HEATHCARE FUNDING: A WEAK PREMIER BREAKS RANK

"Spineless" best describes Premier Ball – having helped undermine the Premiers’ united front on federal funding for health care. 

It is one thing for the Premier to exhibit poor character locally – having wimped out on both the deficit and Nalcor - both threatening our solvency.  It is quite another to allow this behaviour to reflect on the whole society that elected him or permit it to go unnoticed when the risks of doing just that are significant.

Ball chose to join the Premiers of New Brunswick and Nova Scotia – the two perennial toadies to the federal government. Their decision to break ranks came mere days after the Premiers met with the federal health minister and affirmed their united stand against her offer.

NO LIMITS ON INCOMPETENCE. ANOTHER $700 MILLION FOR ASTALDI

This Blog has reported many times the amount of money in dispute with Astaldi is in the range of $600-800 million. 

CEO Stan Marshall confirmed the sum yesterday. Nalcor, he told reporters, had reached a new contract with Astaldi increasing the value of the original contract by a whopping $700 million ($1.15 billion according to Marshall but $1.0 billion was the figure first reported). 

Some of this money was accounted for in the revised $11.4-billion estimate – making the net impact $270 million. If the PR types think this early attempt to soften the blow, given the size of the award, they are mistaken.

$700 million is a staggering sum. It not only creates a new and higher project cost estimate of $11.67 billion, it forces us to ask for the thousandth time: does anyone at Nalcor know what they are doing? And, why hasn’t Stan Marshall sent them away?

BURYING SECRETS: NALCOR AWAITS RESCUE AS GIL BENNETT TALKS TO HIS MIRROR

The appointment of Stan Marshall as CEO has not diminished the culture of secrecy at Nalcor. It was born under former CEO Ed Martin and current V-P Gilbert Bennett and is entrenched in a number of insidious ways, each of which ought to be exposed. The more prescient examples are ones that receive the greatest attention – this post describes one more. Still, no one should think they are outcrops of randomness even if discussion of the larger problem awaits.

What should be clear to all, however, is this: if Stan Marshall has brought change to Nalcor’s governance practices they elude the most ardent observers.

Likely, Marshall is more preoccupied with deciding on which knee the CEO of Hydro Quebec will sit - as he come to grips with the reality that a “bad” and a “necessary” deal are one and the same.  

That, too, is an important subject especially given the negotiations underway with la belle province. Marshall likely intends to “excise” the Muskrat Falls project – remove - cut it out -from the “Liberal” narrative; Ball not having had the good sense – let alone the instinct – to keep it grafted onto the Tories’ hide.

INSOLVENCY: LEARNING FROM THE PUERTO RICO MODEL

Guest Post Written by David Vardy

Puerto Rico Financial Control Board

Puerto Rico is a US Territory which has for decades been autonomous. It is not a state. But it has had sufficient independence to build up a debt of $70 billion. Its population is just under 3.7 million and has been declining. This amounts to a debt of US $18,919 per capita or $24,935, in Canadian dollars. RBC's financial projections place the per capita debt of Newfoundland and Labrador at $27,542 by the end of the current fiscal year, or 10% higher than that of Puerto Rico.

Without federal intervention Puerto Rico faced default on its debt, which would have made further borrowing impossible. The US Senate on June 30, 2016 passed the “Puerto Rico Oversight, Management and Economic Stability Act” (“PROMESA”) and it was signed into law by President Obama. The Act enables the government of Puerto Rico to restructure its debt and to regain access to capital markets.

QUEBEC NEITHER ENEMY NOR BENEFACTOR SAYS FORMER HYDRO-QUEBEC EMPLOYEE

Guest Post Written by Bernard Lahey

I am a Quebecer, currently retired, having spent most of my career in the Quebec public sector - including two stints at Hydro-Québec.  From my point of view, most discussions of Newfoundland and Labrador’s dealings with Quebec ignore several important factors. 

