Guest Post by David Vardy
many people in this province believe we are heading for a fiscal cliff? How
many are aware of how precarious our position has become as a result of our
high public spending, combined with the tragic decision to build Muskrat Falls?
What are the options available to us? This post will review some of the
options, including early negotiations on a possible power contract with Quebec
after 2041 and the prospects of enhanced federal support. My intention is to
bring some of these options to light for respectful, informed dialogue. With
final reports due soon from both the Muskrat Falls Inquiry and the Public
Utilities Board there is a plethora of evidence and ideas. Sadly the greatest
dearth of research relates to the fiscal impact of Muskrat Falls, which is the
real elephant in the room.
Liberal government raised taxes and fees when they first came into government
but they have done little on the expenditure side. Public discussion of late
has focused on the equalization program which is intended to equalize the
fiscal capacity of the provinces. Yet we currently receive no equalization.
When oil revenues fell the province maintained its high expenditures and
ratcheted up its overall (current and capital account) deficit. We borrowed to
replace the reduced offshore royalty revenues and have failed to bring
expenditures under control.
Leader of the Opposition has proposed a referendum on equalization in order to
improve the province’s bargaining position with the federal government. However
the equalization program is locked in for five years, capped at $20 billion
with Quebec receiving two thirds of the total equalization pie. It is hard to
take the referendum proposal seriously. It is tantamount to voting for a pay
increase which somebody else will pay, namely taxpayers across Canada.
are the options available to deal with our fiscal situation? Should we sell off
Muskrat Falls? Should we build a case for more federal help? Should we attempt
to generate cash today by renegotiating the Churchill Falls contract so that
power sales after 2041 can produce cash in provincial hands today? Or must we
simply tighten our belts and allow rates to double?
Frontier Centre for Public Policy (FCPP) has released an evaluation of Nalcor’s
hydroelectric assets in a paper by Ian Madsen entitled “As Falls Muskrat Falls,So Falls Nalcor: A Valuation & Strategic Appraisal Of Newfoundland &Labrador’s Electric Utility”.
This FCPP paper examines privatization and divestiture of Nalcor as an option
to deal with the province’s fiscal crisis. It concludes that a large write down
of asset value would be required in order to privatize Nalcor. This means that
the province would have to absorb most of the existing debt, including the debt
of Muskrat Falls, in order to make divestiture feasible.
FCPP favours privatization of crown corporations as a matter of policy but they
are not optimistic that it will be any kind of panacea for the province’s
fiscal dilemma. However they speak positively of the value of the province’s
investment in Churchill Falls: “the present value of its share of Churchill
Falls’ future impressive repriced power sales is substantial, and can be used
to refinance the company to make such a divestiture a success. It can be
collateral that could be offered to Ottawa, or an acquirer.”
a restructuring of Nalcor is necessary “it is unreasonable to expect
provincial, let alone Canadian taxpayers to fund such a restructuring if the
provincial government does not contribute to the restructuring itself.” Clearly
the FCPP does not support federal subsidies as a means of solving our fiscal
crisis. However they do see Churchill Falls as an important asset and a
potential source of fiscal relief not only after 2041 but even today.
Federal Options: Dignity vs Nuclear
all think tanks think alike. The Schroeder Institute has a different view from
that of the Frontier Centre about the role of the government of Canada and the
role they can play in coming to our rescue. This view builds upon the
well-known concept that the Confederation contract creates an obligation for
the federal government to come to the aid of a financially distressed province.
This unwritten obligation is supported by actions taken in 1993 to provide
succour to the Romanow government in the province of Saskatchewan.
number of proposals have been advanced which hinge upon the 65 year power
contract between CFLCo and Hydro Quebec. Writing on the CBC website, Bob Hallett of the Shroeder Policy Institute has proposed what he calls the
“Dignity Option”, which he contrasts with the “Nuclear Option”. This is based
on the loss which Newfoundland and Labrador has sustained in economic rent
since Churchill Falls over the 42 years the contract has been in effect. Canada
would pay the province $900 million a year because it failed to ensure that
CCFCo (Brinco) would have access to Quebec’s high voltage transmission lines in
order to sell its power to markets outside Quebec. In the Schroeder Institute
proposal Canada would also absorb $500 million in interest on federally guaranteed
debt and assume interim responsibility for principal repayment. After 2041, GNL
would repay the $8 billion principal on the federally guaranteed debt. Without
such federal intervention the province would not be able to pay either the
interest on debt or to meet principal repayment obligations. It would be forced
“Nuclear Option” is the more dramatic option. The province would default on its
obligations to pay interest on any of its debt or to make principal repayment.
It would lose its credit rating along with access to financial markets. It
would be forced to curtail services in order to eliminate its $1 billion
operating deficit and its $1 billion capital deficit. The federal government
might be forced to take action to avert bankruptcy by a Canadian province and
to prevent the ripple effect on other provinces and on the Government of
Canada. Hallett cites the Saskatchewan experience of 1993 where the province
faced severe pressure but avoided the “Nuclear Option” by working with the Government
of Canada to design a plan for fiscal recovery through provincial cutbacks and
increased federal payments.
the Schroeder Institute believes that GNL cannot handle the current fiscal
situation without increased federal support. The evidence presented to the PUB
during their rate mitigation hearing confirms that more federal support is
needed. The largest single rate mitigation measure proposed to date is one
whereby the province foregoes its dividends, thereby shifting costs from the
ratepayer to the taxpayer.
is not a solution; not even a placebo. The additional $1 billion annually in
the cost of providing electricity, known as revenue requirements, is too much
for a small province to bear, with its shrinking population and its high dependence
on volatile oil and gas revenues. Yet there can be no free lunch. The province
cannot expect to fund programs more generously than other provinces and yet
expect the national government to bail us out.
a 59 page submission to the PUB entitled “Management of Muskrat Falls’ Excess Costs Using Future Electricity Sales from Churchill Falls after 2041”, by “RBB” (anonymous) has proposed a number of
mechanisms whereby the province can turn its ownership of two thirds of the
shares in Churchill Falls into cash long before 2041.
“By September 01, 2041 the Newfoundland share of
the 34 TWh yearly electricity production will revert to Newfoundland &
Labrador. The Newfoundland ownership of the CF(L)Co is 65.8% and approximately
21 TWh of supplementary energy will be available to Newfoundland. This
electrical energy represents more than 4 times the annual production of Muskrat
Falls. At a present value of between $0.03 per kWh and $0.06 per kWh in 2041,
this production is worth between $630 millions and $1.2 billions per year and
perhaps more. Churchill Falls has been rightly called the golden goose of
Newfoundland and Labrador. This will be similar to inheriting more than four
projects like Muskrat Falls in one shot, all paid for, all reliably operating.”
(pages 18-19) RBB estimates GNL’s 65.8% share of Churchill Falls to be worth
more than $15 billion today.
proposes a negotiating strategy for GNL to adopt with the province of Quebec
whereby GNL receives cash today in order to relieve its present financial
plight. The first component involves taking Churchill Falls power purchased
from Quebec and using it to level out the flow of power from Muskrat Falls as
well as to export the power through the Labrador Island Link and the Maritime
Link. Power could be accessed on an exchange basis with no immediate cost as
future power returned to Hydro Quebec is traded for delivery of Churchill Falls
second component is to sell power to Quebec in 2041 and beyond for cash today.
