Saturday, March 31, 2007

Part 2: Media coverage of current events

Dr. Wade Locke is an economist who has conducted considerable research into the failed Hebron project. He says the precise benefits from the development, had it proceeded, would be hard to measure, due to the various factors involved (such as oil prices) and the lack of precise information on the deal that was almost reached. But he does feel that there are consequences associated with the failure of Hebron.

“The significance of it being gone forever are different from the significance of it being delayed for a period of time,” Dr. Locke said in an interview. “If it’s delayed a year or two that has consequences but not as severe as if it’s delayed indefinitely.”

I probed Dr. Locke on a subject that he rarely discusses: public perceptions, and the role media play in shaping them. Dr. Locke agreed that the true significance of the loss of Hebron, and its potential benefits, is lost on some people. Part of the problem was timing, he said.

“The first time we rolled out anything of any significance was during the NOIA conference (of 2006). Some interesting numbers came out at that point in time. But what happened at the same time was, the spending scandal started… and the Minister of Natural Resources resigned. So (our message) got lost in the pandemonium and excitement.”

While he has no specific complaints with media coverage in the ensuing months, Dr. Locke is concerned about the level of emotion that has entered the public debate.

“The perspective that somehow we’re having somebody stand up for us because we’ve been done wrong all these years has good currency in this particular province,” he said. “The unfortunate part of this stuff is that we go on emotion, so emotion dictates how we react to stuff. If we sat back and thought about the logic or what’s the incremental benefit versus the incremental cost to these kinds of things, we might not behave in certain kinds of ways. We’re all emotional beings. Emotion is a good thing; it defines our character as people. There is nothing wrong with that. But sometimes you want to step back from emotion and say ‘Is this really what I want to be doing? Is it really in my interests to do that?” And that I think is the step that we’ve missed here.”

Locke said that the real issue is the need to create an environment that encourages growth and development in the oil and gas industry. “We want the companies here, we want success, and we want (projects) going forward… I don’t think we have that now, in part because of what happened with Hebron and the ongoing disputes between the provincial government and oil and gas sector. Those are not positive in terms of creating an environment for enhancing economic development.”

Locke said no one disputes the need to develop the industry, and that it is in the best interest of all parties – the government, oil companies and people of Newfoundland and Labrador – to make it happen. However, he says that clearer heads must prevail.

“To me, at this point in time, it’s not clear that we’ve sat down and done the calculus; for example, to figure out exactly what’s in our interest. I know we’ve done the emotional calculations. So we’re happy enough that we are standing up for our rights and all these patriotic kinds of things. I’m not sure we’ve sat down and done the real economic calculations to find out what’s in our interest. That to me is unfortunate… So I think it may not be fully appreciated, the significance or the consequence of our particular position on oil and gas. And that may turn out to have long term consequence for us in terms of how fast the industry progresses, and whether or not it progresses to its full potential. But that’s the unfortunate part about this stuff.”

Locke is talking specifically about Hebron, but I think the emotion to which he refers is connected intrinsically to the anger and outrage that surrounds the equalization issue. I don’t think anyone will disagree that this anger is fueled more by a collective, cumulative sense of victimhood, and less by fact and rational thought. A great number of people are spouting arguments that are red-hot with rage but cool on facts (for an extreme example, see Wallace Ryan’s comments in the Westcott speech post). I think this is cause for concern. A bit of information is good, but a lot of information is better. And cooler heads should always prevail when important decisions must be made (on equalization, Hebron and any other major issue).

Are people getting that information? As noted above, they are certainly getting some. But I do think the media have contributed, mostly in a benign way, to the near hysterical tone to which public debate has risen. (As noted, strong reporting is also happening, such as David Cochrane's Hebron anniversary piece, which you can view here.)

Firstly, I think media need to work a little harder. As I explained in an archived post, all news stories are driven by conflict (yes, there are other elements to a story, but conflict is the essential binding agent). It is easy, then, for a reporter to compile a story that contains comment from both sides – charged with rhetoric and bombast – and consider it a balanced piece. And on the surface it is.

But reporters need to think a little deeper and work a little harder; to not pull up short when they’ve bagged the hot quote. Above all, they should push more aggressively in their questioning. For example, I would like to see a story that says: “When pushed, the premier did agree that…” The keyword is pushed. If he bridges from a tough question about impacts over to the “no more giveaways” line, pull him back. Keep asking the question, even if the giveaway stuff makes for a great quote (they should use that too, of course, it being part of the story).

