Thursday, 3 August 2017

THE RISE AND DECLINE OF CATHY BENNETT

When I wrote “Cathy Bennett’s Days in Finance Are Numbered” little more than ten months ago, I seriously doubted her tenure would last more than a few weeks.

I had assessed the province’s financial position and her first Budget. It was easy to see that the restraint measures she proposed — mostly increased taxation — were the work of a hapless political amateur delaying the axe-wielding necessitated by a widening fiscal chasm. 


The exigencies of politics demanded execution at the start of the government’s term. Even if one cared not a whit about the province’s finances, delay bore far more political landmines than decision.
Admittedly, the September piece had poorly assessed the importance of ego, partisanship and ambition over common sense. Still, in the circumstance, a savvy Minister of Finance should have presented an ill-equipped Premier the fiscal ultimatum commanded by a dreadful Tory legacy.



It is impossible to ignore the timing of Bennett’s departure. She was getting set to bring matters to a head with the public sector unions. Ball was having none of it. He would have his way less because he was Premier than due to the fact that the Minister had squandered the political cachet that accompanied her successive wins in Virginia Waters and her self-described business acumen. 

Of course, very early on, Bennett showed her finance officials that she was even more comfortable ‘in the weeds’ than her Deputy Minister, who was never known, either, as a ‘big picture’ bureaucrat. Early on, too, she became quite alienated from the Premier’s Office. Unable to mend the rift, she ought to have judged the ‘writing on the wall’.
In short, Bennett became part of the government’s dysfunction.
In the ten-month period since the ‘Bennett’ post, events have only reinforced this appraisal.
Last year, I wrote: “Discounted… was an increasingly awakened public, following the imposition of the levy and Stan Marshall’s single outburst of truth — the “boondoggle” at Muskrat. Some of the Minister’s initiatives were plainly dumb — like closing community libraries to save pocket change — and the decision was reversed only after the political damage to the Liberal brand had been done. 
“A neophyte politician, over-confident — relying upon a shrewdness she did not actually possess — kept no bag of tricks in reserve…”  

I added: “… Bennett lacked a steady hand. It is true that she was absent a First Minister capable of rescuing her from a financial “Plan” devoid of context let alone hope. But she willingly chose to go along with Ball’s “Hush Puppy” approach… accomplishing nothing more than... deference to dither. 
“A savvy Minister would have put her foot down at the start…” 


 Admittedly, it was a tough ‘no holds barred’ appraisal of a dilettante who had found herself Finance Minister. The problem was, she had acted no differently than did former Tory Finance Minister Ross Wiseman (except he didn’t piss off nearly as many people) to whose “Plan” she became glued. 
Besides, when an ambitious politician sticks by someone as god-awful as Ball, there is a price to be paid for such temerity.

Ten months after my original ‘Bennett’ post, where are we?

Even when 75% of the electorate were known to have wanted a Forensic Audit of Nalcor’s Muskrat Falls project she, having been both Board Member and Chair at critical stages, did not have the courage to join in the chorus — even if only to avoid the quiet McCarthyism now making the rounds.
The Minister took the proper step to advance a settlement with the public sector unions by moving towards conciliation early. But the union leadership did an end run to the Premier’s Office and outsmarted her.


It was one thing to try and draw a line in the sand for them — a group ever ready to deny the province’s financial predicament — but she had failed to extract from Premier Ball, up front, a public record of his expectations from these negotiations.

The Premier watched as a failing Finance Minister went into the fifth month of the government’s second fiscal year. Only now has she discovered that Premier Dithers had no intention of taking the lashing which the Unions heads could mete out.

A gutless Premier hung Bennett out to dry — and she let him. Bennett must have known of his unwillingness to make a single important decision. More coy than savvy, Ball knew — unlike during the earliest months of her tenure — that she was a spent force in his Administration.
Enter Tom Osborne.


Osborne was given the dream job of Speaker (his own admission) in 2015. Now, suddenly, he is a “great relationship builder,” according to the Premier.

