Newfoundland Has Lesson For Alberta

Williams has lesson for Stelmach

Don Martin , Calgary Herald

Published: Tuesday, October 09, 2007

The only suspense for voters on The Rock today is whether they'll elect to become the third one-party province in Canadian history.

Newfoundland Premier Danny Williams wants a fresh majority mandate and is so confident of delivering an electoral spanking to his Liberal enemy, he's refusing media interviews amid speculation he'll paint all 48 legislature seats in conservative blue.

To have Canada's best dial-a-rant premier in no-comment mode ranks right up there as a media relations shocker with Stephen Harper's first prime ministerial news conference in Ottawa last week.

Silence is not in Williams' genes but, from his handlers' strategic standpoint, perhaps understandable.

You just never know what sized shoe Williams would insert into his pie hole.

But Williams has a hidden message for a political pal struggling outside his campaign bubble, specifically Alberta Premier Ed Stelmach, who is poised to make life-or-death policy decision that has a Conservative dynasty trembling with electoral fear.

Newfoundland and Alberta have more than the unfortunate symmetry of being an empty job market exporting labour to a province awash in help wanted ads. They share an economy lubricated by Big Oil, an industry that strives to remove a dwindling natural resource owned by the public for the lowest possible impact on their obscene profit margins.

(blogger - "obscene profit margins"? A rate of return of 12% is obscene?)

The reason for Williams' rock star reception on the campaign trail is not his sterling economic governance. His province remains mired in chronic 13.6 per cent unemployment, more than triple the jobless rate of Alberta and B.C. and double most other provinces.

(blogger - "not his sterling economic governance". But yet we can learn a lot about how to run a provincial economy from Newfoundland apparently. Where does Canwest find its columnists?)

Williams even presided over a genuine political scandal -- a $2.2-million abuse of public funds by some members in his government who diverted local spending allowance to buy smokes, booze and lottery tickets.

What has elevated Williams to deity-level approval ratings is his claim to have successfully forced oil companies to capitulate to demands for a greater share of their energy windfall.

(blogger - screw the oil companies, win elections. A formula for success)

It was a hollow victory. Analysts much wiser than me have peeled away the fine print and found the premier didn't exactly put the industry over an offshore barrel until it cried uncle.

Yet it's the perception that counted -- a sense among Newfoundland voters that their premier stood up to global forces to defend a public resource from an unfair plundering by foreign shareholders.

It's a grudge match of sorts. Newfoundland still seethes at an age-old power generation deal that sells electricity to Hydro-Quebec at a giveaway rate, a contract that gets renewed for another 25 years in 2016.

Williams has skilfully transferred that historic resentment into a current show of defiance to defend the province's other energy resource from being sold off at a discount.

(blogger - discount? Plundered by foreign shareholders? What about the Albertan shareholders?)

Switch channels to Alberta, where Stelmach is confronting the greatest threat to a perennial Conservative reign.

An independent review panel and Alberta's auditor general both calculate the oil industry has pocketed billions of surplus dollars, courtesy of a prolonged sweetheart deal on royalty rates.

Albertans are not amused, unleashing poll numbers that show they want the industry to cough up a lot more cash for the privilege of extracting their liquid asset.

(blogger - an "independant review panel" which appears to have been appointed to come up with that answer. What would a TRUE independant review panel say?)

Insiders say Stelmach will ignore oilpatch warnings that they'll retaliate by slashing investment or curbing production and raise the royalty rates just enough to recoup another $2 billion per year for the already overflowing provincial coffers.

That might prove tricky if the oil industry isn't bluffing and offsets any royalty windfall with lower oil production.

(Blogger - Trust me, it is not bluffing!! What in heavens name would make you think anyone is bluffing. The industry is merely informing Albertans honestly of the consequences of an ill-informed policy decision. Why would the industry spend money at a loss in Alberta?)

But the price for ignoring a public that believes it has lost an entitlement is high.

King Danny will prove it pays to defend, in reality or perception, his subjects from outside forces. The lesson for Stelmach is that a royalty misstep could turn a Conservative kingdom into a crumbling castle.

(Blogger - if Ed follows the review panel's recommendations, we'll see how a royalty misstep that crashes the provincial economy plays out with voters.)