The Province gets an “A”. Finance Minister gets a “C” (Part 1)

The Dominion Bond Rating Service (DBRS) released its economic outlook for the Province of Newfoundland and Labrador on August 10, 2012.  A few days later, on August 13^th, the Finance Minister released a Statement informing us that DBRS had confirmed the Province’s ‘‘A’’ credit rating.    

The DBRS Report had placed the Minister in a jovial mood.  Likely, he was not surprised about our credit rating being maintained.  What had made him so pleased?  The Report contained a few nuggets about Muskrat Falls he wanted to share.

DBRS is an important and objective international financial house engaged in the business of rating the bonds of governments and corporations. 

Banks and their clients use this information to assess creditworthiness; investors parse every phrase used by such firms; their words cause interest rates to rise and fall.  For governments and for large corporations, a change of credit status may represent millions of dollars of cost, or of savings.      

It is important to note that any downgrade is seldom made in the absence of prior expressions of guidance, subtle hints or outright warnings.

Institutions like DBRS are, therefore, important.  No one knows that better than a Minister of Finance.

UPPER CHURCHILL CONTRACT: “Inherent Uncertainty” or Just Bafflegab?

Note: This item, written by your Uncle Gnarley scribe, was first published in the Telegram August 11, 2012 and is posted here for Uncle Gnarley readers.

Newfoundlanders and Labradorians have a right to feel a sense of betrayal, that an energy strategy, already bought and paid for, focusing on expiry of the Upper Churchill Contract in 2041, has been rejected by the Williams/Dunderdale Administrations. 

The following is a direct quote from Nalcor’s Submission, to the PUB, in defense of its Muskrat Falls strategy:

 "There is inherent uncertainty around guaranteeing the availability of supply from Churchill Falls in 2041 because it is difficult to determine the environmental and policy frameworks that will be in place 30+ years out. There are other issues surrounding the CF asset with respect to HQ, as Nalcor is not the sole shareholder of the Churchill Falls operation".  

Efforts to either break Hydro Quebec’s stranglehold on the Upper Churchill and develop the Lower Churchill, formed significant policy initiatives not just of the Moores and Peckford Administrations. 

Those of Brian Tobin and Roger Grimes had a different strategy but each attempted to limit risk to the NL treasury by engaging Hydro Quebec.

Notwithstanding the failures which ensued, energy policy, since 1974, has been pursued with the certain knowledge that the Upper Churchill Contract, in 2041, expires. 

Indeed, in another time, another Premier, indelibly linked with the Contract, might be heard to say: “It is not a case of ‘maybe’ or ’if’ or ‘possibly’.  The Contract ‘unquestionably’, ‘unreservedly’, ‘unconditionally’, ‘absolutely’ expires in 2041”.

WHO WILL GUARD THE GUARDIANS?

This entry is a companion piece to last week's Post.  First published in The Telegram July 28, 2012, it is re-printed here for UNCLE GNARLEY readers and for continuity.

Quis custodiet ipsos custodes? – Who Will Guard the Guardians, is a Latin phrase traditionally attributed to the Roman poet, Juvenal, and arguably associated with the philosophy of Plato, who suggested that those entrusted to be guardians of the state can be relied upon to guard themselves.  Though asked in a different context and a different time, the question is still fundamentally relevant.  Today, it is an appropriate query for modern media as the perceived ‘gatekeepers’ of our democracy.

We might first acknowledge that modern journalism is undergoing seismic changes. Nevertheless, the constraints which these changes suggest do not alter the fundamental fact that information is still the basis of a healthy democracy.

The behaviour of media and their styles of reporting, mirror changes, not just in technology, but in society, generally.  An emphasis on ‘infotainment’ is not just a daily preoccupation of editors, it is a mantra: keep it short, simple and interesting or risk losing audience. 

The younger demographic, in particular, rely on social media and internet sites to get news.   But social media is rarely about hard news.  Browsers like Yahoo and Google gather stories with a virtual insistence on brevity, which means little time can be afforded big ideas or public policy issues. Be that as it may, I submit, a society that values its rights and responsibilities is unable to afford such laxity.

What about local media? One is forced to ask, should news always be limited to pedestrian issues - all the time? News shows, that, for example, fill their time slot with a daily parade of misadventures, criminals and even innocents flowing through the court system, are frequently more about titillation than warnings of societal breakdown.  The courts have their place in the news; but, I suggest, society would not endure irreparable harm if we were spared some of Johnny’s missteps with the law; especially if a major public policy issue screams to be explained.

Who are the Guardians of Democracy in NL?

Democracy, and all the rights and freedoms represented by that most cherished of systems, historically, has demanded the spilling of blood as the price of victory over tyranny.  Canadians are an exception.  The Great Wars notwithstanding, no blood was spilled in this country in pursuit of such a noble cause.  But as many democrats know, winning democracy is only a beginning; rights are constantly under threat of being diminished.

Poor access to information and the capacity of government to be willfully secretive is a daily issue for the media and for everyone else. Arrogance and ‘legislative creep,’ translated as the progressive restriction of rights over time by modest changes to legislation, is an ever present danger.   Most of us know that public release of information exposes poor analysis, shoddy administrative systems and, sometimes, outright illegality. Governments often prefer to tighten the process of disclosure rather than fix the root cause of the problems.

Bill 29 is an example of legislative creep.  Then too, Muskrat Falls is an example of poor analysis.  But powerful interests want Muskrat Falls built.  Those vested interests, I suggest, are in conflict with the public interest.  Most people want to believe that governments are well intentioned. Still, experience suggests that government decisions are often subject to competing interests and influences rather than objective analysis or the rigid criteria of cost vs. benefit. 

While many agree that this government’s determination to beat off dissenters of Muskrat Falls is a serious display of poor democratic practice, we should ask: who has the responsibility to be on guard when such practices threaten basic rights?