WHY WE SHOULD DISMANTLE NALCOR (PART I)

Nalcor is engaging in lay-offs at the Muskrat Falls construction site.  Undoubtedly, it will say this is a normal and recurring process, except it is known in some quarters the project is suffering low productivity amidst a typical Labrador winter, an unfinished “dome”, and inexperience just as its major contractor suffers a veritable turnstile of senior construction management.  

The Oversight Committee won’t acknowledge the fact yet; perhaps it don't even know. But, eventually someone will have to tell us the project is at least a year behind schedule and that cost overruns are worsening.

The saga of bureaucrats masquerading as entrepreneurs, in a business we can ill afford, plays out.  For whom does the ‘bill’ toll? As always, it tolls for thee. 

Having created Nalcor to pursue a foolish 'energy warehouse' mandate using public money, the Williams/Dunderdale Administrations have gotten the Province into a pack of financial trouble, especially by having sanctioned Muskrat Falls. 

Nalcor's mandate, of course, is far wider than even Muskrat implies. At a time when the House of Assembly is being de-constructed, ostensibly to save a few dollars, we ought to be looking for bigger fish; a place where serious money is being squandered.

Nalcor is one of those places.

"MINI-BUDGET” NEEDED; TIME TO DISMANTLE NALCOR

The Province needs a “Mini-Budget”.  The Government should commit to dismantling Nalcor, too.

Presently, the House of Assembly is engaged in a ridiculous debate over minimal savings on downsizing the Legislature. The Government has created a diversion; large, financially worthy decisions are delayed. It should to be talking about public policy issues and measures that will seriously downsize government expenditures; it dwells on an amount equal to a rounding error in the context of the size of the deficit, especially next year's.

A crisis looms; the important issues can’t make it to the top of the public agenda.

DEMOCRACY WHACKED WITH A NIGHTSTICK

The Premier’s decision to redraw electoral districts and reduce the House of Assembly from 48 to 38 seats has little to do with saving money. As his window of opportunity closes, the Premier is on the hunt for a fix to reverse his Party’s dismal standings. His latest move seems like pure mischief; except it has far ranging consequences.

The 10 seat reduction represents a savings of about $10 million over four years. That is far less than half the amount Nalcor’s Ed Martin wasted in a misguided oil exploration plan that drilled two dry holes in Parson’s Pond!

The strategy of altering the number of electoral ridings for political advantage is not original; though, I am not inclined to ascribe to Paul Davis any of the skills of Prince Machiavelli or even of former Premier Frank Moores, the latter having employed it to great effect.   

Frank Moores’ redistribution plan was not just skilful; it had a purpose noble enough to exceed its crassness.

LORRAINE MICHAEL AND THE NDP’s LEGACY OF UNREQUITED LOVE

It is trite to say Lorraine Michael loved being leader of the New Democratic Party. It was as if her years as a social activist had prepared her for the role. Of course, the love wasn't always requited. Things did not go as she might have liked, either. But, then, seldom do they for most leaders. Her resignation, last week, suggests an appraisal of her performance is required, as well as that of her Party, as it heads into a new leadership race.

It also goes without saying Ms. Michael will be recognized and applauded for having won five seats in the last election; the NDP’s previous best achievement was just one. For most of the Party’s fifty-four years of political history, the number was zero.

That success was due, in part, to her personal credibility, intelligence, and the passions that inspired her well-articulated support of social policy issues.  The fact that the additional seats were won when the electorate was still suffering “Dan-gue” fever added to the achievement; the NDP enjoyed popular support reaching 20%, according to CRA Polls (a virtual tie with the Liberals), up to the time of its sudden implosion.

It is easy enough to dismiss the Party because Messrs. Kirby and Mitchelmore left in a fit of pique amidst a full blown caucus revolt; undermining its progress and Michael’s leadership. Their move certainly impacted the Party’s fortunes, but I am doubtful it is the sole cause.

DARKNL: HASHTAG #ED MARTIN HAS TO GO

As the 1st anniversary of DARKNL approaches, we still suffer Ed Martin as Head of the Province's energy agency. We need to ask: why?

Last January the Liberty Consulting Group was hired by the Public Utilities Board to investigate the reason for several days of Island-wide power outages. An Interim Report, released in April 2014 contained a damming indictment of Nalcor's leadership. 