He estimates that a ten year extension of the contract would generate $200-$300
million annually in additional revenues. This annual payment could be increased
by extending the length of the new contract.
third component advanced by RBB is the sale of part of the province’s shares in
Churchill Falls, to take effect on September 1, 2041, which is the date on
which the 65 year power contract expires. RBB acknowledges that the sale of
equity may be contentious. It is the second component, the present sale of
future power for cash today, upon which RBB principally relies.
order to determine how power tomorrow translates into cash today both parties
need to anticipate demand for and supply of power 22 years into the future,
along with future power rates, projected by RBB at $60-$90/MWh. “In practice the price will probably evolve
from the current ~$0.03 per kWh and increase slowly towards the above high end
values of the order of $0.09 per kWh reached in 2006-2008 era.” (Pages 37-38)
They also need to agree on the appropriate discount rate. This creates a high
level of risk and uncertainty. Are there measures which can be taken to
mitigate or hedge the risk? Can a level playing field be created, one in which
GNL is not on its knees and desperate to reach an agreement in order to avoid
closing hospitals and schools and to avoid the doubling of power rates?
secret negotiations already happening?
his testimony before the PUB Nalcor CEO Stan Marshall confirmed that
negotiations were taking place with Quebec. He also said that Quebec would want
to reduce the uncertainty surrounding the future long before 2041. He did not
disclose the nature of these negotiations but he did say that the recent
decision of the Quebec Superior Court relating to the Renewal Contract for the
last 25 years of the Churchill Falls power contract left a number of matters,
including water management on the Churchill River, to be negotiated between the
parties. He said that there were discussions “involving a minimum of four
provinces” and the federal government relating to power development. He also
mentioned Gull Island. We can reasonably assume that the negotiations now
taking place involve a number of players and will likely take considerable
time. Yet they place a lot of risk on the province.
stakes in all of these discussions are high. The matters under negotiation are
complex. It is important that we do not make major concessions on our legacy
assets (including Churchill Falls and our offshore resources) in order to avoid
taking responsible fiscal decisions. We need to separate our immediate fiscal
pressures from long term decisions that impact future generations. Sensitive
negotiations cannot be conducted in public. Yet some parameters must be
established and our citizens need to know what they are.
the great uncertainty surrounding the completion of the Muskrat Falls project
we must beware of a fire sale. We also need to gain a better understanding of
the value of Churchill Falls in 2041, bearing in mind the rapidly reducing cost of renewable energy other than large hydro projects.
Hydro Quebec will be well prepared to renegotiate the Churchill Falls power
contract as must we. We need to stabilize the project and place our fiscal
house in order rather than to negotiate from a position of desperation. We
should not be hoping that some kind of miraculous Gull Island deal will save
our bacon. Indeed it is questionable how much more the GNL should be investing
in this project having spent over $140 million up to the end of 2018. Remember the Muskrat
Falls project was sanctioned only after the province spent five years trying
unsuccessfully to develop Gull Island.
his testimony to the Muskrat Falls Inquiry energy economist A J Goulding
commented upon our province’s export prospects for hydroelectric power:
“Because of the distance resources from NL must travel to supply into larger
export markets, NL resources must be significantly cheaper than local or more
adjacent resources to cover the cost of transmission. Furthermore, resources
with similar or better cost structures exist closer to the target markets.
Finally, procurement initiatives in the Northeast US are often designed to
favor (to the extent possible under US Federal law) in–state or in-market
resources. Taken together, these factors suggest that new NL renewable
resources are unlikely to be competitive in export markets” (source: CIMFP Exhibit P-o4457 at page 60).
we make a case that Canada has an obligation to NL for having failed to support
wheeling of Churchill power through Quebec? Beaudoin argues that there are a
number of technical reasons why Quebec could not have provided a power corridor
with Quebec, including the following: “The power corridor idea would have
required avoiding the non-synchronized Alternating Current (AC) grid in Québec
to enable electrical synchronization with the New England and Ontario grids.
That configuration would have removed Hydro-Québec as a partner in this
project.” (source: RBB Submission to PUB at pages 19-20).
intransigence of Quebec was used to justify the building of Muskrat Falls. Are
we now going to use it as a bargaining tool with Ottawa?
can be certain that the federal government will not entertain a “bailout”
without sacrifice by the province. To do so would be to reward profligacy.
Instead we can expect that Canada will demand responsible financial measures be
taken before agreeing to absorb interest payments on federally guaranteed debt.
Falls may be our “golden goose” but we cannot negotiate with Quebec on our
knees. With uncertainty as to when Muskrat Falls will be ready for operation it
is far too early to talk about divestiture. We have first to take measures to
deal with our overall deficit. We must prepare ourselves with a clear set of
objectives for any negotiations with Quebec and/or Ottawa and there must be
public dialogue to establish the parameters for those negotiations.
I cannot understand why we haven't sued the government of Canada already because it did not want to upset Quebec by forcing a power corridor through. On top of that, Quebec had inside knowledge and used it to force Nfld to sign the CF power contract under duress. Why cannot a contract signed under duress be overturned?
We can't do anything in the current system. We could be like Brad Cabana and attempt it, but it is stacked against us and the case would get thrown out.
The established political parties are to control us. The party leader is chosen by the party and will not disturb the status quo.
Only an fire breathing populist could get this done. That is a tall order though, cause they would need the patience and intelligence of the current Russian leader.
Here is a question for Dave: Which of the options in your article would you try first, or would it be a hybrid mix of all of them?
What option options can we add? Can we get China to directly invest in us, like they do in Africa?
There are no local solutions such as adjustments to taxes, fees plus cutbacks although that will be a part of it. We have to negotiate and accept the lesser of the evils.
Missing from this is deterrence. Will Gull Island be next fraud? Will our public assets be given away at fire sale prices, making certain investors wealthy?
We need a criminal investigation into this mega fraud. The damages / harm to society is very clear as evidenced by the options being considered in this article. The ring leaders of Muskrat fraud and lies needs to go to jail.
Where is the RCMP? Are they crooked too? Are the Muskrat Falls ringleaders to big to jail?
One of my concerns is that the powerful people that perpetrated this mega fraud (This is like a third of a trillion dollar blunder for Ontario) will be the same people driving the "solution".
It is like asking the mafia to clean up the chaos they created. Politicians will pretend to be getting the best solution while facilitating the plunder of the province. Powerful people control the party leader who controls the caucus. I can see why populist leaders are popping up all over the world. It all stems from corruption and loss of faith in institutions like police, courts and established parties.
Political expediency, loyalty and benefit to the few, not a clear and substantial sense of duty to the people and the province, drove the sanctioning of Muskrat.
What evidence is there that the top-down political/power structure that brought us Muskrat Falls has changed?
The system has not changed.
Once again, from a position of weakness, we have closed, backroom discussions/negotiations going on.
Whose best interest is being protected?
I am convinced that the sociopaths that gave us Muskrat Falls have known for years that it would ruin us, and that this might even have been part of the plan from before sanction.
What comes next is more looting. I am sure Stan Marshall is eager to purchase select public assets (Bay d'Espoir for example) for Fortis. Quebec is interested in the upper churchill and perhaps all of Labrador. Local business want the liquor corp. business. Maybe Nova Scotia will buy out our interest in Atlantic Lottery Corporation. The reptiles are hungry.
Meanwhile the public private partnership cancer is metastasizing. Private money, at higher interest rates that the province could have borrowed, are being used to construct public facilities. They will be operated at a profit, and when our needs change (as the boomers die off), we will be forced to buy them out – only to find the facilities have been run into the ground and the contracts are lopsided etc.