At the outset, it might be a useful reminder that those who ignore history are destined to repeat it.  The danger in the demonizing of Quebec is that it avoids drawing any lessons from Newfoundland’s own role in the saga of Churchill Falls and prevents Newfoundlanders and Labradorians from considering further cooperation with Quebec. 

In this blog, I want to offer some food for thought.  I don’t speak for Hydro-Quebec. I had nothing to do with Churchill Falls. However, I am concerned about what is happening on the Rock.  

EVACUATION PLAN NEEDED NOW IN CASE NORTH SPUR OR COFFERDAM FAILS

Guest Post Written by Cabot Martin

As you read this, various crews at Muskrat Falls are involved in a potentially life and death struggle to contain the raging Lower Churchill River.

They face a leaking coffer dam and rafting ice backed by river flows that, in volume, are 25% greater than those at the mighty Upper Churchill.

The greatest period of risk may well be the next three weeks - they are racing Old Man Winter -  time is of the essence.

We can only wish them well.

Unfortunately Nalcor has not adequately documented and explained the various "during construction" flood risks posed  to downstream residents.

However, we know enough to say that those risks , whether from collapse of the coffer dam or failure of the North Spur, are real and substantial enough to warrant immediate action on the evacuation front.

INDEPENDENT ENGINEER WARNS ABOUT MORE THAN COFFERDAM

A Report prepared by the Independent Engineer for the Federal Government on the Muskrat Falls project warned Nalcor long ago about the potential for a leaky cofferdam. The same Report stated Nalcor had failed to record important geotechnical notes detailing the presence of a sensitive clay at the North Spur (the natural dam) called “quick clay” – which has the potential to liquefy under certain conditions and to cause landslides. 

The Independent Report is important for reasons other than the defective aspects of a project the public is learning to hate.

One relates to Nalcor’s attempted suppression of the Report.

Another is that the Report contains serious deficiencies even if there is - finally - limited evidence of a “firewall” separating the Independent Engineer from Nalcor – earlier reports having been demonstrably incapacable of invoking criticism.  

Those matters will be visited later. But, immediately, the public should be apprised of the concerns the Independent Engineer has identified.

CRIMSON ROBE PERFECT FIT FOR JUSTICE ROWE

The ceremony in Ottawa to officially welcome Mr. Justice Malcolm Rowe to the Supreme Court of Canada (SCC) was one of those pivotal moments in a country’s institutional evolution when unanimity prevailed that the right choice had been made and for the right reasons.

Justice Rowe was appointed by the Prime Minister after an exhaustive screening process headed by former Prime Minister Kim Campbell. It was the first time the process had been used to assess the suitability of potential jurists to the country’s highest court.

The vacancy occurred as a result of the retirement of Justice Thomas Cromwell of Nova Scotia. Many, and not just those within the legal community, felt that convention required that his replacement come from one of the Atlantic Provinces. Residents of this province naturally felt that, after 67 years in Confederation, it was time for a nomination from Newfoundland and Labrador.

A TALE OF JETHRO BODINE IN THE PREMIER'S CHAIR

If you read last Saturday’s Telegram containing the James McLeod story “Ball falls, gets back up” you might be left with the impression we shouldn't worry about the province’s fiscal problems. How Ball actually "gets back up" is unclear. But equally doubtful is Ball's description of how he plans to get the budget back to balance: The Telegram paraphrases the Premier:

“The government has already hiked taxes basically as high as possible in the spring budget, so over the coming years it will need to cut roughly $100 million per year to get back to balance by 2022.”

Hold it there! The budget update confirmed a deficit this year of $1.58 billion. That is just the deficit on current account – or as some refer to it the grocery money. 

Even Jethro Bodine - the dimwitted nephew of Jed Clampett’s 1960s ‘The Beverly Hillbillies’ TV series - wouldn't need help with this problem. It is obvious that at the rate of a $100 million annually it will take “roughly” 16 years, possibly out to 2033, to “get back to budget balance” and then only with respect to the current account.