Secondly, reporting on the premier’s ongoing battles has been linear and narrow. Media have been diligently reporting on the day’s events in Newfoundland, Ottawa and elsewhere, repeating what was said, gathering the obligatory reaction quotes, and so on. They should also be taking time out as often as possible to explore new angles and bring in new perspectives. They could start simply by bringing more voices into the mix; seeking out feedback from the wider strata of Newfoundland and Labrador society. This would extend beyond the occasional quote from a political scientist at MUN, to include economists (such as Dr. Locke), historians, union leaders, business people, Newfoundland nationalists, students, artists and other ‘opinion leaders’ (as well as the person in the street).

For example, an intrepid reporter could start by parsing Liam O’Brien's contention (in comments section to part 1 of this post) that Stephen Harper did not lie about equalization. Liam has studied a lot of documents and is adamant about this, and has posted numerous links to support his argument. (While it may be that the promise can’t be found if you mine into speeches, policy and platform documents, I still find it difficult to get past the ‘No small print. No excuses. No caps.’ line. Still, Liam’s position warrants closer scrutiny. If my emotional reaction to that line is actually unfounded, I want to know this.)

Finally, there are a number of soft and hard nationalists among the local media community, just as there are among the general public. They have every right to their opinion, but I would hope that this bias does not creep into the editorial decision-making process. We, the public, can’t make good decisions unless the information is presented fully and without bias.

UPDATE: An editorial in today's Telegram (Saturday) attempts to explain the equalization issue in simple terms and still finds Harper guilty of deception. I congratulate the paper on taking this initiative, and wonder what Liam O'Brien thinks of its conclusions.


Liam O'Brien said...

Geoff, it may just be the lawyer in me applying "the law is always speaking" in the context of the "policy/politician is always speaking," but I still think it's worth noting that one cannot find any mention of a ban on all measures of fiscal capacity in any of the policy documents, platforms or speeches. Very quickly I was able to show you the key documents. And I'm sure that somebody could find you a hundred or more media stories on this promise/policy. . . .

As for the "No small print. No excuses. No caps" statement. . . I'd have to say that one would need to still consider the context here and the fact that the Premier's current position would seem to be in opposition to any conceivable measure of our province's fiscal capacity.

Budget 2007 does allow for the 100% exclusion of non-renewables that was repeated in every speech, all the policy documents and the letters to our province.

I don't think any of the times it was mentioned there was any mention of what would be a very large print fundamental change to Equalization.

To have promised what the Premier is interpreting in the way he is interpreting it, one would expect the 2004 platform, the 2005 policy document, the 2006 platform, the 2006 letter as well as all the relevant speeches (and Nov 4 2004 isn't one of them, when one sees the context), to include a specific mention of it.

There would be simpler ways to say a promise of the kind the premier is now assuming/alleging the PM made. The easiest might be to simply say that NL will keep its equalization payments for the forseeable future under a new somewhat indefinite arrangement.

If one ten percenter style mail out is going to be taken as authoritative over all the main party-approved and scrutinized documents (We all know that in the heat of a campaign not every tiny flyer or release always gets polished, ask the beer and popcorn ladios or the 'martin/child porn' release writers'). If we're to assume that Stephen Harper didn't need to include such a monumental point in every single speech given here or in NS or in Saskatchewan, if we're going to also ignore the fact that the province never once called for public clarification or stated its specific desire for this type of measure in any of its public communication on this issue, then we're once again stacking things up in a very creative way.

One has to ask why the issue of exclusion was in fact the opposite of what the premier asked for in 2005/2006 and the opposite of what he was willing to accept in winter 2005 with gleefully no post-Accord reforms to equalization.

One has to ask why did the premier never bring this up in any form before his goose egg speech in October, and indeed refused to even place a telephone call to any of Newfoundland and Labrador's Members of parliament or cabinet representative on this issue at any point from January 2006 all the way to that day in the Hotel Gander in an unrecorded meeting with Harper.

One can ask a good many questions.

And I hope the reporters in this province start asking them. After all, it's their job.

Anonymous said...

From Hansard. House of Commons. November 4th, 2004.

