Guest Post by David Vardy
Two
major events signal the rising tension among the people of this province,
fearful of their future. Since 2016 we have had 11 quarters in which the
population has declined continuously, from 530,000 to 522,000. This is a
measure of the angst over our serious fiscal plight and the prospects of
dramatically higher power rates.
The
two events were the release of the final PUB report on rate mitigation and the
second was the press conference by the Premier and Natural Resources Canada Minister
Seamus O’Regan on negotiations toward rate mitigation. Both events focused on
the return on shareholder equity. The PUB recommended that the province forgive
payment of dividends on provincial equity. The joint press conference latched
onto that option as a cure for Muskrat Falls, namely the writing off of
dividends and financial restructuring.
Provincial
Equity
The
province is taking most of the risks, even with the federal loan guarantee in
place. The federal government has invested nothing yet in this project but the
province has invested close to $5 billion in borrowed funds. Nalcor’s estimate
of equity does not make provision for the cost of the borrowed funds which must
be paid as soon as they costs are incurred, during construction as well as
during commercial operations. This allowance for funds used during construction
raises the province’s equity investment from $3.8 billion, Nalcor’s estimate,
to $4.8 billion. The province must also provide equity funding for any
additional cost overruns. Such overruns are likely to occur in relation to the
delay in transmission software and the cost of repairing synchronous
condensers. Disputes with contractors may also lead to further overruns.
Restructuring
Framework
The
revenue requirements over the 50 year supply period, beginning with the first
year of commercial operations, 2021 or later, will amount to $74.6 billion,
based on the current cost recovery structure, which is a combination of “cost
of service” and “escalating supply prices”. The province and the federal
government are negotiating to restructure the financial arrangements through
the following:
✔ Adoption
of the province’s rate mitigation plan released April 2019 and which stabilizes
rates at 13.5 cents/KWh, rising annually thereafter based on an inflation
index.
✔ A
modified cost of service approach which writes off $30 billion in dividends
from generation assets (assets at the generation site and the transmission line
from Muskrat Falls to Churchill Falls).
✔ “Monetization”
of the flow of dividends from the Labrador Island Link.
✔ The
power purchase agreement (PPA) will be abandoned and many of the project
agreements will need to be revised.
At
this point it is unclear how this will be accomplished. The federal government
has indicated willingness to make adjustments with respect to sinking fund
payments up to the end of 2021 and in the cost overrun escrow account (COREA).
Sinking funds involve the accumulation of funds before bond issues mature while
the COREA payments ensure that the province’s equity is injected pari passu
with capital expenditures. None of these adjustments really reduces the
financial burden in any material way.
Borrowed
equity must be repaid
By
agreeing to write off dividends the province is accepting one of the
recommendations of the PUB. However this was an inevitable step given that the
dividends were fictitious. Sadly the province cannot wave a magic wand and
write off the cost of the borrowed funds, on which interest must be paid and
whose principal must be repaid. These costs, relating to the generation assets,
will amount to $200 million in the first full year of commercial operations.
The $5 billion in equity is very real and the cost of the borrowed funds should
have been included in the revenue requirements and added to the $726 million
for 2021. Now it appears that the province must absorb these costs.
 |
| Federal Finance Minister Bill Morneau |
Federal
Due Diligence
The
federal government will insist on a full accounting of the costs before
committing itself to further financial infusions. They will want to know if
this is going to become a $16 billion project or whether the official cost
estimate will stand. They will want a permanent solution and not a temporary
fix. They will not write a blank cheque to cover the required operating
deficit. They will want to examine all the options, including mothballing, if
the cost of operations exceeds revenues. They will want to know what level of
demand can realistically be expected over the next 30 years.
The
federal government now understands that the business plan for Muskrat Falls was
fatally flawed by understated capital costs and exaggerated demand projections.
There is a market for power but the demand is for low priced energy. Muskrat
power will be sold at a huge discount from the actual cost. This discount
negates the prospect of dividends.
While
the province now has no choice but to complete the project it may not be
feasible to operate it. Government has to consider the options and one is to
mothball the project rather than to operate it, if the federal government does
not inject sufficient equity to make it viable.
The
Federal Finance Department will play a larger role in these discussions than in
the past and they will want to deal with the full fiscal dilemma in which our
province finds itself. They will not want to deal with Muskrat Falls in
isolation from the larger structural deficit and the fundamental fact that
while our revenues are relatively high, compared with other provinces, our
expenditures are the highest of any province on a per capita basis. They will
want to place conditions on any further financial support in order to impose
fiscal discipline and expenditure retrenchment.