In case no one recognizes those words as code to the public sector union leadership, they should try again.
Premier Ball knows he has, at most, one more year before he resigns or is dumped by the Liberal Caucus. He feels emboldened to put off a Forensic Audit of the Muskrat Falls project on the same basis.

Ball’s reality does not include a prescient fiscal cliff. It requires no tough decisions, no rancor. His reality is about looking premier-ial, smiling and glad-handing, meetings and ceremony — all the soft stuff of politics.
The hard decisions are those that tackle problems; leadership and hand-wringing are not symbiotic.


Osborne was not brought in to pick up where Bennett left off.
Bennett would have known that the world price of oil is far lower than the benchmark on which her Budget numbers are predicated. The Canadian dollar has been on the rise, too. Her 2017 forecast is already in jeopardy.

Without the concessions she had budgeted from the public sector, she might have been girding for a battle royal in an effort just to break even.
The conditions of Osborne’s appointment were set by the Premier. Having no Finance background, he can be expected to do Ball’s bidding — the deficit, and the assurance of an even larger one, be damned.

The abyss draws closer.
Tom Osborne needs to resist the Premier’s dithering ways, else he will join Ross Wiseman, Cathy Bennett and a few earlier worthies — like Tom Marshall and Jerome Kennedy — who have earned the ignominious legacy of aiding and abetting the province’s financial downfall.

Osborne should know we will be watching how he handles his first test.

29 comments:

  1. I guess the bottom line us there will be no forensic audit during balls tenure, as he dodges along tackling only the necesities, like hoping for an agreement of some sort with the public sector. Tom should be able to do his bidding there, being new and a nice guy. Ball continues his zombie mode smiling his way along the graveyards including muskrat and running out his time. So bloggers and friends may as well accept that there will be no forensic audit, as ball has being saying until after his tenure which will end long before muskrat is completed.

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  2. In my opinion, Cathy Bennett was forced to keep Muskrat falls going, at any cost. She did this, at a great cost to the taxpayers.
    Ball did not command this, I'm referring to party leadership and the big business that supports them.

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    1. There's a lot of truth in what you say. Big business who support the party in power at the time are dictating what is and is not to be done here in NL consequences be damned.

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  3. Maybe, Ball , the ditherer, is really a genius.
    Personally I have a tendency to put off a decision where I am not fairly or highly confident of the result, especially if the result can be negative. So better not to act if acting has a significant chance to be wrong and counterproductive.
    Now Ches Crosbie was firm in his opinion that Cathy's recent budget would result in another downgrade by the rating agencies. Ches was wrong.
    And so we move sideways, no trip wire yet, and Ball smiles and smiles, seeming self assured. Power rates not to exceed 17 cents, so in line with Nova Scotia it seems is the target, a wise recommendation by James Feehan. And from somewhere 400 million a year must be found to subsidize the Muskrat 60 cent power costs, a slight problem they are working on, and times allows that a miracle might happen.
    With a wish and a prayer, the North Spur may hold together for a few years or maybe 50 years, ......if no one knows for sure, why act to stop or condemn Nalcor's world class status, that Dunderdale accepted without reservation. To dither just might work out, especially if you don't live downstream.
    And even commentators on this blog see no easy solution. Ches Crosbie says Muskrat is not our problem, we have a spending problem, that he would fix......and what better place to fix that than with the public service union contracts. They are already to accept a wage freeze.....could one ask for more?
    Ball.......a genius?
    Why upset the public with exposure of fraud and corruption with a forensic audit or public inquiry? Why not let sleeping dogs lie. If Stan can bring Muskrat to completion with a strong finish, as he said, then that will be how it will be remembered, as the public has a short memory.
    Even Greece has not collapsed, thought the toll has been a severe one on the citizens there.
    Beyond that smiling horse face there is a chance, thought a small one, that there actually lucks a real genius. He has now appointed a relationship builder to replace Bennett.
    And look at his own actions as Minister of Aboriginal Affairs for Labrador, as to building relationships. Working well is it not. He will get to the bottom of the Mud lake flood by Sept. And, directed Parsons, our Justice Minister, to bring in 200 or more of Canada's finest to make sure Nalcor's transformer transport trucks don't run over protesting grannies, safely being first and foremost. Poor PR to see the result of being run over by 200 tons. So, no dithering there. 20 additional RCMP was considered sufficient, but Ball said 200 minimum, a show for safety.
    I wonder if I should switch sides, and be pro Muskrat, and acknowledge the Ball genius that is apparent, once you scratch the surface.
    Maybe I need Bruno to bring me to my senses again, as he did when I was about to give Stan Marshall the benefit of doubt.
    Ball, an incompetence ditherer , or a genius?............that's a hard one.
    Winston Adams