This is the text of then Opposition leader Harper's motion to condemn Paul Martin's government for offering Newfoundland and Labrador an oil revenue agreement that included a cap.

You will note that Harper does not make the distinction that applies only to oil and gas revenue. He refers repeatedly to non-renewables (which includes mining etc).

Does this satisfy you Liam?
NOTE: Reporters have been referencing this repeatedly in their coverage of Harper's promise. After all, it is their job.

Hon. Stephen Harper (Leader of the Opposition, CPC) moved:

That this House deplore the attitude of the Prime Minister of Canada at and following the First Ministers' Conference of October 26, 2004, and that it call on the federal government to immediately implement its pledges of June 5 and 27, 2004, to allow the provinces of Newfoundland and Labrador, and Nova Scotia to keep 100% of their provincial offshore oil and gas revenues.

He said: Mr. Speaker,I will be splitting my time with our deputy leader from Central Nova.

On June 5 of this year the Prime Minister arrived in St. John's, the capital of Newfoundland and Labrador. The context was the following. Obviously it was an election campaign when the Prime Minister was asked to respond to a longstanding Conservative commitment to ensure that the Atlantic provinces would enjoy 100% of their non-renewable resource royalties.

This is a commitment that was made by me in my capacity as leader of the Canadian Alliance when I first arrived here and has its origins in the intentions of the Atlantic accord signed by former Prime Minister Mulroney in the mid-1980s. These are longstanding commitments, our commitment to 100% of non-renewable resource royalties. It was our commitment during the election, before the election, and it remains our commitment today.

For the Prime Minister, this was something that he had opposed for 11 years and for most of his political career. But suddenly in the midst of an election campaign on June 5, he met with Newfoundland and Labrador Premier Danny Williams. He came out of that meeting and said the following:

I believe that Newfoundland and Labrador ought to be the primary beneficiary of the offshore resources, and what I have said to the premier is that I believe the proposal that he has put forth certainly provides the basis of an agreement between the two of us.

Premier Williams specified in a letter dated June 10 that:

The proposal my government made to you and your Minister of Natural Resources provides for 100% of direct provincial revenues generated by the petroleum resources in the Newfoundland and Labrador Offshore Area, to accrue to the government of Newfoundland and Labrador and be sheltered from the clawback provisions of the equalization formula--

The Prime Minister said he agreed with the Premier's proposal and he gave his word as Prime Minister of Canada. Premier Williams was asked at the press conference announcing the deal how he could be sure the Prime Minister would keep his word after the election. He replied that as a man of honour, that the solemn word of the Prime Minister was sufficient. Premier Williams said: “It's by word of mouth, and I'm taking him at his word, and that's good enough for me”.

Unfortunately, the solemn word of this Prime Minister turned out to be not good enough. The Prime Minister ignored letters from Premier Williams on June 10, August 5 and August 24 urging him to confirm his promise. Suddenly, the Prime Minister and his Minister of Natural Resources fell silent.

Finally, on October 24, two days before the first ministers' conference, the Minister of Finance finally replied offering:

--additional annual payments that will ensure the province effectively retains 100 per cent of its offshore revenues--

Then the minister added two big exceptions limiting the offer:

--for an eight-year period covering 2004-05 through 2011-12, subject to the provision that no such additional payments result in the fiscal capacity of the province exceeding that of the province of Ontario in any given year.

The eight year time limit and the Ontario clause effectively gutted the commitment made to the people of Newfoundland and Labrador during the election campaign.

Why should Newfoundland's possibility of achieving levels of prosperity comparable to the rest of Canada be limited to an artificial eight year period? Remember in particular that these are in any case non-renewable resources that will run out. Why is the government so eager to ensure that Newfoundland and Labrador always remain below the economic level of Ontario?

The Ontario clause is unfair and insulting to the people of Newfoundland and Labrador, and its message to that province, to Nova Scotia and to all of Atlantic Canada is absolutely clear. They can only get what they were promised if they agree to remain have not provinces forever. That is absolutely unacceptable.


Hon. Stephen Harper (Calgary Southwest, CPC): Everyone in Canada would be happy if one day our Atlantic provinces could fully benefit from their natural resources, everyone except the federal Liberals.