In
the absence of a plan to manage the fiscal deficit they will seek to put a
bandage on the problem. Finance Minister Bill Morneau makes it clear that “As
this proceeds, it is important to remember these are provincial Projects, in
provincial jurisdiction, and the Province bears responsibility to ensure they
are delivered economically.” He is saying that this is our problem and not
Ottawa’s, which is disingenuous given Ottawa’s failure to exercise due
diligence up to now in giving the loan guarantee and increasing it from $5
billion to $7.9 billion without a sound business model.
There
is no question that the right approach is to deal with Muskrat Falls as part of
the larger budgetary problems facing our province. Muskrat Falls reflects a
fundamental governance problem and the same governance and accountability
issues lie at the root of our fiscal unbalance. Federal officials will want to
take a comprehensive approach. Federal Ministers may not want to take the big
picture approach and instead restructure the payments to push the problem into
the future, particularly now they are bearing criticism for the escalation of
the federal deficit.
Lower
Churchill Development Corporation (LCDC)
Are
we bargaining from a position of weakness? The federal government will want to
avoid an event of default which will trigger repayment of the $7.9 billion in
federally guaranteed debt. The province always has the option of allowing a
default by NL Hydro given that section 3.1 of the Hydro Corporation Act sets
Hydro adrift without recourse to the province. By so doing they allow the
federal government to take control of the assets. Such an event of default will
force the province to bear the full cost of its $5 billion equity investment. It
will increase net debt by the same amount because currently the financial
assets offsetting our gross debt are based on the cost incurred rather than on
the market value of our assets. It could trigger a serious downgrading by the fiscal
rating agencies. This would be anathema to the federal government who would
likely move in with a rescue operation to avoid the ignominy of default by a
Canadian province and the financial burden of paying the bondholders. Any
rescue funds will come bearing strict conditions on the management of our
finances.
There
is no realistic alternative to a federal transfusion. The question for the
federal government becomes how to structure it in a way which does not set a
precedent which other provinces will want to follow. Perhaps the most direct
approach is for the province to inject federal equity, some of which might
replace provincial equity. For example the federal government might invest $5
billion, with $1 billion assigned to purchase provincial equity, thereby
providing some relief to the province while injecting $4 billion as new federal
equity. This would approximate the 1978 Lower Churchill Development Corporation
model (LCDC) which called for 51% provincial equity and 49% federal equity.
Using my illustrative example the province would have slightly more than $4
billion in equity while the federal government would hold slightly less than $4
billion.
The
Trans Mountain Pipeline is another model that may prove instructive. In May
2018, the federal government announced its intention to buy the pipeline from
Kinder Morgan for $4.5 billion, and seek outside investors to complete the
expansion. The federal government might join with the province to acquire
Muskrat Falls and to restructure it with a view to inviting private investors
to operate some or all of the project components.
Restructuring
as part of Fiscal Plan
Stan
Marshall told the PUB in October that the financial arrangements were
“hard-wired” and could not be changed. The recent announcement by the Premier
and Minister O’Regan accepts that these “hard-wired” arrangements were
unacceptable because neither ratepayers nor provincial taxpayers can deal with
the enormous revenue requirements. However the challenge in putting the project
on a sustainable basis will be enormous and has to be addressed as part of an
overall fiscal plan to place the province’s finances on a sound footing. It is
hard to imagine how this project can be the singular focus of the negotiations
without embracing the full extent of the province’s obligations and
responsibilities.
Update
Needed
We
have not had a cost update on Muskrat Falls since 2017 and there are many
factors driving further cost escalation, including claims filed by contractors
such as Astaldi, combined with the delay in the transmission line and the
problems with synchronous condensers. On top of that we have the reliability
factors which the PUB is dealing with. In restructuring the finances of the
project sufficient funds must be included to ensure that we have reliable power
and that may demand a replacement for Holyrood. The cost of such a replacement
should be included in the financial plan under discussion between the two
governments.
We
need more complete information on the demand for power as well as updated
costs. Demand projections continue to show shrinking demand which is not
surprising considering our loss of population with 11 consecutive drops in
population since 2016. NP reports that its load is decreasing.
Fiscal
Exposure of Province
Through
its “rate mitigation plan” the province is now taking on the obligation to
ensure that all revenue requirements are satisfied. This includes dividends of
over $70 million in 2021 on the $865 million invested by Emera. The architects
of the Muskrat Falls project claimed that there would be “no recourse to the
province”.
Section
3.1 of the Hydro Corporation Act enables the province to shield itself from
direct financial exposure outside of its own equity investment. This shield has
now become collateral damage of the rate mitigation plan because we have now
removed the shield, exposing us to more than $726 million in the first year of
full commercial operation.
By
so doing we have raised the stakes and increased our exposure! Why would we do
that? We are now exposed to the full $74.6 billion in revenue requirements over
the 50 year supply period. This is on top of our completion guarantee with base
and contingent equity of $5 billion!
