Getting what she wished for

On April 7th, Premier Kathy Dunderdale-2011 wrote what has become the election-time traditional letter to Uncle Ottawa (conspicuously non-textual PDF link), in which she raised, among other things:

The federal Budget released on March 22, 2011, proposed cuts to the budgets of federal entities like the Atlantic Canada Opportunities Agency, the Department of National Defence, Marine Atlantic Inc., and the Department of Fisheries and Oceans, which deliver important programs and services to the people of the province. [And, more importantly to the provincial government, generate nicely-income-taxable payrolls and production-taxable spending - ed.] As we move into a period of program restraint on the part of the federal government, it is important that Newfoundland and Labrador is not disproportionatly affected again.

What would a Conservative government propose to do to ensure that federal jobs are maintained in the province and to increase the number of federal government decision-making positions located in the province?

What would your government do to ensure that any fiscal restraint measures would not disproportionately affect any programs and services delivered in the province?

So, Premier Dunderdale-2011 was concerned about cuts in the late Conservative federal budget.
The same budget which the Harper Conservatives promised, throughout the late election campaign, to re-introduce if re-elected. This part of their agenda was cleverly hidden deep on page 2 of the Conservative party's platform.

The same Harper Conservatives that Blunderdale and most of her spineless caucus underlings campaigned for, even if half-heartedly or for show in some cases.

And now, to the surprise of pretty well no one who can read one or more of Canada's official languages, Tony Clement announces that he's ready to start the promised cutting... with a little bit more cutting on top of that for good measure. Bill Curry reports for the Globe and Mail:

Tony Clement says he’s prepared to shut down programs and shrink the public service in order to deliver as the man in charge of wrestling Canada’s deficit to the ground.

...

“I’m of the view that this has to be done,” he said in an interview Thursday. “This was a clear, rock-solid commitment that we had during the campaign and failure is not an option.”

Mr. Clement noted that his spending review will come up with $4-billion in annual savings that must come from the $80-billion Ottawa spends on direct federal program spending, and not transfers to the provinces.

“So we have to look at our direct program spending and that includes wages and salaries and professional services and grants and contributions and other operating costs,” he said.

“Yeah, there are going to be reductions,” he said. “I don’t want to sugarcoat that. There are going to be reductions and we’re going to try and make it as connected as possible to Canadians’ actual expectations of what they want government to do.”

So when the Harper Conservatives gore a sacred cow or two in Newfoundland and Labrador — and they will — and the Dunderdale 2011 Party squawks about it — and they will — someone, please, remind Kathy Dunderdale-2011 that she voted for 'em.

The Year of Magical Economic Thinking

During Question Period on March 29th, the opposition grilled the nominal Premier about the projected costs of building the proposed Danny Williams Memorial Transmission Line

The blustery response to a straightforward question is worthy of reproduction in extenso:

MS JONES: Mr. Speaker, in 1998, when Nalcor looked at building a transmission line across the Island, they budgeted the cost at $2.2 billion. Fast-forward now thirteen years later and the Premier says she will build the same line for $2.1 billion. We know that over that time period steel cost has risen by more than 200 per cent, that is not to mention the increase in the cost of labour and other supplies that go into building the line.

I ask the Premier today: Will you tell us how it is possible to build a steel transmission line across the Province today for less money than it would have cost thirteen years ago?

PREMIER DUNDERDALE: Mr. Speaker, there has been extensive work done on the development of the Lower Churchill over a number of years, particularly in the last eight years under this government, under the leadership of Nalcor. Mr. Speaker, we used a gaited [sic] process that took in a very detailed analysis, we received the best expertise that was available to us in the Province, in the country, and worldwide when necessary, Mr. Speaker. More than that, Mr. Speaker, we have had two independent audits of the methodology used by Nalcor to ensure that the process is as good and the information as good as can be had at this point in time.

MS JONES: If they have had all that work done, there is no reason why the Premier cannot stand on her feet today and explain to us why there is such a difference in pricing. We know that steel prices have increased by 200 per cent in thirteen years; we know that the line you are proposing to build is only twenty-six kilometres longer, Mr. Speaker, than the line that was proposed back in 1998.

Now that you have all the research Premier, stand up and tell us why your line is going to be cheaper than it would have been thirteen years ago?

