Da Legal Stuff...

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Now, with that out of the way...Let's Web Talk.

Friday, May 30, 2008

Nova Scotia Eyes Lower Churchill Power

The following contains excerpts from today's Halifax Chronicle Herald. The entire article is available at the following link:

Chronicle Herald Article.


TAPPING INTO power generated by the proposed Lower Churchill Falls hydroelectric project probably won’t lower the cost of electricity in Nova Scotia, says the president and CEO of Nova Scotia Power. But Ralph Tedesco says it could go a long way toward providing price stability for an extended period and help the provincial utility "decouple from volatile international fuel prices."

...The opportunity to acquire power generated by the Lower Churchill project offers the most promising option because it could bring up to 600 megawatts of power to Nova Scotia by undersea cable, he says. That represents about a quarter of the total generating capacity required by the utility to serve its customers.
"One of the things that got us very excited about it was when Newfoundland indicated they were bringing power down from Labrador onto the island. As soon as I saw that, lights went off in my head because that then opened up what I called, at least from a conceptual perspective, the opportunity of bringing that power economically to Nova Scotia."

As a result, NSP and its parent, Emera Inc., are in negotiations with Newfoundland and Labrador Hydro, a provincial Crown corporation, to do just that. The talks are still in the early stages, says Tedesco, but the utility feels good about the negotiations so far and is pushing forward in the hope of reaching a satisfactory arrangement.

...The landing point in Nova Scotia will partly be based on the capacity of the utility’s transmission lines.
NSP plans to spend $50 million to $100 million to improve its transmission system in Nova Scotia by 2016.
That will help it accommodate more wind and tidal power but should also be useful in determining where the landing point for Labrador’s hydro power might be.

The undersea cable costs about $3 million a mile to install, says Rob Bennett, Nova Scotia Power’s executive vice-president of revenue and sustainability. It also costs about $1 million a mile to run the cable overland, so that will be a determining factor, he says.

The power passed through the undersea cable would be converted to direct current, which allows less power loss than if the cable were a traditional alternating current line.
The special stations to convert the power from alternating current to direct current and back again would be about $150 million each, says Bennett.

One station would be in Newfoundland, the other in Nova Scotia.

The total cost of putting the Newfoundland-to-Nova Scotia transmission line in place would be about $500 million.

But Bennett says the cost of the entire project would be several billion dollars if the development costs of the generating facilities at Lower Churchill Falls are included and the entire transmission system to get it across from Labrador to Newfoundland underwater and then again to Nova Scotia are added in.

If a deal cannot be reached to bring Lower Churchill Falls power to Nova Scotia, Tedesco says the company will continue to develop a mixture of power-generation options.

Wednesday, May 28, 2008

Danny Williams Defines His Legacy

Although it isn’t capturing as much press as his lowering of the Canadian flag, the 2005 Atlantic Accord dispute, his campaign to unseat Stephen Harper or even his standoff with big oil over the Hebron offshore oil development, Premier Danny Williams is about to make a move that will forever seal Newfoundland and Labrador’s fate and irrevocably define his legacy in the hearts and minds of its people.

What that legacy will be, sinner or saint, only time and the clear lens of history will tell but this week the Williams government introduced two pieces of legislation that have the potential to define, for better or worse, his place in the Newfoundland and Labrador psyche and the future of his people.

Both pieces of legislation deal with the future of Newfoundland and Labrador Hydro, a crown corporation, and how it will be able to operate going forward.

The bills are intended to provide NL Hydro with the tools they need to successfully produce and manage the vast energy assets, both present and future, belonging to the citizens of Newfoundland and Labrador. According Williams they would remove the burden of red tape and endless process that so often tie the hands of government agencies, allowing Hydro to compete more successfully in the energy market. The question is what the outcome of that legislation and the freedom it provides will ultimately mean for the people of Newfoundland and Labrador.

When passed, the first piece of legislation will allow the taxpayer owned corporation to operate outside government freedom of information requirements, including the public scrutiny of the Auditor General. The second would permit NL Hydro to dispense with having to follow the public tendering act, an act designed to ensure that all government agencies provide an even playing field when issuing contracts that require the expenditure of public funds.

Clearly both pieces of legislation should be, by their very nature, of great concern to the citizens of Newfoundland and Labrador. Not that there is anything inherently wrong with their intent, in fact a clear case can be made them, but because of their potential for future misuse, abuse or folly they need to be closely examined.

There is no doubt that a need to enact some form of legislation to make NL Hydro more competitive is required if it is to prosper. Private, or publicly traded, industries do not have their hands bound by the same sort of procedures and guidelines that government agencies do and in order to truly be successful NL Hydro shouldn’t either, but there are concerns.

There is little doubt that with the historic majority the Williams governemnt enjoys in the House of Assembly both bills will become law, that is not the issue. It is not the intent of either bill that is in question. Instead it is how they are written, implemented and could potentially be interpreted that must be carefully managed.

The outcome of this legislation, rather than the legislation itself, is what will ultimately decide the Premier’s legacy and the future prosperity of Newfoundland and Labrador.

In order to achieve the vision of taking Newfoundland and Labrador Hydro from being an electricity generator to becoming a widely diversified energy corporation the ability to act quickly, make timely decisions, without lengthy debate, and respond to market demands must be put in place.