Conclusion
The
province’s decision to write off dividends on its generation equity was a
foregone conclusion and it does not cure the problem. There is no new federal
money on the table and a federal operating subsidy is unlikely. The federal
government may simply tinker with the repayment schedule and defer the costs to
future generations. This would be a big mistake. Anything short of a
significant infusion will suffice. Whether it comes in the guise of
“monetization” of dividends or federal equity is hardly the point.
The
Federal Department of Finance will rightly ask the question as to whether any
large financial support package for Muskrat Falls will cure the flawed business
plan on which the project is founded, including lack of cost-compensatory
demand for power. They will also argue that Muskrat Falls is part of an even
larger fiscal problem and a holistic, rather than a piecemeal approach, is
imperative. We can restructure the payments in many different ways, including
the adoption of a modified “cost of service” approach, moving away from
“escalating supply prices”. We can forego sinking fund payments and cost
overrun escrow account (COREA) payments. We can reduce depreciation costs by
extending the service lives of the generation and transmission assets.
All
of this is tinkering. Muskrat Falls is a big problem one whose magnitude we
have yet properly to measure. We cannot manage what we cannot measure. We need
much more than that and to be honest with ourselves we have to recognize that
nobody has a panacea to offer. Our vast experience in this province with failed
industrial enterprises, such as Labrador Linerboard, teaches us that
governments are incapable of finding a cure for a fundamentally flawed business
plan. Our landscape is scarred indelibly with a multitude of failed public
enterprises.
As
we go forward it is important that governments consult with the public before
major decisions are reached. We all know that a lack of transparency and due
process compounded the bad decisions which led to Muskrat Falls. Let us not
continue to make the same mistakes. All of the revenue, demand and cost
assumptions should be made public and the public should know exactly what will
be required from them as ratepayers and taxpayers.
Both
governments must conduct a full assessment of the costs of the project and seek
a solution that is in the best public interest. In reviewing options they must
make a determination on the following issues:
What
is the best estimate of the cost of the project?
Is
there sufficient compensatory (i.e., covering costs) demand to operate the
project?
Can
costs be reduced through structural changes in the electric power industry,
including the termination of Nalcor Energy and the elimination of its monopoly
powers?
What
fiscal measures must the province take in order to ensure its solvency?
What
alternative arrangements can be made to satisfy energy commitments to Emera if
Muskrat Falls were mothballed?
Is
the financial restructuring plan fair to future generations who have already
been burdened with a large public debt?
Up
to this point government has failed to provide certainty and stability for
ratepayers. Ratepayers remain perplexed as to how they should respond. Many
have invested in heat pumps or downsized to smaller quarters to cope in
response to rising power costs. Many have left the province. Many who stay will
be paying twice for Muskrat Falls, first through higher taxes and power rates
and second through their private investments to secure their own electric power
security (e.g., heat pumps). This uncertainty will continue until such time as
a credible plan for cost recovery is on the table.
Citizens
are too smart and too well informed to believe that they can escape the
consequences of Muskrat Falls. They know that nothing that has been announced
up to this date represents a solution. The options on offer are palliative, a
placebo and certainly no panacea.
David
Vardy
If things unfold in this manner, Federal intervention in NL with strict conditions on provincial financial management, we may finally see a shift away from the control of NL public sector unions that has strongly contributed to the long term, dismal trajectory for our province.
NAPE and CUPE have used their political leverage for decades to bully governments into labor agreements that have been a massive liability to any recovery in our provincial finances. Numerous and expensive provincial employees coupled with dismal productivity, a toxic work environment and bullying labor leaders has been one of the root causes of our economic woes. If Dwight Ball or other NL Premier is told by The Feds that any Federal financial assistance requires a significant reduction in the cost of the NL civil service, he will finally have a political out to allow him to realign the size of the civil service, as he will have the opportunity to blame the Feds for their insistence to act on this urgent priority that so far has largely been left unattended.
The recent provision of raises to NAPE ad CUPE members is shameful and irresponsible in the current fiscal climate for the province, and demonstrates the degree of leverage possessed by the unions in the relationship with the NL government.
Bring on the Federal conditions so we can start making the adjustments that are needed to upright our ship and to take the power out of the hands of the union leaders, who look after the interests of themselves and their members at the expense of the rest of us, who are punished by our declining prospects.
Are you for real? Get your head out of your butt!
A good analysis David at this crossroads.
A few things. Lifting the lid on Nalcor is imperative. The secrecy must end and a thorough disinfection is needed. This lies at the root of the problem and the kickback by the principals will be dramatic. Do you or anyone else have the balls to "Stand the Gaff" as they say here in Cape Breton?
We all know the genesis of MF was the political hubris of Danny Williams. How the levers of democratic oversight were short circuited with nary a whimper by the intelligentsia, political opposition or informed public bears scrutiny. The resulting plunge over the fiscal cliff was predictable. Control of these despotic tendencies must be curbed in future.