Dwight is not quite as ambitious as Danny.Dwight said NL will be the" energy capital of Canada" by 2030,while Danny declared NL will be "the energy warehouse of North America." How about "the basket case capital" of Canada?
The very first item at hand to deal with is that each and every one of the scheming, vile bastards responsible for the MRF bait-and-switch scam needs to be indicted, frog-marched into court for their fair and speedy trial, then locked up.
After that important and necessary matter of accountability and punishment has been dealt with, then the fiscal mess can be addressed
Only Newfies could have so many asset resources such as offshore petroleum, fisheries, mineral wealth, and hydro-electricity, yet cock it all so very badly.
What does this say about their ability, or lack thereof, to competently govern themselves?
Truly, if shit was worth money they'd be born without arseholes.
The local population in Newfoundland has never had control over its resources. It was, and still is to a large extent, a colony to be exploited.
Those who rule it do so on behalf of corporate and personal interests, not the benefit of the public. There are a lot of wealthy families here, many of whom got rich by exploiting the local population. For example, a fisherman was given fishing supplies, a tab at the grocery store and the same merchant that supplied the gear and owned the general store also purchased all the fish for a price he controlled. Then, when the tab was settled, the fishermen got a pittance for the year turning them into de-facto slaves.
The prospector that found the Bay Verte asbestos mine was paid $50. Monopolies were granted making the Pepsi and Carnation Milk distributors wealthy. Wealth has never been shared. We had dozens of mines (silver, gold, iron ore, asbestos, florspar), vast softwood timber resources, marine fisheries, oil and human resources. All the local population got out of it was low paying jobs. Billions of dollars have been extracted. Quebec did well with the upper Churchill, Britain extracted billions, and the Federal government did well to have the Eastern Atlantic ocean under its jurisdiction.
Brinco which undertook industrial development in the province was founded by Rothschild, Anglo-American, Bowater, English Electric, Rio Tinto, Bank of Montreal, Royal Bank and the Suez Canal Company. Big resources, big money.
One criticism I feel is valid is that we are too passive and aren't revolting. Worker owned cooperatives, in the Spanish Mondragon style, would break the cycle of employment enslavement.
A new political party with a Newfoundland first attitude could demand control of the fisheries, implement marine sanctuaries, ban dragging and limit fishing to sustainable levels. No more trading our fisheries for access to foreign markets or other federal backdoor deals or having local fish processed overseas.
We should also me demanding accountability when leaders betray the public trust. Were are the crowds demanding the Muskrat Falls ilk be charged with crimes? Why aren't we chasing sociopathic scoundrels down the spiral staircases (Colonial Building reference) ?
Typical Newfies… looking to blame anyone, be it the Feds, Quebec, CFAs, the merchant class, the bloody Man in the Moon… looking to blame ANYONE but themselves for their wretched plight.
Just like a bunch of naive little children in need of adult supervision.
Why don't you take responsibility for your own actions for a change? You may garner some respect.
After reading Mr. Vardy's piece, I then listened to Rob Greenwood on VOCM espousing the social economic position of the people. He was commenting on the just released Report, Viral Signs, by the Harris Centre, at MUN. Some things jumped out at me. The average household family is $81,000, or above the Canadian average. Our personal debt ratio to income is 1.44 compared to 1.81 nationally and 2.15 in Alberta. On the other side, the the public Service debt has risen from 12$ billion in 2012 to 23$ billion in 2017, which is mainly the boondoggle. So without that one single blob, despite all the other inequalities, like being an island on the fringes of the country, and some mentioned by others, we would be on a par with most other provinces. Of course Mr. Vardy's piece paints a very different picture than the Vital Signs Report, it remains that they are talking about the same province, but you would have to check the name just to make sure. Maybe we need Lock to mediate the two positions. Of course I am not condeming any if these gentlemen, but saying there should be many more papers by citizens and especially from the center of higher learning, but more importantly they should be talking to each other, as it appears they are operating in issolation to each other rather than in collaboration, so that the average Jane and Joe won't be so confused with their comments says Joe blow. Of course I realize one piece was on the fiscal position of the province in dealing with muskrat where as the other was on the social economic position of the province, but never the less they were reporting on the same province.
Hoops ..In viral…replace the r with a t…but of course you all knew.
Statistics are great tools for deceiving people. If everyone made the average family income of $81,000 it would be completely different situation from having most people in poverty while a small percentage made a fortune, resulting in an average of 81,000.
What is the most common family income? What percentage lives in poverty? How many people frequent food banks? How many children use Kids Eat Smart as the only meal of the day because there is food at home? Is the reduction in income support the result of rejecting more applications, or did people no longer require it, or moved out of province? My personal feeling is that all is not well and the overall situation is very complicated.
I don't know if the provincial debt figure is accurate either. I believe we still pretend that Muskrat Falls is an asset worth what we paid for it, rather than writing it down to market value. Market value is probably 10 billion lower.
I would take anything from the Harris Center with the same skepticism as I would if it was from MUN's Wade Locke.
Anony @ 14:20:
The income distribution isn't as skewed as most might initially think. There are ~422k persons (out of ~437k persons eligible for workforce) over 15 who reported income for 2015 in NL.
If you exclude the ~20% with income less than $20k (ie part time, school aged etc) and smooth the 8.5%(~35k people) making over $100k to a range of $100-200k, the distribution plots as exponential decay with a correlation of ~94.8%.
If we exclude the 8.5% over $100k and correlation goes to ~99.5% for those between $10k and 100k of reported income. A similar correlation is gotten if household income is plotted with a correlation of ~99% when the tails are smoothed – with 23% of households reporting less than $20k.
I think the root cause is age of population, only 40-50% have education beyond highschool and we have a higher percentage of person not in the workforce – more or less, a solution to those on the low income end needs to be found, and welfare/social assistance or income supplements arent workable solutions.
Income averages are a bit deceiving as they don't represent the average person or household. For that we need the median. I looked at the stat can 2016 census same as commenter above.
It shows the median NL household income of 67,272.
I also see that we have more households in the under 40,000 area than the CDN avg. Plus slightly more than average in the 125-199,000 area. Between 40-125,000, NL has slightly fewer households than the CDN average.
Median individual income in NL is 31,754 vs 34,204 for all Canada.
I'm yet to look at the Harris center report to try and reconcile their findings.
A NIDDY NODDY?
Some may recall a few months ago, the comments on barrels, in Nfld we had various sizes of wooden, from very large ones, to medium size beef and fish barrels to small ones.
The trick question " Little Niddy Noddy, two heads and one body, what am I ? The answer was a barrel, and in my location a Niddy Noddy was a very small barrel.
Now Ball, at his fund raiser, taking in 250,000.00 (500 @ 500.00 a plate), spoke about our ethical oil ( so too Ball's farts don't smell, and lacks methane, a proven fact).
He refernced the kgs of CO2 per barrel.
What size of barrel was he using, a Niddy Noddy?
Here is the quote from Ball from CBC:
"A barrel of oil in our province emits , on average, 12 kilograms of carbon dioxide. If you compare that to the world average, 18 kilograms per barrel, that leaves at 50% less carbon per barrel" The writer Jeremy Eaton then says>Twelve kilograms per barrel is actually 33 per cent less than 18 kilograms per barrel.