The downside of this is that the movement of billions of dollars, market regulations and the secrecy requirements necessary when brokering deals with publicly traded oil, gas and electrical companies will leave the true owners of the crown corporation no longer able to have any insight, or input, into how or where their money is being spent.

History has left an indelible, and often painful, impression on the hearts and minds of most Newfoundlanders and Labradorians thanks to the actions of the larger than life political figures they’ve elected over the decades.

The one sided Upper Churchill contract, the Sprung greenhouse fiasco that cost of millions, the building of the Come by Chance oil refinery, which ended up as the largest bankruptcy in Canadian history before being turned around, all speak of the folly of conveying too much blind trust in a single individual. These and many other examples play an integral part in making most Newfoundlanders and Labradorians understandably nervous when it comes to the actions of any government that enjoys unfettered power in the legislature.

There are very few people, even his adversaries, who doubt the good intentions of Premier Williams or the reason for this legislation but even the best of intentions can lead down a road to destruction and despair. We’ve all seen it before.

I seriously doubt any of the former Premiers involved in the sort of projects identified above ever harbored ill will toward the people of Newfoundland and Labrador. In fact I’m certain they had nothing but the best of intentions, just as I'm sure Premier Williams does. Unfortunately that didn’t alter the outcome of their actions.

There is no doubt that to compete, survive and prosper, as everyone in Newfoundland and Labrador hopes it will, NL Hydro must be given the freedom and ability to act without one hand tied behind its proverbial back. What must be questioned, discussed, debated, parsed, scrutinized, studied and dissected is the precise wording and function of the legislation being tabled.

The people of Newfoundland and Labrador will ultimately reap the benefits or pay the price for this legislation.

It is the people of Newfoundland and Labrador who, rightly or wrongly, placed the current government in the strong position it enjoys and as such it the responsibility of each person in the province to ensure that the mistakes of the past are not permitted to be visited on the present.

The opposition parties, the media and the public at large, whether they support the current government or not, must all ensure that at the end of the day the legislation put in place does what it is intended to do and is the right thing for Newfoundland and Labrador.

It is only through open discussion and debate that the public can ensure the hands of future governments are not inadvertently tied by the same process that intended to free those of the energy corporation. It is also the responsibility of everyone to ensure that the corporation’s success is a success for everyone in Newfoundland and Labrador.

It is often said that in politics a day is like a week and a week like a year. That the public quickly forgets the wrongs of the past as soon as something new comes along. This has never been the case in Newfoundland and Labrador politics. Let’s hope it isn't true when it comes to planning for the future.

Joey Smallwood, the man who led Newfoundland and Labrador kicking and screaming into Confederation with Canada, began his days in politics as a savior to many but ended them reviled by most for actions that led to several of the highest profile giveaways Newfoundland and Labrador has ever suffered.

Not since Smallwood has a Premier enjoyed the level of public support and unbridled power that has been entrusted to Danny Williams. To date the Premier has, more often than not, earned that support by standing up and fighting for his people. There comes a time however when trust must be tempered with caution.

The Premier would be well served to take a deep breath and look back on the history of the place he so publicly professes to love. At this point in his life and in Newfoundland and Labrador’s history he, and everyone else, has the responsibility to ensure that this legislation is truly something that will serve the best interests of the people well into the future.

Danny Williams’ legacy depends upon it but most importantly so does the financial future and well being of everyone in Newfoundland and Labrador.

Tuesday, May 27, 2008

Stephen Harper's Totalitarian Regime

The long delayed resignation of Canada’s Foreign Minister, Maxime Bernier clearly shows the pathetically small talent pool Prime Minister Stephen Harper has to choose from inside his party. It also shows that the PM would rather have fight to protect the job of a mediocre, or totally incompetent, Minister rather than relinquish the sort of totalitarian control he exerts over the government of Canada.

Bernier left his position this week after it came to light that he had left classified government documents at the home of a former girlfriend who has been reported to have direct ties with organized crime.

The incident came to light after several previous gaffs by the minister that included a public demand of the sovereign government in Afghanistan to remove the governor of Kandahar province from office and announcing his intention to use a Canadian military aircraft for foreign relief efforts but discovered there wasn’t one available.

Although it will doubtlessly get the lion’s share of media attention, the resignation of Minister Bernier is not the real story that needs to be reported. The real story in this is the reason why the resignation of this Minister was not asked for far earlier. On the surface it appears to be a story of ministerial incompetence but it is also a story of an incompetence that is only surpassed by the clear lack of judgment and blind ambition of Canada’s Prime Minister.

For months the opposition parties have pummeled Stephen Harper with questions related to Bernier’s ability to do his job and the security concerns he posed in the sensitive foreign affairs role. For just as long Stephen Harper brushed those concerns aside and went on the attack against the opposition members who asked questions on the issue.

In taking this dismissive approach to such a serious situation Stephen Harper inadvertently exposed his true motives for keeping Bernier in the role. Harper exhibited a level of poor judgment that should never be tolerated in a Prime Minister and proved that his political aspirations in Quebec, Bernier’s home province, and his burning need to completely control every aspect of governing Canada are the driving force behind his actions.