The cost is likely now over 16 billion for the reasons you outline (software, synchronous condensers, Astaldi)with likely much more bad news to come. where will that money come from?
The rot is so deep that the feds will shrink from exposing the truth. Foe instance NL is the only place abroad or in Canada that SNC has not been investigated for bribery and corruption. Odd is it not?
The manipulation by the premier to launch MF has also not been investigated. I wonder why? The feds will want to hold their nose and push the problems down the road unexamined and unresolved. Where will that leave NL rate/taxpayers for the next 2 or 3 generations David??
Is there a David (so to speak) willing to hurl a well placed rock to fell Goliath?
Well put David. Lets see if any of this takes hold. There's no doubt something has to and will be done and needs to address the provinces overall fiscal situation. Its amazing that in the face of this, our provincial politicians continue to pile onto our provincial debt at close to a billion dollars a year.
Last one out, turn off the light (if it's even on). This place is finished. Thanks Danny!!
ALL those currently in government should be ashamed of themselves, that a private citizen (David Vardy — without the benefit of any government provided expert and financial resources) has to do what government has failed, and continues to fail, to do — but should have done long ago.
Without the benefit of government assistance, Mr. Vardy's post is about as transparent as is possible.
Wake up premier (and other MHAs) and do your duty.
Mr. Vardy's post is a good example of the kind of work (and openness) that government should (and must) provide their citizens.
A good first step might be government asking Mr. Vardy to take on an independent advisory role to the province's negotiations team and with a direct reporting relationship with the premier/cabinet.
Government should have put Vardy on the Muskrat Oversight Committee. It was an easy, obvious choice to start combatting Muskrat groupthink inside a bureaucracy that was devoted to its political overlords. The overlords couldn't handle such meddling then and they really don't appear to have changed in the slightest. As much as the public would like and benefit from having a person of Vardy's integrity in a position of influence, what Ball and the Gang really value is more Carla Foote types who will work hard to satisfy an irresponsible political agenda. The rest of us are on the outside looking in and not getting into that circle anytime soon.
I thought of that after I posted my comment.
But perhaps heading up such a team might more likely tend to compromise the independent nature of the advice, as the position would then organizationally be subordinate to the direction/advise (?) of the premier/cabinet.
Thank you David, for your determined efforts to reveal how Governments, having conceived this Boondoggle, and persists in covering the truth, still hasn't the courage to "tell it like it is". As one who joined the Concerned Citizens in order to support the need to bring the light of day to this travesty, I commend all who have done the same. Our children and heirs deserve better. Keep the faith.
I have a pretty simple observation.
We have all watched this Muskrat Falls mess literally unfold in front of ALL of our eyes.
We have heard months of testimony at two phases of a Muskrat Falls Inquiry.
ALL fingers point at NALCOR as being 100% responsible for the mismanagement and delivery of this project.
We can all debate who's idea it was from inception to now.
However, we are sitting at this point in our history as a Province and we are facing some of the most monumental financial challenges EVER in our history,
Why do we allow NALCOR to continue to operate this project?
Not to mention that some of the very same key people are still in control of both NALCOR and the Muskrat Falls Project!
How much more does this out of control company have to do before we question their capabilities?
If you were investigating a serial killer would you simply let the person continue to kill, or would you stop it?
At what point and time do you come to a very basic conclusion?
You have to stop the continuation of the offence!
What are we waiting for?
The Justice LeBlanc Report?
I'm doubtful it will tell us much more than what we all know already.
The process we are continuing to watch is flawed. NALCOR are still calling ALL of the shots on the project. All the while STILL veiled in a cloak of secrecy?
We have all seen what this "cone of silence" at NALCOR has done for us to date?
We are literally teetering on the edge of financial ruin as a Province!
Don't agree that Nalcor is totally responsible for mismanagement and delivery.
The first and principal responsibility rested and rests with the premier/cabinet/house and the public service (all of whom had an inherent responsibility and duty to insure proper oversight, project management structure, business plan, etc. was in place and remained in place, and to make any adjustments to the plan for the duration of the project).
There was SIGNIFICANT evidence at the inquiry of government failure to do its duty and to do what would have been reasonable.
Maurice,
That is exactly my point?
We allowed ourselves (politicians, bureaucrats, civil servants, Boards of Directors etc.) have all been run roughshod by NALCOR since the inception of this project.
I will agree in terms of oversight EVERYBODY has failed miserably!
What is the one common theme running through ALL of this?
NALCOR!
We watched numerous people that rightly and obviously wrongly they "trusted" NALCOR to do the right thing!
They were "one of us" analogy was thrown around by many witnesses.
Some who testified to me seemed to be in disbelief that their faith in NALCOR had been shattered!
Jerome Kennedy in my mind was one such witness.
