FEDERAL ELECTION: BE READY TO CONFRONT THE ‘SILENT SEVEN’

If any of the 338 Federal MPs in the House of Commons entered a race to name the “most quiet” politicians, the Newfoundland and Labrador seven would win hands-down!

For them, flying under the radar is a practiced art, a condition which may change slightly during the next six weeks of the Federal Election Campaign — though, if they are re-elected, reversion to “same ol’, same ol’” is a certainty. Even NL's Minister in the Federal Cabinet loses his tongue for extended periods, occasionally bobbing up to utter some vague assurance that he is on the job. What job is seldom clear.

GROWING DOPEY

Tax revenues for growing dope!
But growing food? Scant funding hope.
It's policy from Pols myope,
When shops run out, how do we cope?

In NL where the weather tries
And ferry service oft awry
And washouts due to rain are high
On long-haul transport can't rely.

MUSKRAT: LESS A PLAN THAN A CONSPIRACY?

Last time, author and consultant to the Commission of Inquiry, Dr. Brent Flyvbjerg’s thesis of “strategic misrepresentation or political bias” (at P - 00004, p 17) was discussed as an explanation for how the absurdly unnecessary and uneconomic project Muskrat Falls project received sanction.

Flyvbjerg’s thesis posits  that “… forecasters and planners deliberately and strategically overestimate benefits and underestimate cost and schedule in order to increase the likelihood that it is their projects, and not the competition's, that gain approval and funding.”

Undoubtedly, there are still people who believe that the Muskrat Falls project grew out of a process of evaluation based on the statutory requirement of lowest cost and reliability.

WHEN YOU THINK MUSKRAT, DO YOU BELIEVE “NEVER AGAIN”?

There are a few matters that need to be discussed before the details of the Muskrat Falls debacle test the patience of readers (as if they haven’t already).

Reflections on the past year, as the Inquiry examined a bevy of politicians, bureaucrats and consultants, leads essentially to a single question: how did so many people in positions of responsibility exclude themselves from common ethical norms and processes, as well as the “best practices” of their professions, affording themselves engagement in a lengthy, complicated, and costly plan of deception to achieve the sanction of such a reckless, state-sponsored project?

The question is only partly addressed here; the lengthy and diverse evidence supporting the mostly likely thesis — better coming from the Inquiry Commissioner anyway — would test most anyone’s patience. Still, the likelihood of Muskrat’s repeat is high. If the next one is not on that scale of “crazy” it is only because no one is foolish enough to lend us the money — not because the current political leadership is any less reckless. 

OPTIMISM IS NOT A PLAN: ADDRESSING NL'S FISCAL CRISIS

Editor's Note: What follows is the text of my remarks to  St. John's  Rotary today titled "Optimism is Not a Plan: Addressing NL's Fiscal Crisis". I am truly grateful for this opportunity. - Des Sullivan

Ladies and Gentlemen:

Firstly, I want to thank Rotary for inviting me. Let me also acknowledge your work supporting an array of projects and commend you for offering an essential platform from which to air important public policy issues.

Having been an intervener at the Muskrat Falls Inquiry with Ron Penney and your fellow Rotarian, David Vardy for the past year, Muskrat might have been an obvious subject for my remarks today. However, a desperately larger issue looms over us…the Province’s debt and deficit which, of course, is inseparable from the Muskrat Falls Project anyway. 

THE ELEPHANT IN THE ROOM

Guest Post by David Vardy
The province’s deteriorating fiscal position has been linked with Muskrat Falls but yet it has received scant attention. Virtually absent from the Muskrat Falls Inquiry (MFI), and from the PUB reference Inquiry into Rate Mitigation options, is the fiscal impact of the project. It remains the elephant in the room, in plain view but virtually ignored by both inquiries.  Yet it is the major public policy issue facing the province.