It describes wide ranging management, personnel, forecasting and operational issues.  Hydro had not even completed its 2013 summer maintenance program. Replacement parts had not been procured or even sourced. Poor forecasting methodologies led to an inadequacy of power generation.

Missing from the Liberty Report was blame on cold weather or excessive power demand.

Nalcor had not only mishandled the Province’s power assets; it had attempted to obscure the real reasons for the failure.

THE POPE AND PAUL DAVIS

2014 could be rightly named the year of missed opportunity.  It didn’t begin with Paul Davis at the helm, but it ends that way. Already hindsight confirms that, in contrast to Pope Francis who will never have to face re-election, Davis’ failure was pre-ordained.

Almost at the start, Premier Dunderdale vacated her post amidst appalling insensitivity to widespread public endangerment and economic disruption.  Nalcor had visited upon the Island the vicissitudes of DARKNL. Her “not a crisis” comment was just the latest in a series of gaffes exhibiting an incapacity for empathy. A frustrated public had reached their breaking point.

Temporary first minister, Tom Marshall, took no opportunity to right what had become a ship-wrecked administration. While opinion polls awarded him barely higher marks than his predecessor, the local media did its best to award him an undeserved pedestal. The man of great girth warranted little stature.

THE 'ADVISORS', 'BOOSTERS', AND 'SHILLS'

Last week the Minister of Finance confirmed what everyone knew: lower oil prices are a wrecking ball for the 2014-15 provincial budget. While no one forecast $60 Brent crude, equally we should not be surprised. Events such as this have long been a feature of resource based economies.

When we say commodity demand and prices are ‘cyclical’ that doesn’t mean they go up and then go up further.  Prices fall, too, often hard and precipitously. Anyone who has invested in the stock market has felt the euphoria of conquest. But nothing always stays the same. When the market turns, the whiplash of price swings guarantees that those having danced with, and perhaps married risk, get stung. The markets do not discriminate between the well-intentioned, the prudent and the foolish.   

The word “prudent” made its way into the Finance Minister’s budget update. Said Ross Wiseman, “In the shorter term…we have to be prudent and adjust our oil price forecast for the remainder of this fiscal year.” The word has no meaning for this Minister; short or long term.

CETA: RETURN OF THE KEYSTONE COPS

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.  

NALCOR: THE 'BULLSHIT' STILL THRIVES

There was a time when an appearance by public servants, in front of the media without the presence of their Minister, was a rare sight.  Any such briefing was limited, technical, and forthright.  If ‘spin’ were needed, it remained the Minister’s job to provide cover for the government. Public servants are not politicians.

Since the Williams’ Government hired Nalcor CEO Ed Martin, the Minister of Natural Resources is often nowhere to be seen. Martin has been handed the policy and conducts the implementation role; there is little evidence the Premier or the Minister are knowledgeable enough to be conversant in Nalcor’s entanglements.  Nalcor’s Board of Directors is composed largely of political hacks whose part-time oversight capacity is fundamentally meaningless.

The level of risk to the public purse and to programs and services of Martin’s investment schemes are increasingly evident, as oil prices fall precipitously and overruns on Muskrat are reported. Unfettered by political control, Martin runs a Crown Corporation using public money in the billions; the amounts have no precedent.  The practice seems publicly acceptable because they are thought to be ‘investments’. 

WHAT IS PREMIER DAVIS TO DO?

Following the P.C. Party’s defeat in last Tuesday’s two by-elections, one might have had some sympathy for Premier Davis if he had not been part of the Dunderdale and Marshall Governments.  Davis had an opportunity to deal with those years of misrule. He didn’t. 

  

Upon winning the Tory Leadership, Davis should have dashed for the job, attempted to strike a different tone and set a new agenda. Instead, he dallied on getting sworn-in, chose a politically inexperienced Chief of Staff, made a balls of his new Cabinet, signalled the wrong public policy priorities and proceeded to confirm he was happy with the Government’s record. 

Not having caused the current Session of the House of Assembly to prorogue, he lost a strategic opportunity to assert additional ideas for a ‘fresh’ image.   He overlooked the fact that the chief function of a Throne Speech is to signal innovation and renewal to an expectant public.