Strangely enough he was one of the "few" who had bothered to make contemporaneous notes on what he was involved with?
Now I am by no means a Jerome Kennedy fan but he was one of a few who told it like it was on the stand!
So again this obvious misplaced oversight by so many people will undoubtedly make it's way for some key findings in the Leblanc Report.
But again we all know that from the Inquiry testimony?
It's nothing new.
However NALCOR'S mismanagement of this project has continued up to and including the present 2020!
All we have to do is see the Muskrat Falls propaganda that continues to spill from NALCOR?
Their BS machine is still alive and well!
Why?
I think 'we agree to disagree'.
1. We (politicians and public service) should not have allowed themselves to be "run roughshod' over.
2. It was these 2 groups (higher on the responsibility hierarchy), not Nalcor, that had the duty to FIRST put the mechanism in place, to put the guardrails in place and then to monitor/oversee Nalcor
3. The 'one of us' and 'faith' defense is nothing more than excuse
4. As for Kennedy, I saw his note-taking as excessive and largely based on self-interest. That degree of note-taking would have made any his attention/analyses/contemporaneous questioning all but impossible (but a great CYA activity).
But I agree "Their BS machine is still alive and well!" —- and our government is still putting up with and participating in it.
Agree Maurice, what you are saying should apply in principle, but practically and figuratively speaking, it was not. Danny and other premiers created a monster bigger and greater than itself, gave it more powers than the govt itself, lost total control of it, operating according to itself, Eddie was King and ruled supreme. The train had left the station, the tail was wagging the dog, Stanley told us all of that. Nalcor was gradually brought under control, first by removing its head, Eddie, who gave govt an ultimatum, my way or the highway, never expecting to be challenged. Not saying Stan and ball were perfect, but a great improvement, in brining the monster under control, then carving it up into two parts, Oilcor. Not destroyed but somewhat more under the control of the elected. And, yes guess the dividends never really existed as mr. Vardy said, only on paper. But the govt taking back control to change the legislation, and will change the purchase power agreement with the people, lets nalcor know that there is a power greater than itself, the elected may have taken back most of the unfettered power they were given. Wether nalcor in it's present form, control, is a positive or negative may be debatable. Should it be amalgamated with hydro or remain alone is debatable. Just put the right people in the right places, those who built muskrat must have learned something about how to operate it, rather than bringing in brand new operators, as it would be a steep learning curve, that is if it does in fact operate. My take, says Joe blow. Or would everyone say, the monster has not been tamed, and is still operating with unfettered powers? But would you not agree that the first step is to bring it under the control of the elected. That is how democracy is supposed to work. It is a bad system, but the best we have, as Churchill said. If we have elite families, as some say, that runs the province, rather than the elected then they need to be publicly named rooted out tarred and fettered, for bringing this province to near fincincial ruin. I am sure there are families in Ottawa and other provinces that wield similar powers in other govts. If so why did they not raise holy hell when the national govt gave loan guarantees to a province, without doing their due diligence. Too late if the barn door was left open, and the horses are gone. Too late for the national govt. to say it was a provincial affair, they were the enablers, and need to belly up to the bar, as mr. Vardy implies.
Sorry JB, my view is that "…the monster has not been tamed, and is still operating with unfettered powers…"
Ball/Coady/Marshall is little more than a red form of Danny/Dunderdale/Martin.
If not, tell me who constitutes the red "negotiating team"?
Guess, I can't argue with you. Except, nalcor does not have their claws into the oil money, or do they? When the legislation is changed does that not take power from nalcor? As for the 2 entities you mentioned, guess you are right. And we should be raising holy hell about the negotiation team, that it is not in secret, and Mr. Vardy or people like him should be on the team to keep them honest and the public informed.
NAPE and CUPE aren't the problem. There are many assistant deputy minister/director/manager that make horrendous decisions that cost tens of millions, or in the case of Muskrat Falls, tens of billions. People like Carla Foot and not in unionized positions. Many government departments could be eliminated and the public would never notice. Unions did not create these useless positions and they do a great deal to protect workers from sociopathic employers.
As a group, unionized positions in Newfoundland, especially professionals, are not well paid compared to other provinces, but we do have some benefits like defined benefit pensions and sick leave. Non unionized workers are generally worse off. Rather than a race to the bottom (take away union benefits because others don't have them) we should all be unionized.
We do need a mighty purge of the management of the public sector, followed by a rebuild. This has to be forced upon it by external forces.
We should not be fighting ourselves. We should be fighting the common enemy, which in this case, is a small group of well connected families and wealthy people that run the place. These people have filled the entire management structure of government and all its agencies, including the judicial system with the wrong people (family members, friends, often woefully unqualified who in turn hired their own cronies).
