In March of this year the Finance Minister, Tom Osborne,
delivered the seventh in a successive string of deficit budgets, their genesis originating
in both Tory and Liberal Administrations. And like his Liberal predecessor,
Osborne still offered the  assurance that fiscal balance will be achieved by 2022-23.

On what basis should we believe him any more than we did Tory Finance Minister Ross Wiseman or Liberal Cathy Bennett? Isn’t the process of digging the province out of the current debt spiral less a matter of prediction than of serious intent, discipline and leadership provided through diligent oversight? 

Last year’s Budget outcome offers a perfect example of why the promise of achieving a balance of revenue and expenditures in our fiscal affairs is just that – a promise. Nothing more.
The Government released the public accounts for the fiscal year 2017-18 on November 6. It is essentially an official record of the accuracy of the Finance Minister predictions but even more it is a measure of his resolve and his capacity to right a sinking ship. It is absent forecasts, best guesses and the Government favourite tool
– hope.  
How did the Minister fare? 
Actually, not well at all. He missed his Budget target, coming in
$98.8 million over the forecast deficit number by a whopping 17%. The Minister
couldn’t even come close to the revised estimate announced in March. As a percentage of the revised figure, he failed by a substantial 10.1%.  
The Minister will argue, as he has, that such variances are
normal. However, an error in forecasting of the magnitude of 17% is in the
category of misfire rather than discrepancy.
If only language was the Minister’s biggest failing!
The province’s terrible fiscal situation does not need to
undergo repetition here. Worrisome enough is the current year’s Operating Deficit forecast
of nearly $700 million (plus the borrowing for infrastructure and Nalcor’s play things). Troublesome, too, is that the Minister seems not to take the fiscal situation
seriously or, otherwise, seems unwilling to insist that the deficit is a number to be beaten down rather than a starting point.

Admittedly, Osborne needs the support of the Premier and
the Caucus to maintain the process of fiscal discipline. But in the role, he need
not be hapless; he has persuaded his constituents to vote for him on several occasions. Why cannot he not use suasion to engage his own Caucus colleagues and instruct them on the perils  of fiscal profligacy?

It is right to acknowledge that maintaining discipline on $8
billion of expenditures is no easy job – especially when the Government is
unpopular, the Premier is wimpy, 40 MHA’s constantly have their hands out and when the public believes someone else – not them – should be denied. Of course, it
is a tough job. It would tough even if oil was $120/barrel and we were rolling
in dough. But we are not. That what makes the Finance job so important.

The Finance Minister needs to decide if he wants to be liked or
if he intends to lead. I suggest that a Finance Minister caught in an unending maelstrom of fiscal drunkenness needs to be grounded in values. He will always have his resignation letter at the ready in case he can’t
stomach more of what seems the Government’s determined course. 

But, then, Osborne didn’t ride into the Finance Ministry swinging the sword of deficit slayer. On the contrary, the price of admission, the Premier’s nod, was that he would cause the disappearance of Cathy Bennett’s latent – as much as tepid – obstinacy over public service contracts.

The Ball Government decided at the outset that it
had no intention of cleaning up the foul mess of deficit, debt and Muskrat
Falls – a litany of recklessness left by the Tories. That is a choice the
Liberals made and they should not be surprised if they will have to pay a
price for it.
Still, as Finance Minister, Osbourne has the opportunity to make choices other than to placate public sector unions. He can use some of those choices to, at least, hold the line on spending. 

An engaged Minister will eye
the figures constantly, ask for updates from his officials, cajole the
Premier and the Cabinet when further deficit creep has been recognized; he would have the Treasury Board on high alert. He would lead when the Premier can’t.

If he was really serious about the deficit, a big axe would become his Office’s only
adornment. Everyone in Government – including the public service would know
that, if they have the temerity to ask for something not budgeted, they had
better be ready to forgo an equivalent expenditure.