Canada’s Prime Minister sees himself as being more like a U.S. president than a Canadian PM. In reality the PM is simply the top minister within the nation. The entire cabinet is supposed to manage the interests of the Country, not one man. Stephen Harper does not see it that way.

Instead of elected officials leading Canada, as the system intends, Mr. Harper has surrounded himself with a hand full of cronies inside his office who are actually running Canada without ever being elected or ever being answerable in any way to the Canadian public.

The government of Canada today has very little to differentiate it from the leadership of the former Soviet Union. Closed door decisions, tight control of press coverage, elected officials turned into impotent figureheads, bureaucrats fired for doing their jobs and the public kept in the dark while being led in a direction that is at the sole discretion of one man, whether they like it or not.

In Canada, democracy appears dead and the smoking gun rests in the hands of one man, Stephen Harper.

Over the coming days the opposition parties in Ottawa and the press corps will no doubt want to know exactly which sort of documents were left exposed by the former minister and whether national security was ever at risk. Based on what we've seen of Stephen Harper to this point in his regime I'm willing to bet he'll claim he can't discuss the documents because they're classified.

Only in Canada.

Monday, May 26, 2008

The Politics of Churchill Falls Power

Although recent public comments by Newfoundland and Labrador’s Minister of Natural Resources, Kathy Dunderdale, led to a scramble to clarify what was going on, there are still positives to be found in her clumsy statements.

This week Minister Dunderdale left the impression that Newfoundland and Labrador was contemplating legal action against the Federal and Quebec governments related to the lopsided Upper Churchill power contract. This afternoon she clarified her position in front of the media.

Since coming on stream decades ago, the estimated direct revenue to Newfoundland and Labrador, from the Upper Churchill hydro electric project in Labrador, is estimated at $1 billion. In that time Quebec has garnered $19 billion, plus untold secondary revenues from business and industry attracted to that province by the abundant power. Ottawa has also been greatly enriched by the taxes generated there.

The situation has long raised the ire of the people of Newfoundland and Labrador and has become a rallying point for anti-Canadian/Quebec sentiments over the years.

In a press conference this afternoon, also attended by Newfoundland and Labrador Justice Minister Jerome Kennedy, the official line was that the Williams government was in fact not considering direct legal action at the present time but was instead investigating ways to assist the Labrador Innu in their recent demands for redress over lands lost during the decades old development.

In the past Newfoundland and Labrador tried on several occasions to re-open the one sided contract, at one point bringing it to the Supreme Court of Canada, without success.

However in recent years new evidence has come to light that, at the time the contract was inked, a board member for Quebec Hydro also sat on the board of the company developing the project in Newfoundland and Labrador. As a result it is believed Quebec Hydro had inside information to the effect that the project was only weeks from bankruptcy if a deal, any deal, were not signed immediately.

The federal government of the day, which had the authority to prevent Newfoundland and Labrador from being put in this precarious situation, refused to support requests to wheel power to markets through Quebec at fair market rates, leaving Newfoundland and Labrador at the mercy of the larger province.

The resulting contract has seen Quebec reap massive profits and in coming years will actually see Quebec Hydro utilize Upper Churchill power at a fraction of the obscenely low price it has been paying for decades. An amount that was below market value even 40 years ago.

Last week the people of Newfoundland and Labrador once again relived the facts of the situation when a spokesman for the Labrador Innu Nation publicly stated that new developments being planned for the Lower Churchill River, and requiring the agreement of the Innu people, would be blocked unless full redress for land losses from the earlier project were forthcoming.

Premier Williams noted that his government was not in a position to make good on losses suffered by the Innu since Newfoundland and Labrador itself had also suffered greatly from the situation and had not received any redress from the real beneficiaries of the project, Quebec and Ottawa.

It was these events that precipitated today's press conference. A scrum in which the Ministers noted that, rather than persuing legal action against Quebec and Ottawa, the Newfoundland and Labrador government was assisting the Innu in their efforts to determine which levels of government were libel for compensation, revenue sharing or other forms of redress to the native group. In doing so they also intend to factually determine who has benefited from the project and to what degree.

The Ministers said any legal action that might be taken would likely be initiated by the Innu people, not the province.

There are two old sayings that quickly come to mind in this situation.

"A smart politician can fall into crap and come out smelling like a rose" and “You don’t butt heads with native peoples during an election campaign”.

It seems clear Premier Danny Williams must have heard both of these sayings at some point in his life and took them to heart.

While the next election in Newfoundland and Labrador is still several years away, there is an axe perpetually hanging over the head of the current government in Ottawa. As a result the timing couldn’t be more fortuitous for the Innu people or the government of Newfoundland and Labrador, which already has Stephen Harper firmly in its crosshairs.

Over the years it's always been easy for the governments of Canada and Quebec to downplay, brush aside and laugh off any concerns around the Upper Churchill, or anything else, expressed by the people of Newfoundland and Labrador. The Labrador Innu may not be as easy to dismiss without a public backlash.

In one politically astute move the Williams government has taken a potential negative and turned it to their advantage.