Nobody is currently being held accountable. Muskrat falls lies, school board purchasing $60,000 in car tires that fit no vehicle in the fleet, well documented hiring of unqualified people (rooms, English school board etc.), boards of directors triggering golden handshakes by converting resignations into "fired without cause" before themselves quitting. Even the police – tickets for green lights, execution over a tweet – they are all above the law.
Also noteworthy is that Dave Vardy (author above) was a deputy minister once upon a time – a time when the civil service was run by professionals. Those days are long gone. We need to get back there somehow.
The whole dirty mess needs to be torn down and rebuilt from the bottom up.
Privatize all but essential services so that real accountability is brought to bear with management and workforce. Eliminate at least 15000 jobs from the NL civil service so we return to 2006 levels when our population was largely the same as now. Real measurement of employee effort and real accountability regarding employee performance.
Rewrite labour laws to eliminate the monopoly for use of Building Trades unions on major projects and depoliticize the Labor Board by replacing former union leaders on the Board with lawyers. Bring the province into the 21st century so we can create a real economy with a healthy private sector to provide a sustainable tax base for NL. Alberta and Ontario have already started this and we desparately need to do the same.
The only asset that is valuable enough to compensate for MF is CF. We already have a buyer for that power, the infrastructure is all in place and there are no alternative. Let sign an extension to the 1969 power contract for power at about 5 or 6 mills (what is paid now with the contract + GWAC) for another 25 years or more. In exchange, a debt of about 4 billions is transferred to HQ.
Once that is cleared, let see if HQ has some interest in Gull Island despite their suplus power.
This is the only place where enough external money can be reached to ease our situation.
We are pretty much in the weakest position possible (both provincially and in terms of energy prices) — now is not the time to renew the Upper Churchill contract (are you short-sighted or working for Quebec?).
AS TO TIME, Maurice:
Time is on my side, yes it is
Time is on my side, yes it is
Now you all were saying that you want to be free
But you'll come runnin' back (I said you would baby)
You'll come runnin back (like I told you so many time before)
You'll come runnin' back to me, yeah
Time is on my side, yes it is
Time is no my side, yes it is,
You're searching for good times but just wait and see
You'come runnin' back (I said you would darling)
You'll come runnin back (spend the rest of life with ya baby)
You'll come runnin back to me
Go ahead baby, go ahead, go ahead and light up the town
And baby, do any thing you're heart desires
Remember, I'll always be around
And I know, I know like I told you so many times before
You're gonna come back
Yeah you're going to come back baby…..
This could be posted from the President of Hydro Quebec to Nflders
But actually by the Rollin Stones, likely when CFs was being built, when people like me and MA and many others worked there.
How often have we tried to split from Quebec over Churchill Falls contract, to be masters of our own destiny?
No one is an island unto himself, some wise person once said, even once used by Bill Marshall here.
Winston Adams
Some more thoughts on time:
Time is not on your side, no it's not
Time is not on your side, no it's not
That could be from Greta to The Digger, T Rex Murphy , Andy Wells and other climate change deniers,even PENG2, as to reigning in CO2 emissions.
Winston
Perth-Andover, has done things differently;
https://www.cbc.ca/news/canada/new-brunswick/net-zero-perth-andover-1.5464239
Can you think of similar progressive communities in NL? Rent a heat pump?
Maurice, it is you who is short-sighted.
From now on, our fiscal situation will get from terrible to worst to impossible. The longer we wait, the worst our situation will be.
From now on, HQ will keep doing their own stuff to be sure not need CF anymore after 2041 (they already dont need it anymore as of now, their surplus being higher than what CF produces). Should we wait longer, they will need less and less of it.
From now on, QC is expected to have surplus while NL will do only deficit. Should we wait for too long, we may end up too deep in it for Qc to help us out of it.
NL population is declining and we get weaker every month. If that does not stop soon enough, NL will not have the critical economical core to survive.
We created this boondoggle trying to give Qc the finger. We now must admit that they are the ones who know how to do that kind of business.
I guess it was my shortsightedness that led me to say in 2011 that "we did'nt need the power", that "we couldn't afford it", and that "it was too high a risk".
Perhaps my shortsightedness led me in 2012 to ask the PUB to compare Nalcor's escalating supply price assumption to the industry cost of service standard.
Or perhaps it was my 2012 shortsightedness that caused me to write to the PUB and to point out that Nalcor's Decision Gate 2, feasibility level (plus 50% to minus 30%) cost estimate was not accurate or reliable enough to permit the PUB to make a rational decision as to whether or not Muskrat was "least-cost".
The foregoing evidence can stand up to your fanciful prognostications any day.
"I guess it was my shortsightedness that led me to say in 2011"
"Or perhaps it was my 2012 shortsightedness that caused me to write"
You are very close to it Maurice.
We are not in 2011 anymore. We are not in 2012 anymore. But you, you are still locked in the past.