Making targets Budget targets is not a heroic
expectation. On the contrary, if the Premier had a spine, he would tell his
Finance Minister that and, for good measure, demand of him an achievable plan of budget balance, too. 
For all those reasons, a Budget deficit off by 14% to be cast as just a
variance is simply maddening.
There is hope even if it is feint. The Finance Minister
delivered his Budget Update for the current fiscal year on November 6, 2018.
Revenues are up by $130.2 million and expenses are down by an amount that actually
does constitute a variance: $5.7 million. The Minister attributes the extra
revenue not to any decision he made but to higher oil prices.  
And therein lies the rub. Without the interference of
serendipity – or an edict of the Bondholders – Budget balance has no chance of
ever being met.
As to the current Budget deficit, I suggest that that the $136
million mid-year surprise is viewed as something akin to low hanging fruit. 
An election beckons.  Mindless
Ministers will want to spend every cent they can get their hands on.
Don’t hold your breath waiting for a balanced Budget.

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?


  1. Everyone knows NAPE/CUPE run this place. Government knows if they keep them happy, they have a good chance of getting the BLOAT VOTE and also rid themselves of the anti-government evening TV ads that will start up as soon as the unions smell trouble. If it wasn't so comical it would be sickening.

  2. OMG…was watching the webcast again this morning, had to turn it of, as Bobby spouted his silly crystal ball of the time (2011) it was hogwash ((KD word) and is hogwash now. They got away with it then, and they are still getting away with it. Pushing bs down the throats of the people. These people should not be in their glee spouting baloney and oil money from the past, but rather squirming and sputtering as an embarsement to themselves and the people as part of the public flogging. They keep the same old line as if the boondoggle was better than sliced bread. Ask Bobby, what in the hell can we get from the maratime link, on a cold winters night, when our power goes down. And NS is freezing in the dark too. Interconnected grid…may ass…. says says Joe blow.

  3. Off topic I know, but it is hard to keep down my breakfast while listening to the obfuscation spewing from Robert Thompson.

    It seems clear that he had been and continued to be, groomed from time with Natural Resources while KD was Minister, and then to be moved into the position of top public servant (Clerk of the Executive Council).

    Well position from early on to keep pushing MF through the government system.

    • It's odd how Robert can't seem to recall mostly everything… BUT the things that are of no value or may aid to the Governments and Nalcor narrative, he can elaborate on. Very peculiar indeed. The biggest expenditure in our province's history and he can't recall critical details and people involved. There have been witnesses with far less involvement that know more. And to think he was top level! Collecting a nice pension for being monumentally incompetent… even more-so than Ed perhaps.

      NOTE: Comparison to Ed was just for emphasis… as Ed has set a lofty bar.


    • The public service is infested with people like Robert. They have no interest in protecting the public interest. Look how people like this keep getting assignments from the top.

      From CBC: "He was appointed clerk in 2003, when the Progressive Conservatives took office under then-premier Danny Williams. Thompson had served seven years in deputy minister roles. After his first appointment as clerk, Thompson was subsequently moved into key positions in Natural Resources and Health. Williams tapped him to lead the government's review of the health-care system sparked by the breast-cancer testing scandal and the Cameron Inquiry. He was reappointed clerk of the Executive Council in 2010, after Premier Kathy Dunderdale assumed office."

      These people are henchmen for powerful people.

    • Press release from back in 2013:

      "Premier Danny Williams today announced two appointments to senior positions in the public service. The Premier has appointed Robert Thompson as the Clerk of the Executive Council and the Secretary to Cabinet, and Deborah Fry as the Deputy Minister of Health and Community Services."

      Robert is one of Danny's men.

      It would be interesting to create an organizational chart for all the key decision makers in sanction, or people that could have derailed it — and their connections to Danny.

  4. The good luck of higher oil prices is a temporary reprieve. It is a windfall tied fortunately (for NL)to the electoral cycle. It will give finance ministers an opportunity to BS and not address the deficit and debt.

    The bad news is that the price of oil is dropping like a rock. By the time the election is upon us there will be a huge deficit in the budget. The plan to "moderate" energy prices from Nalcor profits will be a pipe dream and folks will be facing 23 cent/KwH power bills.

    I wonder how many will be lined up for a half million dollar home in Gall Way!

    • I recommend multiple heat sources when possible (or affordable). A propane fireplace, propane condensing boiler or oil furnace as one system, and a heat pump as the other. If you have baseboard electric, then just keep that as another backup. Each winter you can use more of whatever is cheaper. If oil gets cheap enough, the heat pump can still be a summer air conditioner.

    • Switching or multiple heat options will accomplish nothing but making you poorer if Hydro gets the two tier rate system that has been talked about. Its virtually the same thing as a huge increase in the monthly flat fee. There will be nowhere to hide from the Muskrat bogeyman!