The PUB reference Inquiry is focused on the means whereby revenues can be generated to pay the increased revenue requirements to operate our electrical power system, rather than on the fiscal impact. In its work the PUB has been directed to examine measures to reduce the cost of providing electrical power as well as to identify new sources of revenues.  The fiscal impact of the project remains outside of the scope of the PUB. All of this suggests we must look to the MFI for an assessment of fiscal impact.

JUDGE LeBLANC TO REPLACE JIMMY KIMMEL AS NL's MEDIA SENSATION

As the fun was winding down in Dildo, Jimmy Kimmel having accepted the title of Honorary Mayor rather than face an Election, Judge Richard LeBlanc was wrapping up the Inquiry into the Muskrat Falls Project. It was time to begin the contemplation of a problem far harder than that which had excited Kimmel’s viewers all week.

Likely, Kimmel had stolen even the “die-hards” who might have otherwise tuned in for the Inquiry’s last inning. There was no pleasure to be had in Goose Bay anyway. There was only the pained legal verbiage of banal lawyers representing Nalcor and the venal politicians — the “culprits” — as well as the “contractors” (Astaldi), the “silent”  (Newfoundland Power), and the senior bureaucrats, the “submissives”, whose practiced deference helped create the debacle.

Judge LeBlanc will have the last word; unlike Kimmel, cautious metaphor will be the least of his problems. 

THE NORTH SPUR: WARNINGS IGNORED

Guest Post by David Vardy
Many warnings about the North Spur have been ignored.

Dr. Lennart Elfgren and Dr. Stig Bernander, both full professors at the Lulea University of Technology in Sweden, wrote the Minister of Natural Resources on August 1, 2019.  In their technical report entitled A Downward Progressive Failure of the North Spur at Muskrat Falls - A Possibility that ought to be investigated and mitigated, dated July 25, 2019, submitted to the Minister, they said that “The most critical inclined progressive downward failure surfaces of the North Spur at Muskrat Falls have not been properly investigated. Relevant stress/strain properties of the metastable soil layers have not been made available, and no independent external experts seem to have reviewed this aspect of the stabilization work.”

They said that old methodology was used to assess the safety of the North Spur, the same model which had been used unsuccessfully at other failure sites, such as Mount Polley, a copper/gold tailings pond owned by Imperial Metals and located in central British Columbia. They repeated their call for an independent panel of experts to undertake the research and to assess the need for further remedial work.

NORTH SPUR: JIM GORDON TRIES AGAIN TO GET SIOBHAN COADY'S ATTENTION

Dr. Stig Bernander

Editor's Note: Canadian Hydro Engineer, Jim Gordon has worked hard to get successive Ministers of Natural Resources, including more recently Siobhan Coady, to take seriously the geotechnical analysis conducted by Swedish scientists Dr. Stig Bernander and Dr. Lennart Elfgren in relation to the North Spur, but without success. 

The Spur is a natural formation which forms part of the dam structure for the Muskrat Falls project. The feature contains clays defined by experts as "sensitive" because under certain circumstances they have the capacity to liquefy and to collapse. The issue is increasingly urgent because Nalcor, in a matter of days, will begin filling the Muskrat reservoir to the 39 meter level. 

MOODY'S AND FINANCE: WAITING FOR A MIRACLE

First, let’s clear up any confusion. The downgrade in the Province’s credit rating by Moody’s, a credit rating agency, resulted not from a “highly ambitious” deficit plan, as the Agency suggested, but because the Finance Minister’s ambitions about Budget balance in 2022-23 were supported only by talk. Moody's as much as said, “talk is cheap.”

Underlying the issue is a $14.5 billion “Direct” Debt compounded by $9.4 billion of utility debt referred to by the Budget Estimates as “self-financing” — which, of course, it isn't. “Rate mitigation” — required to prevent power costs reaching 23 cents/kWh — means that the Province's $4 billion equity contribution to the project is “sunk cost”. Implicitly, that’s Moody's view, too.