The Lower Churchill - A tale of Two Agreements

Development of the Lower Churchill hydro project is top of mind in Newfoundland and Labrador these days. Thanks to a simple loan guarantee promised by the three major federal parties, not to mention Quebec’s near apoplexy over what amounts to one of many campaign promises that may never be fulfilled.

With a Provincial election slated for October former Premier, Roger Grimes, has also re-entered the fray by re- asserting that a deal he negotiated with Hydro Quebec several years ago was far better than the one his successor, Danny Williams, produced.

As the saying goes, the devil is in the details. Unfortunately details of both agreements sorely lacking leaving many to scratch their heads in confusion.

The current agreement, which is the subject of all those wails of anguish emanating from Quebec, is the Danny Williams edition. It would see Newfoundland and Labrador partner with Nova Scotia on an 80/20 cost shared basis to develop the 800 megawatt Muskrat Falls.

20% of the power would flow to Nova Scotia for the life of a 35 year agreement. Of the remaining 80% just over 300 megawatts would be used inside the Province with the remaining 300 or so sold on the open market. All revenues from those sales would accrue to Newfoundland and Labrador.

At the end of the agreement, the assets, including the Nova Scotia allotment, would revert back to Newfoundland and Labrador to do with as they wish.

It sounds like a reasonable arrangement but there are some, primarily in the Province’s opposition ranks, who question why power rates in Newfoundland and Labrador will be higher than those in Nova Scotia after the development comes online.

There may be some political meat on those bones, but in reality consumer power rates are determined by the utilities and regulators inside each Province and are dictated by many factors that go far beyond a specific project and its limited power output.

It may be an over simplification but essentially the agreement boils down to a simple narrative: Each Province pays a percentage of the development costs and shares a proportionate amount of the power for 35 years. At the end of the agreement the assets belong to Newfoundland and Labrador.

The Roger Grimes plan on the other hand is far less open to summarization, at least not with anything even remotely resembling a simple narrative.

According to Mr. Grimes, he would have developed the larger 2200 megawatt Gull Island site.

That deal would have seen the province borrow the development funding from Hydro Quebec in return for Quebec gaining sole access to the power source, minus Newfoundland and Labrador’s requirement for 300 megawatts or so, under a 30 year agreement.

For the life of the agreement Newfoundland and Labrador would be guaranteed $100 million per year in revenues. At the end the Province would stand to make $800 million each year on the power.

Some this might consider this reasonable, but what do the numbers, as great as they sound, really mean unless put into some sort of context.

Unfortunately context has not been forthcoming from Mr. Grimes. What results is a knowledge vacuum leading to wide spread speculation, not all of it pretty.

Putting aside operating expenses and using a simple approach for comparison, it isn’t difficult to get a picture of the scale of revenues Gull Island represents.
It’s known that Gull Island has a generating capacity of approximately 30% that of the existing Upper Churchill power station. By extension we can assume that gross revenue from the project would be in the order of 30% as well.

Since it’s been said that Hydro Quebec reaps about $1 Billion a year from the Upper Churchill while Newfoundland and Labrador (the owners) receive $100 million for a total of $1.1 Billion a year, at 30% of the size, Gull Island could be expected to generate about $330 million using today’s rates.

Using these numbers, if Newfoundland and Labrador is to receive $100 million a year it means Hydro Quebec would be the recipient of $230 million. Over the 30 year life of the agreement Hydro Quebec would receive only $6.9 Billion in return for financing an expected $6 to $7 Billion dollar project. Newfoundland and Labrador, over the same period would see $3.5 Billion.

Clearly this cannot be the case as rates will rise but the comparisons are valid between both projects.

Many in Newfoundland and Labrador may despise Hydro Quebec, with good reason, but love them or hate them nobody is likely to portray Quebec’s crown corporation as a charitable organization.

They are clearly not in the business losing money, or even investing simply to break even, so obviously Mr. Grimes’ estimates are based on rates far higher than exist today. The question then becomes how much higher might those rates go?

Clearly former Premier Grimes must, by the very nature of his assertions, have estimated that market rates would climb at least 130% over that 30 year period. He couldn’t have said Newfoundland and Labrador revenues in the end would be $800 million a year otherwise. It’s the only way his assertions hold water, well almost, but we’ll get to the other possibility later.

Remember, Gull Island is only 30% the scale of the Upper Churchill but to be worth the $800 million a year in revenues put forward it would have to be 70% the size. Since the river isn’t growing, to get from 30% to 70% only a sharp rise in market rates, at least 130%, would have to take place.

It may sound like a huge increase in rates but actually it’s rather conservative, less than 5% per year on average over the life of the agreement, even lower factoring in compounding affects over time.

This begs the question: If rates rise, even by this conservative amount, how much would Hydro Quebec actually stand to profit beyond their initial investment and a reasonable rate of return?

I’m betting most Newfoundlanders and Labradorians would love to know. Keep in mind that Hydro Quebec has clearly learned from the original Upper Churchill project just how profitable it can be when power prices rise dramatically while purchasing costs remain fixed, in the case of Mr. Grimes’ plan, fixed at $100 million per year for the life of the agreement regardless of market value.

Rising power rates could potentially (and would likely) see Hydro Quebec make far more from its loan to Newfoundland and Labrador than it would at standard borrowing rates. In fact it would likely be a great deal more than the Province would pay in interest by simply borrowing from a more traditional source.

Guesstimating what market rates will be in 6 months is difficult. Speculating with any kind of accuracy what they’ll be in 30 years is impossible. Only two things are certain. Rates will increase and Hydro Quebec wouldn’t guarantee a dollar figure like that without hedging their bets and making sure they get a handsome profit. It wouldn’t make any business sense for them to do otherwise.

In reality nobody knows just how high those rates might rise or how much Hydro Quebec might gain from such a deal but I’m sure it’s something Newfoundlanders and Labradorians would love to know.

Add to this the possibility that Hydro Quebec, under such an agreement, would be the sole creditor on the project. Given the right conditions this would mean they could take possession of the entire asset.

It isn’t hard to understand why the Grimes’ position might be so unnerving to people in the Province.

Of course all of this is all pure speculation based on the limited amount of information provided in those far too rosy snippets put forward by the former Liberal Premier.

For example, Mr. Grimes’ $800 million a year revenue figure (post loan agreement) might not have been based on Newfoundland and Labrador selling its power into the open market at all. He might have been suggesting that Hydro Quebec would continue to purchase the power and simply pay that flat amount as a fixed price to the Province while rates continue to rise and Hydro Quebec’s profits continue to grow exponentially.

Whether or not a fixed price agreement is what Mr. Grimes was trying to sell is a point that certainly requires clarification.

If the Upper Churchill contract taught Hydro Quebec anything it’s that Newfoundland and Labrador might indeed elect a government that would foolishly sign a potentially disastrous fixed price agreement.

That decade’s old contract has also left the people of Newfoundland and Labrador hoping with all their hearts never to elect such a government again.

We can only hope the lessons of the Upper Churchill were not completely missed by former Premier Roger Grimes and others inside the Liberal party of Newfoundland and Labrador.

While the jury is still out on both the Grimes and Williams approaches on the surface the current agreement brings to mind the adage.

“you get what you pay for”.

Mr. Grime’s approach on the other hand, whether rightly or wrongly, reminds me of a far different adage.

“Fool me once shame on you, fool me twice shame on me.”

End of the Williams Era in Newfoundland and Labrador

The first rumblings that something was up began early Thursday morning. This was quickly followed by a brief news release from the Premier’s communications director simply stating that Danny Williams would be going before the microphones to “discuss his political future”.

By 11:30 am Newfoundland time Williams did just that, stepping before the microphones in the foyer of Confederation building where he was greeted by thunderous applause and a chorus of “Danny… Danny” that continued for some time until the Premier asked for the chance to speak.

During his address, which lasted several minutes he discussed his government’s accomplishments and, as he is known to do, quoted several well known figures including the late Orson Wells when he said, “…if you want a happy ending, you need to know when to end your story…”

Danny Williams then announced that he will be stepping down as the ninth premier of Newfoundland and Labrador on December 3, 2010. At that time Deputy Premier Kathy Dunderdale will assume the leadership role until a new leader is selected.

According to Williams the reason for his decision was one of timing. He noted that much of what he hoped to accomplish when he became Premier in 2003 was now in place and he saw this as the right time to hand over the reigns.

During his tenure the Williams government improved the Atlantic Accord revenue sharing agreement with Ottawa, improved royalty revenues and ensured a provincial ownership position on offshore oil developments and most recently announced a 6.2 billion dollar agreement to develop part of the Lower Churchill hydro project.

As federal Liberal MP Gerry Byrne said today, “He’s got his bucket list done, that’s the bottom line. He’s accomplished what he set out to do.”

In spite of less than flattering headlines and commentaries in the national news media where pundits often referred to him as “Danny Chavez” or a “dictator”, Mr. Williams’ accomplishments were substantial.

Beyond those accomplishments previously identified his government also instituted a nationally lauded poverty reduction plan that saw the province go from having one of the highest poverty levels in Canada to having the third lowest. It was also during his tenure that Newfoundland and Labrador paid down 4 billion in provincial debt (approximately 25% of its debt load), moved from being a “have-not” to a “have” province for the first time in its history and nurtured a level of pride among the population that has not been seen in decades.

