Danny Chavez back in business

Believe it or not my colleagues and I have great debates about old Danny Williams and his tactics on Newfoundland and Labrador.  There is no doubt that he has tapped into a long standing but latent view among residents on the Rock that their province has been constantly receiving the short end of the stick.  His posture towards the mining, oil and now forestry interests on the Rock has renewed a sense of pride and worthiness among residents and his approval rating is an unbelievable 90%+.

But these kind of heavy handed efforts – for example writing legislation to take back property rights without any negotiation with the company – are problematic. 

I wish we could have strong leaders like Williams but channel that strength into building new industrial sectors to replace the old.  Alberta is buying its way into nanotechnology, film & media and other 21st century industries by throwing hundrds of millions of dollars at them.  Shouldn’t Newfoundland use the proceeds of its oil wealth for the same objective?  There must be some interesting, nascent sectors that could be exploited with the help of oil money, Memorial University and some of the talented smaller firms over there.  

I know that some of you cringe at the notion of government trying to engineer economic development with taxpayer dollars (or royalties), favourable legislation and policies.  But that is how the auto sector was started in southern Ontario. That is how the film and media sector was grown from nothing to a billion dollar industry in British Columbia and that is how the pharma and aerospace sectors were grown in Quebec. 

You can pour money into dying sectors.  You can do nothing and rely on more Equalization from Ottawa or you can be proactive about economic development.  I prefer the latter approach and again just to make the point I don’t think you have to subsidize uncompetitive firms or industries to build clusters.  Endowing a $50 million chair in a specific research area can be just as effective an ecoomic development lever as enticing Google to set up here.  But the overall objective of economic development must be the catalzying of new business investment in sectors that have a long term perspective and that offer above average wages.  That way you have sectors with a 20-30 year time horizon, good sources of new tax revenue and the quality of jobs that keep people here and that will attract people from afar.

9 thoughts on “Danny Chavez back in business

  1. First, keep in mind that this is NOT like Venezuela. Newfoundland’s position is that Abiti Bowater is breaking its contractual agreement of a lease that goes back almost a century. In fact, listen to CBC’s interviews with Abitibi and the pretty much ADMIT that. So maybe we’re hearing more of that ‘maritime defeat’ (or is it just New Brunswick now?) that government should simply roll over for corporations. Perhaps they should do like New Brunswick, and rewrite legislation so that they can ship all the wood out-after all, like NB’s Minister of NR’s says “somebody has to use the wood”.

    So it’s no surprise that WIlliams approval rating is 90%, which shows you just how small the support for current business practices are. But this story doesn’t relate to others, how do you KNOW that NFLD isn’t putting its money into other areas?

    Finally, it depends what is meant by ‘Chair in research’. Granting $50 million to set up a chair doesn’t do much-depending what the ‘chair’ is doing. The recent RIM example is a good one, RIM didn’t ‘come to NB’ because of any Chair in anything, but by buying a research company. If they find expansion possibilities and workers then they will no doubt expand, but not because of a research chair. Businesses are not fooled by appearances, they want to know the bottom line.

    But for the ‘cringers’ you refer to, the reality is exactly the opposite of what they fear. The most successful IT and research models have come from GOVERNMENT, NOT from industry. In fact, now that industry is taking over mroe government functions and research, we are seeing just how poorly industry ‘manages’. In fact they can’t even manage the industries where they get carte blanche. Again, in top managed companies in Canada, the only ones from NB are ALL public utilities, or those closely linked-they aren’t Irving.

    This is REALLY big news as its the first time an expropriation threat has come from a canadian government. You combine that with the poor showings of industry-as well as the FACT that Abitibi’s own managers state that the mill earns20-30 million a year and people are going to start putting two and two together. Wasn’t it here that I read something about “government running it”? I wouldn’t say governmment RUN it, I’d say government FUND it, and workers run it.

  2. The NL gov’t didn’t unilaterally end the business relationship. AB did with their actions to close the Grand Falls Windsor Paper Mill.
    As to the legality of taking back ownership of the Hydro assets, AB broke one of the covenants contained in the agreement itself with the mill’s closure, they have no rights in NL to provincial resources whatsoever.
    They do however have an expectation to be compensated for infrastructure they built. That is fair and will be taken care of by NL is due course.
    I’d suggest reading the following links:

    The Star Lake Power Plant cost Abitibi about 50 million to build in 1998.

    Timber rights were given to them to produce paper…No paper, therefore no timber rights.

    I guess the 250 million must be a good will payment!!