  5. Although, I did not tune in for all of it, I was not impressed with those doing the questioning. The only ones that made Bobby squirm at all was co-commissioner Leamonth, and surprisingly Ryan representing NL power. All the others was a cake walk, as Bobby recalled in great detail, (except when something important was asked, his memory disappeared completely) and vividly in his glee, and reliving his glory days, when nalcor, the premier, himself and a few others, reigned supremely. They controlled the province, held the people and themselves in haw, as they carefully, knowlingly, and wilfully created a boondoggle from which there was no escape. The best laid plains of little men and mice, can't hold a candle to the deception they perpetrated on the innocent of this province, took such joy in doing it…and the buggers are still doing it. Wasn't impressed at all with the consumer advocate, he was enjoying himself almost as much as Bobby. Maybe they are keeping their powder dry for the big guns, yet to come, as there are bigger fish to fry. Hope that's their plan and not just fizzlle out as we approach the festive season, and reward them with gifts and mistole just for appearing and gracing us with their presents. I just like to call them as I see them, says Joe blow, and hoping someone has the ability to give them a public flogging for the dire fincincial position they have placed this province in, all in the name and the bidding of nalcor.

  6. In protecting the civil service from layoffs, the government has only shifted the financial burden for the glutenous size of government to the private sector, where businesses and private sector workers are being clobbered by financial decline or bankruptcies. Ironic thing is that the private sector tax base is largely the source of tax revenue that pays for the cost of government. So if government does not reduce costs, then they either continue to overtax the private sector, and further shrink the tax base, or borrow more money. If this continues to be the path, the end will be ugly for everyone in NL. The public sector unions have worked diligently over the years to gain the upper hand with their government employer and they have certainly been successful. They have driven an agenda with Ball et al that protects the interests of unionized public sector workers but in no way considers the economic health of the province or others outside their ranks. I think Jerry Earle called business owners selfish when the Board of Trade raised concerns about the deal signed by government with NAPE. He actually said that with a straight face too. By setting very low standards for productivity and encouraging poor worker attitude toward employers, unions have largely destroyed the economic environment in NL. We are in desperate need of entrepreneurs and investment to boost the anemic economy. Unfortunately, the budding entrepreneurs mostly leave the province and the investment stays away because it is largely a waste of time to start a business here. I hope somebody in government can grow a pair and make conditions more favorable here for business, as a strong business environment is at the foundation of every strong free market economy. A good start would be a shrinkage of the size of government and reduced taxation for businesses and workers. We might then have half a chance to reverse the downward spiral and start to rebuild the economy.

    • Ah yes the capitalist free enterprise system, when the incompetent assholes fail and we should let the system work and some business more competent takes it place, what do we do? Of course we bail them out like in 2008 or like the more recent bailouts for Bombardier by the government of Quebec and the federal government using federal txpayers money and the beat goes on…..

    • Bombardier is a poor example of a private sector enterprise. Governments should not have their fingers into private sector investment using tax payer dollars. Businesses should be able to make it work on their own or fail. The free market system is not perfect but it is the better than any other system that we have known. Socialism and communism look good on paper but always fail because there is no incentive for people to work to advance themselves. Governments in socialist or communist states promise to look after the people rather than encouraging the people to look after themselves. NL is the poster child for a state ruined by socialism, as we used to be proud and resilient, while we have largely become weak, lazy and entitled.

  7. I recall some years ago in Bell Canada, I was part of a management study, to determine a structural reorganization around, wait for it, Business Development Forecasting. I never forgot an older AT&T pioneer saying "Lad, it's not about the organizational structure, it's about the people". This relevant now with respect to the Muskrat. The whole "Integrated Management" idea seems to have led our boys astray. The strong and impressive players, in important positions missed the whole point of project management. Where was the critical thinking around Energy Policy, accurate forecasting, problem definition, analysis of options, work breakdown structure, construction delivery, and cost management? The players should have been overseers of pm., not mixed up in the management process.

  8. A few comments from a public servant:

    Most of the Public service is either desperately needed and overworked (like health care workers) or the other extreme — useless bureaucrats that nobody would miss. There are entire departments that the public would NOT miss and produce absolutely nothing of value.

