2013, REFLECTIONS ON HOW FAR WE HAVE COME

Each of us will define benchmarks of progress, in 2013, differently. They may be as varied as a bigger paycheck, a larger house or the kids’ advancement in school.  However they are calculated, in addition to matters personal, they ought to also reflect whether Newfoundland and Labrador, as a society, is better off.  We are, after all, “part of the main” to use Patrick O’Flaherty’s titled phrase. 

Many in this Province have done well even if national statistics suggest we have more work to do.  High personal debt levels, poor retirement readiness, health care issues and job security challenge us, as they do other Canadians. 

Newfoundland and Labrador is engaged in a seemingly endless process of transition.  The emptying of hundreds of rural communities is a continuing flag giving confirmation that the last threads of an enduring rural culture can no longer resist the attraction of larger towns. 

Perhaps it is our lot, as a society, that we are forever in the grip of fundamentally painful change.

Yet, the Province has prospered even if many have not landed on the sweet side of the economic divide. 

'MAD HATTER' COMPETITION OVERSUBSCRIBED

The rrrrrr…ing of the telephone became insistent.  A peaceful short snooze, after dinner, suddenly seemed too high an expectation. 

Leaving my warm couch I wondered why a bloody email couldn’t have done the trick.  Hello! I answered with as much equanimity as I could muster.  “Hello, Nav! It’s Uncle Gnarley. I didn’t disturb your little cat-nap, did I? Now that you’ve surpassed 100,000 hits on “my” web site, must even I give you fair warning before you pick up the phone”, he teased. 

Gnarley chuckled but gave me no opportunity for retort.  “I am coming over to spend Christmas with you, Nav.  Those single malts beckon.  I presume you have adequately re-stocked, he bantered mischievously.  Anyway, make sure you let me in” and abruptly disconnected.      

No sooner had the receiver landed in its cradle than the doorbell initiated its own intrusive summons.  I opened it quickly and the big framed, slightly balding, old professor pushed his way inside.  “Merry Christmas, Nav”, said Uncle Gnarley, shaking my hand vigorously.  “Aren’t these cell phones wonderful? Everything is so fast these days!” 

BUDGET UPDATE: LEADING FROM THE REAR

Ask yourself this question: if the investment firm that manages your RRSP placed 33-50% of your money in the volatile commodities market, i.e. oil, would you not, at least, question its competence?  Likely, you would move your funds elsewhere. 

The Provincial Budget is annually predicated upon consistently high returns from the same volatile commodity.  NL has been bestowed a valuable natural resource; but we do have the responsibility to carefully manage its inconsistent value.  The international oil market is constantly under pressure and hence subject to significant price changes.    

For those reasons, just as we would expect a portfolio manager to insulate our most important investments from excessive risk, the Finance Minister ought to be guided by a set of policies that protects the public purse against the worse effects of volatility.         

The 2013-14 Provincial Budget Update delivered by the Minister, on December 2^nd 2013, was a reminder that this Finance Minister is comfortable leading from the rear.  He has made it clear he plans no reform to the Public Service Pension Plan though the annual unfunded liability continues to mount. 

He will run deficits in a time of plenty.  He will do anything but make necessary financial decisions.  Now, he has acknowledged that changes to the current budget deficit, found in the Update, are purely accidental.

DOES THE FEDERAL LOAN GUARANTEE HELP YOU SLEEP BETTER?

There are some, including this Blogger, who had hoped the Federal Loan Guarantee (FLG) would not get final approval.  The UARB’S approval of the Maritime Link scotched that possibility. 

It does seem bizarre that critics of the Muskrat Falls Project, in this Province, would look to outside intervention to defeat an unwise, even foolhardy use of public money.  But, when independent assessment is shut down and essential information denied, the options are scarce. 

Now that the Government has prevailed, it is unlikely that thousands of Newfoundlanders and Labradorians will pack our version of “Independence Square” (as the citizens of Ukraine are now doing) to push-back bad policy and to demand the Government’s resignation.

IS RICHARD CASHIN CORRECT ABOUT DUNDERDALE'S ‘WONDERLAND’?

“Alice in Wonderland” has achieved a power in local politics one would not normally ascribe to the renderings of Lewis Carroll. 

Recounting the behaviour of Kathy Dunderdale, Richard Cashin has frequently invoked Carroll’s unforgettable Novel to explain the Premier’s illogical behaviour and strange utterances. 

Other pundits have spoken the name “Alice”, as metaphor, too. 

It suddenly seems appropriate to consider the powerful imagery to which all of them, especially Cashin, has drawn attention.  To be clear, we ought to assume it is not our beloved Alice, but the Wonderland she came to inhabit, that gives the parody context.

It is hard to blame Mr. Cashin, or anyone else, for attempting to make sense of a place gone mad.  The Premier’s behaviour seldom fits the reality; public policies have been turned upside down, she lets her Ministers say one thing when the opposite is true; ‘what’s one seat?’ she informs the voters of Harbour Grace-Carbonear as they head to the Polls.   At times, you would think it was she, and not the Mad Hatter, who intoned: “You would have to be half mad to dream me up.”

CRA POLL REFLECTS BY-ELECTION MESSAGE TO THE PREMIER

When Kathy Dunderdale told Reporters on the afternoon of the Harbour Grace - Carbonear By-election, ‘whatever happens it’s just one Seat’, you are forced to wonder just how disconnected she is from ordinary people and detached from notions of leadership.   

The CRA Poll, released on Wednesday, places the Premier’s personal popularity at only 25% (22% three months ago) against 39% for Dwight Ball and 18% for a chastened Lorraine Michael.

Why would anyone expect the Premier’s popularity to be higher? ‘Whatever happens it’s just one seat’ is declaration of ‘don’t care’ when it ought to be one of concern and distress.

If you took notice of her comments on the six o'clock news – just two hours before the Polls – why would you think the Premier could ever lift the Tories’ from the doldrums?

Though support for the P.C.’s increased to 29% (from 26%), it equates only with the Poll’s margin of error (2.9%), so even this uptick is tentative. 

DUNDERDALE ADMINISTRATION: UNFIT TO GOVERN

It didn't take long for the Nova Scotia UARB to approve the Energy Access Agreement (EAA) in its Supplemental Decision on the Maritime Link (ML). Its blessing is needed by the Dunderdale Government to trigger the Federal Loan Guarantee (FLG) for Muskrat Falls.

The UARB took just one week to digest the evidence presented at both the Technical Conference and Hearings and write a Report. They ought to feel a little foolish for the rush knowing it was unnecessary to create more CO₂ than a Sydney coal by burning all that mid-night oil; the Dunderdale Government is concerned with saving face. It would have agreed to anything.

The crux of the matter is that UARB declared, in its July Decision, (para 216, page 70) the Maritime Link is $706 million to $1.422 billion more expensive than the alternative lowest cost option.  It stated that its approval depended upon Emera’s success at closing this large financial gap.  It said the gulf could be bridged if Nalcor guaranteed to Nova Scotia sufficient surplus or “Market-priced” energy from Muskrat Falls. 

It had no concern about price as long as the power was valued against the super competitive New England market. A bigger fear was that Labrador mines or domestic growth might absorb the available surplus.