound very conservative and it isn’t. Politically, the provincial Conservatives in Newfoundland and Labrador are more like Republicans than the Progressive Conservatives who used to run the province in the 1980s. American Republicans like to cut federal taxes and jack up federal spending and then blame the resulting financial meltdown on the Democrats.
Around these parts, the Reform-based Conservative Party, as the Old Man used to call them, blames everything on the Liberals. That is the Liberals who, in case you missed it, haven’t been in power in a decade.
About two thirds of the people in the province who file tax returns earn less than $35,000 a year before taxes.
It’s the kind of detail that you cannot banish from your mind when you read about the politically popular economist Wade Locke. The guy who directly and indirectly helped the provincial government create the current financial mess is on a leave from his university job to help with the new budget.
As the Telegram reported on Wednesday, Locke’s “contract with the government stipulates that he'll be paid $250 per hour for his consulting work to a maximum of $75,000.” That would be on top of the 80% or more of his university salary that he is entitled to for being on what the faculty contract calls a “sabbatical” leave.
The Telegram also reported that Locke said he would only bill taxpayers one dollar at the end of his contract. Let’s take him at his word.
Still, you have to wonder why he would sign a contract in the first place for more than twice what most people in the province make in a year. Don’t misunderstand. A consultant should get what he can earn and if Locke can get someone to pay $250 an hour for his services, then more power to him. Given the context, though, the contract is still rather distasteful.
Locke’s supporters will defend any amount of money because they value his advice. And that’s really where we can peel back the cover on this little can and see what is inside.
Mr. Speaker, I again have to implore the members opposite to stop pretending that you do not understand the fiscal structure of the Province. The $600 million that was earmarked in the Department of Natural Resources was not contained in the current budget, Mr. Speaker. That was contained in investment. There is a difference between a capital budget, the investment budget, and the current budget.
Muskrat Falls has nothing to do with the deficit we are experiencing this year…Let’s break it down.
The provincial cabinet has been burning the midnight oil the past couple of nights.
Literally.
Late night sessions that ended God-knows-when, night after night.
Apparently, they are trying to figure out what to do in order to get out of the massive financial and political hole they have dug for themselves over the past decade.
As bizarre as that might seem to some people, the politicians who created the mess have no idea yet what they are going to do. All that Premier Kathy Dunderdale and finance minister Jerome Kennedy have been able to offer lately are lots of vague comments about when the budget might be or how many lay-offs there might be. Dunderdale put a number of 500 lay-offs out there a few days ago but frankly, that’s about as reliable as her forecasts from last year.
And when Jerome told David Cochrane that they were still working out the Sustainability Plan, he was not bullshitting. He meant it, even though he claimed they had already started implementing the plan last year.
If you are familiar with government budgets and how these things normally get sorted, then odds are you are reading this now that someone has been able to revive your unconscious form.
It seems like only yesterday that the young man from the Pearl was the mayor of the cozy city.
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By now you’d be living in a cave if you hadn’t heard any news of the latest Corporate Research Associates poll.
The NDP are slightly ahead of the Tories and both are about 10 percentage points ahead of the Liberals. More people want Lorraine Michael as Premier than want Kathy Dunderdale. And a majority are unsatisfied with the government.
Now this is an historic set of poll results as Don Martin tweeted to tease people about the release on Monday morning. The release doesn’t make any reference to that, preferring instead just reporting the results blandly. By contrast, Mills hyped the living crap out of poll results a few years ago that hit historic highs.
Finance minister Jerome Kennedy is supposed to know about the economy and stuff.
During an interview with CBC provincial affairs reporter David Cochrane for On Point, Kennedy said that in the 1990s the government was the main employer in the province. The implication was that the public sector wasn’t what it used to be. People laid off from the public service could find work much more easily in the private sector as a result.
Well…
Err…..
No.
The north side of the site of the future Muskrat Falls dam has a problem. The soil is made up of clay that has a tendency to sheer away in landslides when it gets too wet. The North Spur, as it is known, is a key part of the reservoir.
