THE BALVENIE AFFAIR (Part 2)

Note: Uncle Gnarley wishes to acknowledge and thank "JM" for having written today's Post.  "JM" will also write part 3 of this Series.

JM took the bottle of Balvenie and placed it on the board room table.  He placed good catholic disbursements to each of us, as he seemed to collect the thoughts in his head. 

“Uncle Gnarley this issue is a complex one indeed.  It is difficult to argue the Premier’s position that it is prudent to invest our current oil wealth for future generations of Newfoundlanders.  It is a noble effort and I believe that the Premier is sincere when she speaks these words.  Yet, with rumor of recent cost increases, I am more troubled by this great project that they call Mush-rat Falls”.

With that JM took the first sip of the golden nectar.  Despite his preference for Rum his response confirmed that he was well accustomed to the peaty taste of the Scottish juice.  “Muskrat Falls represents one of the greatest public works projects in our province’s history, the type of project that engineers and tradespeople dream of working on.  Yet our economy is booming, labour is in short supply, and project costs are increasing due to the other resource based projects.  If you remove all the arguments about demand forecasts, and overall feasibility I just don’t know why the government is doing this project now.

“Roosevelt built the Hoover dam during the great depression.  It provided a livelihood and hope for a generation of Americans.  However, we are completing Muskrat Falls in a time which is so busy that Newfoundlanders will not be able to truly benefit from its construction, despite the fact that their tax dollars will fund it.  Why are we doing this now?”

It was clear that Uncle Gnarley was animated, and eager to long join a debate with someone near his own caliber.  But as I thought he was about to embark on one of his own lengthy discourses, he seemed to rethink.  Happy to hear more from JM he asked what, at first, seemed simple enough.  The question was not just loaded, it was lobbed, as if it was a test for JM:  “But don’t we need the power now?”

HOLDS A SECRET MEETING WITH THE ANONYMOUS "JM" (Part 1)

(Author's Note: After a fortuitous encounter with the anonymous, but very real "JM", the person whose 175 page Submission to the PUB on the Muskrat Falls was frequently referenced in that Agency's Final Report, the author and JM have agreed to write a three part Series dealing with certain critical issues pertaining to the Muskrat Falls project. Part 3 will disclose new issues regarding Muskrat which new research by "JM" has uncovered.  Today's Post is written by this Author; Parts 2 and 3 will be composed by "JM". Part 2 will be posted on Wednesday, September 26, 2012 and Part 3, a couple of days later .  While Uncle Gnarley is a fictional character, the issues dealt with in this Series, and in earlier Articles by the author, are real).
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“Now, Nav”, Gnarley continued, “who would have undertaken such a demanding project? Who would have made such a commitment knowing that he could neither benefit financially nor on an academic level?  After weeks of difficult research, the decision to sign off on the work, under the anonymous "JM", had to be tough.  Whoever JM is, Nav, I believe he left the signature of a real academic; a person in pursuit of the truth rather than any reward, not even self-aggrandizement”. 

That was Uncle Gnarley, in July, long after having read “JM’s” 175 page anonymous Submission to the PUB on the Muskrat Falls project.  That Agency had relied upon JM’s Brief to help it with its analysis, frequently quoting him in the Final Report. 

Now, Uncle Gnarley was sitting in my SUV, fidgeting and exhibiting his characteristic impatience as he waited to be driven to meet the same JM, the heretofore ‘anonymous’ expert on Muskrat Falls.  Impatient may not be the best word to described Uncle Gnarley’s demeanor; he wore an aspect that suggested ‘agitation’; some ‘dilemma’ was clearly causing him conflict and, on this occasion, I was not invited to assist with a resolution.  I wondered if it involved JM or if there was some other matter causing him distress.

The invitation had popped into my “Inbox”; not only had JM written a new Paper on Muskrat, entitled, Upper Churchill: The Unexplored Alternative, to which, I knew, Uncle Gnarley would want to give thoughtful consideration; it was accompanied by a request from JM to meet Uncle Gnarley face-to-face.

AMATEUR HOUR IN THE PREMIER'S OFFICE

When a Member defects, as Tom Osborne did last week, there are always repercussions for the party leader. 

When the act is by a Member on the Government side, as Osborne was, the ensuing questions and concerns are magnified.  Why?   The defection speaks less to the defector, personally, than to the message he sends regarding the condition of the ‘ship of state’.

Cartoon Credit: John Meaney, Rant and Roar

For that reason, the political fallout must first, be understood, and then, skillfully (intelligently) handled.

People are unnerved about any political upset; but, they are alarmed when the Premier’s response is perceived as one that diminishes her person and her office.

