Gnarley is hosting the Class of 2012; his umpteenth time performing high level
instruction to the politically naïve. 
Let’s listen in…as he addresses the group.) Here’s Uncle Gnarley:

often to their detriment, enjoy a belief in the fundamental fairness of political institutions.   
Human progress is frequently inhibited because, all too
often, we give way to, what I call, “the tyranny of naïve realism”.  

The art of the process is not as much science as it is attitude.  Perhaps it is our relative
isolation, maybe it is in the generous nature of island people, as most of us
are; whatever its source, we have a tendency to see things as ‘we want them to
be’ rather than ‘as they are’.  It is a
common weakness, especially in politics. It has to stop!

But don’t
worry. Uncle Gnarley will have you wearing the grim aspect of a Presbyterian in
no time. 

Now, Johnny,
down in the far corner; you look so wise, yes, you, the one with the Walmart ‘Prices
are Falling’ sticker on your jacket.  
Answer me this question, what does the phrase “envelope approach to
federalism” mean?  No, Johnny, I didn’t
ask you to let your eye balls fall out; it’s not time for ‘show and tell’.  What do you mean, ask, Mary.  I’m asking you!  You have never heard of it? Then sit down and
let Mary speak. 

Mary: “Would
it mean Kruger gets to supply all the envelopes to the government in exchange
for staying open until after Muskrat Falls is built so that the government
won’t be embarrassed for starting the project too early?  Now Mary, you knock that off, you said this
was your first time at Boot Camp, you sound like a very old cynic…come closer;
you’re not Mary, are you?  I thought so; you’re
Dwight Ball.  Cross dressing, are you
Dwight, just so that you can sneak into my Boot Camp!  You looked familiar; didn’t have the cash to fly
south with Brian Tobin, did you? Now, there was a guy who received individual
tuition in the business of political realism…as did Danny Williams!

envelope approach to federalism’.  Let me
explain it this way.  The Trudeau Liberals
decided some 40 years ago that a province, the size of Newfoundland, being a dead
weight on Ottawa, should get the equivalent of about 100 marbles from the
Federal Government each year.  Of course,
I am using marbles as a metaphor. 

have to think of those marbles as federal money for roads, lobster buy out
programs, ACOA grants to business or regional development associations; any one
of a bunch of federal expenditures in the Province. Now, you may get more, one
year; but, you must always remember that any excess will be grabbed back in
future years.

The other
provinces receive a number of marbles too, in proportion to their size and
economic heft, except, of course, Quebec
and Ontario and except, if you have
a lot of MPs supporting the party in power and except, if you have skillful cabinet ministers from certain
provinces, better able to extract favours out of the government because they are
powerful, have more buddies or things to trade.

What you
have to remember too, is that ‘envelope’ federalism has never fundamentally
changed; under the Liberals or under the Tories. As much as the politicians,
the bureaucrats also like it that way.  Any
Premier, who has failed to learn that essential Canadian concept, has always
run into trouble, as Dunderdale is now.

Frankie, you
have a question…yes, very good question, Frankie…Frankie wants to know if the
marbles have to be all the same colour?  That
is an excellent question; truly a measure of your seriously enhanced political

it’s like this.  ‘Envelope’ federalism is
a system that cares only that you not get more than 100 marbles.  You can have Liberal red ones or Tory blue;
in fact, even if the NDP ever form the national government, they will insist
that all the marbles are orange, the same colour as their favourite ice cream.  This little fact is important for road signs, you see.  One Party would not want another to get credit it should receive. But, always remember, it matters less what the colour is, as long as the number
of marbles you get, add up to no more than 100. 

Now Paul,
you had your hand up?  Paul wants to know
if ‘envelope’ federalism applies to the loan guarantee for Muskrat Falls…an
important question.  Fast progress,
Paul.  The answer is an unequivocal, YES.  If Dunderdale wants a loan guarantee, the PM
will give her one, or “…equivalent”, as he skillfully noted.  (But the loan guarantee has to benefit Nova
Scotia, else the PM might not be quite as interested.  Ironically, the Nova Scotia PUB may be our
best shot at killing this “nutty” project before it bankrupts us.  But, I digress.)   

The federal
bureaucrats will tally up the cost of that “equivalency” (they are so good at
it, they can even do it, en francais!). 
They will also figure out where best to take back “equivalent” marbles,
so that the number of marbles are kept nice and even and so that none of the
big cabinet ministers and none of the big provinces complain that we are
getting more than our share.  You have
already seen a couple of Coast Guard Centers close.  Funding to all the regional development councils
will end, as announced; the claw back of marbles for the loan guarantee has
barely even begun!

The Muskrat
Falls guarantee or ‘equivalent’ is likely worth around $300 million. That, my
friends, is a lot of marbles.

Yes, Judy,
yes? If Premier Dunderdale understood how federalism worked, why would she be
calling the PM at all.   Well, she
doesn’t understand federalism, you see, Judy. 

If the
Premier understood federalism she would not ask Harper for anything. 

Instead, she
would hammer the bejeepers out of the Prime Minister; hammer him for what he
gives her and she would hammer him harder for what he didn’t.  Plus, she would hammer him for what he takes

That way,
she would become the most popular NL Premier ever, perhaps even as popular as Danny
Williams.  How do you think Danny did it? 

Had she
attended my Boot Camp, Dunderdale might have been a truly beloved Premier. 

And, oh! yes, she might not be losing so many
of her marbles!

Des Sullivan
Des Sullivan
St. John's, Newfoundland and Labrador, Canada Uncle Gnarley is hosted by Des Sullivan, of St. John's. He is a businessman engaged over three decades in real estate management and development companies and in retail. He is currently a Director of Dorset Investments Limited and Donovan Holdings Limited. During his early career he served as Executive Assistant to Premier's Frank D. Moores (1975-1979) and Brian Peckford (1979-1985). He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB). Uncle Gnarley appears on the masthead representing serious and unambiguous positions on NL politics and public policy. Uncle Gnarley is a fiscal conservative possessing distinctly liberal values and a non-partisan persusasion. Those values and opinions underlie this writer's views on NL's politics, economy and society. Uncle Gnarley publishes Monday mornings and more often when events warrant.


Bill left public life shortly after the signing of the Atlantic Accord and became a member of the Court of Appeal until his retirement in 2003. During his time on the court he was involved in a number of successful appeals which overturned wrongful convictions, for which he was recognized by Innocence Canada. Bill had a special place in his heart for the underdog.

Churchill Falls Explainer (Coles Notes version)

If CFLCo is required to maximize its profit, then CFLCo should sell its electricity to the highest bidder(s) on the most advantageous terms available.


This is the most important set of negotiations we have engaged in since the Atlantic Accord and Hibernia. Despite being a small jurisdiction we proved to be smart and nimble enough to negotiate good deals on both. They have stood the test of time and have resulted in billions of dollars in royalties and created an industry which represents over a quarter of our economy. Will we prove to be smart and nimble enough to do the same with the Upper Churchill?