  3. The Supreme Court of Canada basically said that the ‘only’ reason the off-shore could be considered to be owned by Canada is because of third-party international law. The court actually said that the status of these resources is very much in the hands of NL. They demonstrated their meaning by saying, and I paraphrase, ‘not-with-standing international laws, NL brought those resources into Canada, and NL can take them back out’.

    So in response to this the Atlantic Accord compromise was reached. In that deal the rest of Canada gets to suck the teat of yet more of our resources. Harper has twice unilaterally violated that compromise agreement in order to suck a little more out of NL’s share. Talk about bumming off the poor!

  4. The Canadian Confederation is nothing short of Democratic Discrimination by all of the national PUPPET parties of the Upper/Lower Canada majority against the minority provinces in there never ending quest for power.

    Where is the vision for the majority of the provinces in the Canadian federation? As opposed to what we have now which is a vision for the majority of the population in Upper/Lower Canada By all of the national PROXY parties in there never ending quest for power.

    The Canadian confederation is A Tragedy of the commons (minority prov/colonies) at the hands of our Tyranny of the majority (national PROXY parties of the Upper/Lower Canada majority) in there never ending quest for power!

    No national PUPPET party of the Upper/Lower Canada majority or the MP’s you elect to any such party will ever back Newfoundland and Labrador’s 1.5% if and when the ROC doesn’t support it. It’s called the national PROXY party line or Tyranny of the majority in our systemically flawed political system.

    The Canadian Confederation has NO equality between its members and as such is nothing short of Per Capita Colonialism!

    To paraphrase President Clinton’s campaign manager “It’s the political system stupid! “


    In the Canadian confederation the national PROXY party minority province MP’s will TOE all of the national PUPPET party lines of the Upper/Lower Canada majority of doing what’s in the best interest of the majority of the population to win or hold onto power.

  5. Newfoundland and Labrador (national) Energy Plan 2

    Let’s put this in perspective for the rest of Canada, at $1.5 billion, that’s about $3,000 worth of extra debt every man, woman and child in Newfoundland and Labrador will have thrust on their back by Stephen Harper and his vindictive government — on top of the highest per capita provincial debt in the country.

    The rest of Canada seems to see this as a bit of a side show, but if they were taking the hit would they be crying foul? You bet they would.

    If a hit of $3,000 each was taken by the other province, let’s see what the calculations would show.

    For Ontario the figure $36.48 billion flows from the 2006 census and the 3k each for Harper.
    Quebec takes a $22.64 billion hypothetical swipe from the feds.

    British Columbia would see $12.34 billion extracted from its budget.

    Alberta, the prime minister’s home province, would feel the $9.87 billion pinch.

    A $3.45 billion swat at Manitoba wouldn’t go over well.

    Saskatchewan would find a $2.90 billion addition to its debt painful.

    Nova Scotia would likely balk at the $2.74 billion hit.

    New Brunswick’s share of $2.20 billion would definitely hurt.

    Prince Edward Island’s $3,000 per capita adds up to .41 billion.

    Add in the swipe at the Territories and the federal treasury stands to swell by about $95 billion.

    Would that cause a stir? It would sure wipe out the deficit.

  6. NS Rodney McDonald sold out Sask and NL on the first go round with Crown share for his province, money for Maritime gateway, and money for rural high speed.
    Sask Brad Wall sold out NL by agreeing to drop the court case challenging the constitution and non-renewables, Money for Bridge, Nuclear, and money for Carbon sequestration.
    That was the last time when Harper promised to exclude non renewables in keeping with the constituion and fair treatment like every other province. It cost NL 10,000,000,000.00 BILLION.
    This time NS Rodney sell out Mcdonald got a side deal that would have seen NS lose 75 million.
    Not sure what Man got but it was also a side deal.
    The problem with NL in this federation is we are worth too much money on a per capita basis and can’t be bought off without the rest of the provinces getting upset even though it is our cake and we should be allowed to eat it too.
    Did you know NL is the largest province in the entire federation when you include it’s continental shelf.
    In fact NL’s continental shelf is the size of the three prairie provinces combined.
    The real problem here is the fact that the SCC contravened the constitution and handed ownership, control, and primary beneficiary over to Ottawa and since NL only comprises 1.5% of Ottawa it only gets 1.5% back.
    Mr. Harper might find it instructive to sit down with the families of the men lost on the Ocean Ranger if he wants to get the provincial perspective on this issue from NL citizens other than Premier Williams. This province has taken the risks and paid the price – materially and in human costs – of exploration and extraction of resources. Mr. Harper’s mean-spirited attitude dishonours those sacrifices.
    For those not familiar with the Ocean Ranger disaster, on Valentine’s Day 1982 a massive storm off the coast of Newfoundland destroyed the “Ocean Ranger”, the world’s mightiest oil drilling rig. All 84 men on board — 56 of them from Newfoundland — perished in Canada’s worst tragedy at sea since the Second World War.
    I doubt that Mr. Harper’s Alberta has paid that kind of price for its oil. Show a little respect.