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  4. Incompetent, Ditherer, or a Genius

    Winston - To quote the immortal Meatload. 2 out of 3 ain's bad.

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  5. Folks, it becomes more evident that the hoped for Ball administration to bring real change, is in abort mode. With all the good discussion of the need for fix, and the prospect that the PC's will return, what makes you believe that a return of "Tory rules", will make any difference? Our BC experience, where a full fledged review of Site C and other stupid Tory government ideas, (LNG, ICBC, MSP, poverty/drugs, issues), is at least getting action from the "Left leaners", is at least getting on. The Tory minded have struck out. Where are the "Lefties"; (Workers, Greens, Anarchists, Coakers) in NL? Time for a united third option, if you want real people-centred problem solving in energy, environmental, economic and social issues. Soul of Ray Guy and Lyn Jackson, Greg Power, Harold Horwood, please stand up.

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    1. robert i agree with you on most points but can we afford the libs for another term with all the new taxes & fees without curbing spending but actually raising it just to satisfy their party backers . since they came to power. we only have PC & LIB because we will soon have to put the NDP back in the museum unless dwight gives kirby back. so like i said before the tories will get a gift from the libs

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  6. I once had a 5 minute chat with Ray Guy once, at the CBC stairwell, when the Mount Cashel scandal was on the go.............a real Nfld hero I think
    The inital pieces by UG I thought might be composed by GUY, it was so good.
    I had a discussion with Horwood about 1968, found him in a hideout place at Beachy Cove, and questioned him on his book White Eskimo.
    I have unpublished journals of my father of his Labrador, his experiences with Eskimos and Indians in the late 1930s ....Horwood said they were good stories, and advised I take them to Cassie Brown who wrote Death On The Ice.
    Lyn Jackson, I know nothing about.
    Greg Power, I know a little
    Coaker.....I have read much about him......once described as a communist, but did a lot for a while. But actually suggested, in the 1930s that Musalini, the Italian facist was a good man......and retired on an estate in Jamica..........so his legacy is somewhat tarnished. He built a monument to himself that would likely cost a quarter of a million dollars today, where he is burried. His appearance from the bust reminds me of Russia's Lenin! I have a photo with my arm around him, as a joke ..........Lenin was a devil , was he not....an evil genius. Ask young people who was Coaker, and they never heard of him.
    Winston Adams

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  7. I agree with none 5hing in this article that being Ball is Balls as and he not Bennett should have been shown the door. He needs to quit politics and become a spokesman for some hair product commercial

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  8. This is perfect is it not? The new Finance Minister with no economic experience while the ship is afire. What could go wrong?

    Bennett bailed because the fiscal forecast is so badly overly optimistic and the hole she has dug is so deep that she cut and ran. So much for steadying the ship.

    Whether the cynicism afoot is McCarthyism or IF Stoneism is up for debate. The rotten core is now exposed both literally and figuratively, the politicians run off afraid to face the music, one after another, and the madness continues unabated.

    What will it take to force a BC Site C audit and forensic investigation?

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  9. thank you for your post as always it is interesting & informative. iknow it takes a lot of your time but it is good to see well thought & knowlegable comments. thanks again i am looking forward to more.