As a result Premier Williams’ level of support remained strong, in fact even after two terms in office his consistent approval ratings of 80% or higher (one recent poll placed his voter approval rating at 93%) was the envy of politicians across Canada.

Accomplishments accepted, the Williams government was not without its share of problems as well, including an ongoing doctor’s dispute, and the mistaken appropriation of Abitibi’s mill property in Grand Falls-Windsor (a mistake that happened during the adoption of a bill to appropriate water and timber rights from the company, a move that overall was very popular in the province).

According to MP Gerry Byrne, “He’s a loved and hated politician among the political class, but today whatever feeling of animosity people may have is replaced with envy.”

Federal MP Scott Simms told the Globe and Mail today that there are likely a few politicians breathing a sigh of relief – including Prime Minister Stephen Harper”, who ignored Mr. Williams and suffered electoral losses in his province.

Simms was referring of course to Danny Williams much publicized “ABC” (Anyone but Conservative) campaign during the last federal election. A move that saw the Harper government completely shut out in Newfoundland and Labrador.

“Danny Williams doesn’t take the middle road,” said Mr. Simms, “He doesn’t relax. For Danny Williams it’s you’re either in for everything or you’re in for nothing. At that level of play it’s a pretty intense life,” Mr. Simms said.

“Williams has an iron fist and a golden touch. It’s going to be hard to find a similar successor in the Progressive Conservative party.”

“He’s one of a kind,” Mr. Simms said. “He just personified something that we wanted for so long. I think what [Mr. Williams] did was instill a sense of pride. ... I just thought he was the right guy for the right time.”

The question now shifts to what's next for Danny Williams.

Never one to sit idle it would be difficult to imagine he has plans to sit on a beach somewhere. No doubt someone with his resume has countlss opportunities in the private sector but unless it's a CEO position on the table, nobody believes Williams would consider it. He's always been a leader, never a follower.

What about federal politics?

Never one to mince his words, when asked today if planned to run federally his response was uncharistically "political" in nature. Williams neither discounted the idea or said he would be interested. He simply said it was not the driving reason behind today's decision but that he has had many people approach him with the offer.

Interesting since there would clearly be no room for the life long Conservative inside any federal Conservative party run by Stephen Harper. That bridge was burnt long ago.

Only time will tell what the (almost) former Premier will do next. In the mean time reaction to the Premier’s resignation has been pouring in from across Newfoundland and Labrador, as well as the rest of Canada, ever since the unexpected announcement this morning.

Sell Lower Churchill Power to Quebec at a Guaranteed Price for the Next 30 Years

Those are the words that have necessitated today's Web Talk commentary.

Web Talk usually does its best, within reason, to avoid entering the political fray inside the borders of Newfoundland and Labrador, preferring instead to focus on external entities that affect the province, either positively or negatively. I’m referring of course to entities such as the federal government, other provincial governments and even large industries that affect us on a regular basis.

This is one of the few times when an exception to that general guideline is not only warranted but where, I firmly believe, ignoring or avoiding the issue of our local political environment would constitute a clear case of negligence on the part of this forum.

I’m speaking about the current mindset of the leadership and perhaps some of the membership within the provincial Liberal party.

Before going any further let me get all the mandatory disclaimers out of the way.

First of all I am not a member of any political party locally or federally. In past elections I have supported individual candidates from all three mainstream parties in the province. I support the current PC government on many of its actions but have also disagreed with their direction on some issues, both privately and publicly.

The reason I say all of that is with the hope, as unlikely as it is, that my explanation will serve to lower the volume level of those readers who will try to write me off as just another one of “Danny Williams’ Kool-Aid drinkers”.

There really isn’t much hope of heading those readers off at the pass so to speak but it’s worth a shot.

I’ll leave the subject of closed minds (on all sides of the political spectrum) for someone else to tackle.

My concerns today rest with the current state of affairs in Newfoundland and Labrador politics. I believe, for the average voter, the problem is two fold.

As previously mentioned, I agree with the Williams government on most of its agenda, thought sometimes not on the all the details. I also adhere to the old adage that “absolute power corrupts absolutely”. In this light I would love to see a more diverse makeup at the House of Assembly after the next election. Specifically I believe it would be in the best interests of the province to see growth in the opposition ranks.

Most of us take it as a forgone conclusion (barring some sort of self destruction) that a PC government will be returned to power when the polls close next time around. That said, if left unchecked, too much power can lead to serious problems for us all and it’s for that reason I would love to see more Liberal and NDP members in the House. The status quo of a single party “invincible” majority is not a situation that should be allowed to continue in the longer term.

My previous point leads me directly into the second of my concerns, specifically the state of the Liberal party in Newfoundland and Labrador and the need to balance the opposition ranks without actually allowing the current contingent of party elite to gain any real power.

Call it partisan if you like (it isn’t) but that’s right I said we need to ensure that the Liberal party, as it exists today, shouldn’t be allowed to gain power in the province

To put it bluntly, as it now exists, should the Liberal party find itself elected as a future government, or more precisely, if the people of Newfoundland and Labrador were to find themselves governed by the Liberal party, in its current state, then God help us all.

No, that isn’t Liberal bashing, it’s self preservation in the face of recent events.

I’ve supported past Liberal governments in this province just as I’ve supported PC governments but when you look at some of the happenings at Liberal HQ these days you have to shake your head and pray that something changes, quite dramatically, before they are ever given the reigns of power again.

With their ranks nearly decimated in recent years and at a time when they should be focused on rebuilding they have actually gone ahead and named none other than Craig Westcott to spearhead their communications machine.

Really, Craig Westcott?

For those of you unfamiliar with the man, this is an individual who has done almost nothing in the past several years except bash the current Premier and not just when it was deserved, but incessantly and apparently for the sport of it. It’s almost like he has tunnel vision when it comes to the Premier and at the end of that tunnel is a set of crosshairs aimed squarely at the Premier’s head.

No doubt Westcott’s compulsion for Danny bashing was a major item on his resume that the Liberal leadership found attractive, but you have to ask yourself, does a compulsion to blindly attack make Mr. Westcott the best choice for the job?

Remember, this is the same person who was one of the loudest naysayers shouting from the roof tops that the sky was falling, yelling that Premier Williams was single handedly killing the oil industry in the province and driving away investment because a deal wasn’t signed on the Hebron oil project during negotiations a few years back. We all know how those negotiations eventually panned out now don’t we.

From the Liberal perspective, with Williams’ approval rating resting comfortabley near 80% for as long as anyone cares to remember, there is no doubt they would love to find a way to knock his numbers down. They need to realize however that when someone is THAT popular, no matter the reason behind the numbers, blind attacks are more likely to solidify his support base (it’s called closing ranks) rather that wearing away at it.

Negative political attacks may work well in U.S. elections and perhaps even in other parts of Canada but most Newfoundlanders and Labradorians don’t get a warm fuzzy feeling when someone they support is incessantly attacked, no matter the source.

Besides, the best way to win Liberal support is to show the public the Party’s strong points, not simply attack for the sake of attacking. In this light Mr. Westcott might very well end up being a liability rather than an asset. Just ask local Liberal member and former candidate, George Murphy, also known for his great work with the Consumer Group for Fair Gas Prices, who resigned his position as a Liberal party organizer after calling the appointment of Mr. Westcott an “insult”.

Enough of Craig Westcott (something I believe the Liberals should consider saying as well).

My biggest concern has far more to do with the future of the province than with the internal workings of the Liberal Party, the common thread between the two being a clear display of poor judgment in both cases.

In this case I’m referring to the words of Danny Dumaresque, long time member, executive and former president.

If Mr. Dumaresque’s way of thinking is any indication of the mindset that exists inside the Liberal Party then voters should run away in droves and members should look for the nearest exit from Party HQ.

With recent comments from Danny Williams that the province is looking at a phased in approach to development of the Lower Churchill project, media is reporting that the Liberal opposition would like more details on government plans. That’s fair enough. In fact I’m sure we would all like to know how a phased approach using the Maritime route can be undertaken in an economical manner. I have no problem there.

What scares me is a comment on the subject attributed to Mr. Dumaresque in which he appears to be promoting the sale of Lower Churchill power to Hydro Quebec at a set rate through a long term contract. Read the following excerpt from the local media and tell me if I’m wrong to be concerned.

“ … Hydro Quebec was prepared to buy the power. He says the corporation has been a good, paying customer... He says they are the only customer in North America that can take on 3,000 megawatts of power and guarantee a price for the next thirty years.”

Was that as scary for you to read as it was for me?

In my book Danny Dumaresque’s words sound awfully similar to the reality of the Upper Churchill contract, a reality that has tortured Newfoundlanders and Labradorians for decades and been burned into our collective psyche. Far too similar.

It would appear, based on media reports that Mr. Dumaresque, a very influential member of the Liberal party, would have us sell the power from the Lower Churchill to Hydro Quebec at a guaranteed price for the next 30 years. Wow!!!!

The only thing that seems to be missing from his comment is any reference to an automatic renewal clause that would allow Quebec to continue using that power for a further 25 years at an even lower rate.

I have to say, if those words don’t make voters shake in their boots and question the province’s future should power be placed in the hands of the current Liberal brain trust, nothing will.

