Wednesday, February 28, 2007

David Cochrane’s speech on ‘patriotic correctness’

In the days following the collapse of the Hebron talks, the Newfoundland Ocean Industries Association (NOIA) issued a news release, expressing concern about the situation and urging both parties to resume negotiations. Rather than address the points raised by NOIA, Premier Danny Williams ridiculed the association, saying they were here to "annoy ya". Many business leaders were shocked by this behaviour. Yet none spoke out. If you noticed this disconnect, then you aren't alone. On February 21, David Cochrane, Provincial Affairs Reporter for CBC Here & Now, delivered a controversial and hard-hitting speech to the St. John's Board of Trade, in which he demonstrated that, when politics and business collide, business loses. Following is the text of David’s speech...

By David Cochrane

"I’ve been covering politics and provincial affairs in this province full-time since the Fall of 1998. In that eight years, I’ve seen the worlds of business and politics collide many times. In almost every case, politics won.

I have covered stories about resource-based industries involving four different premiers, and intersecting with some of the biggest companies in the province. In almost every case, the government used the power of the legislature to change the rules under which business is conducted to determine a favourable political outcome.

The political climate in Newfoundland and Labrador is having a profound and negative impact on public debate. And the time is ripe for change.

Please note that I am not passing judgement on any of the actions I am about to describe. I’m merely pointing them out and outlining what I think were the consequences.

In almost every case, these actions had tremendous public support. But popular decisions are not always good decisions. And when everybody is nodding their heads in agreement, I think it is the journalist’s role to shout ‘Bullshit!’ from the back of the room.

In 1998, former Premier Brian Tobin was in the middle of highly charged negotiations with Inco over the development of Voisey’s Bay. The central issue was whether Inco should build a nickel smelter in the province. Inco had spent $4 billion to acquire Voisey’s Bay and was proceeding under existing development rules to start mining nickel. On November 17th of that year, Tobin and mines and energy minister Chuck Furey outlined a series of amendments to the Mineral Act. The key element was section 31.1 which gave the cabinet the right to order a mining company to complete primary processing in the province. These changes would be broadly applied. But the clear target was Inco.

The changes were retroactive so that existing discoveries such as Voisey’s Bay were included. And it could not be appealed. Tobin said this was to ensure that companies such as Inco couldn’t use “back door methods” such as the courts to get around that requirement.

This decision had tremendous public and political support. But it was a political decision to change the rules of the game after a company and its shareholders had invested billions of dollars to acquire the rights to a nickel deposit. Investors were not happy. Negotiations reached an impasse. And there was no deal on Voisey’s Bay until Tobin left and Roger Grimes became premier.

It was under Grimes that I covered the second major collision between business and politics. And it’s a dispute that continues today.

In the summer of 2001 Fishery Products International announced its intention to buy Clearwater Fine Foods of Nova Scotia. Shortly afterwards, FPI announced plans to cut jobs at its fish plants in Harbour Breton and the Burin Peninsula.

FPI is a publicly traded, private company. But it was created in the mid-1980s though a piece of legislation called the FPI Act. The Act included restrictions on share ownership and the sale of assets designed to stop the break-up of the company. But it was privatization legislation and not intended to give the government any direct control over the day-to-day operation of the company. However, starting under Grimes that legislation has been amended three times. In almost every case, it was in reaction to the company’s decision to cut jobs or reduce operations.

Most recently it was amended to attach operational and capital spending requirements to the company’s plans to create an Income trust and again to change the structure of the Board of Directors.

But the most controversial changes came under Grimes. Grimes put a halt to the Clearwater takeover bid and delayed the looming job cuts at the south coast plants until last year when the plant closed. He threatened to amend the FPI Act to give government an operational veto over FPI, a privately owned, publicly traded company. He toyed with the idea of legislating the government a seat on the Board of Directors.

Those options never happened. But the government struck an all-party committee that recommended a series of changes to the FPI Act. The most significant was the inclusion of a clause stating that the company and its shareholders could not sue the government, even if government’s actions financially damaged the company and caused its share price to plummet.

FPI may be the most unpopular company in the province. Its management and directors are cast as the current villains of the fishery. Each time the FPI Act was amended it enjoyed enormous public and political support. But each time the FPI Act was amended the industry and the financial sector recoiled. Fish companies complain that it has become increasingly difficult to get financing from Canadian banks. More and more of them are turning to Icelandic banks for loans. Bankers tell fish companies that the political climate in this province gives them cause for concern.