    NAPE had done a good job of protecting low level workers. A clerk with grade 11 and limited skills has job security and is paid more than double what he/she would get in private industry. For professionals it has been useless and the pay is about half what you'd get in private industry (provide you are competent). Salary steps don't make sense either — three years and you are at the top of the scale and that is the end of the line.

    Everyone in NAPE took a 2% pay cut when they got rid of 'severance'. Salary increases are nowhere close to keeping up with inflation. There is no such thing as COLA (cost of living adjustment) so everyone is worse off every year.

    I think that the public likes to think that public servants are lazy and overpaid. The reality is far more complex.

    1) The administrative portion of government could be cut in half. Many departments could be eliminated.

    2) More hiring will be needed in specific sectors as the population ages. This is not a place to cut back. Many employees are grossly overworked.

    3) There are overpaid areas like education where teachers get fantastic incomes compared to the USA for example and have the summers off. Given the rapid decline in population of children in Newfoundland, this is an area that needs downsizing. Close schools with single digit populations and apply common sense everywhere. Don't expect that from the corrupt English school district though. The auditor general's report shows that the needs ethics training, hire unqualified people, promote them rapidly through management and pay them "up-scale" bonuses for being the only candidate in what amounts to secret job competitions.

    4) Government management needs to be purged. You see people on the inquiry witness stand and comment on their pathetic testimony. Remember that they were political appointments. Nobody was put there because of the merit — unless you consider nepotism, cronyism and sycophantic behavior to be merits. They will never self purge — only a commission of government might do that.

    5) Government expenditures are always about getting votes or because of back room deals. We have a huge mi-allocation of funds. Things we need aren't funded. Things the public absolutely does not need, are funded.

    I could list hundreds of ways to save millions and so could many other public sector analysts. There is just no way for common sense ideas to get implemented when you have ignorant children, sociopaths, ignorant and arrogant fools running the place. I don't blame voters because "none of the above" isn't a candidate. Managers have to be particular careful since they have no union protection and work at the pleasure of the minister. Imagine working at the "pleasure" of Danny Williams and telling him that the cost of Muskrat Falls is grossly underestimated or that to proceed is unwise, or that he should let the PUB completely review it.

    Disclosure: I unfortunately fall into the useless category and would quit if there was an economy here.

    • Very honest commentary about how to make meaningful and balanced change. We need more commentary like this to help shape solutions on how to make the civil service affordable and effective in our little province. It's time for elected representatives and public sector union leaders to put their own interests to one side and focus on the needs of the people and our province. Unfortunately, the people in those positions have short term vision and can't see anything bigger than their own interests. Our children will bear the weight of our irresponsibility and they will see our generation as reckless and selfish people who lived beyond their means in their time and left the bills for the kids to pay. Pathetic.

  9. Westney wisdom could not convince the Integrated project team of the probability of "fail", or "Black Swan" event. Muskrat was launched as a space ship with no provision for "abort". Where have I heard about "too big to fail"? Sadly our own Site C project in BC is on the same path.

    • Robert @ 11:14:

      The list of awarded contracts and dates is available on Nalcors website – security and medical services showing as being awarded before sanction 9why medical and security if no work ongoing?). My memory (as I said in 2015) there were a number of earthwork contracts also let with work setting up the site ongoing prior to sanction. Impossible that so many major contracts were let within days of sanction if sanction was not already predetermined.

      A google for MF sanction has a statement from DW on sanction day at the Confed Building ceremony that when they put this together a 'couple years ago' – this was telling. Also at the same ceremony, EM said trucks would roll within days on the site – awful quick mob.

      Nothing new, just now people are reading more carefully since they are not on the band wagon anymore.


  10. Westney really slammed Nalcor's risk management approach this morning as something unprecedented in industry and in his experience. Some wow moments there.

    Nalcor's lawyer now trying to chip away at his credibility and downplay his direct knowledge of events.

  11. This morning’s testimony from Richard Westney a Consulting firm used by Nalcor.

    “A P1 might as well been a P0, a totally unrealistic schedule.”

    The calculations by Nalcor had basically a 1% chance of being on schedule, and on budget.

    The P1 reference on the Westney Report was asked to be removed from the Nalcor presentation by Paul Harrington of Nalcor.

    The deception has begun.

    • No wonder Paul wanted it removed. He stood to personally profit from the scam.

