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Wednesday, November 4, 2009 01:04 PM
A vice-regal salute
Tim Powers
The Governor-General ate seal. John Crosbie, Newfoundland and Labrador's Lieutenant-Governor, wore a seal-skin coat to meet Prince Charles and Camilla today. Good to see those who are seen as ceremonial players use their posts to send important symbolic messages to the world.
I am sure some of the nuisance so-called animal-rights activists and some in the European Union will have a run at John. He may be in his late 70s, but he'll still be able to repel the assault. It is wonderful to see he never loses the passion to fight for the things he believes - even when his current job restricts his public commentary. Somehow he always finds a clever way out of his shackles.
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Friday, October 30, 2009 01:34 PM
It's not just Danny
Tim Powers
Rob, let me tell you being a Newfoundlander means one always possesses a healthy dose of paranoia. It is part of the Irish in us. However, I don't think in this case the Premier is being overly paranoid. My god the Toronto Globe and Mail headline this morning goes farther than Danny; screaming from the top of the front page: "Canada's New Energy Crisis." Over the top? Maybe?
It is not just Danny and The Globe (an unlikely pairing). They are asking questions in New Brunswick and Nova Scotia. Has Donald Savoie, one of Canada and Atlantic Canada's top scholars, lost the plot for saying, "This deal is a sweetheart deal for five years. After that, it becomes a sweetheart deal for the province of Quebec...?" Is Nova Scotia Energy Minister Bill Estabrooks out to lunch for arguing that, "I don’t know why New Brunswick would be going down this route — for obvious reasons of politics and finances, but that’s not something for me to surmise...?"
If nothing else it does force people, as Rob suggests and I agree, to have a hard hard look at the deal New Brunswick has signed with Quebec. Not only should the matter of this unprecedented sole-source be examined, but as well as:
1. What is the true story on consumer and business electricity rates? Seems to be conflicting information out there.
2. What of corporate taxation in New Brunswick? Will Hydro-Quebec being paying any?
3. What of open access? What is New Brunswick's version vs. Quebec's?
4. Who will truly set energy policy for New Brunswick?
5. If New Brunswick has given away its power assets for quick cash what leverage does it have in the future? What is the value of this deal in the long-term?
Allow if you will one slight indulgence of my own suspicious mind. Check out this clever gem posted above from The Halifax Chronicle-Herald's Bruce MacKinnon. God bless political cartoonists!
Friday, October 30, 2009 12:36 PM
Is Danny Williams paranoid?
Robert Silver
So after a year or so regrouping from his last "national unity crisis," the "country is coming to an end" battle, Premier Danny Williams is back on the war path. His target this time? New Brunswick Premier Shawn Graham is the direct opponent but the real enemy is Hydro-Quebec.
For those who don't follow energy policy and politics closely, let me give you a 30-second brief. Newfoundland has a historic spat with Quebec over the Churchill Falls development. And for good reason: it is a wondrous, profitable deal for Quebec and it has brought little wealth to Newfoundland.
Premier Williams wants to develop the Lower Churchill but either wants to avoid dealing with Quebec entirely or, at the very least, wants to have negotiating leverage with the province and its utility. Williams's problem is one of geography and the size of his province's utility (I won't discuss that here - it is less sexy politically). Geography is the big one - it is very hard to get power from the Lower Churchill to market without wheeling it through Quebec.
Very hard but not impossible. There is a plausible scenario where you ship the power underwater and then wheel it through New Brunswick and into the New England market.
Ah - you see, New Brunswick... That helps explain Williams's comments from yesterday that "Hydro-Québec's 'agenda' is to secure a stranglehold over access to electricity markets in the United States."
Commentary in Quebec today backs up Williams's concerns. As one La Presse reporter writes (my translation):
"This transaction has Hydro-Quebec salivating. The Crown Corporation will have new access to the Maine and rich North-East US markets thanks to an extra 500 MW of transmission capacity. It's not just that they can export more power but they can choose the ideal time to sell their electricity, when prices are highest"
The only problem?