This was underscored in March of last year when the fisheries union held a rally outside FPI headquarters to protest job cuts at fish plants on the south coast. At that rally Tom Rideout, a lawyer, former premier and currently the deputy premier and attorney general of the province, climbed onto the back of a pickup truck, while wearing a fish union toque and accused FPI of breaking provincial law.

FPI has since been charged with illegally exporting fish. But at that time there was no completed investigation or public evidence of any wrongdoing. There was only a crowd of angry fishery workers. And the deputy premier in a toque. I’m not a lawyer, but I know of no jurisdiction in the world where trial by toque is the foundation of their justice system.

The most recent collision of politics and business is the failed Hebron negotiations (I exclude Hibernia South from this discussion because that one’s not over). Last year Premier Danny Williams and the Hebron partners reached an impasse. Williams wanted more then the oil companies were prepared to give.

There is a generic royalty regime on the books here. But that became a starting point for negotiations rather than the terms of a contract. Given ExxonMobil’s disciplined commitment to its business model and Williams’ negotiating style, I’m not sure if these talks will restart soon or if a deal is reachable. What I do know is that despite the stakes, the public debate around this impasse has ranged from “way to go Danny” to “lets go Danny.”

This has been the case in all of the examples I’ve outlined. Politically motivated changes to the Mining Act and the FPI Act had mass appeal, but made many people in the business community nervous or even angry.

But they stayed silent.

One of my frustrations as a journalist is that the business community in this province is soft. They are afraid to challenge the government or criticize it in any meaningful way. We see this now with Williams, a man elected to be the business premier; but a man who is making many in the business community nervous.

We saw it with Tobin, a premier who had arguably the worst fiscal record this province has ever seen. Tobin’s so-called balanced budgets were a house of cards; a shell game of one-time money used to mask enormous structural deficits. The business community knew this, but said very little. And instead of writing letters to the editor, they wrote cheques; donating thousands of dollars to the political parties they spent their time muttering about under their breaths.

When the world of politics and business collide, only half the story gets told because only half of the collision is talking. Business leaders shy away form comment if it even smells of conflict with the government. They react as if the first person to speak out would be like the first person to wander off alone in a horror film… never to be seen again.

Now this isn’t to suggest that business people don’t talk about politics or criticize their government. They just don’t do it in public

I have had hundreds of conversations with business people, many of them imploring me to do stories about the many, many problems they have when it comes to doing business in Newfoundland and Labrador. I agree to do a story if they will go on the record. But they won’t. This reluctance to speak is as understandable as it its regrettable.

There exists in Newfoundland and Labrador a phenomenon I like to call “Patriotic Correctness.” Like political correctness, it makes certain words or expressions unacceptable.

But most significantly, it has fostered an environment where informed dissent is seen as nothing short of treason. Where the simple questioning or criticism of the government or the premier is viewed as an unpatriotic assault upon the very fabric of Newfoundland and Labrador.

Patriotic correctness manifests itself in times of conflict. Usually it pits the premier and the government against an outside force such as the federal government, a nickel company, Big Oil, or a fish company that happens to be run by a Nova Scotian. It creates an incredibly lop-sided public debate, one where all good Newfoundlanders and Labradorians must rally to the side of the government.

What matters most is a public display of loyalty; of being on side with the stated goal of getting the best deal, best return and most benefits for the province.

What matters least is a public debate about the merits of this stance. Or whether these goals are even reasonable or achievable. Or whether the government is acting in a way that is fair to all parties.

We saw this with Voisey’s Bay. We saw this with Hebron. We are seeing it to this day with FPI.

The first collision of business and politics I witnessed was the Voisey’s Bay negotiation. When I came on the scene, Tobin had won a second mandate after calling a snap-election just 30 months into his first term, supposedly to send a strong message to Inco and give him a “strong mandate” to negotiate the best deal possible on Voisey’s Bay. After all, “Not one ounce, not one spoonful of ore” would leave the province without a nickel smelter being built in Argentia.