PREMIER DUNDERDALE: Mr. Speaker, the Leader of the Opposition is all over the place. Everything is going to go up. Labour prices are going to go up, commodity prices are going to go up. The only thing that is not going to go up, Mr. Speaker, is electricity. The price of electricity is not going to go up. The demand of electricity is not going to go up. Mr. Speaker, the least we could ask from her is consistency.

MS JONES: No answers from the Premier; she is out there trying to sell a big deal, Mr. Speaker, in the Province and she gets up and gets on with such gibberish in the House of Assembly. Very clear, very simple questions, Mr. Speaker; why is it that the cost that you are projecting to build this transmission line is cheaper than it would have been thirteen years ago, Mr. Speaker, given the fact that everything else has increased in cost including the price of steel? I ask the Premier to have a little decency and to stand up and explain that to the people of the Province.

PREMIER DUNDERDALE: Mr. Speaker, if you were to listen to the Leader of the Opposition, you would think that the Government of Newfoundland and Labrador is going to develop Muskrat Falls for a lark, for an absolute lark, for something to do. Mr. Speaker, we are developing Muskrat Falls because it is the best and cheapest energy solution for Newfoundland and Labrador. We are building it for the people of Newfoundland and Labrador, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

PREMIER DUNDERDALE: That is why we are building Muskrat Falls.

Mr. Speaker, we have developed a methodology that allows us to do this in the most cost-effective way. Mr. Speaker, we have had those costs and that methodology audited by independent agencies of worldwide reputation. Mr. Speaker, they have given us high marks on the information that we have used and the outcomes that have resulted as a consequence of it, Mr. Speaker.

MS JONES: I am not sure what lark [?] is doing but I know what their government is doing and that Premier is doing and that is they are jacking up the price of electricity going into every single household in this Province, Mr. Speaker. The Premier, Mr. Speaker, claims they have had all of these audits done; we are asking a very simple question, Mr. Speaker, give us the information. So if you have had it done and you have the information that you can provide to the people of the Province that shows how you, Premier, can build a transmission line today cheaper than you could thirteen years ago, we would love to see it. So I ask you: Are you prepared to table the information?

PREMIER DUNDERDALE: Mr. Speaker, we have provided information upon information, upon information. We have asked Nalcor to provide information and they have done that in briefing after briefing after briefing. We will continue to do that, Mr. Speaker. The problem is they do not know how to interpret or deal with the information when they get it, but that will not stop us from trying to inform them about this project, Mr. Speaker.

Now, it would have been easier for Premier Blunderdale to just own up to the premise of the question and answer it fulsomely. It’s not as if inflation, or the changing costs of material and labour, are unknown quantities or anything.

Just ask Nalcor.

In its closing presentation to the environmental panel examining the Lower Churchill project, Nalcor again pours cold water on the idea of transmitting Labrador hydro power within Labrador, to eliminate isolated small-diesel generation on which many communities depend. At para. 332, Nalcor says:

The reality for many isolated communities in Labrador is that the cost of constructing additional transmission to connect them to the interconnected system is greater than the continued cost of diesel. In fact, in 2001 the Province estimated that the cost of constructing transmission lines to these communities would be in the range of $300 million. With inflation and increased costs for materials and labour, that number would be even higher today.

Now, perhaps it is the case that economics works in different, and mysterious ways, depending on which side of the Strait of Belle Isle you are on. Indeed, perhaps the cost of running a diesel plant will, by some economic wizardry, remain unaffected by the same price pressures on fossil fuels that are said to be the justification for building Muskrat Falls and its transmission line to Soldier’s Pond in the first place.

This would, after all, almost be the implication of Nalcor’s observation about the increased cost of transmission within Labrador, but without making any comparable balancing observation about any change in the cost of the alternative. In Labrador, the ledger only has one column.

Still, it would almost seem self-evident that in 2011, transmission line cost estimates prepared in 2001 would be ten years’ worth of inflation out of date.

It would thus seem to be even self-evidenter than in 2011, cost estimates prepared in 1998 would be thirteen years’ worth of inflation out of date.