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  10. Site C Review; A change management government at work. Pity the Ball bunch can't understand the need for similar action. The comments to the Tyee article are also recommended reading. Winston, please note the Site C option is for Burrard Thermal. Bell Island geothermal would be my choice for Avalon power demand. Please give me your thoughts.

    https://thetyee.ca/News/2017/08/03/Tough-Task-Site-C-Reviewers/

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    1. Don't get too excited, an election is in the very near future in BC and progress is important to people. We can't live on environmental protection alone. Who will pay for our continued prosperity?

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    2. Robert , the Cite c review is to limited to 12 weeks , and some fear it is insufficient. Critical that interveners get detail information before the PUB to counter Hydro arguments.
      Here there has been no interveners for conservation and energy efficiency, so the power companies get their way unchallenged. Don't know if that will change with our new Consumer Advocate. Tom Johnson, our last CA previously stated he would not call expert testimony to counter the power company!
      I searched Burrard Thermal in BC and that is a natural gas generation plant for peaking that was effective. Deep geothermal can provide high temperatures for steam turbines for generation, so not sure what you mean for Bell Island geothermal.
      Winston

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  11. I see Brain Jones of the Telegram calls for Muskrat to be stopped, even at this late stage, but have not seen Russell, or Ashley or other at the Telegram ever make this call.
    In BC, as Robert notes, the 8.8 billion is undergoing a review , after 2 years into construction, and may get cancelled.
    Jones last week suggested that Muskrat may get completed and then be uneconomic to operate and so get shut. Des also sees that happening.
    I would expect once completed, if uneconomic to operate, it may get sold off for a song to private power companies, leaving the debt on the back of the ratepayers and taxpayers. Makes one wonder if this is not part of the rationale for continuing, and no forensic audit.......as we do not know the web of private interests in this whole fiasco. In the USA a Grand Jury is now to investigate not just the Russia connections, but the private interests of Trump and family. Where there is smoke there is a good chance of fire.
    Conflict of interest here is a foreign concept it seems. Cathy Bennett, pushing ahead with Muskrat while being on the board of Nalcor previously being but one example.

    Winston Adams

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  12. Yesterdays Telegram editorial titled Rate Rejection, mentioned the Manitoba PUB rejecting the interim rate increase there, and allowing only half ( as an example of what should happen here). They conclude by saying watch what is happening in other jurisdictions.
    For 5 years I have commented on the benefit of independent Efficieny Corporations for helping customers to reduce costs and energy use, as this is very successful in other jurisdictions. Even Manitoba recently adopted it.
    Yet here I have not seen the TELEGRAM HAVE ONE EDITORIAL OR REPORTER say look what other jurisdictions are doing, that could have helped avoid Muskrat!
    Their silence on this topic is deafening.......and one must wonder why, given their stance of saying `look what are jurisdictions are doing`. Nova Scotia cutting demand by 40 Megawatts per year, and started their plan in 2008.
    Winston Adams

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  13. It's a small, yet substantial victory to have her gone from that chair. She has arguably been the most damaging, and likely the most corrupt, Finance Minister in our provinces's tainted history. Her new job now is to try to save that one seat from imminent defeat. ... OUR job however hasn't changed at all. If we don't quickly achieve a forensic audit and a public inquiry this province is finished. If not by the Muskrat monster than by the bigger, (and seemingly everlasting) monster behind it all. The corrupt oligarchy, who continue to enjoy the proceeds of their crimes while people (continue to) freeze, starve, drown or commit suicide.

    There is no 3rd Alternative.

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  14. BREAKING NEWS (as Wolf Blitzer would say).
    I have concluded heat monitoring for July month.
    The foremost heating engineer (who seems to be an adviser to our power companies) that I could find at MUN said we had only a 4 month heating season in Nfld, but when I said he was wrong, he changed to 6 months.
    I suggested 10 months of heating and expected a little heat needed even in July and August.
    To confirm I leave the thermostat set at 21C, so it cannot turn on the heat unless it cools to a temperature lower than that, that may happen in the early morning hours, before sunrise. The energy of that load is recorded continuously, separate from other loads.
    Knowing the duration of our heating season is important as to energy saving from investing in efficient lights and refrigerators etc., and efficient heating systems.......the longer the heating season, the LESS you save on investments of lights and fridges, and the MORE you save on efficient heating systems, so it is important for energy analysis, and homeowner savings.
    Perhaps it surprises hardly anyone (except that MUN prof) that I hereby confirm that July is indeed a heating month, although some days no heat is recorded. From early data, it appears August too is a heating month. Both of these months are also cooling months requiring some air conditioning, it varies from day to day.
    The amount of heat for July will be reported here once tabulated.
    Winston Adams