The situation, which initially appeared to be the start of a battle between Williams and the Innu leadership has instead provided an opportunity to work in partnership and to very publicly support the Innu in their efforts. It also allows Newfoundland and Labrador, working with the Innu, to finally put the true story of the Upper Churchill project on the lips of the Canadian people. Something that has never before happened.

By assisting the Innu people the government of Newfoundland and Labrador finds itself in a position where it can once again legitimately begin delving into the circumstances of the Upper Churchill contract, and its ramifications, without the appearance of acting in its own self interests.

The Innu, in support of their cause will be better able to apply public pressure on the Federal government than the province ever could. The Innu have the ability to gain far more sympathy over the Upper Churchill, via the national media, than Newfoundland and Labrador would.

They can also assist themselves, as they already have, by threatening to block the development of power on the Lower Churchill. Electricity desperately needed in power hungry Ontario and the Maritimes.

For the Innu, the people of Newfoundland and Labrador and the Williams government the situation, as ineptly as it was handled by one Minister this week, may yet prove to have an big upside. For the Harper government and for the national perception of Quebec the opposite is true.

Friday, May 23, 2008

We Are Canada

As surely as the sun rises and sets, the Canadian federation is slowly devolving into a handful of separate and independent states.

The dissolution of the Canadian federation has been quietly advancing for decades but the timelines have suddenly become more compressed and gaining momentum. Few of us have even noticed.

The idea that there will come a time when Canada no longer exists as a Country may be laughable to some and frightening to others. Though many of us may no longer walk this land when it finally happens, the movement from a single National entity into several autonomous Countries has already begun.

Quebec has been on the cusp of separation since the 60’s. Though public sentiment there has eased on the issue it still exists and requires only some unknown spark to re-ignite and flourish.

Ontario has long bemoaned the unfairness of a federation that has seen its once great manufacturing sector contribute so much and, in the opinion of most Ontarians, recieve so little in return. Ask any Ontarian about this Country and they will likely tell you, “We ARE Canada”.

The vast majority of Canada’s population resides within the borders of these two Provincial giants. This means the federal government has always been hard pressed to do anything that might upset voters there, even when the best interests of the nation are in jeopardy.

As a result neither the East nor the West has ever been recognized as anything but a handy supplier of raw materials. A group of eight “lesser” provinces orbiting a black hole that swallows up all the oil, timber, fish, wheat, beef, iron, gold, potash and low cost workers the regions have to offer.

With no real voice in Canada's government the Atlantic Premiers have, for several years, held meetings and conferences designed to more closely align their direction. They continue to find ways to strengthen their economic ties, enhance their political clout and streamline their individual expenses, without Ottawa’s assistance.

In recent years the Western Provinces have also begun to follow the lead of their Atlantic counterparts by working together to address issues of mutual interest and strengthen their ties to one another.

Now, with manufacturing heavy Central Canada slowly being weakened by an impending recession, Ontario and Quebec, the two most powerful provinces in Canada, have decided the time has come for them to band together for self preservation.

To all appearances, the coalitions formed in the Western Provinces and those on the Atlantic Coast may have been fortuitous, in light of what is to come after this latest move by Ontario and Quebec. A move that could well put the final nail in Canada's coffin.

When Ontario or Quebec sneeze Ottawa reaches for the tissue box. It’s always been that way. Now that both Provinces are joining forces the likelihood that any federal government would dare deny them just about anything they want has never been lower.

This can only mean very dark days for the rest of the Country.

What Ontario wants Ontario gets.

What Quebec wants Quebec gets.

For years Ontario and Quebec have been enviously eying the oil and energy wealth of other Provinces and looking for ways to “access” it.

Now that Canada has shifted to an energy based economy oil and electricity are the new currency of the federation. Oil, electricity and cash are three things many parts of Canada have more of these days. They are also three things Ontario and Quebec desperately want.

Make no mistake, Ontario and Quebec intend to improve their lot and the rest of the Country can be damned.

When Ontario and Quebec band together the oil wealth of Eastern and Western Canada will be up for grabs. The electrical energy capacity of places like Newfoundland and Labrador will no longer be safe. And a federation that was extremely dysfunctional, even when Ontario and Quebec acted independently, will begin to spiral into collapse.

Either Alberta or Newfoundland and Labrador will likely be the first to see the full impact of this new reality as more and more of their dreams are crushed to satisfy the yearnings of the two larger provinces. They will also be the first to make a move toward independence.

Then, like a series of dominos, other Provinces or regions will follow. An Atlantic State will form, then one or two Western States, Quebec will finally achieve the independence it has so often talked of and, in the end, the people of Ontario will be able to say with all honesty, “We ARE Canada”.

It’s no longer a matter of “if “Canada will cease to exist as it does today but when. Perhaps within the next 20 years, perhaps the next 30 or 40 but it will happen, as surely as the sun rises and sets.

Monday, May 12, 2008

The Truth is...

With the news that Newfoundland and Labrador will soon be moving away from equalization while Ontario will be moving toward a “have not” position, much has been said by government and the media alike on the subject.

Over the past week it seems, to this observer, as if the objective has not been to clearly discuss Ontario’s woes or even to congratulate Newfoundland and Labrador for its success. The objective of some seems instead to be an offensive against Newfoundland and Labrador by turning what should have been a good news story into some sort of blight.