The Liberal attitude is as typical as it is senseless. There is no point pulling back non-renewable resource revenues from a have not province. This is an opportunity and it is a one time opportunity. It is a short term opportunity to allow these provinces to kick-start their economic development, to get out of have not status, to grow this short run opportunity into long run growth and revenue that will be paid back to Ottawa over and over again and that will benefit the people of those regions of Canada for a very long time.

This is what happened in the case of my province of Alberta. Alberta discovered oil and gas in the 1940s and 1950s, Alberta was a have not province. From 1957 until 1965, Alberta received transfers from the equalization program. Alberta was allowed to keep 100% of its oil royalties and there was no federal clawback. This is what allowed Alberta to kick-start its economy, to expand and diversify, to build universities, to advance social services and to become one of the powerhouses of the 21st century Canadian economy.

Of course the Liberals expended endless effort to limit the growth of Alberta's revenues, culminating in the experience of the national energy program. Now we see already, with this opportunity in Atlantic Canada, the same attempts to limit the opportunity. The Prime Minister's Ontario cap effectively limits the maximum benefit of the offshore resource to $452 per person in the province of Newfoundland and Labrador. After that, every dollar will be clawed back by Ottawa, no matter how many billions the offshore resource turns out to be worth.

The Prime Minister, before he was here, was president of a company that largely depended on offshore activity. Does he not understand that energy resources are finite, temporary and a short term opportunity? The provinces of Newfoundland and Labrador and Nova Scotia should be allowed, indeed should be encouraged, to improve the living conditions of their citizens and to use this to attract new long term businesses to replace the temporary opportunities provided by the offshore resources.

Instead, when the Atlantic provinces rejected the latest federal offers, the caps, the limits and the exclusions, the government engaged in a clumsy divide and conquer tactic, a tactic which gave away its obvious objective of holding back the development of the Atlantic provinces. It has tried to negotiate with one province and not the other, but both Newfoundland and Labrador and Nova Scotia have made clear that their positions are the same and that they want to be dealt with fairly and at the same time.

Whether we live in Newfoundland and Labrador, Nova Scotia, Alberta or anywhere else, we are all Canadians. We all have a right to a better future. That future is not for the Liberal Party to decide to speed up or to slow down, to start or to stop. It is not to negotiate. The Prime Minister gave his word. The terms of his proposal were clear. Newfoundland and Labrador and Nova Scotia requested and were promised 100% of their offshore revenues without equalization clawback, period. There is nothing to negotiate.

What is at stake is the future of Atlantic Canada, an unprecedented and historic opportunity for those provinces to get out of the have not status that has bedevilled them for decades. What is at issue is very simple. It is the honour of the Prime Minister, and all he has to do is keep his word.

Geoff Meeker said...

To anonymous: A good, carefully considered post. Is there a reason why you can't sign your name? I discourage anonymous posts unless someone has a very good reason...

Liam O'Brien said...

Anon/Staffer(just a guess, Geoff, on why anon must be anon):

you said:
"This is the text of then Opposition leader Harper's motion to condemn Paul Martin's government for offering Newfoundland and Labrador an oil revenue agreement that included a cap."

Yes, the motion was about holding Martin to his promise on that agreement, a specific and time-limited agreement that does indeed feature no cap.

As I pointed out already, the context here is in reference to that agreement. Here's a link to the speech itself.

Unless your objective is to show that one Premier Williams demanded and Paul Martin promised a specific revenue deal with no "cap," that Stephen Harper believed that promise should be kept and honoured, then it doesn't any other real purpose. The Accord II arrangement, as is-is, with time limit, is honoured by the current federal government completely and fully. That speech was not in reference to overall equalization reform.

anon/staffer said:
"He refers repeatedly to non-renewables (which includes mining etc)."

Well, yes, and you don't need to go looking at a Commons speech that refers to trying to drag Paul Martin into keeping his promise on a specific deal to find reference to that.

Non-Renewables exclusion is mentioned in 2004 CPC platform, 2005 March Policy Document, 2006 Letter to Williams, 2006 CPC platform, and, yep, you guessed it, 2007 federal budget..

What is your point?

The contentious issue here seems to be any mention or form of measurement of the province's fiscal capacity.

anon/staffer said:
"NOTE: Reporters have been referencing this repeatedly in their coverage of Harper's promise. After all, it is their job."