On that Eaton would appear right, as 50% of 18 is 9, but Ball says ours is 12, yet somehow it is 50% cleaner , but only 33% (this must be 33.3%), so he is off big time. You must multiply 33.3% by 1.5 to get 50%, so it is misleading by 50%, on that alone.
But that does not address the barrel size, and actual CO2 from a barrel of oil, as CO2 occurs when fuel is burned.
One might assume the barrel is the American steel drum? The 45 gallon barrel? Is this 45 USA gallons, if so it is about 36 Canadian gallons, and 36 Nfld gallons. If water it would be 360 lbs of water, if if crude oil it would be lighter, by how much does that size of barrel of crude weigh?
Is Ball talking an oil barrel, or a Niddy Noddy size barrel, as his figures are way off as to CO2 emitted when burned.
Am I lost, anon, if so, set me straight. What is the wt of CO2 from burning a standard oil drum full of crude? Give it in kgs and lbs please.
So someone else might post it? 12 kgs is about 26.4 lbs of CO2 from Nfld oil, are you sticking with that anon?
Eaton has proven ball cannot do basic arithmetic, and Patty Daley noted it yesterday too, repeating Eaton. But is it much worse?
G'wan, ya crazy twit.
Well anon, EPA of the USA, says a barrel of crude oil burned produces o.43 metric tons of CO2.
Now a metric ton , in my day, we called a long ton, being 2200 lbs instead of 2000 lbs, being a regular ton.
So, 0.43 x 2200 = 946 lbs of CO2 produced from a typical barrel of crude.
Now Ball say about 26.4 lbs of CO2 from our barrel, which is only 2.8 % of what is expected from an average barrel(26.4/946 = 0.0279 = 2.8%).
So there are 2 possibilities;
1. Our crude is ethical beyond believe.
2. Ball's barrel is very , very small, a Niddy Noddy in size.
Where did this crazy twit go wrong?
Anon, of course, if my figures are right, then there is a third possibility: Dwight lied?
I see that the standard oil barrel in the USA is 42 US gallons, not 45, and 42 equals 35 Imperail, Nfld Gallons,…. unless he uses a Ball Barrel, which is likely a Niddy Noddy.
A US barrel with regular crude is about 300 lbs, and some lighter crude is 275 lbs in a barrel
An oil barrel is not a standardize size, but oil is reference as barrels, usually US barrels of 42 US gallons.
Maybe Ball has a new size that he hopes to get standardized world wide to make us the energy capital of Canada, he can get about 35 Niddy Noddy barrels out of one regular barrel, and so pay off the 12.7 billion boondoggle, and only about 3 % of CO2 produced per barrel when burned.
Who said Ball was stun, that is stable genius quality.
NL can not avoid negotiating about CF while on its knees because we are already there and will stay there until that negotiation is over.
Once again, the power corridor over Qc is nothing but the standard propaganda used by typical haters to build, develop and focus power. That corridor was not technically achievable by any other than HQ (they invented the 735 Kv technology for that) and no client was ready to buy that much power at any higher price than what HQ paid.
As for loosing anything related to CF, know that you can not loose anything if you do not put anything in it. That is exactly CF: NL did not put a single dollar in it, so can not loose a single dollar from it.
Also, if you read the text with a little attention, the author describes CF as NL's golden goose while at the same time complains about how NL did not made any benefit from the 1969 contract. HQ gave NL that golden goose in exchange of the contract! So if it is a golden goose, then NL received a gigantic benefit from the contract. If NL did not received anything from the contract, then CF is worthless so should not be called a golden goose.
This article is the typical hater's speech, complaining about everything outside and more…
Anon, I do not see this article as a hater's speech, and must read it again to see how you might think it.
I agree with some of your opinions, not others.
For me, I ask if CFs is a golden goose, is it mere gold plated, or solid gold. I suggest solid gold.
Yes indeed… like offshore oil, the Newfies try to say lay claim to it as if it's theirs alone.
Meanwhile they had neither the fiscal means nor technical skills to bring one drop of it to market.
Nothing more than the Jedd Clampetts of Hibernia.
I must be a Nflder and not a Newfie?
I say Quebec, mostly, had created a solid golden goose. It laid solid golden eggs for Quebec from startup to now and to 2041, and a thin gold plated eggs for Nfld during that time. But after 2041, all the eggs will be gold plated, and then NL gets 2/3 and Que gets 1/3, which is a great gift, part by luck, seeing Nfld invested little (did Brinco spend 160 million on failed attempts, whether that had a little or any value that was considered?)
But without he Quebec decision there would be no golden goose. The 1/3 owned by HQ is still golden for Quebec, and assume is the lowest cost production of all the HQ fleet? It is what Heracles called a win win, but only now NL is starting to see the shine. And their blindness helped to create the boondoggle.
If Newfies try to lay claim as if there's alone, then they are Goofie, and too: those most screwed were/are the Labrador Innu, were they not, they are clever at catching geese, but got no golden goose.
So what colour is the sky in your world, buddy?
You are no buddy. But the sky is ever changing, much like the colour of CFs. Is it not golden? Mfs however is always black and gloomy, and maybe a hazard.
Winston, most HQ hydro built prior to CF (Manicouagan, Beauharnois, Bersimis etc) cost less (or were on par) than CF – taking into account power losses for the more distant dams.
As you know, construction costs ballonned by the end of 70s / early 80s. (CF luckyly escaped those steep inflation years).
In 1969, Hydro Québec figured it would save some money with CF, instead of building James Bay earlier (and create jobs in Quebec).
In insight, HQ should have built James Bay earlier instead. James Bay would have cost half the price (by totally escaping those steep inflation years). And most importantly, HQ would still enjoy this half price James Bay hydro past 2041…
Valid Points EX. I had suspected that Quebec projects earlier than CF were low cost and may be on par with CFs. I did not know James Bay would have been the better option for Quebec in hindsight, but makes sense, and so the current situation with the value of CFs is part good luck. More good luck for NL going forward, and good for HQ too, but would have been even better for HQ if they had chosen James Bay first. Would James Bay have been within HQ financial ability when CFs was done, not knowing the long term benefit of later inflation benefit?
In early or mid 1980s I believe Scotia Bank was paying 19% on GICs for a while.
CF was the pilot project for HQ advancement and in my years at CF, HQ engineers visited often to see how it was done. Brinco, CF engineering and construction personnel went on to be involved in the SEBJ organisation to build the James Bay Project.
1. "We need to … place our fiscal house in order rather than to negotiate from a position of desperation."
MY COMMENT — I wholeheartedly agree.
Why then is the top-down, politically expedient and essentially same party/bureaucratic system/structure that brought us Muskrat, AT THIS TIME, having closed door, back room discussions on CF contract renewal and/or Gull Island, etc.?
2. "It is important (and I would say – 'essential') that we do not make major concessions on our legacy assets (including Churchill Falls and our offshore resources) in order to avoid taking responsible fiscal decisions. We need to separate our immediate fiscal pressures from long term decisions that impact future generations."
MY COMMENT — I agree, but we must not entirely 'separate out’ long term considerations.
The province/federal government needs to first put in place a diverse, multi-chaired, citizen/provincial/federal committee that is client (citizen/province/Canada)–centred/focused, that reflects a bottom-up, collaboratively driven, integrated/cohesive structure, that is broadly mandated to flesh out the essence of our fiscal and other pressures, develop and propose short, medium and long term solutions and propose a framework for implementation (stove-pipe type initiatives such as the public inquiry, the PUB ‘mitigation’ review, etc. are not broadly inclusive, they are narrow in scope and are not mandated to deal with and address a broad-based existential threat to the province).