One high ranking member clearly would have caved into big oil during the Hebron negotiations a few years ago and another would have us sign a new long term, set rate, contract with Hydro-Quebec for Lower Churchill power.

Under the circumstances I hope readers will excuse this short foray away from the usual approach of keeping provincial politics off the agenda here at Web Talk and understand the reasons why there was a dire need to weigh in on the subject.

Williams Sets Record Straight at the National Post

As soon as the news hit the wires that the federal government had settled a NAFTA challenge from Abitib-Bowater over the expropriation of the assets in Newfoundland and Labrador pundits for the so called "national papers" coudn't wait to take another shot at NL and Danny Williams (or as they often refer to him, Danny Chavez, Village Idiot, or some other less than flattering term).

Today Premier Williams decided to set the record straight at the National Post. Here is what he had to say:

Danny Williams, Special to the National Post · Friday, Aug. 27, 2010

I am disappointed, yet not surprised, by the nasty attacks on me in the National Post ( "From Newfoundland, another tantrum," editorial; and "The Cuckoo of Corner Brook," by Peter Foster; both of Aug. 26). I certainly can take the criticism. Where I draw the line is at mean-spirited insinuations and inaccuracies about our province and its people.

In regard to the recent financial settlement between the Canadian government and Abitibi Inc., which resolved the company's NAFTA complaint, let me point out that Abitibi operated in our province for 100 years. After reaping untold millions in profits and also providing substantial employment for our hard working people, the company closed two mills, threw hundreds out of work, and walked away without even paying the severance these people were owed.

There is no doubt that the pulp-and-paper industry is facing difficult times globally. However, Abitibi broke its covenant with our government under the original terms of its operations in the province. We could not simply allow it to desert the workers while keeping rights to our timber, hydro and lands; valuable natural assets that were entrusted to this company based on certain terms and conditions. Our expropriation of those natural resources was the right thing to do for our people.

Additionally, I am compelled to respond to the following inaccuracies:

- From Peter Foster's Financial Post column: "[Williams] appeared to pull off a coup when the owners of Hebron-Ben Nevis offshore prospect ... returned [with] an agreement that included provincial participation and a 'super royalty' that kicked in if prices remained high...When oil price hit $147 a barrel in 2008, Williams looked like a hero. The oil price is now less than half of that."

Fact: Our super royalty kicks in when prices exceed $50 a barrel. Still seems pretty lucrative to me, despite Mr. Foster's further assertion that this was a "wealth destroying" game I had played.

- From the National Post's editorial: "The Premier's demands for super royalties from oil companies caused them to scale back development of the Hibernia South and Hebron offshore fields, which, in turn, caused the federal taxpayers to indirectly subsidize Newfoundland's budget for lost revenues."

Fact: What kind of logic does one use to say the federal government compensated us for projects that didn't even yet exist? Secondly, the paper fails to admit that because of our government's strong stance and ultimate success in these negotiations, both of these projects are proceeding as originally planned. These two projects alone will generate billions of dollars of revenue for Canada and all Canadians.

- From Peter Foster's Financial Post column of: "[Williams'] attempts to force oil companies to do expensive but unspecified R&Din the province led to a further request for NAFTA arbitration."

Fact: The referenced action was in fact taken by the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB). This is a joint federal/provincial board that operates at arm's length. The action was not taken by me or our government, but it certainly had our support.

- From the National Post's editorial, referring to the EU seal ban: "Ottawa had to play hardball with the EU to keep the meat, skins and byproducts flowing."

Fact: Despite best efforts, the EU ban actually proceeded -- though court action by the Inuit people of Canada has temporarily paused the ban, which we hope will result in a rethinking of the issue by the EU. In any case, I think all Canadians would be proud that our government defends our interests against other countries.

I will never apologize for fighting to protect our natural resources and for getting fair benefits for the people who own them, even if that means taking on big corporations.

Let me close by saying this: Upon completion of Newfoundland and Labrador's current oil and mineral projects, the result in net revenues after expenses will be in excess of $225-billion for Canada. Criticize when you must, but it is time for the Post to start recognizing the contribution made by our province to this country. I am heartened that ordinary Canadians are much more inclusive and generous of spirit, and acknowledge the contribution not just of Newfoundland and Labrador to the Canadian Federation, but indeed of all people, provinces and territories.

- Danny Williams is Premier of Newfoundland and Labrador.

Quebec Hydro - Positions to Block Lower Churchill Development

The following report was issued by VOCM News this morning.

Premier Ready to Square off with Quebec Hydro

The Premier is gearing up for another fight on the national stage.

Danny Williams says Hydro Quebec continues to try and block this province from developing the Lower Churchill, now refusing to sign onto a water management agreement for the Churchill River in Labrador.

Speaking to a sold out crowd last evening at the PC Party's annual convention, Williams says the issue came to a head Friday and he's setting his sights on the mainland power utility as the issue moves to the Public Utility Board.

In light of the profits pulled by the company on the Upper Churchill, The Premier describes the actions as 'the pure heights of greed.'

The Quebec power company is also reported to be taking over New Brunswick Hydro, Williams says, to get a strangle-hold on route access. He says while there is nothing he can do about that possibility, he offers New Brunswick some words of caution. The short term gains could have long term consequences of giving up energy resources . He warns our experiences have not been good in dealings with the powerful Hydro Quebec.

Patronage Plumbs Peddled for PM's Purposes

This morning I stumbled across an article from the “Hill Times” that immediately caught my attention and captivated my interest. The piece was about none other than Prime Minister Stephen Harper

The headline read, “Harper criticized for not 'taking care' of former MPs, top staffers”.

The author referenced Conservative MPs and staffers who are worried because, “...Mr. Harper demands loyalty … (but) he doesn't show the same loyalty when MPs lose an election or staffers leave their Parliament Hill jobs."

Apparently those loyalists are, "disappointed that he has failed to "take care" of them in their post-Parliamentary lives.”

I have to say I was left in total bewilderment after reading this.

I mean boo hoo for the party hacks moaning to this reporter but what's going on here?

First of all let me say I’m strongly believe that political patronage and the “old buddy” network is a major part of the problem we have with politics today. Anybody who chooses to run for office or to work for a political “machine” shouldn’t have any right to expect to be “taken care of” when the party ends. They do of course but that doesn't make it right.

Knowing how I feel about this I’m sure you can understand my confusion.

Politics in Canada has been an elitist and closed “scratch my back” system for decades and to hear that suddenly Stephen Harper, one of the most underhanded and self serving of the bunch, may have suddenly decided to do the right thing and give up the practice had me flabbergasted.

I mean wasn’t it Stephen Harper who claimed he would never appoint senators to that most golden of retirement homes, the Red Chamber?

Wasn't it also Stephen Harper who did just the opposite by appointing 18 of them?

Didn’t he thank Mike Duffy for his partisan service and support during the last election and for Duffy’s crucifixion of Stephane Dion after a botched Nova Scotia interview (an action by Duffy and NewsNet that was later described by the Canadian Broadcast Standards Council as unethical)?

Didn’t Mr. Harper also send former Newfoundland and Labrador MP, Fabian Manning, to the red chamber after Manning was ridden out of town on a rail in his home Province? Wasn’t that a thank-you to Manning for standing next to the PM in the House of Commons, laughing and clapping as Mr. Harper callously stripped hundreds of millions from Newfoundland and Labrador and publicly ridiculed Mr. Manning’s home province?

Could the Stephen Harper I know and dislike have changed so much in such a short time that his party insiders and toadies were beginning to worry about their future expense accounts and "rolling around money"?

I was so confused. How could some reporter have identified a lack of political pork barreling and cronyism as a serious weakness in anyone but of all people, Stephen Harper?

Really?

What was I missing?

I mean here is a Prime Minister who has proven time and again that he is not to be trusted in any way, shape or form. For Stephen Harper breaking a promise or “sculpting the truth" is as natural as breathing. So my question was this: Had the Prime Minister suddenly turned over a new leaf or was he just proving to those in his inner circle what many of us already know, that he can’t be trusted?

It's something they all should have been aware of by now but in the rarified air of Ottawa clear vision is something often encountered.

Was it something else all together?

Did the Hill Times get boondoggled by the Harper media machine into running a story that might allow the Prime Minister to be viewed as the only one willing to “clean up dodge” even at the expense of his loyal minions?

The whole thing left all me with so many questions my head hurt and I believe (just for a moment) my morning muffin threatened to reappear from the depths.

What was I to say about this new information staring me in the face?

At first I almost thought that even though the Hill Times wasn’t very flattering to Mr. Harper (They seemed to view this lack of cronyism was a bad thing ) I might actually be forced to sit down to write something complimenary about the man.

My blood ran cold.

I nearly passed out from the stress.

But I was saved the horror of defending Mr. Harper's actions.

As I lowered by now tense frame over the keyboard and the blood slowly began to flow back into my head I suddenly realized what was really happening. It wasn’t that Stephen Harper had decided to do the right thing by turning his back on old school politics, it was just a case of the true nature of the man once again reaching the public eye.

I guess all the conflicting facts and my desire to see political cronyism done away with had clouded my judgment and overwhelmed my nervous system.

Think about it, Stephen Harper hasn’t actually done the right thing by deciding not to offer cushy jobs to his cronies on the taxpayer dime. Instead he’s been carefully weighing the market value of those around him and acting accordingly.

