Monday, 15 December 2014


The Keystone Cops were fictional incompetent policemen, featured in silent film comedies. In Confederation Building these days, it seems a comedy of errors is being played out by our very own version of the Keystone troupe; though no one is laughing.

Loss of federal funding in relation to the Canada/European Trade Agreement (CETA) has stirred up a new war with Ottawa.  Premier Davis might like you to pick up placards and show your outrage. My advice: save your energy.  The ineptitude is right here.

Even though the CETA issue is not about high sounding principles or constitutional rights, the controversy involves a lot of money. Whether the Province ought to have levered funding from a trade deal in which it was also a beneficiary is moot. Now we are left to ask: how could a deal deemed by Dunderdale to be “done” completely fall off the rails?

This story involves more than just a dispute over phraseology or even intent; it is about naivety and over bearing confidence. It calls into question the judgment of the former Premier (one more time) and the professionalism of the bureaucrats who headed the negotiating team.  

Was Premier Cathy Dunderdale too eager to boast a “we got it” moment?

Provincial politicians and bureaucrats may believe they had negotiated a deal on dropping Minimum Processing Requirements (MPRs). They may have thought the exchange of letters between the two governments adequate. But agreements are all about enforceability.

The Province argues tying funding to MPRs was never part of the deal; the Feds say the complete opposite. This is not an argument about a phrase left ambiguous or undefined; the dispute is over the reasons the funds can be used – essentially the guts of the deal.

That is why Senator David Wells’ comment to the Telegram to the effect the deal was just “an agreement in principle” is simply wrong. 

That said, if the province was certain all loose ends were tied up, why were they seeking clarification from the Feds on key contents soon after the letters were signed?

To that point: given the deal’s high value (“up to” $320 million of Federal money) it seems inconceivable the letters were not converted to a Memorandum of Understanding (MOU).   

The MOU is a common legal instrument used by governments and their agencies for prescribing the terms and details, requirements and responsibilities, of the respective parties. It would have voided all reference to superfluous issues.  It would have confirmed the deal in legal language, eschewing as far as possible, ambiguity.  It would have brought specificity to the amount of compensation, the terms under which the amount could be drawn down and the timing; critically, it would have defined a plethora of items missing from the letters. Premier Davis acknowledged that the matter was complex. The requirement for specificity was reinforced by him.

Was the MOU overlooked? Did the members of the Committee suggest it was necessary? Was their advice rebuffed?  Was there no lawyer on the negotiating committee? Politicians are amateurs over matters such a legal form; senior public servants ought to know.  

The Province hung its hat on an exchange of letters. The correspondence uses words like “up to $400 million” which provides a ceiling but no floor on funding.  It suggests the program’s assistance should be extended to “any other province that is also affected”, and makes reference to a “regional fund”. These items confirm the need for additional clarity in a solely NL agreement. 

The Feds are masters of obfuscation and far less prone to running to the media prematurely. The Province got snookered; another amateur hour.
The Feds got the Province’s signature when they needed it. NL’s leverage dissipated once the deal with the Europeans was struck. CETA will proceed because the Government of Canada is empowered to enter into international agreements. NL’s latent change of mind may be an irritant; but it will be a small one.

A few additional comments are necessary.

One is Premier Davis’ admission that the Province might not suffer adverse impacts over the removal of MPR’s.  Why would the Feds agree to compensate this Province with a large sum of money, to be spent on the “five pillars” of the fishery, if NL is the sole Province to benefit?
Likely both this Province and the Feds initially overestimated the impact of eliminating MPR’s. As that prospect became doubtful and in the absence of a single Tory MP in Ottawa, it is not surprising the Feds might look to exit the agreement. This just speaks to the naivety of local politicians and negotiators.

There is a second point.

Premier Dunderdale ran off to the media to announce the supposed $400 million deal on October 29, 2013. No federal politician joined her.  The Feds would not even permit their bureaucrats to attend Dunderdale’s Press Conference. They feared their presence might lend credence to the claims Dunderdale was about to make. It ought to have been a tip to Dunderdale and to her officials, greater certainty was required. 

Since the days of Danny Williams when the Feds reversed his “we got it” arrangement without the courtesy of informing him, local Tories have been advised not to trust Stephen Harper. Even Dunderdale will recall Harper’s “take it or leave it” Federal Loan Guarantee for Muskrat which nearly left her napping in St. John’s while he headed to Goose Bay to make the announcement. Yet, she accepts a ‘loosey goosey’ exchange of letters as the basis for $400 million CETA arrangement! A baffled public might ask: when had Stephen Harper become a nice guy? 

Now, before I tuck away my placard in the expectation of a more propitious occasion for an outpouring of vitriol, and at the risk of seeming cynical, I would offer this final comment:

Dunderdale announced the CETA deal on October 29, 2013. Six days later, on November 4, 2013, a Writ of Election was issued for a by-election in the electoral district of Carbonear –Harbour Grace to fill the seat left vacant by Jerome Kennedy.

That was just a coincidence. Wasn’t it?