  7. And lo, Newfoundlanders and Labradorians led all the rest

    Cross Examination by Averill Baker
    The Charter
    The last line in the poem Abou Ben Adam reads, “And Lo Ben Adam’s name led all the rest.” Amen.
    Figures were released three weeks ago identifying the provinces that contribute the most to the Canadian economy in exports to foreign countries and lo Newfoundlanders and Labradorians led all the rest – again. But, this time, it’s in spades, as the gamblers say, with the one-eyed-jack-of-diamonds-and-the-devil-close-behind way.
    Newfoundlanders and Labradorians now contribute more to the Canadian economy per capita than any other Canadians to such a remarkable degree that it makes one feel sympathy toward Canadians from other provinces.
    Other Canadians who look at these recent figures must feel embarrassed that Newfoundlanders are, in economic terms, contributing so much more than they are to the Canadian economy.
    Canadians in Ontario and Alberta must feel like they’re on unemployment insurance with Newfoundlanders paying the bill. Quebecers and Maritimers must feel they are on welfare with Newfoundlanders paying the bill.
    In economic terms each Newfoundlander is now worth four Canadians from other provinces.
    It’s becoming embarrassing.
    And what is just as embarrassing is that historically, since 1949, this province, on average, on a per capita basis, has led all other Canadians in contributions to the Canadian economy.
    Of course, the billion dollars of power that we export indirectly to the United States shows up as Quebec’s power on the official figures. That’s one billion dollars of exports that must be taken from the Quebec column and counted as coming from this province.
    Oh yeah, says the economist, we lead every other province on a per person basis with just over a half a million people – of course Newfoundlanders and Labradorians lead the rest of Canada. Also we have always exported practically everything we produce – wood, pulp and paper, minerals, fish, and now oil. That is why we have always contributed more to the Canadian economy than any other Canadians on a per capita basis.
    And that is why some people sometimes suggest that we would have been better off had we not joined Canada or if we were today to separate from Canada. On the economic yardstick this province is in a far better position to separate and print its own money – just like we did prior to joining Canada.
    The Export Development Corporation in releasing its figures last month claimed that this province is now exporting about $4 billion of crude oil to the United States. It points out that Statistics Canada figures, used by the provincial government, are incorrect.
    Those incorrect figures, used by provincial governments and Ottawa, show that most of our exports of crude oil are going to other Canadian provinces for refining. The Export Development Corporation claims in their end of July report that in fact most of our crude is being shipped to the United States for refining and not to Canadian refineries. I believe the Export Development Corporation.
    Together with the power through Quebec, these adjustments are necessary to get to the truth about our exports to foreign nations.
    Some of our offshore crude and all of Voisey’s Bay nickel are shipped within Canada for processing and cannot be counted in values of exports. Voisey’s Bay nickel and Duck Pond copper and zinc, and iron ore, will lead exports of minerals next year. Where is Duck Pond you might ask? It’s around Trout Pond, which is next to a smaller pond called Goose Pond.
    The Newfoundland separatist makes a valid point in saying that if we were not a part of Canada all of our exports would be to foreign nations.
    Then look at the fantastic economic position we would be in.
    Maybe Major Peter Cashin and Malcolm Hollett were right in 1948.
    The only thing missing today is the quality of politician we had years ago – from the records of the National Convention and Hansard, quality politicians like Peter Cashin, Malcolm Hollett, Gordon Bradley, Joey Smallwood, James Chaulker, Dr. Jim McGrath, Dr. Fred Rowe, Bill Rowe, Charlie Ballam, C. Max Lane, Ed Roberts, John Crosbie, James McGrath, Clyde Wells, Nathaniel Noel, Bill Marshall, Dr. Noel Murphy, Ambrose Peddle, Jack Pickersgill, Dr. Frecker, Tom Hickey, John Lundrigan, Jim Morgan etc. etc.
    Yes, today we do have some outstanding politicians, like Danny Williams, but they are like hen’s teeth – they’re hard to find.

  8. I am thrilled to see Newfoundland & Labrador achieving economic success. The province was shafted with Churchill Falls – no doubt. But I hope that Newfoundland and Labradorians will approach their newfound status with the same good nature and attitude that the folks there are known for. I did a considerable amount of work on the Rock last year and came away with a great impression.

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