Those who have little future value to him, savagely loyal or not, must be removed and forgotten in the interest of the Harper "buddy" portfolio. In this way the limited number of valuable patronage positions available can be offered to those who have continued political or personal value.

I mean if Harper just gave away those plumb jobs as a thank-you to every Tom, Dick or Sparrow how would he be able to buy future influence inside Ottawa?

Consider this, were the onslaught of senatorial appointments really a political thank-you on the PM’s part or a way for him to meet his own self interests?

I admit that at first I thought they were nothing more than a taxpayer funded pat on the back but on reflection, and in light of this recent information I’ve been forced to look for another explanation and it isn’t hard to find one.

Just squeeze your eyes into tiny slits, forget you’re human or even a primate and try to think like Stephen Harper. I know it hurts but if you try real hard the answers will come.

For anyone afraid of having their personality or moral compass get stuck in Harper mode stop now and I'll tell you what I came up with.

Mind you I didn’t have the time, inclination or article room to research all the senate appointments made my this PM but in the case of Duffy and Manning the answer is simple.

Those appointments weren’t Harper’s way of thanking two political hacks for climbing into his back pocket they served a much more important purpose.

Duffy’s senate seat ensures that Mr. Harper has a very experienced and well connected media insider at his back pocket and at his beck and call whenever he needs to create some spin. And here’s the really interesting part, it’s not costing the Conservative party a cent because the taxpayers are footing the bill for Mr. Duffy’s enormous salary and golden perks.

As for Fabian Manning’s appointment, that ones a lot simpler and less forward looking.

Harper still has a major pissing contest underway with the Premier of Newfoundland and Labrador, Danny Williams, and he needed a way to retaliate against the Province for not electing a single Conservative during the last election. What better way to send a message to the Province and the Premier than to offer a highly publicized senate seat to the Province’s poster boy for “traitor of the decade”?

Can you say “slap in the face” Premier Williams? I bet you can.

Anyway, once the reality of the situation got a little clearer I slapped myself for being so politically naive and I felt much better, not for Canada which is still politically screwed, but about my personal well being.

My headache went away and things began to return to normal after a few minutes of deep breathing. It was then that another terrible thought occurred to me. What will happen after the next federal election?

According to the same “Hill Times” article that threw my morning into such turmoil, Mr. Harper may not always “take care” of his loyal supporters but the Liberal party has, “a fairly strong support network, not only political, but also corporate and academic” to help its loyalists.

Oh great. Once again we are faced with proof that the Canadian political system is nothing more than a joke. The banana republic of the North.

Now Canadians can either elect a ruling party that has no morals but which is pickier about feeding its loyalists at the trough or one that claims to have all the morals in the world while historically handing out patronage positions like Halloween candy.

Thank God we live in a democracy (well actually a democratic monarchy) where the public is free to decide which party had the best publicity machine leading up to election day.

Personally I think I’ll take next polling day. At least nobody will be able to blame me for “choosing” our next government.

Newfoundland and Labrador Takes 10% Stake in Offshore Expansion

"That amount ($10 billion) is actually double the royalties collected by the province from all three projects to date, since 1997," - Premier Danny Williams

Speaking at the Newfoundland and Labrador Offshore Oil and Gas Industries Association Conference in St. John’s on Tuesday Premier Danny Williams announced a long awaited tentative deal with a consortium of industry partners for expansion of the Hibernia South offshore project.

An agreement on the expansion was put on hold by the Province months ago when the government introduced its new energy plan. At the time government requests for clarification on some aspects of the expansion and the lack of an agreed upon royalty regime or equity position for the Province delayed the project.

On Tuesday Premier Williams announced to a packed house at the NOIA conference that a tentative agreement has now been reached that will see the province take a 10% equity stake. Depending on the future price of oil, the equity position, combined with provincial taxes and an enhanced royalty regime is expected to put $10 billion dollars into provincial coffers over the life of the project.

The royalty regime for the extension can top out at 50% once payout is complete and if specific oil pricing conditions are achieved. The final contract is yet to be completed so precise details of what those conditions are or what the province’s 10% equity stake will cost have not been released, though some estimates have put the cost at about $30 million.

The Hibernia South extension is estimated to contain more than 230 million barrels of oil and based on past estimates from within the oil and gas industry in the region those estimates are likely on the conservative side.

According to Premier Williams, "Hibernia South will increase and sustain production from the Hibernia field, preserving employment, while providing a significantly greater royalty return for the province than any previous project."

Comparing Report Cards - Harper vs. Williams

This week Prime Minister Stephen Harper delivered his “report card” on the status of the federal stimulus spending. Ironically, Mr. Harper waxed poetic about how much money has been earmarked for specific projects, municipal leaders across the Country sat in stunned silence wondering where the money was.

Always one to turn a phrase to his advantage, during his address Stephen Harper was quite skillful in saying that money has identified for the many projects while knowing full well that approval and delivery are not the same thing.

What Mr. Harper intentionally failed to admit was that most cheques have not been cut and most tenders for development have not been issued because the money is still somewhere in the bowels of the Finance department tangled in red tape. Stimulus funding is wonderful stuff when it’s needed but it isn’t much good if the money doesn’t flow.

As much as the Prime Minister dislikes the place, perhaps Mr. Harper would do well to look toward the province of Newfoundland and Labrador if he wants to see how stimulus funding really works.

On the same day the Prime Minister delivered his report card to the Professor Ignatieff and the rest of Canada Newfoundland and Labrador Premier, Danny Williams, and several of his Ministers delivered an update of their own.

The Provincial infrastructure stimulus package included in the 2009/10 budget was set at $800 million dollars and just yesterday that amount doubled to $1.6 billion and the program extended to include the 2010/11 fiscal year as well.

The biggest difference between the Newfoundland and Labrador package and the one touted by Ottawa isn’t in the numbers or the duration but in the delivery.

Perhaps Provincial Transportation and Works Minister, Trevor Taylor, put it best when he said at yesterday’s press conference, “It's one thing to make unprecedented commitments but it's quite another to get this money flowing and projects tendered quickly and that's just what our government is doing."

"Right now our Tendering and Contracts Division is the busiest it has ever been. On average, at any given time, the Provincial Government has between 20 to 30 tenders in circulation. We currently have 107 tenders out, which is a record for this province."

"We are issuing and awarding our tenders earlier than ever before and we plan to maintain this aggressive tender schedule as long as the commodity and labour prices hold and the industry has the capacity to do the work. Also, we are duplicating the designs of many of our new schools and health care facilities which expedites the process and makes it more cost-efficient,” said Taylor.

While there is no doubt the economic downturn is affecting the Province, as it is the rest of Canada, with increased unemployment and a lower GDP there are some positive indications for improvement over the coming months.

Finance Minister, Jerome Kennedy noted that, "At a recent meeting of finance ministers across the country, the Federal Government indicated that Newfoundland and Labrador is now leading the rest of the country with stimulus flowing to the economy in 2009 and 2010 relative to our GDP."

"In addition, thus far this year, our province is leading the country in a number of economic indicators, including investment intentions, retail sales, labour income and urban housing starts," said Kennedy.

Perhaps one of the best features of the Newfoundland and Labrador stimulus package is that isn’t overly dependent on Ottawa to provide a share of the funding. 85% of the program’s funding will come from provincial coffers with the remaining 15% being shared by federal and municipal governments.

It’s a good thing there isn’t too much dependence on Ottawa. We all know where that has led the Province in the past. In this particular situation and at the speed federal infrastructure funding is flowing the recession is likely to be a distant memory by the time the first cheques go in the mail.

It’s really too bad Stephen Harper and Danny Williams aren’t on speaking terms or the PM might have picked up a few pointers on how to handle an economic crisis.

NL's Access to Quebec Hydro Grid Raising Questions

Nearly two weeks ago Newfoundland and Labrador Premier, Danny Williams, stood in the House of Assembly and made an announcement touted by papers across Canada as a turning point for his province.

The mainstream media and the Premier have since waxed eloquently about how Newfoundland and Labrador’s new ability to wheel hydro power through Quebec to American markets may herald the dawn of a new day.

The problem is that it actually means nothing of the sort.

Yes, Quebec has refused to allow just such an arrangement in the past but what does it really mean for the future of Newfoundland and Labrador or its ability to reach markets with the proposed Lower Churchill development?

It means absolutely nothing from that perspective which is why I find myself quite puzzled by the Premier’s apparent elation over the event.

The timing and tone of Premier Williams “ground breaking”, “turning point” announcement earlier this month, simply because Quebec will allow a token amount of power to be transmitted on their under utilized grid, has my gut telling me to be wary.

In order to wheel the more than 3000 megawatts to be generated by the Lower Churchill across Quebec a great deal of new capacity would have to be added to the grid and, just as in the past, every Newfoundlander and Labradorian knows, or should know, that Quebec has no plans to allow anyone other than themselves to build new transmission infrastructure inside their “nation” unless they own, control and reap the profits from it.

Over capacity is one thing. New capacity is something else all together.

Newfoundland and Labrador can kick and scream all it wants. Danny Williams can blow a gasket, grow a new one and blow that. The Canadian Constitution can be quoted chapter and verse on this issue (which supports Newfoundland and Labrador’s ability to access markets) and it can be proclaimed from the highest mountains but in the end Ottawa, as it always does, will acquiesce to the demands and desires of vote rich Quebec. Newfoundland and Labrador be damned.