They are almost certainly wrong. Quebec doesn't have the legal right to do what is being concocted. At least not if they want to continue selling into U.S. electricity markets.
As Tom Adams, one of the best energy analysts in the country (even if I sometimes disagree with him) wrote in a note on his website : "Hydro Quebec is likely to remain responsive open-transmission-access rules of the U.S. Federal Energy Regulatory Commission."
FERC has huge power over Quebec's ability to sell into the New York and New England market and if Quebec does not abide by their rules, there will be serious consequences.
Tom goes on to make a very poignant comment that goes to the heart of our current federation: "It is a pathetic statement about our federation that the U.S.'s international electricity trading rules bring more liberality to Canadian power markets than our own inter-provincial transmission access provisions."
Indeed.
So again, I think the N.B. Power deal is problematic because I don't understand how in 2009 a government can sole-source a $10-billion deal without any competitive process to determine the real value of the asset and allowing all potential, qualified bidders an opportunity to bid on it. Hydro Quebec may have been successful in a competitive process but there's no way they should have been able to get this done without competing against other potential buyers.
That having been said, let's keep the criticism of the deal factual, rather than basing it on irrational fear or political posturing.
Thursday, October 29, 2009 12:25 PM
The New Brunswick deal
Robert Silver
While I have never done any work for any of the utilities involved in today's big deal, I do work in my day job in the energy sector, which is why I typically avoid writing about energy issues in this space.
There are still a number of questions about this deal that need answering for me. Unlike Tim, I don't see selling your utility as "giving up your sovereignty" over energy policy in a province. Sovereignty emanates from the ability to regulate rates and set overall policy direction. It is unclear at this time what regulatory levers the province will maintain as part of this deal but in order for Tim's argument to hold water, you have to buy that Nova Scotia and Alberta have long ago lost control over energy policy in their provinces, which is a ludicrous notion.
First the good about the transaction: this deal allows New Brunswick to pay off 40 per cent of the provincial debt which frees up more fiscal space to implement Premier Shawn Graham's aggressive tax cut policies while investing in health and education.
The New Brunswick debt load was becoming a real issue and cost-overruns at Point Lepreau weren't helping matters.
Therefore, the decision to sell this asset is eminently defensible and I would argue excellent policy.
So on the one hand, I have absolutely no problem with New Brunswick selling their utility. On the other hand, there is something deeply troubling about this deal. A $5-billion purchase price and the assumption of $5-billion or so in debt may be a good deal for the tax payers and rate payers of New Brunswick. It may be a terrible deal. It is of course difficult to answer that question because this is a $10-billion sole sourced contract. There was no competitive process. No opportunity for a higher bid.
I have no doubt that if there had been a competitive process, Hydro-Quebec may very likely have still won. They have strategic reasons for buying the assets that don't apply to other potential buyers (and they start in Newfoundland), they are big enough to easily absorb the relatively small sized New Brunswick company and they have cheap capital compared to many other companies. That having been said, there may have been other companies that could have offered an even more attractive deal.
But of course we will never know now and I just don't understand how a government in 2009 thinks that sole sourcing deals of this magnitude is acceptable government practice.
The other problematic component of the deal is the rate cap that is being put in place for residential and industrial customers for five years. Rate caps are atrocious policies - even if they are politically popular in the short term. They have failed as policy in jurisdictions ranging from California to Ernie Eves's Ontario. There is no indication in the initial stories about the deal how rates will be set once the cap is lifted.
But to the larger point, as Ontario and other provinces consider asset sales as potential solutions to their budgetary problems, on the one hand I am encourage by the boldness of Premier Graham's move and on the other hand, I would be very surprised if you see a repeat of this type of sole-source arrangement. My gut says that if Graham pays a political price, it will be for the problematic nature of how this deal came together rather than the notion of the transaction itself.
Thursday, October 29, 2009 09:27 AM
N.B., what are you doing?