The money is gone.
The technology failed (LiL, Software, Condenser, …).
The most economically capable ones are leaving.
By proving how strongly anchored in the past you are, indeed you are demonstrating your short-sightedness. Not only can you not see the future, you can not see even the present. You see only the past. So Yes, this is being very short-sighted.
Yes we are in a very different and worse place than in 2011 or 2012. Even heat pumps was a great alternative pre sanction, now it is a mixed bag, helps the homeowner but impacts badly needed power sale revenue.
I see our success as tied to climate change mitigation:
1. A regional plan to use up excess HQ surplus, the Atlantic and Ont area, with Federal assistance for transmission infrastructure.
2. That wold guarantees HQ needs for CF power long term, and at escalating rates, making CFs profitable for NL and HQ, as co -owners. Hydro power will be more valuable if Trump is out, and the USA New Green Plan goes ahead. No USA green plan and we are all doomed.
3. Once the Canada green plan happens, Gull will likely be a profitable opportunity down the road, and help offset MFs costs.
4 If the NorthSpur is properly stabilized, all 3 plants can operate efficiently. Perhaps most all power flows west.
5. A master plan by the Feds for climate change mitigation and using hydro efficiently , including EVs must proceed. An opportunity, as our timing for deal making may get worse not better, if a Real Plan is not soon put forward.
Winston Adams
Ball has announced his resignation and called for a leadership convention.
Yes, a new premier in 10 weeks, or will the minority govt. be defeated. Which will come first ask Joe blow.
Ball sees the writing on the wall. The Feds will have to rescue NL but the conditions will be challenging. Any NL Premier and government will be squeezed between a heavy handed Federal government and an entitled NL population, who has shown repeatedly their refusal to give up anything to help reduce our debt. The NL civil service will catch the brunt of it because that is where the government currently spends the most money. Being Premier will become a hateful existence in this pressure cooker situation. Mr Ball exits stage right before the fireworks gets going!
The VOCM poll showed only 11% believed Ball had any rate mitigation plan. I saw only Consumer Advocate Dennis Browne thought the announcement last week had merit. A replay on Roger's TV channel would make one sick, the deceit of Ball and Shameless O'Regan. The emperor had no clothes moment. No one believing Ball any more.The jig was up. Even his taped speech contained little truth. Under his watch our dept increased by many billions, yet he claims great success, which is false.
Vardy today, as usual, masterfully exposed the deceit of Ball's nothing burger.
Winston Adams
why are you not addressing the 6 to 10 biilion dollar future plant that this province will never afford to build, never have political appetite ever again to build, never have the expertise to build, nor any way ever to physically transport product to market?
Gull has to be sold. and will be sold from position of weakness.
only that with an agreed to purchase 200 to 400 million per year of upper CF power, now, for future sales of CF power post 2041, for lets say until 2065, will there ever be a way to shelter anyone from this watershed moment (lol)
Dwight just wants to buy some time while someone else takes the newfie bullet, straight thru the hearts of every single Newfoundlander who dreamed these three pillars of Hercules, CF Gull MF could raise the prosperity of this Country.
Quebec protested the loan guarentee. on what planet does a quebecois leader throw 5 billion public dollars at NL? you,ll be lucky if the people on the Labrador peninsula are still paying taxes in NL.
Ahhhh I see now why April Fools day was so fitting an anniversary for the ol rock of not quite Gibraltar.
ye bys are down the churchill river without paddles. let quebec deal with the professional protesters that will move into central labrador. take whatever money is on the table. stop blaming. just get it done.
Eat your heart out buddy, you will never get us, or any part of us.
Maybe it is time for "Concerned Citizens" to form a New Party.
Take a look at what happened in Greece when Syriza and the Independent Greeks formed a coalition to take power in 2015. This movement rose up with an agenda of radical change for Greece (with similar economic problems as NL has now) and popular support from the people. Alexis Tsipras was the new Prime Minister and Yanis Varoufakis was the new finance minister. After a brief period where they threatened to default on creditors and pursued possible radical action, they came to more intimately understand more than just the perspective of the people, and the limited courses of action they actually had to bring sustainable improvement for their country. Their positions moderated and their early radicalism actually hurt their prospects to resolve Greek problems. After a long period of austerity, Greece is now far more stable with improving prospects.
We as NLers have to stop demanding that we pay no price for the mistakes that have been made, as it is too late for that. The politicians we elect are terrified to be truthful with us because for those who tell us the truth, we punish with our commentary and at election time. Cathy Bennett wanted to push an agenda of rapid response to address our fiscal problems and her Liberal colleagues, the public sector unions and the people punished her for it so she bailed out and left politics. She was replaced with Tom Osborne to pacify the unions and the people, who prefer to stay in denial than deal with hard realities. So we delayed for 5 years, digging an increasingly deeper financial hole, only to finally be forced now to deal with the problems that have been visible for years. Just remember that the politicians we elect serve our wishes and if the majority of us insist on denial, then that's what we will get.