Cabot Martin has documented the whole thing in a slide presentation based on documents released during the environmental reviews of the project.
According to Martin, Nalcor won’t have a potential solution to the problem or know the cost until sometime this year.
Breakdown by department: 10 Advanced education/skills. 6 CYFS. 13 Environment. 4 Finance. 6 Fisheries. 23 Health. …7 Exec Council. 2 IBRT. 10 Justice. 9 Natural Res. 2 Tourism. 6 Transportation. 62 of 98 jobs cut were union jobs.That’s the way it has been for the province’s political reporters since the end of February. Cochrane, NTV’s Mike Connors, and the Telegram’s James McLeod tweet on how many layoffs happened on that day, the number in each department, how many belonged to which union and how many were non-unionised.
On the front page of Wednesday’s Telegram was another instalment in James McLeod’s blockbuster on the provincial government’s policy of censoring public documents.
This one focused on the claim by a spokesperson for the public engagement office that orders in council were not covered by a section of the province’s access to information law that prohibits disclosure of cabinet decisions even though the orders are essentially cabinet decisions.
At the same time, the spokesperson said the orders were subject to other sections of the act that allowed government officials to censor them selectively.
Yes, that is exactly as screwed-up as it sounds.
In Nova Scotia, the provincial government has to beat prospective woods companies with a stick to keep them in line in the rush to take control of lands from the former Bowater mill in that province.
Seven groups want to get some part of the 220,000 hectares, a power plant, a mill site and all the timber that used to go into the paper plant.
In May 2011, the provincial public works department issued a call for proposals to replace the lift bridge in Placentia.
In August 2011, the department scrapped the project and went back for a re-think. They got only one proposal for $43.25 million, which upset them given that they had figured it would only cost $24 million.
In March 2013, they accepted a tender for $40.6 million to replace the bridge. The release noted that the new tender was $2.5 million less than the one they’d cancelled.
Nice thought, that, but it actually isn’t a true reflection of the situation, is it?
Shortly after the 2003 general election, the newly elected Conservative politicians accepted a proposal to cut down the number of health boards and education boards across the province.
Save money, they said.
Save money, the politicians repeated.
And so it happened.
As it turned out, the consolidation didn’t save any money. It certainly didn’t reduce the public service payroll, a goal the Conservatives set out in their election platform.
Labour federation boss Lana Payne made an interesting comment on Twitter over the weekend: “there is never a time for austerity.”
Never.
Ever.
You can hear all those Newfoundland politicians from the 1920s applauding her from the grave. Those were the same politicians who spent the government into bankruptcy in about a decade.
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As we approach the umpteenth anniversary of the internationally-accessible Internet, a website is about as far from news as anyone can get.
That’s why it was so laughable last week to see the junior fart-catcher apprenticed to the province’s minister of secrecy and obfuscation issuing a news release and holding a news conference to herald a completely trivial event like the launch of a new front page (!) to a website..
The only thing left for Steve Kent to do is invite the representatives of the province’s news media to gather ‘round as he opens an envelope. Even the Voice of the Cabinet Minister might not attend that sort of snore-fest or the subsequent events in the series: Kent to check e-mail and Kent posts Twitter message.
Not only does the provincial government now censor public documents called orders in council, they can’t get their own scheme right.
Public engagement minister Keith Hutchings published a letter to the editor claiming that government had always censored orders in council. The Telegram dutifully went back and asked for some of the same documents they’d received before with censored sections blacked out.
A front-page story in this Saturday’s edition (March 2) lays out the details.
Over the past decade, the provincial Conservatives have consistently outspent the other parties in the province on polling and similar research in both election and off years, according to figures filed with the province’s elections office.
The table below shows the amounts each party reported as spending on research and polling. In general election years, the figures are the reported figures for the general election periods. Parties also may have spent money outside the election period. That isn’t included here.