During this time Newfoundland and Labrador has been called the “poor cousin” of Confederation. It’s been pounded home time and time again how Newfoundland and Labrador has “never been off of equalization since it joined Canada”. It’s been called a place that, “wants to have its cake and eat it too”. It’s been said that “Newfoundland and Labrador is the place to go if you want to see your (Ontario) tax dollars at work” and Newfoundland and Labrador’s Premier was even asked by one political reporter if he was willing to give up some oil wealth to help Ontario out of its troubles.

None of this was done with tongue firmly planted in cheek. In fact, for the most part, the tone was far darker than anything publicly said about Newfoundland and Labrador in recent memory.

Unfortunately, through it all, the true story of Newfoundland and Labrador’s existence and its first tentative steps toward so called “Have” status were, not even once, put before the people of Canada in an honest way.

The truth is: At the time Newfoundland and Labrador entered Canada in 1949 its total debt was about $100 million dollars. After 59 years of Confederation that debt mushroomed to over $11 billion dollars, the highest per capita debt in Canada. This is what happens when, as my dear Mother says, “you have to borrow money to pay the light bills and put food on the table”.

The truth is: For centuries the historic ocean trade routes between North America and Europe saw thousands of ships travel the eastern seaboard and fill the harbours of Newfoundland and Labrador, as well as the Maritime provinces. That isn’t the case any more. In an effort to centralize industry and grow the mega economies of Ontario & Quebec the Federal Government used the tax dollars of all Canadians, including those in Atlantic Canada, to construct the St. Lawrence Seaway, essentially killing commercial traffic flow into Atlantic ports.

The truth is: When Newfoundland and Labrador entered Canada it boasted the world’s most prolific fishing resource off its shores. It was a fishery envied around the world. Upon entering Confederation this fishery fell under the control and management of Ottawa. By 1992 this fishery had been mismanaged into collapse and overnight more than 40,000 people lost their livelihoods. The impact to Newfoundland and Labrador’s small population was the equivalent to Ontario losing one million jobs in the blink of an eye.

The truth is: In the 1960’s Newfoundland and Labrador began development of the Upper Churchill Hydro Electric project. At the time it was the biggest project of its kind in North America. The Province of Quebec refused to let Newfoundland and Labrador wheel electricity across its borders at market rates and although the federal government had the authority to force the issue it did not. As a result Quebec now makes billions directly from the Newfoundland and Labrador resource and billions more through the industries it attracted. The owners of that power, Newfoundland and Labrador, can barely afford to keep the turbines spinning. This situation will continue to exist for another 33 years.

The truth is: Even though most of the oil and gas discovered off its shores would never have fallen inside Canadian jurisdiction had Newfoundland and Labrador not entered into Confederation in 1949, the federal government never the less has control of those resources, not the province. The way the federal government views the subject, in Canada oil on land belongs to the province, oil under the water belongs to Ottawa.

The truth is: When Newfoundland and Labrador petitioned the federal government for the right to force oil companies to develop major finds, rather than sitting on them as a “nest egg”, Ottawa refused to stand up for Newfoundland and Labrador. This is why today if a company in Alberta does not develop a discovery within 5 years they lose control of it to the Province. In Newfoundland and Labrador an oil company can sit on a discovery forever, never produce a drop, and prevent anyone else from accessing that find.

The truth is: Although the original 1985 Atlantic Accord supposedly ensured that Newfoundland and Labrador would receive the full benefits of oil resources, it wasn’t until an update to the contract in 2005 that the spirit of the deal was actually fulfilled and a fairer sharing of revenues was delivered.

The truth is: After disputing the value of the 1985 Accord for 20 years and after fiercely battling the Federal Liberal Government for months Newfoundland and Labrador finally got the changes it wanted with the signing of the 2005 update to the Atlantic Accord contract. A little more than a year later the Federal Conservative Government, without consulting the Government of Newfoundland and Labrador, unilaterally changed that contract denying Newfoundland and Labrador, according to independent economic estimates, of $10 billion dollars in potential revenue.

The truth is: The list of ways Newfoundland and Labrador has been impeded in improving its economic situation is a lengthy one, with many other examples similar to those identified here.

The truth is: In spite of those roadblocks Newfoundland and Labrador is finally beginning to see some small signs of progress. That progress is not due to the benevolence of the Canadian government. It is because the people who have clung to Newfoundland and Labrador’s rocky coastline for centuries simply refused to give up in the face of adversity.

The truth is: Today Quebec continues to make billions from the Upper Churchill power plant in Labrador. Ottawa still refuses to force oil companies to stop sitting on massive reserves. 16 years after the cod fishery collapsed the fish stocks still have not recovered, yet Ottawa continues to turn a blind eye to foreign fishing fleets raping the spawning grounds off Newfoundland and Labrador.


The Truth is: In spite of it all, Newfoundland and Labrador is paying down its debt, to the tune of nearly 1.5 billion over the past couple of years.

Newfoundland and Labrador has finally recorded multi-year surpluses in its provincial budgets.

Newfoundland and Labrador has reached a point where it requires only $18 million dollars in federal equalization payments this year and will move off equalization completely next year.

