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Wednesday, August 15, 2007

The Hebron Solution

Last week premier Danny Williams, left the premier’s conference in New Brunswick citing a fresh round of negotiations over the Hebron oil project as the reason. This was good news for the province, not to mention a golden opportunity for Williams to break away from the infighting and wheel spinning taking place in New Brunswick at the time.

The restarting of official negotiations for the Hebron project has come after many months of silence on both sides. Talks broke down because the oil companies expected tax concessions and showed no interest in allowing the province to hold a 4.9% equity stake in the project.

Several months ago premier Williams helped get negotiations back on track with his public statement that the province’s new energy plan would be released sometime prior to the October 9 provincial election. He also said that after its release the “ask” by the province for all projects would exceed the 4.9% expected from the Hebron partners but noted that if a deal was made prior to that time the province would still be willing to settle for the previously quoted amount.

Another factor that may be at play here, but one that the people of Newfoundland and Labrador will never know for sure about, is the potential for backroom federal intervention. It’s possible someone on the national scene interceded on the issue and spoke with “friends” inside the oil industry, perhaps someone who hails from the oil rich west.

If this was the case it surely wasn’t done for the good of the province. More likely it would have been done to improve federal revenues.

It’s only speculation of course, but some people are finding it more than a little curious that when Newfoundland and Labrador was fighting to retain 100% of offshore revenues, as promised by Stephen Harper during the last election, talks fell apart and Ottawa refused to support the province.

Hey, Harper is from out West isn’t he? Hmmmmmm.

Sorry, where was I? Oh yeah, now that Ottawa believes it has assured itself of gaining revenues every time a project moves forward in Newfoundland and Labrador, or more accurately they’ll end up paying far less to the province in equalization, suddenly the talks are back on again. Just a coincidence I’m sure but you know how conspiracy theories get started.

Regardless of the reasoning behind the latest round of negotiations I believe the province has a golden opportunity to show Ottawa that two can play the game when it comes to financial slight of hand.

Perhaps Newfoundland and Labrador should setup a royalty and offshore revenue distribution system that shuts Ottawa out of the picture completely and denies them their pound of flesh.

It’s not really that difficult. In fact it could be accomplished with a payment system that allows a portion of royalties and revenues from the Hebron project, or any other, to be paid directly to the province’s creditors rather than the province itself. The Hebron partners could also direct a portion of the provincial share directly into funding programs such as schools, roads, hospitals or anything else the province decides.

Such an approach would see the provincial debt paid down in record time, freeing up even more money that would otherwise go to servicing the interest, and it would allow expensive provincial programs to be maintained or even enhanced without the provincial treasury ever actually laying its hands on a single penny from offshore.

It’s something that should be considered very seriously.

When it comes to equalization, Ottawa can’t claw back something the province never had.

15 comments:

Clyan Reary said...

So how much does Danny pay you to write this?

f*ck canada said...

I'm guessing he's paid no more than Stevie pays you to spread your B.S. around.

Clyan Reary said...

ok f*ck, so how much is it, since you admit Myles is being paid?

Wince said...
This comment has been removed by a blog administrator.
f*ck canada said...

Clyan Reary said...

ok f*ck, so how much is it, since you admit Myles is being paid?

Well, my guess is $0.00, which is the same amount I'm sure you'd happily fellate the PM for.

And Wince, don't go talking about anyone's supposed immaturity on this blog when you're the one who goes out your way to post "FIRST! I WIN!" (or some similar drivel) whenever Patriot posts a new article. If you're going to be a hypocrital douche, at least take the federalist position (y'know, face down - ass up).

Anonymous said...

Ottawa doesn't get any oil revenues.

How many times do you have to hear this to believe it.

The province's royalty regime has always been 100% theirs.

Always.

Please, for the benefit of yor readers, please illustrate how the federal government gets money from Newfoundland oil.

Furthermore Ottawa doesn't "take back" or "claw back" money, or cash through Equalization, it simply reduces the amount that it gives to Newfoundland.

Trust me, the money never flows the other way.

Maybe you should learn to read.

clyan reary said...
This comment has been removed by a blog administrator.
Patriot said...

Hi all,

Not that I want to get into this childish debate but I get nothing for writing this. In case nobody has the intellect to notice, this is a personal blog. You can read it or not, I couldn't care less.

Secondly, Anon said: "Furthermore Ottawa doesn't "take back" or "claw back" money, or cash through Equalization, it simply reduces the amount that it gives to Newfoundland."

Thank-you Anon for providing the perfect definition for a claw back.

You're not from these parts are you? (by the way, that was a rhetorical question)

Later all,

Myles

maul partin said...

2. This document reflects an understanding between the Government of Canada and the Government of Newfoundland and Labrador that:

Newfoundland and Labrador already receives and will continue to receive 100 per cent of offshore resource revenues as if these resources were on land

ralph good-dale said...

If you didn't get it the first time here goes again:

2. This document reflects an understanding between the Government of Canada and the Government of Newfoundland and Labrador that:

Newfoundland and Labrador already receives and will continue to receive 100 per cent of offshore resource revenues as if these resources were on land

calvin said...

"have been done to improve federal revenues." - I like this point Myles.If Ottawa doesnt benefit ,then nothing would be happening Now!!! - NO MORE GIVEAWAYS!!!!

Wince said...
This comment has been removed by the author.
Anonymous said...

CBC reports: Hearn to Press Mackay on Goose Bay.

Newfoundland and Labrador's cabinet representative, Fisheries Minister Loyola Hearn, plans to meet with new Minister of National Defence Peter MacKay as soon as possible about past commitments to the province.

...says he will press new Defence Minister Peter MacKay to keep the promises of his predecessor.

...assigning more soldiers to the Canadian Forces Base, 5 Wing Goose Bay in Labrador.

Meanwhile...isn't sure if he will run again in the next election.

TRANSLATION: I'll try to buy back voters by looking like I'm moving Goose Bay forward but it that doesn't work I might as well retire because they won't vote for me.

Patriot said...

Hi folks,

Two comments have been deleted from this site due to content. (I could have deleted a number of them for the BS they contain and it wouldn't have been a big loss, but have let them go).

As for the two in question, it's bad enough to bring the debate (and I use the term loosely) to the low level its gone too but I would appreciate it personal references, (addresses, names, family information, etc. is no longer used.

Later this week I will be making some changes to the site that will include only permitting users who are registered to make comments. I hope in this way we can keep the content of the posts a little more on track.

Rules of engagement will be provided and anyone who does not follow the rules will be blocked.

I had not wanted to go to that extreme but the level of debate has slipped into little more than attacks and it has caused many individuals who would otherwise provide valuable input to simply not bother posting.

A formal notice will be placed on the site this week and after that point if you are not a registered blogger you will still be able to read the articles but will not be given access to the comments area.

Registering is easy and only takes a few minutes so if anyone who is not registered would like to register it only takes a couple of minutes.

Myles

Starrigan said...

Quebec has used the same strategy to hide the money they make on the Churchill Falls contract. I can't see any reason why NL can't do the same? Can any of you?