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.

BEGGING THE AUDITOR GENERAL TO SHOW COURAGE (PART II)

There is little doubt the A-G is deeply concerned over the state of the Province’s finances. In his 2014 Report to the House of Assembly, gravitas is expressed over our dependency on petroleum revenues, the structural deficit, the growing debt, a declining GDP, and other issues.  

Premier Davis would have us believe recent Administrations have exhibited sound fiscal stewardship and there is no need for change. The truth is the Williams’ years, and since, have been marked by a level of financial recklessness that is not only repugnant; it will take years to repair.   

The purpose of this Blog is to not just chastise unwise and undisciplined politicians.  It seeks to illuminate serious public policy issues. The A-G's Report needs plenty of light.

The statements that follow are extracts from the 2014 Auditor General’s Report, specifically Chapter I entitled “Comments of the Auditor General” and Chapter 5, “The Financial Condition of the Province”.  I think those selections represent his most prescient “observations”. (Click on this Link and go to Chapter 5 for more details.)

In my concluding comments I beg, yes, beg the Auditor General to display the utmost courage and uncloak Nalcor CEO Ed Martin and the Muskrat Falls project. First, the Auditor General has the floor:

A-G's REPORT IMPORTANT BUT NOT COMPLETE (PART I)

The Report of the Auditor General for the year ending March 31, 2014 is important for the observations he offers regarding the state of the Province’s finances.  He delivers comment (but no conclusions) on the impact of oil on revenues, the pattern of government spending and how the lack of fiscal discipline is resolving into a serious structural deficit. It is a story told in charts and graphs more than as a written narrative.     

The Report comes as the world price of oil has experienced a 25-30% hair-cut.  Many wonder how the Government will curtail public spending without injuring the economy. Yet, everyone knows the time has passed for the easy method of fiscal restraint.  

The A-G’s Report deserves two very different comments.  

One relates to its incompleteness, though that is partly the fault of the Department of Finance, on which the work is based.  The second is why it is important; a matter which will be dealt with in a subsequent Post. 

THE TORIES: DEATH COMES SLOWLY

The Tories’ loss in the CBS by-election reflects what provincial polls have been telling us for a long time. The Party is unloved and that is being kind.  Premier Davis has done nothing to differentiate himself or his Administration’s approach to either communications or public policy from that of his recent predecessors.  

Does he not want to disassociate himself, at least, from the Dunderdale era?  Does he not understand voters are still distressed by that time?

For all the reasons that are well-known, this by-election was important to the Government and to the P.C. Party. Hoping that the bleeding was at an end and having called by-elections in Trinity-Bay de Verde and Humber East, the Premier might have wanted to proclaim: “Remember, Remember the 5^th of November”! Having lost, he has no rallying cry. The voters are not inspired.  Even the most ardent partisans make no claim that theirs is a Party of renewal. 

The problem is illuminated by CBC political “Point” man, David Cochrane, who chalked up the loss to the Tories being out-hustled by a resurgent Liberal Party organization; except Cochrane has merely identified a symptom, not the source. 

PREMIER DAVIS: TEAR DOWN THAT WALL

Last week a retired Swedish geoscientist, industry leader, consultant, Professor, and internationally recognized expert on “Quick Clay”, Dr. Stig Bernander, spent three days studying what he described as a “live” land mass on the lower Churchill River. He was able to personally view, on the ground and from the air, a great many landslides and see physical evidence of active movement over a large area including the "North Spur". 

He spent another four days editing his notes, selecting photographic evidence and lecturing at the LSPU Hall and at Memorial University on the dangers of Nalcor relying upon “outdated” geotechnical analysis of the problem.

Quick Clays are unique, sensitive glaciomarine clays.  The clay deposits, at the North Spur as elsewhere, occurred when sea water levels were much higher.  They are unstable clays. Their peculiar characteristics are known to cause landslides.  When Quick Clay is subjected to sufficient stress, the material may liquefy. (Locally, some call the clays "pug".)

When a person of the stature of Dr. Bernander, having no connection to this Province, is troubled enough to perform this public service, pro bono, you have a right to think there is cause for concern.

Rissa slide, Norway

When the Vice-President of Nalcor, Gilbert Bennett, shows up at Dr. Bernander’s lecture at Memorial University, not to welcome the man or to acknowledge his internationally accepted engineering models for assessing landslide risk, not even to ask him a question, but only to express umbrage against the Professor, you know the Corporation has gotten far too used to not being challenged by competent third parties.  

THE ‘ROCK’ STAR OF “QUICK CLAY”

The biography of Dr. Stig Bernander reads like that of a ‘Rock’ Star except in his case, he is better known for his work with clays rather than rocks, especially “Quick Clay”.  Some of this “sensitive” material is present at the North Spur, the projection of land creating the natural dam at Muskrat Falls.  It is one of the issues which threaten the viability of the project.

Dr. Bernander, you ask?  Who is he and why would you be interested? I will get to those questions in a moment. First, what are “Quick Clays”?

Quick Clays are unique, sensitive glaciomarine clays.  The clay deposits occurred when sea water levels were much higher.  They are unstable clays. Their peculiar characteristics are known to cause landslides.  When Quick Clay is subjected to sufficient stress, the material may liquefy. At Muskrat Falls, Quick Clay could undermine the structural integrity of the North Spur. Remediation is potentially a money pit.  It is a public safety issue, too.

One of the best known and large Quick Clay landslides occurred at Rissa, Norway.  The slide was videoed as it progressed. The event is as exciting as it is horrifying. If you choose to follow the Link, just be patient for the first couple of minutes and the Rissa video will demonstrate why Quick Clay should be taken very seriously. It is the perfect primer in advance of Dr. Bernander’s Lecture. 

Bernander is neither politician nor bureaucrat. He is a scientist; one with long industry experience.