None of that does, or should, come as a surprise to anyone living in Newfoundland and Labrador for more than five minutes. What has come as a bit of a shock is Danny Williams apparent need to “spin” the Province’s ability to export a paltry 200 megawatts of power, with Quebec’s blessing, as some sort of major breakthrough.

It’s more than a little odd to this observer that the Premier would be touting this as a victory and claiming it bodes well for future developments when that clearly isn’t the case.

Has political expediency and the need to “play well at home” trumped reality for yet another of Newfoundland and Labrador’s Premiers?

Has Premier Williams been listening to his own publicity team for so long now that he’s actually started to believe them?

Don’t get me wrong, on the whole I like what the Premier has done over the past couple of terms and I’ve been happy to back him on the issues he’s been strong enough to take a stand on, but this one has me baffled.

Why would the Premier of Newfoundland and Labrador consider it a shining moment for his Province simply because Quebec made a token gesture at a time when they plan to develop a multi-billion dollar hydro project just outside the Labrador border?

Ever since that border was defined in 1927 Quebec has disputed its exact location.

Did Quebec really turn a page with this recent announcement or is Premier Charest hoping Premier Williams won’t make too much fuss about the fact that one of the grey areas in the 1927 border decision just happens to contain the headwaters that will feed Quebec’s massive Romaine hydro project?

As has often been said, “He who controls the headwaters controls the project.”

Recently I requested specific clarification from the government of Newfoundland and Labrador concerning the border and its relationship to the headwaters of the Romaine River. To an untrained eye, which I am not ashamed to say I have, it’s debatable as to which Province can stake claim to those waters.

To date there has been no response but I continue to wait (im)patiently.

When it comes to the “big” announcement a couple of weeks ago I’m not accusing anyone of anything underhanded but I certainly have questions.

In 2005 Professors Feehan and Baker released a research paper on the Upper Churchill renewal clause. That paper contained previously unknown evidence pointing to the use of coercion and inside information as the means by which Newfoundland and Labrador was forced into signing the disastrous Upper Churchill contract. It concluded that a legal challenge could be made.

Since that time the Williams’ government has never openly discussed those findings or pursued a legal challenge to the contract. Instead, the provincial government later released the Province’s long term energy plan. A document that makes no mention of attempts to rectify the Upper Churchill debacle and contains a plan that extends until 2041, the same year the contract will have run its entire course (without challenge).

In 2008 the Williams government quietly sent a letter to the joint Quebec/Federal panel reviewing the environmental impacts of the Romaine hydro project. The letter expressed concern about the misrepresentation of the Southern Labrador border on maps being used for the process. It made no mention of any concern with Quebec pushing ahead on a project that might depend on headwaters inside Labrador.

The letter was sent to the review panel without any fanfare, publicity or notification of the media. It was only through a chance discovery but one local reporter that the letter ever became public knowledge in the first place.

Why was so little concern expressed about the project and the headwaters and and why was the letter sent so quietly?

In recent months Premier Williams has publicly stated on several occasions that he has no concern with Quebec’s Romaine River hydro development. How can this be the case given our history?

After being fleeced for decades on the Upper Churchill, if the Romaine’s headwaters are indeed inside Newfoundland and Labrador territory doesn’t that mean that Newfoundland and Labrador should have a stake in the project?

Does the lack of concern mean the provincial government simply plans to let Quebec push forward with no financial benefit accruing to Newfoundland and Labrador from what amounts to yet another of its extremely valuable natural resources?

If so, why would anyone do that?

Could it be that the “token gesture” made by Quebec in allowing a small amount of power to be sold through its grid was a down payment to the Provincial government on a promise to support the Lower Churchill development once the Romaine has been completed?

If so, is a promise like that worth the paper it could never actually be written on?

These are questions that need to be answered.

There may indeed be very rational and reasonable responses to each of them but they need to be asked and answered.

I don’t mean to sound like a conspiracy theorist but I can’t help it. The celebratory position taken by Premier Williams, not to mention the copious level of high praise, encouragement, kudos and smiley faced pats on the back flowing like sweet molasses from the national media over what amounts to a mundane non-event, has me wanting those answers sooner rather than later.

Is Ottawa Party to a Cover Up?

Over the past few days several individuals and news agencies have been questioning the validity of a conspiracy theory making the rounds.

The theory speculates that perhaps someone onboard may have intentionally scuttled (sank) the Spanish Trawler, Monte Galineiro, which went down near the Flemish Cap off Newfoundland earlier this week.

According to media reports the vessel was being closely tracked by a Canadian Coast Guard patrol vessel, with the intention of conducting a fisheries inspection once the weather cleared, when she suddenly issued a distress call. The vessel sank minutes later.

All hands onboard were plucked from the frigid North Atlantic but questions have since arisen about the incident and whether the sinking might have been intentional.

The theory itself is deeply flawed but there are never the less a lot of valid questions that should, and likely never will be, answered.

For a fairly large vessel to sink as quickly as this one did it would need to take on a lot of water very rapidly.

The most likely reason for such a sinking would be a large hole in the hull. The other likely possibility is that the “sea cocks”, which allow water to be taken in for ballast, were opened, either intentionally or not, thus the conspiracy theory.

Since the ship did not impact with a foreign object like an ice berg, the concern over why a four year old vessel took on water and sank so rapidly is a real one.

Another question is what she was doing on the very edge of Canada’s 200 mile limit when she sank? Some estimates put her at about 214 nautical miles from shore.

It would be of value to know what direction she was traveling in when observed by the Canadian Coast Guard. Was she heading toward Canadian waters? Was she heading away from them? Did the vessel appear to be attempting to evade or outrun the patrol vessel?

The captain of the Monte Galineiro claimed he heard an explosion in the engine room and reported a fire onboard. Why wasn’t there smoke visible before the Monte Galineiro went down and why did some crew members claim to be wakened from their sleep by an emergency alarm, not an explosion as claimed by the ship’s Captain?

These are valid questions. Unfortunately the Canadian government, under the auspices of the Department of Fisheries and Oceans, has said it will not be conducting any investigation into the incident. Preferring instead to leave that to the ship’s Country of origin, Spain.

Personally I doubt very much that anyone would intentionally sink their own vessel during February in the North Atlantic while sailing in 10 foot waves.

If they did, the majority of the 22 member crew, some of whom were rescued in their underwear, could not have been informed. To do so before putting them in such a frightening life and death situation would almost ensure that they would want to get their revenge on the perpetrator by telling authorities.

Indeed the crew knew a Coast Guard vessel was in the area but in reality, would anyone, other than a total psychopath, throw himself and more than 20 others into a situation where mere minutes mean the difference between life and death?

What could the motive be?

Would someone take that gamble simply to avoid the slap on the wrist that would be waiting for them even if they were found to have tons of illegal cod onboard?

I doubt it.

Perhaps the most sensible statement regarding the conspiracy theory came from St. John’s Maritime Lawyer, Owen Myers, in a “Sou’Wester” article, when he said the Monte Galineiro wouldn't face serious fines under "toothless" North Atlantic Fisheries Organization (NAFO) rules, even if it was convicted of illegal fishing. "It seems very unlikely to scuttle a $20-million vessel in order to escape a Canadian fisheries inspection," Myers said. "It's kind of like getting a traffic ticket. You're not going to blow up your Ferrari sports car because you've been given a parking ticket. I think it's really well-known that that is the problem with the NAFO convention - there are just no penalties in it."

There’s a lot of truth in those words.

It seems that nobody really knows what happened out there on the high seas but isn’t that the problem?

Shouldn’t somebody be trying to find out?

Putting aside the conspiracy theory itself for a moment, since it only clouds the issue, the question of exactly why this ship sank and what she was doing in the area prior to the sinking should not be cavalierly brushed aside, as is being done by Canadian authorities.

Late last week Newfoundland and Labrador premier, Danny Williams, issued a press release saying his government would not sign onto, or support, the latest trade discussions between Ottawa and the EU because of a number of ongoing issues, including NAFO’s lack of control over illegal fishing, the EU’s continued flouting of fisheries law and Canada’s lack of concern for protecting Newfoundland and Labrador’s interests.

The federal government’s lack of interest in finding answers to the questions being asked only serve to prove Mr. Williams point.

With trade talks taking place between Ottawa and the EU, with the premier’s position publicly known and with the lingering questions about this particular vessel left unanswered there is ample reason for the Newfoundland and Labrador premier and the people of the province to have concerns.

Was the vessel so loaded down with illegal fish that she ripped her engines apart, causing a fire, by pushing the ship to her limits in an effort to avoid inspection?

Were her fishing trawls in the water or onboard when the incident happened? Knowing this, or even if they were in neither place (had been cut) would add valuable information to the situation.

Was the crew of the Monte Galineiro doing nothing illegal at all? If so, an independent investigation would help clear the crew’s reputations, and that of their home nation.

Was there a design flaw in the ship, perhaps allowing the sea cocks to accidentally open or water to enter around the propeller shaft? If so, knowing the answer might save lives in future.

There are a lot of important questions left unanswered, not the least of which is why the government of Canada is doing nothing to find those answers.

Are the Sheep Really Eating the Wolves?

Here we go again.

