Let's Put Danny William's Demagogy To Rest

When it comes to transfer payments to Newfoundland & Labrador. Then we can deal with Dalton McGinty and the other provinces.

Danny Williams' juvenile fury
National Post
Thursday, April 05, 2007

If Danny Williams, the Newfoundland and Labrador Premier, were trailing in the polls, his latest hysterical attacks on Prime Minister Stephen Harper could be explained away as mere electioneering. But his provincial Conservatives are so popular -- polls measure his support as being as high as 70% -- that their re-election is all but assured in this fall's elections. So there must be some other reason for his demagogic rantings and threats to deliver Mr. Harper "a big goose egg" of seats in Newfoundland in the next federal campaign. We suspect his theatrical fury is cover for his own recent disastrous mismanagement of his province's energy industry.
Since the federal budget last month, Mr. Williams has taken out newspaper advertisements accusing Mr. Harper of breaking the Atlantic Accord, the 2005 sweetheart deal Mr. Williams won from a desperate Paul Martin Liberal government. Under the terms of that deal, Newfoundland is destined to receive generous equalization and transfer payments all the way through 2012 (and very likely beyond), even if it manages to become a wealthy province through offshore oil and gas development.
But the federal Conservatives never broke that deal (even though they would have been entirely justified in doing so, at least from a policy perspective) --and Mr. Williams knows it.
It is true that the budget changed the mind-numbing formula by which equalization payments from have to have-not provinces are calculated. Whereas non-renewable resource revenues were previously excluded from the formula, provinces now have the option of deciding whether to include 50% of their oil and gas revenues.
This change would mark an abrogation of the Atlantic accord -- if it included Newfoundland within the new calculations. But it does not. Newfoundland's resource revenues are grandfathered. The province will even continue to receive massive federal transfers long after 2012 (to as late as 2020), so long as it never qualifies as a have province and so long as its massive debt-servicing payments do not fall below the all-province average. In 2007/08, Newfoundland and Labrador will receive total transfers from Ottawa of $1.67-billion, or $3,296 per person, more than 3% higher than last year. It takes a truly world class whiner like Mr. Williams to complain about such largesse.
Premier Williams' motives seem aimed at deflecting attention from his own screwup: Newfoundland's economy is headed for a likely dip due to the provincial government's errors in negotiating new royalty agreements with offshore drillers. Because Mr. Williams banged the table too loudly and demanded too much from oil companies, both the Hibernia South and Hebron projects have been shelved for the midto long-term, and the massive offshore rig that was supposed to drill two wells in the Orphan Basin this summer, the Eirik Raude, has been reassigned to the Gulf of Mexico, from which it cannot be recalled for at least two years.
The Premier is looking for a scapegoat for all this, and Ottawa is apparently the best target going--even it means having to undermine a fellow Conservative, Mr. Harper. On Tuesday, Mr. Williams even went so far as to say "the quicker this [Harper] government could be out of office would make me very happy."
At his best, Mr. Williams is a charmer and a visionary. He seems genuinely committed to getting his province off the federal dole -- eventually. But at his worst -- such as when he is storming out of premiers' conferences and flying home to take down the Canadian flag from Newfoundland's House of Assembly --Mr. Williams' is a juvenile showman whose antics serve to cast his province as Canada's pouting brat. Newfoundland and Labrador deserves better.
© National Post 2007

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