Winston, here are some extracts from the article…
Category 1 : Typical complains about what have been explained to everyone million time already
–the equalization program which is intended to equalize the fiscal capacity of the provinces. Yet we currently receive no equalization
–Can a level playing field be created, one in which GNL is not on its knees and desperate to reach an agreement
Category 2 : Complaining specifically about Quebec / HQ / the Power Contract:
–the equalization program is locked in for five years, capped at $20 billion with Quebec receiving two thirds of the total equalization pie.
–This is based on the loss which Newfoundland and Labrador has sustained in economic rent since Churchill Falls over the 42 years the contract has been in effect.
–Canada would pay the province $900 million a year because it failed to ensure that CCFCo (Brinco) would have access to Quebec’s high voltage transmission lines in order to sell its power to markets outside Quebec.
–Can we make a case that Canada has an obligation to NL for having failed to support wheeling of Churchill power through Quebec?
–The intransigence of Quebec was used to justify the building of Muskrat Falls. Are we now going to use it as a bargaining tool with Ottawa?
So Yes, this article is the typical complain from NL and more precisely hate directed against Qc.
But because this has been the norm in NL for decades, you do not even see it anymore.
Anon, considering your most recent comments, I again reviewed Vardy's piece.
Vardy cites positions taken by others that are in the pubic forum, but does not say it is his position, or that all or any of them are valid. So it is NOT "precisely hate directed against Quebec", as you suggest.
In particular he brings attention a number of possible actions that could be taken, and in particular the 59 page Beaudoin proposal, and suggests CFs may be a golden goose. He says we should try to put our own house in order and not be on our knees. This too is valid. It may imply our weak financial position could be a liability. I suggest Vardy fears our political leaders and backroom deals,without the public being informed.
Vardy seeks a respectful informed dialogue on these issues, but seems you attack his character, and is not helpful to advance respect between Quebec and NL citizens.
I would like to see Ball invite the Quebec premier to Nfld, that Nflders see that our neighbours do have have horns on their foreheads, that perhaps a few might think.
Perhaps the Quebec Premier can suggest at our House ways that our provinces can cooperate to mutual benefits, and bring the issues out of the shadows.
Well said Winston!!!
Considering UG proved himself as a hater by bashing against Qc and HQ, is it really that surprising that other people he works with do the same ?
Anon, I almost missed Vardy's letter to the Telegram, published evening Nov 8 online > "Searching for a silver bullet". I just read it now.
He says of RBB's proposal : "This is a serious proposal,…..not a silver bullet but yet one to be taken seriously"
This proposal was from a Quebec atomic engineer retired.
Meanwhile this piece on UG posted Nov 7, again including the RBB report and a link to it. This obviously with the consent of the UG editor. Yet you put them both as Qc and HQ haters, proven you say!
Seems your opinion is out of line with the facts, and too out of line is your opinion that hatred towards Qc and HQ is widespread in NL.
Vardy calls on our University, MUN to become involved in discussions for finding silver bullets, it they exist.
I was late in seeing the RBB proposal,and noted it on UG comment section a while back. Vardy and UG has not condemned that proposal, but has noted it: that it has merit worth serious consideration.
Surely you should acknowledge your error in judgement?
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Gerry Byrne reminds me of the little figures some have on the dash of their car or truck, with a bobbing head on a spring.
Whenever there is an announcement by Ball on TV with a Liberal crew in the background, Bryne is prominently close behind, mouth always part open and nodding support constantly to ever word uttered by Ball. If he could get up Balls arse further he would. Make no wonder Ball says he has full confidence in Bryne. No one nods like Bryne. Perhaps Ball and Bryne are in love, like Trump and Kim.
He should be fired from cabinet, takes no responsibility and places blame elsewhere. He attacks the character of others for no good reason to deflect from his own failure.
Fisheries minister is he? Then the fisheries are doomed. Throw him out of cabinet and overboard to the invasive aggressive green crab species, and they will vamoose from whence they came.
What does it say about Ball to keep this guy around?
Last year he boasted of our success of the wild Atlantic salmon. I researched the data and found it was very poor results, and wondered how he got away talking with such nonsense.
Minority government will catch up with that cheesy bastard soon enough…
I have read the final submissions of Dennis Browne(our so called "consumer advocate" who refuses to respond to this consumer), and of Nfld Power and Nfld Hydro final submissions.
I am impressed with none of them on rate mitigation. How can the PUB get insight ?
All 3 are tip toeing through the tulips on how to deal with heat pumps, this being but one issue.
Perhaps Planet NL could cut through the BS for a piece on UG.
Here's a big joke; almost 8 years after I presented initial research to the PUB, and Andy Wells called then called upon Nfld Power for a report, and 4 years after I filed more detailed research on HPs with the PUB, Nfld Power NOW says they are doing HP "research on hps" This now almost 30 years since minisplits were introduced to Canada!
Tricks that worked for Nfld Power for 8 years, they continue on to deceive the public, and deceive the PUB, by not having research done for this mitigation review. They still plead ignorance for this technology. They are working on a new Conservation and Efficiency Plan. Where will LEDs and plastic and tape and programmable thermostats fit with the new plan? They will educate the public they say!. Seems the public is educating the power companies on how they can save money on their power bills, causing some panic.
Browne's comments…..HPs incentives will only benefit the well off class he says, and hurt the poor. That they are only good for the "under age 35" is not part of his final remarks,but that was his public remarks.
A neat trick for the power companies is to encourage EV uptake without encouraging HP uptake to decrease peak winter load. These must go hand in hand.
Not a word anywhere on "cold climate"hp models, an essential criteria for good power management.
Frankly, Browne seems not to have a clue on technical issues. This likely a key factor for his appointment as Consumer Advocate.
Can a heat pump be dual-configured for use as a penis pump too?
Anon @ 21:12
Smartass remarks like this confirms your parents are paying for your heat and light.
I'm a blind person living in the Caribbean so I don't need heat and light.
Anon @ 21:12
I would say sadly for you, no they can't.
But on the bright side you can still use your blow up doll, or maybe a relative could give you "hand"?
You should be still good to go!
An important comment from the final submissions(from Nfld Power maybe) is that Nalcor does NOT have a Plan if Holyrood is NOT decommissoned after MFs comes on stream.
Realize that Holyrood cannot be decommissioned if MFs proves unreliable.
The DC system may be 95-98 % on stream even with a reasonably good software upgrade by GE. This implies 150 to 400 hrs per year downtime which by definition is NOT RELIABLE. That result was or should have been known before sanction, and certainly known now.
So, why is there no Plan for reliable power?
It is not Nalcor's mandate?
Is it Nfld hydro's mandate?
Is it the mandate of Nfld Power and the Consumer Advocate and PUB to call for such a Plan, and propose a Plan?
Would it involve gas turbines, (adding to GHGs) or a combination of 400MW of wind and aggressive CDM or more island hydro and increased transmission capacity to Eastern Avalon?
These Plans should be costed and in place now, not waiting years from now while continuing to burning fuel at Holyrood (now importing coal power since August 24 th)
Seems the Plan is merely wait and see just how unreliable the LIL is, so kick the can down the road risking more DARKNL with rotating outages.