      From the telegram:

      Harrington has a Nalcor Energy email address, and he works full time as the project director for the Muskrat Falls hydroelectric construction project. He reports directly to Nalcor vice-president Gilbert Bennett.

      But Harrington technically isn’t a Nalcor employee.

      He’s one among hundreds of “embedded contractors” who do all manner of management and support work on the Muskrat Falls project.

    • WOW nothing NEW here !! ALL the senior LCP Project Management Team are embedded contractors. NONE are long time Hydro staff – NONE !!!
      They made ALL the decisions including hiring and firing (even of NLH and Nalcor REAL employees)- and NOT using Nalcor HR policy or HR staff.

    • Paul Harrington actually owns Erimus Consulting.

      Erimus Consulting has also placed numerous “embedded contractors” on the Muskrat Falls project.

      So he is getting commissions off of all of the personnel his firm has placed.

      He has has his own Nalcor e-mail and is listed as a Nalcor manager.

      He is one of three independent contractors who are suing the Government of NL not to release contractor pay.

      There is little doubt that both he and his firm has made millions of dollars off of Muskrat Falls.

      Conflict of interest anyone?

    • Bottom @ 20:30:

      I never seen Erimus on a recruiters list – not sure PH company ever placed anyone at LCP, but I could be wrong.

      Though if you check Nalcor Atippa releases PB-320-2016 and PB-477-2016 you can find some good info


    • EPCM consultants are all familiar with the term "chaos is cash". As long as the owner doesn't kick you off the job, new chaos leads to new money. Undoubtedly this mantra was repeated many times within the LCP team.

      PENG2 – apparently Harrington is affiliated with (part owner maybe) of one of the main agencies supplying staff to LCP. Presumably we'll find out more soon to validate that. As PB477 shows the largest firm having 81 staff on LCP, that's a pretty good cash flow to consider at maybe $200M gross revenue/yr. Who wouldn't like to get a 1-2% dividend on that.

    • Anony @ 11:12:

      I believe NSB is actually a relative, not Harrington himself. You should read deeper into PB-320, if you like drama. Anyway, I was referencing Erimus as not providing persons – i never seen them on any supplier list.

      How did you get $200M from 81 persons – my math gives closer $12M/yr gross – depending on how you average the salary. Either way the cut for being little more than a cheque writer is good.


    • An extra zero slipped in there somehow. Meant to write $20M. $1000/day x 250days x 81 puts us in that ballpark.

      I did browse PB-320 but so much was redacted I think I need better insider knowledge to fill in the gaps. If you have that insight and can give us a coles notes set of issues/questions/allegations, please do. It may even help guide MFCCC questioning.

    • Jim Keating – came on as VP of the oil and gas portfolio maybe a decade ago. Also had something like "corporate affairs" added to his title for a while. As a VP he presumably had considerable exposure to all things Muskrat though little direct accountability.

      He and Stan went to the native circle event in Goose Bay a year or so ago – Jim had a bit of a breakdown talking about the flooding on Mud Lake (this was before the investigation relieved Nalcor of blame). He never seemed to have any role after that and then the Nalcor oil and gas division was spun out of the organization or whatever it was.

      He would also be a career oil and gas guy going back to Hibernia who likely knows all the senior LCP team contractors.

      No idea where the Inquiry is headed with him or what is so commercially sensitive in his limited dealings with the project. Maybe he did more than was apparent.

  12. World ass…world class… A bunch of mid to low level managers in the oil industry, yahoos and lackeys, frightened the hell out of the govt. bureaucrats, when they arrived and took over including running the project as well as the province. And the politicans became the cheerleaders. If Bobby said nalcor once during his testimony he repeated it a 1000 times. Blinded by the silly f……s and pushed us into debt for the next 50 years. What for??? To fill their pockets and laugh all the way to the bank.

  13. My first line of questions to the Project Manager; What were the events leading to a cost blowout, (bust), of the budget approved at sanction? When did you recall this occurred? Did you get approval from the Owner, (Shareholder/Gov), to commit increases to the Budget? How many times did you subsequently go for additional funds? Was there any consideration of aborting the project? Should be interesting.

  14. Is it just me?

    I have been watching some of the testimony at the Muskrat Falls Inquiry.

    I’m trying to decide if it is harder to get a simple yes or no answer out of a politician, or an engineer?