The people ate it up. Tobin got an overwhelming mandate. Voters accepted the rhetorical fiction that a snap election was really about getting a mandate to negotiate with Inco. Or if they didn’t buy it, they ignored it, and embraced the blind hope that Brian Tobin – a Newfoundlander – might one day be prime minister. So he had to be supported at all costs.

Again, it was the rush to be “on side.” To embrace the populist myth that Our Leader needed Our Support to take on Them.

I was working for CBC for less than a year at that time and was new to the political beat. But I came to the conclusion very soon after the 1999 election that Tobin’s “not one spoonful” stance was an excuse for inaction. That his stance was so entrenched, the political stakes so high, that he could not possibly get a deal that would satisfy the public’s expectations. Expectations he created. Good politics got in the way of good economics and it became obvious that Tobin would never sign a deal with Inco. When I started to challenge Tobin on this I felt the sting of Patriotic Correctness.

I was new to the press gallery. And suddenly the halls of the legislature were buzzing with talk that I just didn’t understand Newfoundland and Labrador. After all, I was a mainlander. Liberal MHAs openly questioned how someone from up-a-long could understand this province’s long history of disappointment and bad deals.

Now, having been born at the Grace, raised in Mount Pearl and educated at MUN, nobody was more surprised by this than me. But it shows the way dissent – even in the form of legitimate questions – led to an attack on my very character.

For the record, Brian Tobin quit as premier just 20 months into his mandate to negotiate, he never did sign a deal with Inco, he moved to the mainland… and I’m still here.

This attempt to marginalize critics still happens today. When a particular political issue is causing the government grief, it dispatches hit squads to the open-line. Armed with talking points, they seek to hijack the debate. And if someone questions the government on an issue such as Hebron or FPI, the Us versus Them argument is re-opened.

A recent example of this came in the four byelections that we just had. Four MHAs resigned for very different reasons. But the Premier sought to make local elections about something bigger than what they were. These races were cast as a referendum on Danny Williams’ negotiating stance on Hebron and with the Prime Minister on Equalization. Williams said: “It's very, very important that the people I'm into battles with - for want of a better term - understand that I have the clear support of the people of this province."

Never mind what issues mattered to the district. Never mind what you think of the people on the ballot. This was about supporting the premier. This was about Us versus Them.

A vote against the Conservatives in these byelections would mean you didn’t support a better deal on oil. It would mean you didn’t support a better deal on equalization. A vote for a Liberal or a New Democrat would be a vote against a better deal for Newfoundland and Labrador.

I’m not saying people should vote against the government. I’m not suggesting they should vote for one party over another. But people should be free to make up their mind and vote in an election without having their patriotism questioned, before they step into the voting booth. Just as they should be free to question this government – and any other government – without having their love of place put to some sort of test.

Patriotism isn’t the only weapon in this strategy. There are also numbers. In the current government there is a group of backbenchers and new cabinet ministers who like to justify every action by quoting poll numbers. When I say something on the panel or do a story that questions government’s action, the next day at the House of Assembly, I am bombarded with the math of public opinion.

“You may not like it Cochrane,” they shout. “But 75 per cent of the province does.”

But as I said earlier, popular decisions are not always good decisions. Just as popular government are not always good governments. After all, Brian Tobin had poll numbers that rivalled Danny Williams’. Did that make Tobin a great premier?

The MHAs don’t like it when I remind them of that. They like it even less when I remind them that Time Magazine named Adolph Hitler its man of the year about eight months before he invaded Poland.

Good polling numbers are nice. But they are not a vaccine against dissent and criticism.

By all accounts this government has done a very good job of managing its finances. Soaring deficits have been replaced by surpluses. And the new Atlantic Accord is the arguably the most positive development this province has seen since the Hibernia project went ahead. But that doesn’t mean there aren’t problems, or that people shouldn’t be allowed to talk about them.

That includes the people in the business community. Because while Newfoundland and Labrador might have solved its fiscal problem, it may well be on the verge of an economic problem. After close to a decade of leading the country in economic growth, some banks now project that Newfoundland and Labrador will be last in the country in 2008.

One estimate says GDP growth will drop to 1.7 per cent next year. The reason is the lack of any new projects. Projects like Hebron. For the first time since Hibernia, there is no ‘next’ project.

This has done more than just cripple GDP growth. It has single-handedly changed the real estate market in St. John’s, instantly transforming a sellers’ market into a buyers’ market.