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  15. You can follow the Site C Review at

    https://www.google.ca/search?client=safari&rls=en&q=bc+utilities+commission+site+c&ie=UTF-8&oe=UTF-8&gfe_rd=cr&ei=qYKEWb3tLOuK0gKhgJWYAw

    Data and updates will be written up and posted, as the scene unfolds, Transparency I guess. The public is welcome to comment and examine the data.

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  16. Robert, here is how Conservation and Efficiency for customers was handled in Nlfd:
    The power companies develop their 5 year plan , which is almost meaningless for savings for customers, but backed up by a consultant report for the power company. This is part of the process of rate applications before the PUB
    Only issues that is at issue, between the power company and the Consumer advocate comes before the PUB, so the Consumer Advocate and the power company sign off on the Conservation plan, that is the CA fully agrees with the proposal, no objections made, and so this issue is never even discussed by the PUB..... in the public hearings, nothing to discuss.
    So the power company and the CA were as one..........the power company had their so called expert report, and the ratepayers rep, the CA, would call no expert evidence to counter that. So it was a slam dunk for the power companies here.
    Hence for Muskrat.........conservation and efficiency and demand reduction (DSM) was a non issue..... not even considered as an important issue........... a one sided affair that the PUB could hear no opposing expert evidence.
    It is generally acknowledged that a kwh saved is equal to a kwh produced, but for MF a kwh produced is 20 times more costly than a kwh saved.
    More so, when producing a kwh that is 1100 kw awat, about 8 percent of that is lost getting to the Avalon. But a kwh saved by the customer on the Avalon, is more more than a kwh for the grid, as that has a transmission loss saving that actually frees up some existing generation on the island, an important factor overall for the grid.
    When someone like Andy Wells and others on the PUB, who are non technical, are deprived of such evidence.........it is a flawed process.
    Our new Ca ,Dennis Browne days he will have experts on his side for the consumer.........that remains to be be seen,and a departure from the past if that happens. Believe it when I see it.
    We could have easily avoided MF.
    Much was excluded was by design, no doubt.
    I do not attribute it to a false assumption, As Stan Marshall calls it, much was knowingly false.
    Winston

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  17. I hereby make my case to James Feehan, who wants to discourage heatpumps (which reduces energy use and impedes the economics of Muskrat). HP efficiency reduce energy and peak load in winter by 60 percent or more, a big benefit to offset Holyrood fuel.
    For summer, my July use for both heat and air conditioning was just 86 kwh, so a cost about 8.60, damm cheap and not much revenue for the power company.
    However, the Hyundai all electric car has a range of 200kw and a 28kwh battery: so $2.80 for a charge, would cost $1.40 to go 100km
    I drive not more than 300km per week, so 1350km a month, which would cost $18.90 a month for the car. This would cost about $100.00 a month if a gas car.
    We have a surplus of hydro electricity in summer, and little sales revenue for heat or AC.
    In my case heat and AC is about $8.60 and driving with an electric car would be about $18.90, twice the heat and AC load.
    Many are switching to efficient heatpump systems, even at present 10 cent power rates , and the uptake will be much higher with 17 cent or 23 cent power, reducing energy sales.
    So....... why not encourage electric cars to offset the reductions for heating energy.
    Whether encouraged by government or not, the uptake for electric cars will take off, as the uptake for heatpumps already have.
    Leadership by the government can encourage this trend,(which other provinces encourage) which is very cost effective and good for the environment, or they can follow and deal with the consequences.
    For efficient heating, government and James Feehan have not led, but tried to hinder progress to the efficient use of energy.
    Winston Adams

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    1. Just like Trump, the fossil fuel shill, can't stop California, and other States and Municipalities from advancing the "Road to Renewables". It's what we all can do at the community level to advance sustainability through technologies. Thank you Winston for your drive towards enlightenment and awareness. After all it is the logical first step in change management, which NL sorely needs. We cannot expect the politicians to lead, they are out of a job when change comes about.