The truth is: While the unemployment rate in Newfoundland and Labrador is still more than double the national average it is at least moving in the right direction and is currently at a 25 year low.

That’s the truth.

Now imagine for a moment what Newfoundland and Labrador might have accomplished if it had been given half a chance.

Friday, May 09, 2008

They're Just Newfies...

In March of 2006 I penned a commentary for Web Talk, which was picked up and carried by other media outlets. The piece was entitled, “Newfies, Niggers and Other Terms of Endearment”. The opening paragraph read as follows:

As a proud Newfoundlander it makes my skin crawl and my blood pressure spike whenever I hear people use the word “Newfie” in a derogatory way. I’ve come to see this word in the same way I see words like “Nigger”, “Kyke” or “Polack”. Each of those words is extremely disturbing to hear, just as disturbing to commit to paper and I hope even more disturbing for you to read.

I felt that way then and I feel it even more so today. Newfie, Polish and Black jokes, to name a few, have been around for generations.

They are not funny in any way, shape or form.

These jokes serve no purpose other than to make the uninformed and bigoted jokester feel superior by demeaning and belittling a recognizable group of people.

Every time an individual belittles an entire segment of the population it does a great deal of harm in society in general and the tendrils of their words, though they don’t often realize it, have far reaching effects well beyond their little circle of acquaintances.

Most cultures, ethnic groups and races understood long ago how harmful the underlying message behind this dark humor actually is and how damaging it can be.

In standing up for their rights and their dignity certain segments of our society forced Canada’s political leaders to enact laws to address the issue. Although this legislation may not have been successful in fully removing such damaging speech from society at least it has been relegated it to the darkest corners and the public has become fully aware of the need to avoid using them.

Newfoundlanders are the exception.

For as long as Newfie jokes have been around most Newfoundlanders have either kept silent on the issue, brushed it off as harmless fun or worse yet, laughed along under the misguided belief that “no harm was meant”. I beg to differ.

If someone at a social gathering today were to suddenly say, “By the way, did you here the one about the three Niggers who walked into a bar”, that person would immediately be labeled a racist and shunned by everyone around them, and rightfully so.

If, on the other hand, the term “Newfie” were substituted for “Nigger” we would find a room full of people hanging on the speaker’s every word and waiting for a punch line that inevitably portrays how stupid they believe Newfies to be.

I know there are those who honestly believe there is nothing wrong with the term “Newfie” but the truth is just the opposite. By letting the term continue to be used in civilized society the stereotype of the “goofy newfie” or “stupid newfie” is perpetuated.

As the roots of any stereotype spread and grow ever deeper the boundaries of what is deemed acceptable language in our society expands outward to its extreme limits.

A case in point is an incident that happened just 2 years ago, when a police officer in Edmonton saw nothing wrong with officially stating one of the reasons he detained someone as because, “He is a newphie”.

What does that tell you about how harmful such stereotypes can be?

As recently as this week reports have surfaced that T-shirts are now appearing that depict the words, “Save a Seal, Kill a Newfie”. Is that supposed to be funny and why is it considered acceptable?

If the T-shirt read, “Save your Neighborhood, Kill a Nigger” or “Save your Money, Kill a Jew” would it be laughed off as easily? Would that be acceptable in today’s society?

Such a statement, using a term denoting any other group of people besides Newfoundlanders, would be considered hate speech and those promoting such hatred would be investigated and charged under the criminal code of Canada. Not so in this case.

Unfortunately the term Newfie is considered acceptable right across the Country. It, and the stereotype it promotes, has become so entrenched in the Canadian language that many people actually see Newfoundlanders as being inferior.

This is the real damage that the term brings with it. That’s why those who are the victims of T-shirts that say, “Save a Seal, Kill a Newfie” simply don’t matter.

They’re just Newfies.

Thursday, May 08, 2008

Is Dalton McGuinty Representative of All Ontarians?

Though much has been said lately about equalization, the sad truth is that the economy of Ontario is indeed suffering as a result of a high dollar, high oil prices and being too closely tied to the economic whims in the U.S.

While some of the articles and commentary on this site over the past few days may have made light of the problems in Ontario that doesn't make those problems any less real.

In fact the economy right across Canada is being hit hard.

Newfoundland and Labrador is no exception, with impacts to the fishing and forestry industries topping the list.

Thanks to revenues from a growing oil industry some parts of Canada are better able to offset the impact of the current downturn. But while the overall economic numbers in places like Alberta or Newfoundland and Labrador may look good from 50,000 feet up, the true impact to towns, families and individuals who are losing their jobs, outside the oil industry, are no less real.

Oil or no oil people are being hurt.


"Have" or "Have Not", it remains a fact that someone losing their job in Ontario has a much better chance of finding another one than someone living in Newfoundland and Labrador, or nearly anywhere else for that matter. This is why all the doomsday rhetoric by the national media and government of Ontario has perhaps rubbed people down east the wrong way. It may also be why sympathy from Atlantic Canada, which has struggled for so long, isn't always easy to come by.

Even an Ontario that is "Have Not" is still far better off financially than a Newfoundland and Labrador approaching "Have" status.