But that may be the old-fashioned math that was done away with by Danny Williams and his modern calculus of Super-Duper-Mega-Projects. And the magical math that applies to the Labrador-Newfoundland transmission line does not apply to the mortal world of internal Labrador transmission calculations.

But if there is no new math, and if there is no differential application of basic economic principles, then the straightforward question from Yvonne Jones, dodged so artlessly by Premier Blunderdale, deserves a straightforward answer.

Happy News!

The story which moved earlier on Wednesday morning on the Ministry of Truth (Provincial) website:

No Luck in Search for Timber Developers: Dunderdale
October 6, 2010

It is back to square one for the Natural Resources Department in the search for interest in commercial development of the timber resources in central Newfoundland. Minister Kathy Dunderdale says the call for expressions of interest announced eighteen months ago for the fiber expropriated from AbitibiBowater is essentially over. Dunderdale indicates they intend to invite those who were originally interested back into the process.

She says the nine original proponents will be invited to resubmit modified proposals and they will also consider representations from other companies concerning the fiber allocation.

And the 72% positiver and upbeater "update" story which replaced it by mid-day:

Update: Central NL Timber Resources Must be Maximized
October 6, 2010

The Department of Natural Resources says there is a lot of interest in developing timber resources in Central Newfoundland, but Minister Kathy Dunderdale says so far, none of the proposals they have received would maximize the value of the resource. 280,000 cubic metres of wood has been set aside by provincial government for commercial development, and Dunderdale says they have received nine proposals to develop it. She says several of the proposals were for pellet production, which she says is not the best use of the fibre. Dunderdale says the mill in Grand Falls-Windsor had approximately 500 employees, but a pellet plant would only require a workforce of 30 people, at most.

Dunderdale also says government is not conducting a hard sell. She says while government realizes a company has to make money on any development, it is incumbent on government to make sure its value is maximized.

Their advice for you

The Dippity Premier had some advice for the opposition on Tuesday in the Bow-Wow Parliament:

MS JONES: My questions today are for the Minister of Natural Resources. Mr. Speaker, last week we learned the true nature of government’s bungling of the Abitibi file when they admitted that they accidentally expropriated the mill and other assets and liabilities in Grand Falls-Windsor.

I ask the Premier today: Can you confirm that this mistake was realized in the summer of 2009, and I ask you who confirmed that this was the case, and why did you not release that information to the public at that time?

MS DUNDERDALE: A couple of things, Mr. Speaker. She asked the question both of the Minister of Natural Resources and the Premier. I can only speak for myself, Mr. Speaker. The second piece is, it wasn’t just revealed last week due to her questioning in the House of Assembly. We pay attention to the news releases they put out, Mr. Speaker; I suggest they do the same with ours. I announced this on February 5 and, as a matter of fact, there was quite a bit of news coverage right across the Province on the fact that I announced that we had inadvertently expropriated the mill in Grand Falls-Windsor. This came to our attention at the end of May in 2009, Mr. Speaker. It came as a result of work that was being done by a company called Enda Searching. Part of the $8 million you have been asking about was paid to this firm for the land registry consolidation. They found the error Mr. Speaker, and reported it to us.

Ah yes. Read the news release that was put out at least 250 days after Danny Williams-Government learned of its monumental blunder:

Through the passage of Bill 75 on December 16, 2008, the Provincial Government revoked timber and water rights from Abitibi. When determining which assets/properties to expropriate, the Provincial Government included power-related infrastructure and the hydroelectric facility attached to the mill itself. Language to exempt the mill and the other two properties on Reid Lot #59 was not included in the final bill, as intended, and therefore the Provincial Government has legal title to these properties.

"As intended"? Passively? Intended by whom? What was intended? That language to exclude be included? (Also in the passive voice, naturally.) Or that language to exclude be "not included"?

This is the same good Minister of Human Shields (Acting), who last week had another good piece of advice for the pesky MHAs who refuse to get on the bandwagon:

MS JONES: Government wants to be open and accountable, that is one of the trademarks that they have certainly tried to convince the people of the Province in terms of how they govern.

I ask the minister today: If she would be prepared to table the information and the break down of the $8 million in expenditure?

MS DUNDERDALE: Mr. Speaker, we have a freedom of information process in this Province for a very particular reason. We want to –

SOME HON. MEMBERS: Oh, oh!