    It’s too close to call!

    Even yesterday Justice LeBlanc had to ask Robert Thompson to please just answer the yes or no questions without a long winded explanation!

    I get reminded of the line, “Baffle them with bullshit!”

  15. And now here we have this Nalcor embedded contractor one MR. PAUL HARRINGTON of ERIMUS CONSULTING LTD, registered address 16 CHEYNE DRIVE ST. JOHN'S… engaged in a desperate attempt to use the courts to keep his salary secret from NL taxpayers, the same group of taxpayers who footed the bill for this HARRINGTON individual's salary. The bloody unmitigated gall of it at all…

    Here he is pictured here everyone…. see what he looks like in case you happen to spot him at Costco or provincial court somewhere and would like to shake his hand and congratulate him for his major part in the Muskrat Falls fiasco…

    To gaol with those who would deceive the public into penury.

    Right to gaol with the lot of them…

    • In view of the indisputable fact that the public has a right to know how their tax dollars are being spent… if this Harrington fellow didn't want his no doubt generous… indeed, likely excessive… salary to be made public, he should not have entered into contracts of which he was remunerated with public funds raised from taxpayers.


  16. I would bet that Nalcor could have gotten somebody that was far more qualified and competent in the field of hydro electric projects for the kind of money this guy was paid and that goes to the qualifications and competence of those above him in that organisation who hired and supervised him.

    • No doubt about that… I suspect this MRF fiasco was also a carefully planned raid on the public purse by a select group of skeets comprising the Williams/Dunderdale/Nalcor cabal.

      The only way the public might see any redress on what appears to a massive bait-and-awitch scheme perpetrated on taxpayers will be when those conniving bastards are locked up.

    • Nice thoughts but you all dream in technicolour if you expect justice from the legal system! In NL in particular let us just say the relationship is cozy and protective between politics and the legal system.

      In short there will be no remedy from the legal system.

  17. Let's do a little Shadow Inquiry homework, while we await the 2nd phase of the General Inquiry. Please contribute your own data and opinions to an important activity, which may help Messers Budden and Hogan hone in on the excesses, driving project expense off the scale.

    Project cost modelling; Westney as a professional cost engineer knows this subject well.

    Question; Assuming sanction was an all in reliable estimate, at say $8. Billion, what percentage breakdown Hard to Soft costs should have provided best value to the Owner, (Shareholder)?
    Back in the day on much smaller buildings projects < $50M, 15%,($7.5M), was usually considered upper limit and feasible. What would you consider a reasonable estimated cost to plan, design, manage, and startup? @ 15% soft cost, it follows that hard costs would need to be contained at around $7B.?

  18. I think that has been aand still is too much focus on the cost estimates.

    The two main issues were and are 1. Did/do we need the power, and 2. was/is it the lowest possible cost.

    These, so far, have been only glossed over — no real, strong, direct, cross and re-direct examination.

    The truth is that the load forecast (fuel costs), as I understand it, accounts for 62% of the cost [for the island option (?)].

    Budden, I think it was, recently said that the most recent load forecast said that the expected load growth was 0.1% (compared to Nalcor's 0.8%).

    What would that do the load AND the fuel cost and hence the CPW comparison?

    Such things have not been fully fleshed.

    E.G., Nalcor's sensitivity analysis was siimplistic and totally inadequate.

    How well has that been fleshed out?

    A 10% load reduction is useless (when considering that 57 year out load can be 57% higher OR LOWER than forecast and still be within the industry standard !!

    Now do a sensitivity where load is 30-50 less than forecast and then include and combine that with a much lower oil price forecast. That is the kind of sensitivity (just one example) of what should have been done.

    These things alone (I suspect) carry more weight when looking at how this process was manipulated so as to ensure sanction.

    And much more than that is needed.

    • Yes, not using a lower oil price and less demand for the worst case (the most likely in this case) gives an unlikely result using the sensitivity analysis that ignores the worst case scenario.

      I am a cynic but this inquiry is toothless and impotent (by design)to get at the root cause of the MF boondoggle. It is smoke and mirrors to hide the fact that the emperor is naked and mad as a hatter!