I personally believe the people of Newfoundland and Labrador should take the high road and not rub salt in the wounds of the Ontario people. But it isn't the people of Ontario that have made so many stupid remarks over the past week. It is the politicians, pundits and spin doctors. It is those people, not the average Ontarian, who have been the target of most of the "Uppity" remarks from these parts and rightfully so.

I don't believe for a minute that the people of Newfoundland and Labrador wish any ill will on the people of Ontario but those crying foul in their morning Starbucks are a different story.

So, while I wish the people of Ontario all the best in bringing their economy back around to the "good old days" (as long as it isn't at the economic expnense of Newfoundland and Labrador) I can't resist taking one last shot (for now) at Ontario Premier, Dalton McGuinty.

Dalton McGuinty’s Top Ten Thoughts on Equalization.

10. “Sure, the ten provinces should be equal as long as Ontario is more equal.”

9. “Equalization makes Ontarians send all their tax money to Ottawa…uh…Ontario.”

8. “Newfoundland and Labrador is about to do what!!!“

7. “How much is bus fare to Fort McMurray these days?“

6. “Hmmm…maybe I could start drilling for oil under the CN Tower.”

5. “No really, Newfoundland and Labrador is about to do what!!!”

4. “How can I get more federal dollars WITHOUT calling it equalization?”

3. “I wonder how much a barrel of used motor oil is worth?”

2. “Come on Newfoundland and Labrador isn’t really coming off equalization is it?”

1. “F#&K Danny Williams!!!!”

Monday, May 05, 2008

Equalization - A Made in Ontario Solution

As odd as it may seem, the solution to Ontario's fiscal and public image problems rests in doing what Ottawa, at the request of Ontario itself, refused to do more than a year ago.

Remove all non-renewable resource revenues (100% of them) from the equalization calculation.

Today the entire nation, or at least politicians and the media, are in a tizzy over the pending fate of Ontario. It's been that way ever since a report last week indicated that Ontario will qualify for equalization support in a year or two.

The news media (in what has to be the oddest twist of all) now appears to be blaming Newfoundland & Labrador for Ontario's woes.

It seems someone got the bright idea that since Ontario is heading toward "Have Not" status while Newfoundland and Labrador is moving away from it, the entire problem must be the fault of the folks down east.

Clearly Newfoundland and Labrador has nothing to do with the current situation in Ontario. The truth may actually be just the opposite. The province proposed a solution to Ontario's problem over a year ago but nobody listened then and nobody is listening today.

Ontario Premier,Dalton McGuinty, is blaming Ottawa for this insulting situation because the taxpayers of Ontario (like taxpayers across Canada) send huge sums of money to Ottawa. His complaint is that Ontario gets only a small percentage of those federal revenues back.

That's not news and it isn't Ottawa's fault, nor anyone elses.

Of course all of that money doesn't go back to Ontario. If every penny collected in federal taxes went back to the same regions it came from there would be no need for federal taxes (or for a federal government for that matter).

Welcome to the world of federalism Dalton!!!

A Higher Population + More Higher paying jobs + More Industry = Less Federal Support.

It's just that easy.

It seems Mr. McGuinty believes Ontario should be able to get more of that tax money back (which is what equalization payments would permit him to do) but he doesn't want it to be called Equalization.

That would be an embarrassment.

This leads us to the root of the Ontario problem.

The Federal and Ontario governments, in partnership, have essentially painted Ontario into a corner and they have nobody to blame for it but themselves.

One of the major sticking points Ontario had with federal provincial relations was Ottawa's penchent for entering into "one of" funding arrangements with individual provinces. As a result Stephen Harper pledged to never again enter into a side deal. Instead he said Ottawa will only implement funding transfers that are applied fairly across the entire Country.

Under those circumstances finding a way to provide special funding to Ontario without cutting a side deal or using the equalization system isn't easy. In fact it may prove to be a political hot potato for Stephen Harper should he try.

Another big problem for Ontario is the equalization system itself.

When Stephen Harper's government changed the formula there were two key "enhancements" included in the legislation. Those enhancements were at least partly facilited (or should I say "forced") by representatives of the Ontario government and Ontario MPs.

First the calculation was modified so all 10 provinces would be included in determining the average that defines who receives equalization and who doesn't. In simple terms, those below the average receive equalization, those above it do not.

The second change was the inclusion of 50% of non-renewable resource revenues in calculating the average.

Newfoundland and Labrador fought long and hard for the Conservative government to exclude 100% of those revenues from the calculation (Stephen Harper promised he would do it on multiple occassions) because including them would skew the average. By including revenues that are "temporary" in nature, resource dependent provinces are handicapped in their ability to use this one time money to build and diversify their economy.

Once the oil is gone it's gone. It's like selling your car. The money generated is one time only, not like a regular salary. As such it shouldn't be treated, or taxed, as if it were.

Ontario was dead set against the idea and thanks to the pressure it applied on the federal government Harper's promise was never kept. The 100% exclusion never happened.

Fast forward to 2008.

The government (and likely the people) of Ontario do not want to carry the stigma and public shame of having to accept equalization payments from taxpayers across Canada.

Ottawa and Ontario cannot cut a "one of" deal, allowing Ontario to skirt equalization, without both parties admitting that they were wrong for fighting such deals in other provinces. This would result in Ottawa opening a door they said was closed forever.