MS DUNDERDALE: – be as open and as transparent and as accountable as possible, providing as much information as we possibly can to the people of Newfoundland and Labrador, but at the same time, Mr. Speaker, we have a responsibility to protect information that could be used against us in court hearings, in NAFTA hearings, and so on.

The access to information process makes information available, but also protects proprietorial information that we need in legal proceedings and so on. So that is why we use that process. I do not have that legal background, Mr. Speaker. So through the process all of those values are protected, and that is why we encourage people to use it.

Minister Blunderdale joins another of her cabinet colleagues in encouraging members of the public, and others, to use the Access to Information Act:

If you're too lazy to put in your request through the [Access to Information and Protection of Privacy Act], then don't certainly harass me as a minister looking for it.

Good on them! It is great to see the government willing to have itself held to account.

It is unclear, however, whether Minister Blunderdale's concern for such "proprietorial information" and solicitor-client privelege extends to all potential NAFTA cases. As her even more accountable cabinet colleague told the Bow-Wow Parliament on Monday:

MS JONES: Mr. Speaker, the fishermen, through their union, are asking for about $10 million or $12 million in bridge financing for this season. The government continues to insist that they cannot do this because they would be in violation of the North American Free Trade Agreement. Again, I think it was on Friday the minister stated this in a press release, and he also said that he had an external legal opinion.

I would like to ask him today if he is prepared to table that legal opinion in the House of Assembly, and has his department even evaluated what assistance they can provide to the industry without constituting a Free Trade risk.

MR. JACKMAN: Mr. Speaker, about the issue of inventory financing, we think there is merit to it – we really do - but we cannot put ourselves into a situation of countervail.

I will invite the Leader of the Opposition to come over to my office, to sit down and let us go through that legal opinion and then see if she is willing to lay it on the line that she is willing to take the chance of some of the inherent issues that arise out of that.

Sun rays crown thy expropriated hills

From Tuesday's proceedings in the Bow-Wow Parliament:

MS JONES: The minister knows the information that I put out there in the public has come from the documents that have been filed in the courts on both sides. I say to the minister today, Mr. Speaker, she knows that the bill to the people of this Province is going to continue to grow on this file, and I ask her to come clean today, tell the people of the Province how much this is going to cost them.

MS DUNDERDALE: Mr. Speaker, the Leader of the Opposition shouted across this House yesterday, ‘Abitibi lies on your shoulders, Premier, the full responsibility of it lies with you’. Now, Mr. Speaker, that is a responsibility that we embrace. At the end of the day, our position will prove itself out, in terms of value that we have and what we have to expend. That is not talking about the intrinsic value, the importance of having those assets remain in Newfoundland and Labrador for the use of Newfoundlanders and Labradorians. We are not second guessing ourselves on this side of the House, Mr. Speaker, we did the right thing.

No wonder Abitibi-Bowater was going under; what with this nefarious plan, which Our Dear Expropriation halted in its tracks, to move swaths of central Newfoundland forest, and the entire Exploits River, out of the province altogether.

So how's that Abitibi expropriation play going anyway? (II)

Not all that well, actually:

MS JONES: Mr. Speaker, in addition to that now that the government has expropriated the former mill and the people of the Province are responsible for its upkeep and monitoring costs I ask them if they can provide to us an update on what the future plan will be for that mill and the associated assets in Grand Falls-Windsor?
MS DUNDERDALE: Mr. Speaker, when it was discovered that we had inadvertently expropriated the mill, our first thought was to return the mill to AbitibiBowater. Because they were already in bankruptcy protection we were not able to do that. The law prevented us from doing that.

Gabby Kathy

Ahem.

A hilarious little blast from the recent past. As the CBC reported in May 2008:

A Newfoundland and Labrador cabinet minister sparked a brief uproar Monday, saying the province was considering a lawsuit aimed at Ottawa and Quebec over the controversial Upper Churchill hydroelectric deal.

However, Natural Resources Kathy Dunderdale retracted her statement within hours, saying that she had misspoken about any government plans to launch litigation over a 65-year hydroelectric contract that for decades has been a sore point between the neighbouring provinces.

Cf. G.K.'s still curiously under-reported comments to private radio from back in September.