This seems incompetence as to planning as to reliability, and inviting for serious emergency power shortages for prolonged periods. Nfld Power especially knows this. They were silent as to the boondoggle risk, and largely silent know as to this risk, just noting there is no plan, but not proposing a plan, or the consequences of no plan.
Nfld Power will not say anything negative for which Stan has to reply.
Vardy's letter to the Telegram "Searching for a silver bullet" says our province is facing a tough fiscal challenge and solutions are hard to come by, but proposals are emerging. He mentions the MFs Inquiry report is due the end of Dec and the Mitigation report due the end of Jan.
He says "This quest for the best solutions should be a priority for our University"
Consider : what priority was given by MUN as to the wisdom of options for our power alternatives that resulted in the boondoggle?
Did not MUN enable the boondoggle? Especially under the influence of economics professor Dr Wade Locke, who was sucking and blowing at the same time. And Stephen Bruneau risking his career and position there to make his views public.
And what of the silence of many many professionals at MUM then and now.
And too, MUN and staff doing work for Nalcor and in a conflict of interest.
It is wishful thinking by Vardy to hope MUN to see this as a priority, and that is fine.
Is it magical thinking to expect MUN will see and act on searching for a best solution?
It would involve a change of culture at MUN surely. Liberty often is critical of the culture of Nalcor. Is MUN any different? How many from MUN has commented or written pieces for the UG blog over the past 7 years? Almost all under the cone of silence, least we forget.
MUN professors have to be very careful about making comments. Official, government supported propaganda is fine. Going against the tide isn't. Wade Locke said Muskrat Falls was the best option. He is also head of the economics department.
Now imagine someone else in his department, writing a report trashing his corrupt work and pointing out the conflict of interest inherent in accepting private consulting gigs from the NL government. http://unclegnarley.blogspot.com/2018/02/the-moonshine-list.html
I have heard stories about professors being literally yelled at by the head of the department, or having their tenure track threatened. Black sheep will not get tenure, and are likely to be forced to teach courses that are undesirable (not their background). There is no end to the ways that you can be harassed.
Think of MUN as a political organization, just like core government. People keep their mouths shut to keep their jobs because losing a professional job because you outspoken in a small place like Newfoundland quite likely means having to leave the province for good. In larger areas, if you are very good at what you do, there is a job for you. In Newfoundland, merit seldom matters – but cronism matters a lot. Carla Foote is a good example https://www.cbc.ca/news/canada/newfoundland-labrador/anthony-germain-analysis-rooms-hiring-1.4916337
The AG report on the school board discusses the hiring and promotion of unqualified people. Thousands more never make the cbc news. Newfoundland is a tough place for ethical, competent professionals who care about the public good.
No doubt you are right. But how about as anonymous to get around the cone of silence.
Anony @ 09:26:
Not sure you are correct. During the 2012 PUB hearings, at least 3 professors at MUN made presentation / documentation to the PUB with a no voice to MF. Also, in document MC 2012-02-27 presented to the PUB for those same hearings (MC 2012-02-27 is a collection of public letters in the Telegram between 01-June-2011 and 27-Feb-2012) not less than 7 MUN professors made public statements questioning MF.
Again, the public didn't want to hear of anything anti-MF at that time and are now crying foul.
There are always a few professors that are willing and able to dissent loudly, but the majority are unable to for personal reasons. There is also a big difference between sending a letter to the PUB (which is low profile since very few in the public will read it) compared to making public presentations or going on a speaking tour like Dr. Bruneau did.
Worst than the cone of silence are the political animals, like the head of the economics department, using their position with MUN for credibility, engaging in significant moonlighting for the government and then abusing the public trust by creating propaganda.
How does Dr. Wade Locke even have the gall to speak about our Provincial debt?
My take on Dr. Wade Locke:
"Dr. Wade Locke
Department of Economics
Memorial University of Newfoundland
Dr. Locke maybe best known as former Premier Danny Williams, right hand man in their selfless promotion of the much beleaguered Muskrat Falls Hydro Electric Project.
Dr. Locke was the center stage act in the Premier Danny Williams PC Party/ Nalcor Muskrat Falls Circus Show!
How many occasions did we witness Dr. Locke take to the Danny Williams Circus stage and espouse his words of wisdom onto the down trodden masses of the province.
Yes everyone, listen to me, Muskrat Falls is THE only, and THE lowest cost option of providing reliable, low cost electricity to the province of Newfoundland and Labrador!
There you were, grand standing around the province, speaking to whomever would listen, all of this with the giddy enthusiasm of a teenaged cheerleader waving his Pom Poms!
(Sorry about that one, I am starting to give myself a bad mental picture!)
Why we would doubt what you were saying?
After all, you were an esteemed Economics Professor, at our very own, world renowned Memorial University of Newfoundland!
Here we are today!
A province in the middle of some of the most turbulent economic times in our history!
Who could have ever predicted that?
Well, we know it wasn't YOU as a Professor of Economics at MUN!
We know it wasn't anyone else in the Danny Williams PC Party/Nalcor Circus Show!
However, there were many individuals around this province, (at least one who also worked with you at MUN) that were trying to get the attention of persons such as yourself, and the rest of the Danny Williams PC Party/Nalcor Circus Show!
These people were trying to put up warning signs!
Maybe we were not headed in the right direction as a province?
Maybe Muskrat Falls was not in fact the lowest cost option?
These people were simply dismissed en masse as being part of some sort of lunatic fringe!
How could anyone dare to disagree with the Danny Williams PC Party/Nalcor Circus Show!
We have an out of control Muskrat Falls project that is quickly approaching a 13 Billion dollar cost!
(Who knows how much more before the whole mess is completed!)
1) How could you with all of your wealth of knowledge, and educational background be so overwhelmingly wrong?
2) Did you even consider the idea that you were putting your reputation as Full Professor of Economics at MUN at risk by exposing your lack of judgment to the entire population of the province?
3) Did you, or MUN realize that you were also exposing the reputation of the University with your obvious miscalculations and predictions?
4) On the topic of MUN, how bad of an error in judgment do you have to make before you are relieved of your duties as a tenured Professor at MUN?
Here we are today with the legacy of Muskrat Falls literally hanging around the collective necks of the entire population of the province.
We are looking at a raw (unblended) cost of electricity from the Muskrat Falls powerhouse of approximately 55 cents per kwh!
(Possibly more if project costs continue to increase).
We have Billions of dollars of debt also downloaded onto every resident of the province, on top of an imminent staggering increase in electricity rates!
Not to mention the trickle down effect, and a complete cooling off of our already stagnant economy!
We are actually at the point as a province, that we are quite conceivably going to lose significant parts of our core services!
We literally do not have enough money to operate as a province, let alone even attempt to pay for Muskrat Falls!
The residents of Newfoundland and Labrador deserve to have some answers!
People need to be made accountable for their actions, especially when it impacts the well being of every resident of the province of Newfoundland and Labrador!"
End of my rant!
BFA @ 14:48
Well Said and so true.
This bloody Wade Locke individual isn't fit to work as a mail clerk at
H & R Block, let alone head of MUN's Dept or Economics.
Locke's continued tenure there only serves to further sully the tattered remnants of its reputation.
Just a little late for Stan to cast one of the hapless Nalcor captains over the side of the Titanic!! Long after the damage is done!
Forced taxation is theft. I can tolerate it as long as I believe that the money is being spent wisely, fairly and in a way that sustains or improves society. Spending tax money to hire, often unqualified and low performing cronies, at outrageously high salaries with equally outrageous million dollar quitting packages is a betrayal of the public trust.