Unfortunately, most people do not engage politics except on a superficial level; they should not be judged too harshly, for life intervenes and there are mouths to feed.  But they are never completely tuned out; that is why, intuitively, people take note when they feel ill at ease by the very government they have put in charge.

Tom Osborne’s decision to quit the P.C. Caucus is a clarion call, a call to action.  Skillful leaders know that, in these circumstances, the public wants re-assurance, expressions of intelligent thought and consistency, overlain with a reasonable rationale for what has just transpired.  None of that was on offer, last week. Indeed, the sheer scale of the vituperation emanating from Government Members was truly appalling.  

Osborne, it must be remembered, is not just any MHA.  He was the longest serving member of the P.C. Caucus. Both he and his family boasted a record of Party service that outshone every other Member. He held three Cabinet posts. He enjoys respect in his constituency and has been returned to the House of Assembly a total of five times. He has not quit over any point of principle or singular issue, except for, as he clearly stated, a lack of confidence in the Premier. 

A party stalwart with that record, is not one that you should mindlessly pillory or denigrate.  He has not defected to another Party; hence, with the leadership problem fixed, he could possibly be back in his usual seat within months.  These are the facts.

Let’s look at the Government’s response.

Tom Osborne Defects: Time for a Realty Check

The announcement by the MHA for St. John’s South, Tom Osborne, that he is quitting the Dunderdale P.C.s, had me recalling my June 25^th Post, entitled, “All Eyes on the Backbench, Please”.

Since posting that warning of the political cost of Dunderdale’s declining popularity her personal Poll numbers have been in free fall.  Her comment, that ‘strong leadership’ does not govern by Poll results, was unconvincing. 

Everyone knows, Premiers can’t let a single poll result or two cause a reversal in decision making.  But a trend will.  And what Premier Dunderdale is experiencing right now, is exactly that, a trend. 

Tom Osborne’s decision begs five points of analysis:

First, when the Premier’s popularity descends into free fall, the authority of leadership is the first casuality. Most Premiers have enough personal IOUs with caucus members that they can survive periods of voter displeasure, especially when it occurs early in the mandate. This is a crucial test which Dunderdale has failed.

Second, when Osborne refused to endorse Dunderdale for the uncontested Tory leadership position, she all but shunned him.  It was one thing not to appoint him to Cabinet; that is her prerogative.  It is quite another not to make him feel welcomed inside the Tory caucus and attempt to gain his confidence.  That is an error in judgement. 

On Muskrat Falls, Fortis fails to live up to its name

(The following Essay, written by Uncle Gnarley scribe, was published in The Telegram 30/08/2012 and is provided here for Blog readers.  To date, neither Fortis Inc. nor its subsidiary, Newfoundland Power Co. Ltd., have offered an explanation for their complete silence on the Muskrat Falls project eventhough it will have a significant negative impact on their 227,000 captive customers in Newfoundland.  Their customers deserve better.)

A few weeks ago, I took a phone call from a well-spoken young lady from Newfoundland Power.  Her purpose was to inform me that electrical power rates, beginning July 1, 2012, would increase by 7%.  She could not have known my thoughts at that time.  I did not want to seem ungracious, so I thanked her and ended the brief conversation. 

Perhaps, it was good PR.  The power utility wanted to save me, and other commercial customers ‘rate shock’; it thought a little advance warning was necessary.  The caller was an able representative of her company.  Yet, I could not help thinking that Stan Marshall, President and CEO of Fortis Inc., parent company of Newfoundland Power Co. Ltd. (NP) was really the person with whom I wished to speak.  Why?  It was not because of this shock, but because of all the rate shocks that are pending, for both commercial and residential customers, as a result of the Muskrat Falls project.

NL Finance Minister Gets Downgrade (PART 2)

Last time, I discussed the Dominion Bond Rating Service (DBRS) Report which confirmed the “A” credit rating of the Province. The Minister of Finance, in making that announcement, noted a comment by DBRS that, he said, was proof of why the Government should proceed with Muskrat Falls.

Uncle Gnarley obtained a copy of the full DBRS Report and caught Tom Marshall being selective; too selective for a Finance Minister.  Transparency is an important watchword; people have a right to know what their government is up to and how important agencies, like DBRS, feel about the fiscal management of our economy, especially the budgetary process, over which the government has substantial control. 

When government decisions go awry or they engage in bad management practices, the public should not be shielded from the result by 'bafflegab'.  It is part of the reason we are rightfully upset about the recent amendment to Bill 29, the Act governing public access to information. 

This week, let’s look at what DBRS had to say about the NL Budget, our current fiscal position and how the Muskrat Falls project will play a key role in economic forecasts.

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?