It seems like every time the people, the government or, God forbid, the premier of Newfoundland and Labrador does anything that rubs Ottawa or big business the wrong way the mainstream national media swiftly calls a team of verbal mercenaries into action to attack not only the action itself but the motives, agenda and personalities of anyone involved.

It’s the sort of yellow journalism that would have been all too recognizable to the late newspaper magnate, William Randolph Hearst, who built his empire by manipulating public opinion for his personal and political advantage.

Up to this point the attacks have been somewhat immature and asinine in nature, ranging from questioning the intelligence of every day Newfoundlanders and Labradorians to comparing premier Danny Williams to a South American dictator.

The latest assault, by the Globe and Mail, is far more sinister.

Not only does it question the actions of the Newfoundland and Labrador government but uses unsupported comments, supposition and presumptions in an all out character assassination against the Province’s premier.

Clearly as far as the Globe is concerned unbiased journalism is dead.

The editorial board of the Globe has now sunk to substituting unsolicited letters from individuals as hard facts worthy of spreading a conspiracy theory.

It makes me wonder if their lawyers have ever hear of the word “slander” because they may well learn what it means.

The latest attack has to do with the Province’s expropriation of Abitibi’s hydro and timber leases undertaken when the company decided to close its last paper mill in Newfoundland and Labrador.

In a February 19th Globe editorial the paper intentionally left the Canadian public with the impression that the Premier of Newfoundland and Labrador had secret plans to drive Abitibi out of the Province, at the cost of nearly a thousand direct and indirect jobs, so he could sieze control of their power supply to feed a planned smelter that would employ 450 people in another part of the Province.

I'm no genious but to me it makes no sense for anyone to sacrifice a large number of jobs to create a small number. This simple reality appears to have escaped the brain trust at the Globe, but then again, when has reality ever been a factor when it comes to propaganda?

The basis of the editorial was a letter from a single individual living near the soon to be closed Abitibi mill. The letter was sent to premier Danny Williams and copied to the media. The letter, written by someone who was clearly upset about the closure, used rhetoric that the Globe and Mail was more than happy to seize upon to serve its purposes. Reality be damned.

According to the Globe article, “Mr. Williams knew (the mill wouldn’t survive)…it now appears, (he) had other plans."

It goes on to “suppose” that the Williams government only made a token gesture to keep the mill open because it wanted the power to supply a new Vale Inco smelter in the town of Long Harbour and says, “This begs a question: Did Mr. Williams sacrifice the 800 Abitibi mill and woodlands workers in Grand Falls to provide 450 permanent jobs in Long Harbour and another 5,700 person-years of employment during the construction of the hydromet facility?”

“Few people in Newfoundland, where Mr. Williams is challenged at one's peril, would dare ask”, says the Globe.
It’s a conspiracy theory worthy of Oliver Stone himself.

The original author of the letter has since stated that the Globe took parts of his letter out of context. He admits not having any connection with the mill, the government or any political party, meaning he would not have been privy to what transpired between the mill operators, government officials or the unions in the months of negotiation leading up to the decision to close the mill.

Is this what passes substance in the Globe these days?

It apparently is, leading to one of two possible explanations. Either everyone at the Globe, from the editors on down, have no journalistic training and experience or they have no problem ignoring the facts in favour of self serving propaganda.

In reality, the contract that requires the building of a smelter in Long Harbour was signed by a previous Liberal administration under then premier Roger Grimes more than seven years ago. It was in place long before the current Williams administration took office.

Does anyone really believe that the mining company involved, Vale Inco, would have agreed to build a smelter, invested more than a billion dollars building a test plant in the Province and went ahead with plans to invest billions more in a seven year old agreement without ever knowing whether or not they would have any power to run the facility?

Surely nobody could have foreseen, when the original contract was signed back in 2002, that Abitibi would conveniently fall into financial difficulties and close its mill at the exact time the new smelter construction was about to go ahead. The speculation is ridiculous.

The Globe also states that, “Few people in Newfoundland, where Mr. Williams is challenged at one's peril, would dare ask”

What peril?

Would the Globe have people believe that Newfoundland and Labrador’s “dictatorial” premier is travelling the width and breadth of the land beheading the serfs or feeding their still wriggling carcasses to his wolf hounds?

Give me a break.

I’ve heard this fairy tale from the national media and partisan political types before but I’ve yet to find anyone who has suffered in any way, let alone lost their head, because they disagreed with the premier?

Sure, some comments may illicit a terse response and some cabinet ministers or caucus members have been disciplined in the past for not toeing the party line, a process I personally find disgusting, but that happens in all politcal parties. Neither response may not be something we all approve of but they're certainly nothing new under the sun.

I've yet to see anyone in the Province quaking in fear.

I’ve publicly questioned Mr. Williams’ tactics and his actions a number of times including his direction on the Lower Churchill hydro project, a project that appears to be something he's hoping will be his legacy.

I still have my head, my job, my home, my family, all of my appendages. I have yet to hear any hounds baying outside my windows and I don’t expect to hear them any time soon.

It seems that after crying foul over the abitibi expropriation, screaming that the little Province of Newfoundland and Labrador is about to single handedly destroy NAFTA and using every means possible to question the legality of the Province’s actions, the Globe has reached a point of desperation that has led them to skirt the edges of libel and slander in an effort to meet their objectives.

As one proud Newfoundlander and Labradorian recently put it, “They’d have you believe the sheep is going to eat the wolf.”

NL Government Cancels "Have" Status Celebrations

Premier Danny Williams announced today that plans to celebrate the Province’s “Have” status, on March 31st of this year, have been cancelled.

Publicly the Premier stated that the decision to cancel the celebration was made because the Province did not want to be seen as throwing a party at a time when the economy is in such bad shape and while all parts of Canada are suffering.

I don’t disagree with the move but I’d argue that the reasons behind the decision were not as simple as was presented.

Personally I’m quite pleased that the Provincial government has had second thoughts about this. From the start the timing was troublesome.

No doubt the festivities were planned to coincide with the beginning of the new Provincial fiscal year but the date chosen would also have placed that party on the calendar at the same time as the 60th anniversary of Newfoundland and Labrador’s entry into confederation. Not a date everyone in this Province would choose to mark as a joyous occasion.

The fact that the “Have” status celebration would have happened on that particular anniversary, whether coincidental or not, would no doubt have been portrayed in the National media as either Newfoundland and Labrador “mocking” the troubles in the rest of Canada or as the people of Newfoundland and Labrador happily celebrating how much the love being a part of Canada.

Neither of which would necessarily be factual, but then again when has the national media let the facts stand in the way of a story?

Thankfully a wise decision was made to cancel an event that would have accomplished nothing except to provided fodder for renewed attacks on this Province or, worse still, given the impression that we were celebrating 60 years of lost freedom.

Through the Looking Glass - A Constitutional Crisis in the Making

Much has been discussed in Newfoundland and Labrador in the past day or two about a potentially flammable situation developing between Quebec, Newfoundland & Labrador and the federal government over claims by Quebec that a large portion of Labrador rests inside its provincial border.

There appears to be a lot of misinformation of the facts being put before the public by some media outlets, either innocently or intentionally, so in an effort to summarize the reality of the situation, here are the facts as they currently stand:

More than a week ago reporter, Rob Antle, with the newspaper “The Telegram” wrote a story about an impending border dispute between Newfoundland & Labrador and Quebec. He was not informed by any official source in government but uncovered the situation himself.

Earlier this week the Globe and Mail ran a front page story highlighting the same situation.

Here it is in a nutshell.

Quebec Hydro, an arm of the Quebec provincial government, in conjunction with the Federal Ministry of Environment, is in the midst of an environmental assessment before breaking ground on a major hydro development on Romaine River which, along with four other rivers, spans the border between the two provinces.

All “official” maps of the area that were supplied by Quebec, and accepted by the joint committee wrongly depict a large portion of Labrador, containing the head waters of all of those rivers, including the Romaine, as being fully within the boundaries and jurisdiction of the Province of Quebec.

The article in the Globe & Mail pointed out that by accepting those maps for the environmental assessment the federal government was implicitly accepting Quebec’s claims that it controls a section of Labrador as well as the head waters of the rivers they plan to exploit for a massive power generation project.

The government of Newfoundland and Labrador was not invited to participate in the review process and only found out about the situation months later.

Upon learning of the situation back in November, the province of Newfoundland and Labrador submitted a six page document, plus maps, that did little more than point out the problem at hand and express displeasure with the process underway.

No demands to cease the process were made.

As far as anyone can tell no further actions have been taken or are planned.

Officials at the Ministry of the Environment told the Globe & Mail that any territorial dispute is a matter for the provinces to resolve.

This is not correct.

The border in question was clearly identified and ruled upon in 1927 by the Kings Privy Council in England, long before Newfoundland and Labrador ever became a Canadian province.

It was a ruling that both Canada and Newfoundland and Labrador (a separate Dominion) accepted, both being Nations constitutionally ruled by the British North America Act at the time.

That 1927 border ruling was also clearly reiterated and agreed upon in the first two paragraphs of the Terms of Union by which Newfoundland and Labrador entered Canada. It is now tied to the Canadian Constitution making it a Constitutional issue.

Quebec never signed onto the Canadian Constitution and it has never accepted the 1927 Privy Council border decision.