So, perhaps the best solution doesn't rest in finding a way to pump more taxpayer money into Ontario so much as ensuring that Ontario doesn't cross that dreaded line into "Have Not" status.

After all, isn't this really a question of perception more so than reality?

According to Dalton McGuinty himself it doesn't even make sense that Ontario is about to receive equalization when so much revenue is generated in his province. I agree. That's why the simplest solution is the best.

The reason Ontario is teetering on the brink of crossing the "Have Not" line is because the new 10 province standard (which includes oil revenues) has allowed Alberta to raise the bar so high Ontario is in jeopardy of falling under it.

If non-renwable resource revenues were removed from the calculation Alberta would have little effect on the overall numbers.

Ontario would once again resume, what it sees, as it's rightful place at the top of the Canadian heap.

It's a win, win, win situation.

- Ontario regains its status and avoids a painful loss of dignity.

- Newfoundland and Labrador keeps its limited oil revenues, enabling it to pay down debt and diversify its economy, in preparation for a future without oil.

- Stephen Harper can finally make good on a promise that, as an economist, he knows to be correct. A promise that has caused a political rift between two governments and, inadvertantly though it may be, is now causing collateral damage to another.

Friday, May 02, 2008

Ontario's Equalization Non-Disaster

How is it even possible that the good news story of Newfoundland & Labrador coming off equalization has somehow turned into catalyst for concern and near hysteria in some circles?

After 59 years of being a so called "have not" province one would think the news this week that Newfoundland & Labrador will no longer need equalization payments would be a good thing but in reading the headlines one gets the opposite impression.

Unfortunately Newfoundland & Labrador's announcement took place at the same time that financial analysts are saying Ontario could soon become an equalization receiving province. As with most things Canadian, when Ontario sneezes everybody listens and all else is quickly forgotten in the rush to find a tissue.

As a result, instead of cudos being offered, everyone from politicians to the media have gone on the offensive to protect poor little Ontario from those cruel people down East. CTV political reporter, Mike Duffy" even went so far this week as to accuse Premier Danny Williams of being "uppity" because he had the gall to say that he was glad his province was finally able to stop collecting federal support, and in doing so, allowing the system to better help those who needed support.

"Uppity" now there's a word you don't hear very often regarding Newfoundlanders & Labradorians. In fact the last time I recall hearing the word it was used in reference to individuals from a certain segment of the North American population that had been repressed for generations and had finally found a voice. I believe the exact term was, "That's one uppity...".

I won't finish the quote but believe me when I say that the "N" word used in that context wasn't Newfoundlander, though the sentiment was reminiscient.

Thanks to a perfect storm of high oil prices, a soaring Canadian dollar and a booming economy out west and in Newfoundland & Labrador Ontario is no longer at the top of the heap financially. Add to this the coincidental events of Newfoundland and Labrador moving off of equalization while Ontario moves in to replace it and the perfect scapegoat has been created for all that pent up Central Canadian anger. Who better than Canada's favorite whipping boy, er... Province, to take the heat.

According to reports, Ontario MPs are fuming over the situation and one columnist in an Ontario paper was quick to note that, "Newfoundland was always the place we pointed to as somewhere to go if we wanted to see our tax dollars at work".

Through all the noise the prize for twisting reality and spewing venom has to go to none other than the Premier of Ontario himself, Dalton McGuinty.

The Ontario Premier is telling anyone who'll listen, and apparently there are quite a few, that the reason Ontario is in such hard shape is because his province sends $20 billion more to Ottawa than it gets back in services. Money that is being used to support the rest of Canada.

Putting aside the simple geographical fact that Ottawa itself is a part of Ontario, McGuinty is still full of it.

To listen to the guy you'd think Ontario was on the brink of collapse. That bread lines were forming on every street corner and food was being flown in by Oxfam.

Calm down Dalton, things aren't all that bad.

In truth, the reason Ontario may become an equalization recieving province is because the new 10 province standard(adopted in consultation with the Ontario Premier)has raised the provincial average, pushing Ontario closer to the center line of "Have" and "Have Not".

In addition, though McGuinty would love to have people believe the opposite, in reality Ontario doesn't send $20 billion to Ottawa to fund social programs or equalization across the Country.

Federal revenues used for these programs come from the pockets of all taxpayers across the Country. It doesn't matter if you live in BC, Alberta, Ontario or in Newfoundland & Labrador, everyone pays the same federal tax rates. In other words, someone making 50K in Medicine Hat pays the same taxes as someone making 50K in Twillingate. It's these taxes that pay for equalization, not the Province of Ontario or any other Province for that matter.

The reason for the $20 billion discrepancy is simply that Ontario has more people paying federal taxes and a larger percentage of high paying jobs than many other places. That's not exactly the profile of a Province on the brink of collapse.

As one columnist for the Halifax Chronicle Herald recently put it, "...hold the cat food orders, Toronto.

...Mr. McGuinty says Ontarians pay too much to Ottawa. But we all pay the same federal tax rates, so Ontarians can only pay less if Ottawa returns more money through transfers.

Mr. McGuinty is really saying: Give me more transfers, but don’t call them equalization – that’s for have-nots."