Tim Powers
First and foremost let me put my biases and relationships on the record. I am a proud Newfoundlander, have always been and will always be. Also a matter of public record is that my company has had a lengthy professional relationship with Nalcor, formerly NL Hydro.
Less well known though germane to today's fascinating, perplexing news developments is that I am also formerly a resident of the wonderful province of New Brunswick. Shawn Graham, the Premier, and I have met and he seems like a thoroughly decent man. One of his uncles had a long association with my beloved home.
A long rambling introduction to say I can't understand why, apparently, the Government of New Brunswick is prepared to sell its power assets to Hydro Quebec.
For a reported $10-billion influx, it appears New Brunswickers are prepared to give up the sovereignty power assets provide for immediate fiscal relief. They seem to be in search of a quick fix while forsaking the long-term control of their energy to another province. It is a strange political play, one that no doubt will determine Premier Graham's future. What will the wise people of New Brunswick think of this deal?
Some of us see an eerie parallel to deal done with Quebec by a Liberal Premier of Newfoundland named Joey Smallwood decades ago. Smallwood, in search of new revenues, came to an arrangement with Quebec over Churchill Falls. Both the bottom line and mythology agree on who won out - it was not Newfoundland.
Let us see what New Brunswick and Quebec formally announce today. Strap in tight everyone for what promises to be a voluble contentious debate with numerous dimensions.
Wednesday, October 28, 2009 02:51 PM
It was all his fault?
Robert Silver
Reading the coverage about Ian Davey's departure I am struck by the sameness of it; it was all HIS fault. He was to blame for all of the Liberals' problems. Now that we have changed HIM, dumped HIM, good times for the Liberal Party are certain to be here again.
You can easily take the stories, replace the name "Ian Davey" with "Stéphane Dion," "the board," "Paul Martin" or "Jean Chrétien" and be transported back in time when Liberals were last convinced that by changing one man (or in the case of the "board," a group of men), everything will change. Thank God almighty, our saviour is here!
But you know what they say, those who repeat history are almost certain to get completely different results. That's how that chestnut goes, right?
The notion that everything that has gone wrong in the last 12 months was all Ian's fault is ludicrous. A total cop-out.
I know Ian a little bit and I don't think there was anyone more committed to the renewal of the Liberal Party and bringing new, smart people into politics than he was. He is also as decent a guy as there is working in politics. Straight up, honest - decent.
He deserves far better than what unnamed Liberals are dishing out today.
This is in no way to take away from what Peter Donolo brings to Michael Igantieff's office. Peter is a professional. He knows communications and as I wrote earlier this week, that is an area the party has been woefully weak in over the last three years.
But Peter is not the Messiah. If the problem wasn't just one guy, the notion that one guy can turn the entire ship around is equally silly. Liberals who think that we are just one guy away - even if that guy happens to be hugely talented - have an extraordinary naïve view of where the party is at. They are also setting themselves up for disappointment if yet again, the promised savior turns out to be something less.
Wednesday, October 28, 2009 02:41 PM
The Liberals' new saviour
Tim Powers
Well it's official. The extremely talented and likeable Peter Donolo is becoming Michael Ignatieff’s chief of staff. Good luck Peter, but not too much.
Your first task is going to be one you are well familiar with – expectation management. A Liberal Party desperately seeking hope has hailed your arrival as the second coming of the Messiah. They have been aided and abetted in this process by many in the national media who properly have a great respect for you. After you part the Ottawa river and teleport yourself into the 4th-floor Centre Block suite occupied by the Leader of the Opposition you are going to need bring everyone back to earth.
In the afterglow of the of clumsy Douglas MacArthur, “I have returned” like announcement that hailed the next chapter of your political adventure, stories about who leaked it and numerous highlight reels of your impressive career dominate the news. Coverage of your leader seems to be buried by the coverage about the hired help. While some might argue that is a welcome development, the old-school pro that you are knows the coverage should be about the boss not the staff. After all, wasn’t Iggy supposed to be the saviour you have morphed into in the eyes of the Liberal masses?