    • Agreed,MA, key inquiry issue should be :Did we need the power, and was MFs the least cost reliable power of all reasonable options (not the least cost of just the two alternatives considered)
      If Ontario can issue a directive and reduce demand by 2 % a year, could we have done less, instead of forecasting an increasing demand of 0.8 % a year? A decrease of 1, 2 , or 3 % a year represents 17, 34, or 51 MW per year. 34MW a year for 10 years is 340 MW per year reduction,offsetting Holyroods 350MW winter average now, easily achievable by CDM which was completely ignored.
      Then too our very favourable wind resource low cost added supply. Nalcor used a concocked too little, too late approach for wind, and then went to the other extreme of 137OMW,(an off the wall stupid, not reasonable approach, so both not rational.
      While is it fine to expose the devious goings on, the main issue is what was the real least cost to satisfy the real reduced demand, so to offset Holyrood and oil burning. AJ has summed up this before as the key findings necessary by this Inquiry. Perhaps he can repeat his view.

    • Yes, no problem to repeat my view PF, but will just say in brief terms, that I agree with you, MA, Bruno, WA, and anyone else that goes back to the beginning, and says only idiots would go all the way to Labrador for the little bit of power we needed, and that had no resale value for the additional power. World class my my motto. Yes, and that's where the inquiry has to focus, on the comparison of the two options, taking into account the cost of oil for holyrood was hogwash, and our demand for power is decreasing, not increasing, especially if we apply a little CDM. Thebuggers need to hung out, to be strung, hung, quartered and dried says Joe blow for this GD mess. Designed or not to get at the heart of the problem, we must tell judge Leblanc that the people demand that he bring his focus more clearly to root out those two fundemtal flaws of the enderous boondoggle, that we did not need the power and it was not the least cost option. Maybe he needs an expert to tell us how much power we needed and when, and not rely on Nalcor's , yahoos, and lackeys baloney and self interest hogwash. AJ.

    • You put it in plain language,AJ,that expresses the view of ordinary people who follow this fiasco and the impact to our province for the next 50 years. Treating the enablers with kid gloves is an affront to any justice being served. Strung, hung, quartered and dried is a punishment well used by the British for high crimes, but we know is no longer on the books. But your point is well taken as to the seriousness of the misdeed. Serious financial crimes are noted as those exceeding 5000 dollars ( the Hickman issue, resolved just this week , got dragged out before the courts for 16 years, 30 RCMP involved in investigation and several audits of 85 banker boxes of material, the creditor losing 93 million dollars, and then a slap on the wrist for those in Nfld involved). With Muskrat,the difference between true least cost and the current cost of MFs of 12.7 billion is more like 10 billion dollars gone and wasted. And these yahoos show no remorse, shift the blame,and many see nothing done wrong, and would do the same all over again! Surely this Inquiry needs to address the scope of the misdeed in dollar value. There are reputable companies who can assess our least cost reliable power for this Inquiry. To allocate 30 million for this inquiry without doing this is nothing but a farce. Judge Leblanc should not want a judicial farce as the outcome. Surely his TOF and scope will permit a full and proper Inquiry.


  19. Excerpt below is from Ashley Fitzpatrick's article (on The Telegram website):

    Here she quotes Leblanc from yesterday's hearing:–

    And Leblanc seems to be suggesting that government either approve or curtail "how public" parts of his inquiry is to be.

    “Now this is a public inquiry. To me, at this point in time, what might be the expectation is everything we do with Astaldi which is, from what I can see is probably about a third of the cost overrun of this particular project or a third relates to what work they were doing. I’d like to know how in the world we could have what I call — and what the government has asked for— a public inquiry, that we’re going to basically conduct quite a lot of the time in phase two potentially in camera, without the public having the ability to scrutinize that. That is very problematic for me,” he said. “And I’m not sure whether the government has put its mind to this or whatever, but it’s not just my problem as far as I’m concerned. There are people who set these terms of reference and I think they need to look at it. And if they’re serious and they want this done, then they have to understand that it may well be in the public eye potentially, and I’m assuming the government has considered that.”

    • Of course it should be all public. How can it be a public inquiry if it is not public. And again, the people have to demand that, irrespective of what govt. has to say. Of course, I miss lots of the inquiry and judge Leblanc and comments. The only comment I heard in that regard was, in camera, and not open to the public, was regarding the WMA that is before the QC courts at the present time, which is understandable. But nice that you reported Maurice on Ashley's article, to keep everyone in the loop in what is happening or may happen says average Joe.