For years Quebec’s maps, be they tourist, topographical, mineral exploration, election riding or any other form, have depicted its unsubstantiated claims to Southern Labrador.

Reports are now surfacing from long time political figures that at least twice in the past several decades the Quebec government has tried to quietly coerce or maneuver a Newfoundland and Labrador Premier into handing over the region to them.

With this in mind the actions of Quebec and acceptance of them by Federal Officials, who are proceeding with the environmental process in spite of the facts, have led to a great deal of concern among the general population in Newfoundland and Labrador. Yet Premier Williams and his government, as well as Federal MPs are oddly silent on the issue.

Since the dispute became public knowledge, neither the Premier nor anyone else in his government have issued any kind of official statement addressing the concerns of the people or outlining what they intend to do to protect the province’s territorial boundary.

In such a tension filled situation rumors and speculation often fill the void when facts are not available. Premier Williams is not known as the sort of man who sits quietly by when major issues arise so his silence on this file has led to widespread speculation that perhaps something unsavory is happening behind closed doors while the citizens of Newfoundland and Labrador are being kept in the dark.

They worry that the environmental process is due to be completed in just two weeks and if something is not done to address the issue quickly it may be too late.

If one nation attempted to unilaterally take control of territory that was part of another it would be considered an act of war. Taken in that context, Quebec cannot be allowed to proceed with what amounts to an overt act of aggression against Newfoundland and Labrador

Putting the Cart Before the Horse

Chicken and Egg.

Cart before the horse.

However you want to describe it, it’s becoming clearer all the time that most Canadians simply don’t understand Newfoundland and Labrador and never will.

When you listen to most of the national media pundits, federal politicians and even the man on the street in places like Ontario or Alberta, one thing becomes abundantly clear, they all believe that Newfoundland and Labrador Premier, Danny Williams, is power mad and dictatorial.

They believe, as former media darling and newly minted Conservative senator, Mike Duffy, recently insinuated, that Danny Williams is a greedy hot head with a swollen ego and that the people of the Province have under his spell.

I’m paraphrasing of course.

The logic behind the argument runs like this.

Danny Williams is combative, Newfoundlanders and Labradorians are a friendly and happy people, so therefore Williams must be running amok and stirring up trouble.

The argument doesn’t hold water for anyone who knows the first thing about the issues that matter to Newfoundland and Labrador or has any insight into the collective history of the people in the Province.

In fact the misconception is a perfect example of putting the cart before the horse.

Simply put, Danny Williams doesn’t have an 80% popularity rating because he has the ill informed yet contented masses suddenly riled up.

He was not re-elected with a larger mandate during his second election campaign because the people are afraid of his dictatorial vengeance.

In truth, Danny Williams enjoys his impressive level popularity because he is doing the bidding of his constituents rather than ignoring them.

When it comes to addressing their concerns over economic development, the oil industry and, perhaps most of all, dealing with the inequities that the Province faces in the Canadian federation Williams is the first political leader the Province has had in years who is willing to speak up.

His approach is like a breath of fresh air inside the Province but this reality is something that has been totally missed in the rest of Canada.

This is not to say Premier Williams is perfect, far from it. There have been, and continue to be, issues inside the Province that have put him at odds with much of the population but this doesn’t take away the deep respect many have for his willingness to take a stand when it matters most.

Newfoundlanders and Labradorians have been disheartened for decades by successive provincial leaders who have either failed to stand up when needed or have consciously chosen to ignore the public will and for their personal benefit.

From the backroom deals that led to a loss of independence, to Ottawa’s refusal to enforce the Constitution and force Quebec into permitting the transport of Upper Churchill power across its borders, from federal mismanagement of a 500 year old Atlantic cod fishery to the recent unilateral gutting of an agreement intended to ensure that the Province would be the primary beneficiary of its offshore oil industry, Newfoundlanders and Labradorians have a lot of painful memories pressing concerns to screaming to be addressed.

Newfoundland and Labrador has a long history both inside and outside of Canada. Over that time the people, who have a far longer political memory than most, have been used, abused and misused for as long as anyone can recall.

No, Newfoundlanders and Labradorians have not fallen under some kind of spell perpetrated by a ruthless leader.

Yes, they are indeed a friendly people, but nobody should ever take their sunny disposition for granted.

After decades of suffering most of the people have learned that in order to survive when the odds are stacked against you the best approach is often to simply smile and crack a few jokes, but in reality the anger run very, very deep.

As much as many Canadians might prefer to believe it, Danny Williams isn’t stirring up an otherwise happy go lucky people. He’s simply giving voice to their collective anger.

National Post and Fraser Institute Twist Facts of Abitibi Case

In the January 7th edition of the so called “National” Post, Michael Walker, a self professed “Proud Newfoundlander” and senior fellow at the right wing Fraser Institute, wasted no time in attacking the Premier of Newfoundland and Labrador for safe guarding the province’s water and timber rights or in ridiculing the intelligence of everyone in the province who supported the move.

Based on the content of his commentary I can only assume that Mr. Walker’s devotion and attachment to his ultra conservative think tank is far stronger than his understanding of the circumstances around this particular issue or his attachment to the land he professes to take such pride in.

Regardless of his theology, ideology or allegiance, the argument Walker puts forward against the expropriation of Abitibi’s timber and water leases has more holes in it than a rusty bucket. It seems to have more to do with ingratiating himself with his corporate friends, propagating misinformation and distancing himself from reality than it does with the facts.

In a nutshell Mr. Walker claims that Danny Williams ought to be the last person to strip away Abitibi’s water and timber leases because the Premier himself built his personal financial fortune by leasing cable rights from the federal government and then passing those rights along to another cable provider when he decided to leave the business.

According to Walker the initial investment Williams’ made to gain those rights would never have been made if there was any chance the government might decide to strip them away from him.

The last part of his diatribe may hold a very small droplet of water, but since the initial cost of the water and timber rights issued to Abitibi was zero, zilch and nada, beyond that there is little to be said for his position.

Mr. Walker’s take on the situation is a clear example of the sort of narrow minded cursory examination of the facts his kind are known for propagating when any issue arises that does not fit their capitalist agenda.

When you stack the two situations against one another there are a lot of similarities but none that back up Mr. Walker’s arguments. In fact the complete opposite is true.

The cable licenses granted to Mr. Williams were issued by the federal government for the purposes of providing cable access in the region.

The timber and water rights granted to Abitibi’s predecessors where issued by the Province for the purposes of operating a milling operation in the region.

When Williams left the cable business he sold the operation to another Canadian company and the cable licenses followed so the new company could continue to provide cable access to the people.

When Abitibi’s predecessor changed hands over the years and as new players partnered in the operations the water and timber rights followed so the new company could continue milling operations.

Those are the facts. They are facts that are not difficult to understand, even for a former “Newfoundlander” much more accustomed to life the Bay Street than life on Water Street.

Instead of recognizing and accepting these simple facts Mr. Walker instead has seen fit to stretch the preceding comparison well beyond the breaking point by claiming that even though Abitibi decided to shut down (not sell) their operations they should still retain the rights granted to them for the milling operation.

Just think about that for a moment.

This would be the equivalent of saying that if Mr. Williams had decided to shut down his cable operations but not transfer his license to anyone else then the issuing body, Ottawa, should have allowed him to do just that.

Mr. Walker, just in case you missed my point, if that had happened, it would mean that nobody, not a single soul living in Newfoundland and Labrador today would have any access to cable television because one individual decided that he wanted to keep those licenses for himself and he was backed up in his arrogance by the federal government.

Perhaps you should visit your former homeland more often Mr. Walker.

The hustle and bustle of the financial district seems to have had a terrible affect on your level of common sense. A nice walk along a river or through a nice wooded area, both of which belong to the people of Newfoundland and Labrador, might do you some good.

What Does Vale Inco's Annoucement Mean for NL?

It’s been a long time in the planning but the recent announcement by Vale Inco means ground will be broken in 2009 on a new hydromet nickel processing facility at Longer Harbour, Newfoundland. The plant will process Voisey’s Bay nickel.

The news is welcomed in the region, especially with employment figures of 1600+ during the 3 year construction phase and estimates of 450 full time production employees being tossed around, but there are still questions that need to be answered.

When former premier Brian Tobin was in office he promised the people of Newfoundland and Labrador, in reference to the minerals at Voisey’s Bay, “…not one teaspoon will leave the province for processing”.

Eventually, after much negotiation, a deal was struck by Mr. Tobin’s successor and now former premier, Roger Grimes, who is today patting himself on the back and desperately seeking some recognition after the Vale Inco announcement.

The deal eventually signed by Grimes allowed Vale Inco to ship ore concentrate out of the province for processing until such time as a new processing plant could be built. The agreement also calls for Vale Inco to then begin processing the ore in the province and, once the mine’s life has expired, begin processing ore from other sources to make up for what was shipped out prior to the facility coming online.

The question I would like answered is, “will this ever happen”?

Good news story and potential employment opportunities aside, in November of 2005 Vale Inco shipped it’s first of many billions of “teaspoons” of the valuable resource out of the Voisey Bay site in Labrador. By the time the proposed hydromet plant is built at Long Harbour, at the end of 2011, many more teaspoons will have been sent away.