In an earlier piece today someone described your hiring as “a game-changer.” In time that might prove to be the case. But whoever inflated those expectations and put a target on your head forgot that old Chrétien maxim that you helped execute – “under promise over deliver.”
After you have guided Iggy to the promised land I hope you’ll allow me to repent for stirring the pot.
Tuesday, October 27, 2009 06:43 PM
OMG! LOL
Tim Powers
OMG is text-messaging short-hand for Oh My God. LOL, as I only discovered from my students last year, means Laugh Out Loud. Yes, I am slow learner; rip on me accordingly but apparently I am not alone. Team Ignatieff may have had their best keystone cops OMG! LOL moment to date.
You see the political high school that is Ottawa is captivated by the 90210 drama of whether or not Iggy has hired is third chief of staff in less than a year. CBC's Power and Politics program kicked off their show by reporting the talented and capable Peter Donolo, former communications director to prime minister Jean Chrétien, has been hired as the new OLO boss. CTV's Power-Play got word from Iggy's current director of communications, Jill Fairbrother, that no that wasn't the case.
In the space of an hour Canadians who watch these programs got a first had view of how totally dysfunctional the hierarchy of the Liberal government-in-waiting appears to be. No one in the Liberal Party who seems to know just who is in charge. Where is Alexander Haig when you need him?
Having lived under similar circumstances with pposition lLeaders of yesteryear,I can empathize with the troubles of Team Iggy. However, the best staff in the world can't fix a leader who doesn't now how to lead.
Monday, October 26, 2009 12:26 PM
How much to say?
Robert Silver
Over at Aaron Wherry's blog, he quotes London MP Glen Pearson's response to Andrew Coyne's latest column:
"Last week our Andrew Coyne argued that now is the time for Michael Ignatieff to deal honestly and directly with the deficit and the state of government finances going forward. In response, Glen Pearson wonders if the press gallery is ready to do likewise:
Let's be honest: No political leader in their right mind dares to be as truthful as Coyne challenges because it would be the media itself that couldn't withhold its scepticism long enough to truly investigate the merits of that leader's case. Opposition parties would immediately pounce and all manner of bloggers, pundits and columnists would discuss the scary ramifications of such a daredevil proposition. I recall when Ignatieff came to London following a visit to Cambridge, in which he stated no leader would be worthy of the name if he or she didn't place the possibility of raising taxes on a long list of future considerations if a deficit couldn't be brought under control. Political staffers mulled around, worried that it would be taken out of context, which it inevitably was ... The very next day in the House, Conservative members used every possible occasion to ridicule Ignatieff, calling him just another 'tax and spend' Liberal. The media ate it up."
Glen seems like a smart guy but boy, is he buying into a false dichotomy here. And yet the dichotomy he is buying into is something of conventional wisdom now in the Liberal Party. It is also the dichotomy that, in my opinion, is responsible for most (though certainly not all) of the Liberal Party's current troubles.
The dichotomy Glen buys into is either you say nothing (the "safe option") or you put out lots of smart, detailed policies (the "risky option"). The risky option is akin to political suicide and therefore the safe option must be followed at all costs.
Well, first off, as the current polls show, saying little can be a pretty risky option too.
More importantly, folks are latching onto the wrong dichotomy entirely. It is not a trade-off between putting forward bold solutions for the problems facing the country or putting forward flaccid mush. Not even close.
The real dichotomy is between communicating your ideas well - whether those ideas are bold or more of the same - versus communicating your ideas poorly.
Take the example that Pearson uses to prove his point: when Ignatieff said "no leader would be worthy of the name if he or she didn't place the possibility of raising taxes on a long list of future considerations if a deficit couldn't be brought under control". Putting aside the merits of what Ignatieff said, please remind me what preconditioning was done with the media before Ignatieff made this statement? Oh that's right, there was none. Who sat down with key influencers to explain them the strategy as well as the policy? What key stakeholders had been lined up as endorsers? What caucus were put onto regional tours to spread the word? What was the social media strategy?