So what? They learned how to copy and paste one of the premier's news releases. Had they visted the above link and even included the reference and context you offered, they'd have realized that it's about as significant and relevant as a citation from Dante's Divine Comedy.

Heck, from Danny Williams' perspective, it'd be a rought quote to remind people of and to use as some yardstick for measuring "shaftings" given that Danny Williams agreed to one of the "shafting" exceptions in the end . . .

Indeed, he agreed to the Accord II arrangement and zero other reform of equalization -- Ie he accepted the 5 province standard at the time, he accepted that the PM at the time would not make a guarantee that future reform would not adversely affect the provinces, he accepted an arrangement that didn't even give non-renewables post-2012, the treatment that Flaherty's budget now gives them. Finally, he accepted that Newfoundland and Labrador would be subject to a gauge of fiscal capacity or a "CAP" post 2012.

And Geoff -- All the Teky editorial does is parrot the news release and the assumptions made by the Premier's office -- assumptions which are not really based on any serious policy documentation and for which even that office has only been able to offer a speech from Harper that is speaking to the specific deal that is still being honoured.

The Tely offers no other documentation or explanation of how the radical change in equalization that Danny seesm to want to think was promised was actually promised.

The biggest problem we have here is the fact that people seem to easily confuse two seperate things.

Mostly at the Premier's bequest, the Accord Arrangement is a separate arrangment with offset payments.

The frequently-repeated CPC policy bundle of promises on exclusion of non-renewables in the platforms and key documents at no point promised to end any measurement of our province's fiscal capacity.

If that was the intention, wouldn't it be a rather major point taht would be included? Wouldn't all hands in that campaign team have been screaming it from the rooftops? Wouldn't the premier's office (an office that was willing to accept an arrangement with far less favourable treatment of our post-accord resources revenue when Martin was in) have obtained some specific record indicating this was the case?

Don't get me wrong, I'm all for arguing for a more favourable deal. I just think the dramatics and accusations here should be based on specific and documented facts.

Also, I can think of more important issues we're neglecting in the meantime while we pay Marg Wente's paper to run ads . . .

Geoff Meeker said...

The anonymous post a little higher up is from a reporter who, for a number of reasons, prefers to not get drawn into the fray. And this is the only exception I will make to anonymous posts. Since this column is about media, I will agree to anonymous postings from reporters if that is their preference.

Candace said...

As a non-reporter Albertan, I have to jump into the fray here.

I do not question that my province, as a "have" province, should help the "have not" provinces. But it is not Klein or Stelmach's bank account affected, it is mine.

I do not have a problem with all of the Newfoundlanders that come to Alberta to work, send money home and fly home as often as possible (while probably swinging it so they are "resident" here to take advantage of our AB tax breaks). We need the workforce.

As a conservative (both small and large C), I can live with my province's current high spending because, after A DECADE of no spending and, frankly, significant cutbacks, our infrastructure sucks (talk to some of your compatriots that work here about Highway 63).

All that being said, I have a SERIOUS problem with (a) a Premier that initiates his own local NEP policy (did the man not see what happened to Alberta in the 80s?) and then (b) gets all pissy when the federal gov't says "no, you don't get more than the provinces GIVING YOU FUNDS have to spend."

Does the man have no shame?

What more is wanted here?

I don't own my home, I rent.
I am a single mother (1 child) with a good, slightly-above-Alberta-average-income. I do not begrudge you your due, but I DO take issue with you wanting to take food off of MY table so that you may have filet mignon instead of sirloin.

Klein was a loudmouth blowhard, and he did our province well in his early years. He ELIMINATED our debt, which allows us to spend like drunken sailors now (thank God, since we need it). More people move here monthly than leave, which cannot be said for Newfoundland & Labrador. The standard of living is significantly higher here than in Newfoundland & Labrador because we collectively busted our butts to pay off our debt. We have a savings account (which, I seem to recall, loaned your province money years ago, with little or no questions asked and I don't know if it was ever paid back...).


Get your act together. Quit telling businesses to take a hike unless they'll hand over some graft (because that's what it looks like Danny was asking for in the name of his province), grow up and get a damn job already.

Candace said...

PS: Upon review, my last comment sounds like I'm yelling at you (Meeker) vs. Danny. For the record, I'm talking to DannyBoy.