Based on early production estimates back in 2005, by the time the new processing plant is built in late 2011 or early 2012 (if it’s even on schedule) more than 660 million pounds of Nickel concentrate will have been shipped to Sudbury Ontario for processing. In addition to the Nickel, 30 million pounds of valuable cobalt, 120 million pounds of copper and a further 420 million pounds of copper concentrate will have been sent out of the province.

That’s a lot of raw material to find “somewhere else” so it can be diverted to Long Harbour, Newfoundland and Labrador once Voiesy’s Bay has outlived its usefulness.

Yes, perhaps new finds could potentially fill the void, but only if they can be found.

Unfortunately new nickel deposits aren’t sitting on every street corner. Finding one isn’t as easy as getting a Big Mac when you want one .

Yes, ore could potentially be re-directed from smelters in other parts of Canada but what level of political influence will be exerted to stop that from happening if the ore is to be taken away from say Sudbury, Ontario or Thompson, Manitoba and jobs are put in jeopardy?

Today concentrate from Voisey Bay is being processed in Sudbury and that supply will no longer be available to Ontario once this new facility comes online. That’s likely to cause enough concern in the Canadian heartland but one can only imagine the reaction if, once the Voisey’s Bay is depleted, further shipments to Sudbury are taken away and sent to Newfoundland.

In addition to the political ramifications there is the question of whether or not there might be technical reasons for Newfoundland and Labrador waiting a long time for those “teaspoons” to start trickling in.

I may be totally off base and perhaps someone with a metallurgical background can help me out here, but reading between the lines of recent news releases makes me question if it is technically feasible to process “other” ore at the new hydromet facility.

Just about every official comment, news release and public statement, from both the company and government over the past few days, with reference to the new facility, has for some reason made a point of including something to the effect that:

The company has proven that, “…the technology will work on Voisey’s Bay ore.”

Or

“…is capable of processing the Voisey’s Bay product.”

Why do they feel the need to specify the "Voisey's Bay" product as opposed to simply saying the system works for processing nickel?

Is it possible the technology being put in place has been designed in such a way that processing is limited to a specific mineral composition or ore type?

Maybe I’m tilting at windmills here but the fact that the proponents appear so keen including those words in public communications is a little unsettling.

The original promise of “not one teaspoon” was made by a former Liberal premier.

The Voisey’s Bay deal was signed by another Liberal premier.

It’s now up to the current PC premier to make sure the people of Newfoundland and Labrador are fully informed and it will be up to a future premier, no matter the stripe, to make sure the original promise is honored in full.

It’s been a long road and it's not over yet.

Time will tell.

Where Will You Mark Your X on October 14th?

In January of 2006, just prior to the last federal election, I wrote an article outlining the responses of each party leader, to a letter written by Newfoundland and Labrador Premier Danny Williams, asking each what their position was on several key issues of importance to the province.

They say that in politics a day is like a week and a week can be a lifetime. They (politicians being they) also say that the public has a short attention span and an even shorter memory when it comes to issues. With this in mind, and with Premier Williams actively campaigning against the Harper Conservatives, I thought a look back at exactly what each party’s position on those issues was just a little over 2 years ago might be in order.

A note of caution:

Recall that at the time the Liberal party was led by Paul Martin so it may be a little unfair to tar the current leader, Stephane Dion, with the same brush on these issues. Then again many of the same old party faithful are still in place in Liberal land so there may be some comparisons to be drawn.

One might also want to take Jack Layton’s responses with a large grain of salt since, at the time anyway, he was clearly not in a position to become the Prime Minister or even the leader of the official opposition and as such knew he would never have to act on his promises.

That said, if Mr. Layton's tactic was to simply make promises he knew he wouldn’t have to keep, and I’m not saying it was, that would tell voters a lot about the true character of the man.

It seems that in this election the character of the leaders is about the only real issue being debated.

The history:

Just prior to the 2006 Federal election Newfoundland and Labrador Premier Danny Williams sent a letter to the leaders of the Liberal, Conservative and NDP parties identifying 17 key priorities for the province and asking each leader to respond with their level of support for each item.

The Responses:

As a disclaimer, my understanding of the content in each response is open to interpretation but having studied the precise wording, phrasing and tone of each response has led me to the following conclusions.

My analysis of course is no substitute for reading the details yourself (available at http://www.gov.nl.ca/) but if you’re not inclined to hunt the letters down and read them yourself here is the straight story. The Coles Notes version you might say.

Do you support cost sharing an early retirement program in fisheries workers:
Liberals – NO, Conservatives – NO, NDP – YES

Will provide a northern shrimp allocation to the Province:
Liberals – Evasive, C – Evasive, NDP – YES

Will you take Custodial Management on the Grand Banks and Flemish Cap:
Liberals – Evasive, Conservatives – Evasive, NDP – YES

Will you adopt the Northern Cod Strategy and not List cod as endangered:
Liberals – YES, Conservatives – YES, NDP –YES

Will you support a comprehensive federal/provincialAquaculture Agreement:
Liberals – Evasive, Conservatives – Evasive, NDP – Evasive

Will you assist with the Lower Churchill hydro development:
Liberals – Evasive, Conservatives – Evasive, NDP – Evasive

Will you sell the Federal share of Hibernia to NL:
Liberals – NO, Conservatives – NO, NDP – YES

Will you re-open Gander Weather Office:
Liberals – NO, Conservatives – YES, NDP – YES

Will you increase the Federal presence in Newfoundland and Labrador:
Liberals – YES, Conservatives – YES, NDP - YES

Will you undertake Equalization Reforms:
Liberals – Evasive, Conservatives - Evasive, NDP – YES

Will you cost share Trans Labrador Highway:
L – Evasive, Conservatives – YES, NDP – YES

Will you make 5 Wing Goose an operational requirement (with troops):
Liberals – NO, Conservatives – YES, NDP – Evasive

Will you create a reserve at Sheshatshiu by June of 2006:
Liberals – YES, Conservatives – Evasive, NDP – Evasive

Will you stabilize Marine Atlantic services and cut fees:
Liberals – Evasive, Conservatives – Evasive, NDP – Evasive

Do you support bilateral cost sharing for economic development:
Liberals – Evasive, C – Evasive, NDP – YES

Will you ensure federal contracts for Marystown and Bull Arm shipyards:
Liberals – NO, Conservatives – NO, NDP – YES

Will you participate in costing sharing of a waste management strategy:
Liberals – Evasive, Conservatives – Evasive, NDP – Evasive

Final Tally: Liberal: 5 NO, 3 YES and 9 Evasive
Final Tally: Conservative: 3 NO, 5 YES and 9 Evasive
Final Tally: NDP: 0 NO, 12 YES and 5 Evasive

Of course there’s a certain level of subtlety to each of the evasive answers that might allow them to be interpreted either a yes or a no, but I thought it best to simply label those as evasive and be done with it. We all know it doesn’t pay to read between the lines with political types and unless a promise is spelled out in great detail, and sometimes even if it is, what does it really mean anyway?

There’s nothing a politician loves more than a good loophole he or she can crawl through when the time comes to deliver the goods.

In all fairness, a few of the evasive answers may have been valid and perhaps the Premier himself should have been aware of potential problems prior asking the questions.

For example, how could anyone support a shrimp quota for a community until ensuring stock viability and availability prior to allocating it? I believe it was moves like handing out quotas willy-nilly that helped lead us to the sorry state of a fishery we have today.

In another response it would have been difficult for a government leader to promise contracts to a specific shipyard when a little annoyance like the public tendering act is in place.

Those realities lead to another interesting point. Some of the questions NDP leader Jack Layton responded affirmatively on should perhaps have elicited a more evasive answer than was given, including the aforementioned question of shrimp quotas.

So, what does all of this mean to the average voter today?I guess it means that when you get right down to it we all have to do some soul searching and hard thinking before we step into that ballot box on October 14th. How many promises were met and how many were broken, who stands for what and who deserves your support are all important questions.

Whether Stephen Harper, or any of the leaders for that matter, can be trusted will likely play a big part in the decision of where to mark your X, or at least it should.

In Newfoundland and Labrador in particular the impact of Williams' ABC (Anyone But Conservative) campaign and the string of broken promises left behind by the Harper government, as well as previous federal leaders, both locally and nationally will no doubt be on people’s minds as will the very structure of the Canadian parliamentary system and the province's lack of voice in it.

For those of you with the kind of short memory politicians love to talk about (and who are not yet tired of reading this lengthy review) here is a short list (certainly not all inclusive) of the broken promises given by the current Conservative government (some of which were given in writing).

Taxing Income Trusts after saying he wouldn’t tax them and in doing so encouraging thousands to invest and lose their savings.

Promising to remove of non-renewable resource revenues from the equalization calculation and then including them anyway.

Promising to station a 650 person rapid response battalion at 5 Wing Goose Bay and a military contingent in St. John’s and walking away from that promise. Nothing has been said about the issue since the 2006 election.

Passing a federal fixed election date law and setting the date of the next election for October of 2009, in an effort to prevent a ruling party from timing elections when it is most favorable to them politically, and then disregarding that law and calling an election anyway.

Campaigning on a platform that included plans for the election of senators and providing a government that would be truly accountable to the public. In his first days in office the PM appointed his campaign manager to the senate, and put him in charge of public works by making him cabinet minister, a cabinet minister who is not really accountable to the public since he does not have to face questions in the House of Commons.

And the list goes on…