It has led to increased anxiety in the local offshore industry and made Oil and Gas Week more of an irony than a celebration.

Now, on the surface, the employment picture looks far brighter. The government issued a news release this month boasting that the Market Participation and Employment Levels for January are at a historic high. But what’s missing from that news release tells a more important story. The Employment numbers for Newfoundland and Labrador include the hundreds if not thousands of people who fly to Alberta to work but leave their family behind. Their job is in Alberta, but their residence is in Newfoundland and Labrador. Because of the way Statistics Canada crunches the numbers, this boosts the employment rate and the participation rate of this province. So while more people from here are working, it doesn’t mean they are working here.

While the economy enters uncertain times, the population continues to decline. Since June of 2003, Newfoundland and Labrador has suffered a net loss of 10,105 people. That’s the population of Gander gone in three years. Of that group, 5,248 were between the ages of 20 and 24.

Instead of slowing down, the pace of the outmigration has increased each year of this government’s first term. There are still many proud young Newfoundlanders and Labradorians. They just happen to live in Calgary or Fort MacMurray.

These are enormous challenges that will be difficult to solve. But how can you have a larger public debate about the big problems, when it’s tough to openly discuss the small ones?

The sad reality is that for my entire adult life the intellectual leadership of this province has been confined to the legislature and the open line. I believe this has to change. The broader elements of our society need to participate in the larger discussion on how the government conducts itself and how it manages the economy.

People need to be free to question, challenge and criticize their government without fear of reprisal or of facing a public challenge to their patriotism.

Now I have to be careful about what I say here, because I don’t want to get sued. However, because of the recent spending scandal in the House of Assembly, I think I can safely say that politicians have – at least temporarily – lost their place on the moral high ground. And they’ve lost it as a result of their own actions.

This has all happened in an election year. This election will be about cleaning up government. But it should also be about the larger problems I outlined earlier.

The state of the economy. Outmigration. And unemployment.

That means there has to be a debate, one that should include the business community. But I’m not convinced that it will. My past experience leads me to believe that most business leaders will shun the spotlight of public discourse in this election and avoid the potential wrath of politicians.

Instead they will cut the cheques that are the oxygen of any political campaign and watch – as always – from the sidelines.

Yes, politicians can make your life difficult. Sometimes there is risk in speaking out. But what if they called an election and nobody donated any money? Each year everyone in this room is asked to donate to the various political parties. You are an IV bag filled with cash for them. They couldn’t survive without it. That annual donation is your ante to the big table; your licence to speak freely and openly about the government and the direction of the province.

It is a luxury that – quite frankly – the middle-class does not enjoy and cannot afford.

This dynamic presents an opportunity to break the pattern of patriotic correctness… something that needs to be done.

A society cannot progress unless it does so on the strength of its ideas. And good ideas require the courage and the intellectual leadership that isn’t always found in the legislature or from the caller on line 3.

Public debate cannot be ceded to the mob. Because when it is, the mob almost always chooses to free Barabbas and send the good man to the cross."

20 comments:

Robert said...

Thanks for posting this.

Anonymous said...

Wow, wow, wow! I'm in total awe of the courage Mr. Cochrane displayed to stand in front of our Province's business 'leaders' and give this speech.

He did it in such perfect balance and maintained his journalistic objectivity. Thank-you so much for posting this. What a beautiful piece of work. To further wjm's comments -Bravo!

Edward G. Hollett said...

Well put, "anonymous", although your anonymity seems to prove David's point.

Albert said...

Very well written and presented. It's about time that the government realized that they can't continue to draft legislation every time something comes up that is to them inconvenient. In their attempt to 'legislate away' their problems, they are only creating an atmosphere that discourages present business in the province from growing, and potential business from coming to NL in the first place. Thank you, David.

George said...

Great sppech David and thanks to Geoff for posting it.Now, if business would come out and make a "business" of speaking out on the Open Line shows, maybe enough people would just stop and think.

George Murphy

Robert K. noseworthy said...

While I may not agree with everything David has to say in his speech, I find it very refreshing to have his points presented in such a thoughful and clearly articulated way. While our greatest asset as Newfoundlanders is our cohession as a people, our dependance on emotion rather than reasoned argument is our greatest weakness.

Tim Marshall said...