Oh, you mean it was just a random comment that came out of nowhere and was quickly dismissed - by us - five minutes later? Wow, amazing that didn't out work better then. Damn media and their unwillingness to cover serious, well thought through policy pronouncements!
So Glen is completely right - if the Liberal Leader adopts Andrew Coyne's suggestion - or any other policy or strategy, bold or otherwise - and has no communications strategy or tactics to roll it out then yes, it will end very, very poorly.
The Green Shift - the reason so many Liberals now accept as divine truth that we shalt not say anything of substance prior to an election - failed because we as a party, from the leader on down (and yes, it was a much bigger circle of people who deserve blame than just Dion) - failed miserably to communicate it.
Period.
Blaming the media for being unwilling to cover it just right is an excuse for our party's failure (and to be crystal clear, this is a general criticism of the Liberal Party, not a criticism of any communications staffers in particular).
Wednesday, October 21, 2009 09:30 AM
Public money to the public
Tim Powers
We live in a wonderful country, a wealthy country, a stable and healthy democracy. Clearly, that must be the case as one of the most pressing debates over the last numbers of days is the one involving how the Conservative government spends the public's money on the public. After years of having Liberals give our money to their friends I guess a period of adjustment is required.
Apparently, in Canada it is scandalous to invest taxpayers money into taxpayer-desired projects. You know the ones. The kind you find in places like Toronto and Newfoundland. Jurisdictions so enamoured with Stephen Harper that statutes have already been erected to him to pay homage to his governance. Dalton McGuinty, David Miller and Danny Williams, the "three Ds for Steve," taxpayers and decision-makers of a different stripe one and all have said okay to federal spending. They even worked cooperatively to get it. And it didn't come with the condition that the ring be kissed or they be photographed holding a big piece of cardboard with a goofy grin on their faces.
Yup, the public-money-for-the-public controversy has so outraged the Leader of the Opposition that, well, he has decided that now, oops, it is not the time tgo vote against the government. This new aggressive posture of giving tacit support to the government he condemns - on principle, I believe it was, not polls - coming to him only after being mauled by small children. Though that must have felt better than being walked over by the grown men and women in his caucus.
What next in Canada? A dialogue about whether the winter is colder than summer?
Silver-Powers Contributors
Robert Silver
Robert Silver is a Toronto-based energy lawyer, entrepreneur and consultant. He currently advises energy companies looking to build clean electricity projects in Ontario. He has been involved in projects that have brought more 3,000 megawatts of clean and renewable energy to Ontario. Robert has also been involved in a number of innovative conservation and energy efficiency projects. He is a highly sought after speaker on energy, infrastructure and environment issues.
An active federal and provincial Liberal, Robert was Gerard Kennedy's National Policy Director during the 2006 Liberal Leadership Campaign. Prior to returning to the private sector, he worked for Ontario Premier Dalton McGuinty as a special policy advisor. He received his law degree from the University of Western Ontario, where he won two North American and two Canadian National Debating Championships.
Tim Powers
Tim Powers is Vice-President of Summa Communications based in Ottawa.
Originally from St. John's, Tim began his career as an assistant and advisor to the Honourable John C. Crosbie, then Minister of Fisheries and Oceans. Thereafter, he acted as advisor to the Minister of Indian Affairs and Northern Development. He also served as the Director of Policy and Research to the leader of the Progressive Conservative Party of Canada. Generally, he has been involved with federal election campaigns in one way or another since the great Free Trade debate of 1988. From handing out leaflets to knocking on doors to TV talking (thankfully his time as a bouncer helped with that) he has had the good fortune of doing a bit of everything.
Tim has a Master of Sciences degree (Media and Communications) from the London School of Economics and has studied Public Sector Management at Harvard University. Currently, he serves as a lecturer in the Faculty of Communications at the University of Ottawa.