Signing employment contracts that obligate the general public to give out million dollar bonuses to people who quit or get fired (MUN president $1 million, Nalcor Ed Martin $1.4 million, Nalcor CFO $1 million) is outrageous. Those who approve these contracts are betraying the public trust.
Board members that vote to terminate executives "without cause" even though there is ample cause to fire them, solely to trigger a larger golden parachute, are also crooks.
I can't really blame a crony for accepting a $450,000+ salary with a guaranteed million dollar payout upon quitting plus a huge pension. I do blame those that approve these contracts. This is not private money – it ultimately comes from taxation. I also blame both political parties for allowing it under their watch.
The term "forced taxation" is what's known as an oxymoron. The notion of "forced taxation" is requisite upon the notion of its converse, "optional taxation" which of course is a non sequitur. Therefore the notion of "forced taxation" is also a non sequitur.
That said, I strongly suspect that the Nalcor monstrosity's days are numbered, either due to the recommendations of the LeBlanc report, or as one of the conditions of the coming federal bailout, or a combination of both. Look for the beginning of the end to commence shortly after Mr. Marshall's departure.
Obviously NALCOR has not learned one thing from all of their recent history with all things Muskrat Falls?
How Derrick Sturge is being dismissed without cause, is beyond comprehension!
The man was literally being paid to oversee the entire financial operations of NALCOR.
The man should have been let go many months ago, WITH cause!
Yet another one walks away with their "platinum" handshake!
Sunshine list records indicate Stan gave him a 50k raise since becoming CEO. I guess the financial motivation failed to yield results. I'll keep that in mind if ever I'm offered a 50k raise – what have I been doing wrong to deserve that… a 50k raise, boy am I in trouble. What a joke, Stan.
I think the payscale for all current Nalcor and Hydro exec's should be rolled back by at least 10 years and every contract needs to have the cushy layoff terms drastically cut to match regular staff. Stan should be fixing the compensation for this crowd, not inflating their overgrown egos.
Don't forget that Stan kept them all on when he should have cleaned house because they were "good people" right. Got to finish strong right.
Nalcor learned that you can give an extra bonus to someone like Ed (e.g. the dismissed without cause to trigger extra cash) who Absolutely DOES NOT deserve it, and get away with it.
They will continue to do this. In Mr Sturge's case, it also sends a message to the rest of the executive – don't rat anyone out and you too will have your special, massive, going away gift / hush money.
I wonder if there are agreements signed before granting "without cause" – e.g. don't write a book about it.
Let's see: PENG2 is "not sure" that MUN could have done more to expose the lunacy of MFs project. What percentage of MUN's experts were vocal or wrote letter opposing the flaws? What percentage proposed ways to mitigate the high power rates?
And too, PENG2 is not critical of Sturge's windfall. Stan can do no wrong in the eyes of PENG2.
Is PENG2 still on the Nalcor payroll?
There is little doubt about that one!
He has continually blamed the residents of the Province for our Muskrat Falls situation.
You have to keep those pay cheques flowing especially if you are a contractor.
I would say he is silently praying for Gull Island!
Fill up the troughs for Muskrat Part 2!
Anony @ 23:22:
So, why didn't the public listen to the 3 presentations made to the PUB from MUN professors or the 7 different professors that wrote the Telegram criticizing MF in the 6 months preceding the PUB hearings in 2012? or, why didn't the public listen to Prof B on his alternatives etc?
Considering Sturge's situation, is it the dollar amount or the fact he got severance at all that bothers you? As per his employment contract, Sturge got 1yr + 1 month + benefits for every year of service – this is much less than what EM got (2yrs + benefits). In the case of EM, the Auditor General said the severance agreement was appropriate for the position – probably would in this case to. Both these employment agreements date back to the DW era pre-Nalcor – not new information.
AG report on EM:
PENG2, so what PERCENTAGE of total experts at MUN is 3 that gave presentations, and what percentage wrote letters? And what percentage just recently had recommendations for rate mitigation? You are silent on that.
Sturge: admits he was often out of the loop on critical financial information, so incompetent, and should have been terminated with cause, as to MFs, after the Inquiry exposed his incompetence.And likely others too.
Derrick Sturge should have been fired WITH cause many months ago.
He was getting paid to oversee the financial operations of NALCOR?
He failed on every level!
Is he the only person at fault?
Not by a long shot!
However we simply cannot ignore what the persons responsible did in this fiasco?
These are the key people who were "supposed" to be working for all of us the residents of the Province!
We should never be rewarding incompetence!
I don't think it is the actual dollar amount that has anybody upset?
It is the principle!
You should have to actually earn your rewards and bonuses, not a rubber stamp as NALCOR has proven time and time again!
Hey if NALCOR were a private company that is between the company and their shareholders!
Apparently NALCOR still hasn't grasped the idea that they are a Crown Corporation and they are answerable to the residents of the Province!
Why do people try to defend the indefensible?
That is unless you are also waiting for your "Platinum" handshake!
BFA @ 10:37:
If its the principle, that's a good discussion to have – the dollar amount is relative to his compensation and really immaterial unless a total review of government compensation/executive contracts is taken on.
The problem I see with your argument is that the AG found EM was terminated without cause – Id say it would then be a hard argument to make that a subordinate was guilty of malpractice, especially when Nalcor was producing profit. Now, it does become a different discussion when looking at the legislation of how Nalcor is governed and how they derive profit – this becomes a government policy issue which we need/should have to fix at the ballot box.
Wade Locke recently on NTV saying we are not going bankrupt, and he is presenting a new paper and invites comment, not sure?
Any other info on this? Does he have a Plan as suggested by Vardy?
Locke such a big joke, how can anyone take him serious, or the media give him air time, as if a credible expert.
This is the best MUN can put out there!
It's a relative term don't you think?
We have pumped BILLIONS of dollars into NALCOR just in a couple of short years.
Derrick Sturge was literally the man being paid to hold the purse strings.
While he was holding these purse strings he basically sat as a highly paid spectator while NALCOR spent our money as if it were monopoly money!
He did nothing other than write himself Dear Diary letters in an effort to try and cover up what he knew full well was completely wrong!
Yes he and others should be held accountable!
We cannot simply continue to reward incompetent behaviour!
While we are on the topic of Ed Martin we all know how much of a shit show that was?
The only person in history to resign his job, have a board of directors "refuse" his "resignation" and have him dismissed without cause triggering his "platinum" handshake!
This of course took place when we had Dwight Ball et al in charge who at the time wouldn't know their own arses from a hole in the ground!
There is plenty of incompetence to go around on the whole mess!
With regard to NALCOR turning a "profit"?
That one can only be accomplished by a bunch of head in the ground accountants?
Any of us who are in the real business world would love to have a "blank" cheque to enable us to turn a profit?
By the way this should also get interesting when NALCOR has to officially declare the entity known as Muskrat Falls as an asset for accounting purposes?
We all know that the actual worth on paper is going to be BILLIONS of dollars less than what it cost US to build it!
It should be interesting to explain that "profit" when we as taxpayers have to take a write down on NALCOR assets?
You talk about the proverbial catch 22?
We have billions of dollars of public money which interestingly enough WE had to borrow in order to fund NALCOR'S incompetence on the Muskrat Falls project!
1) We have the pleasure of owning a hydro project which is actually worth less than what it cost to build.