Mr Cochrane invokes the imagery of "Adolph" Hitler as being praised as Time's man of the year for 1938. He seems to think it clever to equate Williams' popularity with what he thinks was Hitler's being praised by Time magazine.

The Time issue in question has the cover shown here:

http://www.time.com/time/covers/0,16641,19390102,00.html

It depicts Hitler as an organist beneath a great wheel from which hang bodies. The front page caption is "From the unholy organist, a hymn of hate".

Perhaps it's time to come up with a new analogy to impress MPs to whom Mr Cochrane wishes to condescend?

It's an otherwise thoughtful article, but too steeped on the "other side" and patronizingly dismissive of any popular opinion as that of the "mob".

Edward G. Hollett said...

Tim Marshall is an amazing individual.

He can casually dismiss this speech as giving too much credit to "the other side", yet he doesn't bother define what the sides are in whatever context he is discussing. Let us in on the secret Tim. What "side" is the right one?

He writes: "It's an otherwise thoughtful article, but too steeped on the "other side" and patronizingly dismissive of any popular opinion as that of the "mob"."

Somehow one doubts that Tim was quite as accepting of popular opinion when it back say Brian Tobin, who Cochrane discusses at some length.

Far from being dismissive of the mob, Cochrane's comments are aimed very clearly at the business community encouraging them to speak out rather than bitch in private. In the absence of information, how can anyone make a proper judgment including that of the mob Tim Marshall now defends as being so wise?

At least in this case, Tim didn't refer to Cochrane as one of the Liberal Al Queda using the Internet for their nefarious purposes. Some others have already been on the receiving end of that piece of Marshall insight.

Perhaps it's time for Tim to come up with something other than "All Blue Good", "All Red and Canada Evil."

Mike Kehoe said...

exjjDavid Cochrane’s piece appears to be well written but then who am I to judge. I know if I like something or if I don’t and that’s about it. I like Cochrane’s piece.

That doesn’t mean that his thoughts are new though.

I’m old enough to remember the good old days of Joe, the little felon from Gambo. Now, there was the true time of fear of Politicians by business. Joey and his hacks could destroy individuals and businesses with one foul swoop. At least that's what the backroom boys (mainly) have said so many times over the years.

He made them and he destroyed them. Was it any different through Frankie baby or Alfie times? Just how many cases against the Province did Clyde (lied????? surely not) generate? All caused by Government using its might in good faith no doubt.

And Brian Tobin, there was an above board man who walked lock step with Business all they way. Just ask Inco as David appears to suggest.

It’s the nature of Newfoundland or Canadian business for that matter to deal with its political problems by avoiding them where possible or purchasing a solution where not.

In politics, purchasing includes donations to candidates or associations. Usually done in the best of IEC type of bookkeeping. Or, favors to the Party involved.

Has it ever been any other way? Business may go forth quietly in public but it usually carries a big stick in the back rooms with lobbyists and friends of government. That's where I would like to see the David Cochrane's of the world focus their digging.

Cochrane’s article is good. Not new or great. Just good. Ray Guy and others have been saying it for years. Just “sans laptop and tennis shoes “.

His remarks may be brave but to Newfoundland Business and Government they are little more than a friendly love tap.

Don’t shed too many tears for oppressed business in our Province. They have a history of surviving and surviving well.

Especially if they are willing to pay the price.

Jane Simmonds said...

I enjoy your blog very much, but I think in all fairness of good debate and discussion, comments from those unable or unwilling to lend a name to their comments should not be published.

Geoff Meeker said...

Jane Simmonds is right. In the spirit of David Cochrane's speech, we all have to start standing up for ourselves, and getting behind whatever we say in public. I will take down the anonymous posts as soon as I get a free moment. (Posts that link to a blog or site that is not anonymous will not be removed.)

Phil Jeddore said...

Why don't you all run for elected position, if you think you're so smart and know it all.
You all miss the point. It is not about Government vs business - it's about John Q. Public vs the Corporations. Corporations (businesses) will always screw John Q. bec profits for owners/shareholders is what runs the world. And the will speak out of both sides of their mouth when doing that. Cochrane and you other bloks can't see the forest for the trees.

(It's not at all about fairness and good debate; so stick this in your craw and chew on it)

Audrey Manning said...

Phil Jeddore said...

"You all miss the point. It is not about Government vs business - it's about John Q. Public vs the Corporations."