A Concerned Citizens party, I think, would follow a similar course as Syriza in Greece. It would ultimately come to face all the challenges of the situation as faced by all of the stakeholders (Feds, creditors, Emera, NS government, NL government, etc) , not just just those as faced by the NL people, and have to find solutions to address all those constraints.
"Of the people, by the people". Didn't the Greeks define Democracy some eons ago?
Anon, you have some smarts here. Talk to your neighbour.
Anonymous18 February 2020 at 13:44 You are mistaken about Greece (and NL).
The Greek popular government refused o take the EU plan that was a financial trap. They were doing fine until EU bully Germany threatened to shut down the banking system and ATM and the government had to back down and like NL now was forced to take unpayable loans that pushed an impossible debt load a little further down the road and that ensured economic collapse and unneeded desperate cuts to social programs and pensions that vaporized.
This is NL future unless a guy in a spandex suit and cape descends and saves the day!
I think you have it wrong. You're probably one of those who believe there are no limits to borrowing but that is a fantasy.
Although the dumb Greeks were willing to borrow themselves into oblivion, the Germans realized that further Greek borrowing would lead to default by the Greeks, which would have been disastrous for Greece and the EC so the Germans insisted on conditions associated with further Greek loans to ensure there would be no defaults.
You have a lot to say on this blog but most of it is crap. You clearly lack any real understanding on many of the topics for which you express strong views.
The Germans pushed the unpayable loans down the Greek governments throat against the wishes of the electorate and government. The same will be imposed by the bondholders here soon when the the dust that is all that remains of the fed/prov "mitigation" settles.
No cash is a signal that cost Ball his job. Who will be next to step up into the breach??
Anonymous19 February 2020 at 12:55 Anonymous19 February 2020 at 12:55 Two things, First I use my name and don't hide my identity. I use logic not ad homminem attacks to make my point. What of substance do you have to add to the debate??
Again you are wrong Bruno. The Germans did not push loans on the Greeks. The Greeks desparately needed to borrow more to avoid default, as they were making no adjustments in their excessive spending.
The Germans and other Euro nations were willing to loan Greece more money but not unless the Greeks curtailed their excessive spending. Eventually, Greece agreed to more responsible financial management and they then received further loans that kept their country afloat.
If you were less agreessive and more factual with your arguments, there might be more contributors to this blog who would display their names. It is toxic people like you that makes people prefer to protect their identities.
Funny the Greek finance minister thinks otherwise. He contends Germany forced the unpayable loans and had conditions imposed that decimated social spending.
Is social Darwinism your agenda? Everyone for themselves. Let the old and poor die miserable and in many cases preventable deaths? Some of us are a little more caring for the plight of our fellow persons.
PS That is quite a rationalization for the cowardice of anonymity. If persons used there names many of the excessive and vitriolic attacks would cease.
Any genuine whistleblowers can use the tried and true methods contained in plain brown envelopes dropped off at the mailbox of persons like our host.
Funny how some see logical argument that is faithful to the facts as aggression.
https://nationalpost.com/opinion/jackson-doughart-why-is-the-rest-of-canada-bailing-out-newfoundland?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook#Echobox=1582024435
This should be a surprise to no one.
Yup, why should mainlanders think any different? It's going to be a tough mindset to challenge. They're not going to give us one red-cent when they see the capital we pump into our civil service, school system, university etc involves more cost per capita than in their provinces. When we are in tenth place in all measures, they'll start sending something our way via equalization and might consider some special amendment to boost it if severe suffering is happening here.
Imagine the pussy prime minister of Canada failing to adequately tackle the illegal activities of these protesters shutting down the Canadian economy. Shame on him and shame on us for not having him removed from office ASAP. He said he stood for Canadian jobs, while attempting to obstruct justice in favor of his friends at SNC-Lavalin. What about these jobs? Elder Trudeau must be turning in his grave by now.
"Unknown", Suggested reading; "Reconciliation Manifesto", by Arthur Manuel. Also, "Comeback", by Ralston Sauls. No time for gunboats.
Reconciliation BS, bring on the balls, they are sadly missing at the helm.
todd russell or ryan cleary might want to be prime minister of newfoundland. maybe one of the mcdonald boys can start a danny 2.0 regime in red.
dust off ol roger, vale inco worked out ok.
simms is an outsider in trudeaus outhouse, might be a new beginning for him
I’m voting for karla foote. unless eddie sheerr runs
Uncle Gnarley would make a good premiere. Dave could be minister of finance, Ron or Geoff could be minister of justice. Maybe PlanetNL and a few others.