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    2. My grown up children uses about $300.00 a month for gas, 3 times my use, and so the revenue potential,for power companies, for electric cars, is much greater than my personal example. With some cities in Europe now committing to ban the fossil fuel engine, and some automakers planning to discontinue gas and diesel engines, electric vehicles is moving main stream.
      Tesla is now into commercial production they had half a million pre-ordered and now receiving orders for 1800 each day.However, Tesla seems to lack a good service ability,if you are remote from a major city, but others do provide local service,.......but the competition is driving improved technology, more efficiency, and price reductions.Some provinces offer up to $8000.00 incentives to kick start the uptake.
      Winston

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  18. People need to follow the money if they want the truth about convenient lies too. People need to ask "what is the truth?" and does anyone at all speak it these days?

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    1. Are you suggesting that the contract files are corrupted?

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    2. CNN reported say SPIN by politicians is not lies, otherwise there would be little truth told.
      Fact Checker largely separates fact from fiction.
      There is much deliberate intention to deceive, as with Muskrat;
      Start with the fact that MF can produce 824 MW, which is a relative good size........that number was floated initially and still largely used.
      However, that is short term peak production, and because there is a very small resevoir. average production is only about 565 MW.
      Then, because of the distance the power has to travel, 8 percent is lost gettign to the Avalon, so that gives just 520 MW
      Another 3 percent is lost in distribution getting to your house , leaving about 505 Mw.
      The power company can only bill what gets past your meter, so 505MW instead of 824 MW always promoted. So we have to pay off 12.7 billion with 505 MW , not 824.
      So 824MW (so called capacity of MF)is 63 percent larger than what is available to sell in St John`s that gets revenue.
      So was 824 MW a lie or just spin!...... Who did not beleive the spin........did the main media point out the difference, at any time in the last 5 years! It surely affects the cost, of 60 cents per kwh for MF power.
      This but one example of deception.
      Winston

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    3. As if you need more bad news Winston don't forget that without a new WMA that Nalcor "forgot" they needed there is not enough flow to come close to 824 MW. Reduce the power output and increase the cost of produced energy for a realistic picture.

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    4. Yes, agreed, without the Water Management Agreement, it can be much worse than what I stated.

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  19. A little more on electric vehicles:
    I have a 1979 Chev , in storage, that uses 16 l of gas per 100km,
    A205 Jeep 6 cylinder, in storage, that uses 12 l per 100km
    A 2005 Prius hybrid, my regular vehicle , uses about 5 l per 100km
    Hyundai , 2017 model advertises 4.1 l per 100km for their hybrid
    Hyundai electric equals just 1.7 l per 100km, so very efficient.
    The electric represents a 89 percent reduction in energy use over the past 40 years, compared to the gas guzzlers.
    In addition, the newer hybrid has 139 hp (includes both gas and electric boost motor). The electric has 118hp, so 15 percent less hp. Yet the electric has 218 lb-ft torque, while the hybrid has 195 for torque. The electric has 12 percent more torque, and it is torque that gives quick acceleration, so quicker pick up and go that the hybrid. Now that`s performance.
    Of course, Tesla all electric has even much more torque on some models , suitable as sports cars.
    If the avg Nfld family uses 3600.00 in gas per year, and assuming 200,000 families, that is 720 million dollars in gas.
    If these were all electric, it would increase revenue for the power companies, at 10 cent power, by about 144 million. If power was 20 cents , that would be 288 million in revenue, yet still much cheaper for transport costs than gas.
    Since government need to come up with some 400 million per year to subsidize MF, electric vehicles could provide much of that revenue, and from renewable energy ( though less gas tax collected).
    Winston Adams

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