You are taking an unpopular position Phil. It has to be about the politicians and the business community. No one else exists, as David Cochrane so amply illustrates in his speech.

Now if only Mr. Cochrane could
understand that he is merely a member of the mob that he so glibly dismisses, we might be able to have a conversation about what needs to change in this province.

When people like David Cochrane believes they have more of a right to speak than the rest of us, we are in more trouble than I thought.

Who can believe that this was a balanced speech? Really, who can believe that? It is only balanced if you hold the view that the majority of the people in this province don't matter one whit.

Audrey Manning

Anonymous said...

"It has to be about the politicians and the business community".

Guess I should have said "Gov. and Corporations fighting over who gets to screw John/Jane Q. Public the most", instead.
PJ

Audrey Manning said...

To: Phil

You said it alright. I probably did not make myself clear.

It is as you say...all about who gets to jump on me and you.

But what really amazes me is how someone in David's position can call the public the mob. Calling the public a mob is accepting that journalists, and others, whom he deems to have the authority to speak have more of an idea of what is right.

This is elitism and it is a myth! Sadly, it is a myth that David has bought into hook line and sinker.

Callers to open line shows are either spouting the line of one party or another or they are independent thinkers. Either way they are putting forth a legitimate view. If David does not accept that, he has much to learn about his role as journalist.

Audrey Manning

Geoff Meeker said...

No, it’s not about “who gets to jump on me and you” though I am sure David Cochrane could write a great speech on that subject too. I think David is using ‘mob’ as a metaphor for an electorate that blindly follows the leader, in the absence of open and intelligent debate across all sectors of society. By attacking the messenger rather than debating the points he raises, you are doing exactly what Cochrane decries in his speech.

WJM said...

I think David is using ‘mob’ as a metaphor for an electorate that blindly follows the leader, in the absence of open and intelligent debate across all sectors of society.

I think so, too, but Danny's Minions have been armed with their call-in show talking points already. Cochrane is a Traitor. A Mainlander. An Unperson.

Audrey said...

You are quite right! The points David raised need to be addressed. But this is a comment page and I don't imagine anyone expects an article for a comment.

So, I will continue to comment and leave the article for another place and time, if that's alright with you.

David may have been using mob as a metaphor. Who knows? But it does not come across that way, to me. It certainly seems to imply that callers to open line shows should not be taken seriously.

Had David invited independent thinkers to open a debate on the issues it might have been as you say. But he invited the business leaders to challenge the government.

However, the only thing I gleaned from the article (and I will admit that I may well be a biased rural Newfoundlander) is that we do it all wrong when we elect leaders who try their best to do what we want them to do.

My question is: do you believe that any province or country does any better? Politicians get elected by promising to do what the public wants.

David thinks that he has a better answer. And I must say his excitement is refreshing. But, in this province, we have seen the people with better answers come and go. Some have made very good careers out of Newfie bashing.

It seems there is a good possibility that David will get great coverage from his "ideas" and then move on.

The fact that this speech can be seen as anything other than naive means that the more things change the more they remain the same.

Give me caller on line 3 anytime. At least we know it is either a PC, a liberal or a person who thinks outside the box. It is not so difficult to know which is which. We are used to it.

Tim Marshall said...

Somehow one doubts that Tim was quite as accepting of popular opinion when it back say Brian Tobin, who Cochrane discusses at some length.

Wow Ed.

This issue has riled you up.

Who said I was "accepting of popular opinion", please?

And yes, I was supportive of Tobin and as part of the "mob" thought well of him when he came in as premier - I'd been proudly impressed by his performance with the Estai and his role in the 95 referendum. I was encouraged when talks with Quebec over Cuhrchill began.

I was however, disgusted with him later because it turned out he was a quitter.

And you've seen me frown in another forum when people are so dismissive of Grimes. I think the Liberal party hacks used him as a scapegoat on the whipping post when the cycle of popularity for the Liberal party inevitably wound down (as it eventually must as well for Mr Williams' government). It was disgusting behaviour, actually.

So why are you getting so nasty Ed?

Why?

WJM said...

It certainly seems to imply that callers to open line shows should not be taken seriously.

Most of them shouldn't... esp. the ones that call in armed with talking points issued by the 1st Loyal Newfoundland Rapid Reaction Battallion on the 8th Floor of Confederation Building.