2) We have to pay back as a Province what we borrowed to pay for Muskrat Falls construction.
3) We have to pay off a second debt which was also created by simply by building Muskrat Falls in the first place. We will have the "pleasure" of doing just that with our monthly power bills.
"Profit" certainly is a relative term!
BFA @ 12:44:
Maybe read a post in full, you will nots that i also said:
Now, it does become a different discussion when looking at the legislation of how Nalcor is governed and how they derive profit – this becomes a government policy issue which we need/should have to fix at the ballot box.
And this pretty well covers most of what you said…..
As for your statements on EM,the Auditor General disagrees – now, I will never be known as a fan of EM either, but he did get what he was due there. The fault there was DB not understanding the Employment Contract – again check the link I provided above and look at the report instead of media bluster.
Whether anyone want to accept, government policy can only be changed at the ballot box if we stop the lemming behavior – and government policy is the root the cause of 'boondoggles' 'fiscal cliffs' and the like of all sorts.
There is little doubt that we had Ed Martin who basically a "rogue" leader of NALCOR who ruled by a his way or the highway mentality!
Then we had a wide assortment of people ranging from politicians, public servants and other employees of NALCOR who ended up being "spectators" to a core group of people starting with Ed Martin, Gilbert Bennett, Paul Harrington and their personal group of cronies who did exactly as they were told.
It was literally a perfect storm!
In any event people have to be made accountable.
I'm sure Justice LeBlanc's report will make for some "interesting" reading!
There is little doubt in my mind that the "dismissal" of Derrick Sturge is a preemptive strike by NALCOR regarding what will inevitably come out in the Inquiry report.
We can only hope that someone is finally going to make some sort of sense for this entire mess!
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Great posts BFA, keep em coming
Letting Sturge go — now— supposedly without cause, is a way to preempt what Leblanc's report may say —, i.e., that Sturge failed miserably in his financial duties/obligations.
By acting now, Nalcor can argue that it had no reason (ostensibly) to withold Sturge's $900 K.
As I said when Stan was appointed — Ball merely changed horses.
Pile it on boys. Why not keep following the PC government's mantra and keep on screwing rate/taxpayers.
With all the delays, delays, delays, etc, What is NS and Emera saying about all this? A billion invested years ago and nothing happening with electricity flowing their way. They must be getting angsty.
If instead of the approximate 1 million payout to Sturge, that amount was invested by a "competent investor", that my be "world class'even, at 10 percent return, compounded for 60 years, it would yield 300 million, payable against the MFs boondoggle.
10 % annual return is obviously outside the competence of Sturge to achieve for Nalcor, and his incompetence , especially as to MFs should be reason for dismissal with cause. But I suggest at least 100 competent and professional investors in this province can achieve the 10% long term return.
10 million so invested yields 3 billion, and 100M yields 30 billion.
Where do we find the 100M amount and the few necessary competent investors here?
100 million is not much money for the wealth that exists in St John's region. 5000 thousand here just lined up to dispose of over 1 million to the Oboma charity 1 hour conversation event, some to pay up to 10,000 for a photo. Despite the government hardship,surely we are awash is money. Just before that 500 lined up, and paid even more per ticket, to hear our great orator Ball speak and share his wisdom, alternative facts, and vision.
Recall that Fortis grew from a small company to one worth many billions, so why is that we lack financial wizards in government and their agencies? Of all the knowledge and expertise at MUN, Locke is the best so far produced? Vardy expects solutions to come from MUN? I hold my breathe, but I may be wrong.
Bruno may be closer to a solution: Rise up he says. Locke needs to go first, just like Sturge, but dismissed with cause. Does not the albatros of MFs hang around Locke's neck? He should be ashamed to be seen on campus, so grave and serious was his judgement.
I would suggest that $million, invested in sustainable development, (improved town planning), based on converting space heating loads to renewables, might head off more expensive expansion projects of the obsolete grid in the future. This conversation should be about smarter projects, not overpaid bureaucrats
I see that climate science done in Australia in 1987 as to bush fires and climate change was ignored, and predictions now coming about.
The science work in 1987 was to research the effect of rising temperature on the frequency and intensity and impact from bush fires. The research showed that it was not so much the impact of several degrees of temperature increase, but the impact of dryer conditions, that is lower relative humidity from climate change that was very dangerous. Yet this research was ignored, some more concerned then with an ice age risk ( as Andy Wells is now)
Now we see the many fires in Australia and California. Yet politicians in Australia critical of "the greenies and the lefties" as the destruction goes on.
Here with our power issues and whether heat pumps will cause a death spiral to electricity use, while Stan at the Inquiry said they HPs don't reduce peak demand in cold temperatures, which is false. From the mitigation hearings we see that Nfld Power will "once again" do research on heatpumps, their previous "research" being not "authorative" yet like Wade Locke, they are handed this task again. Why?
My research, as mentioned in the past on UG, shows that cold temperatures is NOT the challenge or limiting factor for most of Nfld for HPs. Like the research done in Australia, it is relative humidity, and to a lesser extent, high winds impeding defrost.
Here in winter, when it gets colder it gets dryer RH 60-80 range. When milder it is damper,often RH 90- 100 range. In Australia, dryness in summer is the enemy, here dryness in winter it our friend.
At -17C, we measured a COP of 2.7 (270 % efficiency), while at about 0C, COP is about 2.0 (200% efficiency). This is opposite of what might expect.
As long as cold climate models are used( which is not even recommended by Take Charge, but should be), performance actually increases about 1/3 as it gets colder, as fewer defrost cycles occur. If temperatures go lower than -20C, which is very rare, then COP will decline at very cold extremes, a concern for island inland like Buchans.
We should watch as to Nfld Power's "research" methods and results, or if they contract that out? I thought Synapse was to do it, but a change of Plan it seems.
As to my attempts to have MUN peer review my findings, the engineering dept at MUN had no interest! PENG2 expressed interest on this blog, but didn't follow through.
Winston, as an Alumni, get access to the Campus Buildings Energy Costs, and Strategy to reduce carbon dependence say next 20yr. That should provide substance to change the Admin World, and provide added value, (As Gilbert might say), to the discussion.
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Sure, me must support Byrne in his quest to get a provincial pension on top of his Federal pension. Poor man–his feelings must be really hurt with your badmouthing. I can almost see a tear in his eye.
Don't forget he is a Qualipu MigMaw, status indian, whatever that is? and that entitles him to benefits from the feds from alleging to be a native of some ilk from somewhere????????? What a man, eh? Go Gerry go, eh bye!!! Taxpayer beware.
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I see the giant Saudi Arabia oil company is not so valuable as expected.They said it was valued at about 2 trillion dollars, and planned to sell a small part on the stock markets, so had to get the assets evaluated by international banks etc. Now the value is actually in the range of 1.2 to 1.5 trillion, and not much interest, a considerable reduction. Supply and demand issue, and too much supply in the world, but we aim to double our production, and our oil is very ethical don't forget. Part of the The Way Forward, and 500 turned up at 500 a plate to hear Ball's Barrel CO2 figures, key to oil ethics question.
Perhaps the GRETA effect and banks being pressured to lighten up on fossil fuel asset value. The Saudis said Greta was the greatest threat to oil valuations.
Here with Nalcor and the future with the "bow wave" of offshore hype, perhaps it might be a bye bye wave.
Any reader yet verify Ball's apparent false figure for the CO2 produced per barrel ……if a Niddy Noddy size Barrel?