The Economist is reporting that the global economy has been holding up despite various perils like "investor panic and a credit crunch." However, this stability is tenuous and readers are advised to remain cautious, no matter where they live in the world.
As a conscientious media monitor, I am moved to consider what affect a potential recession would have on my home province of Newfoundland and Labrador (NL).
The search for an answer starts with Canada, of which NL is a province. Canada's economy is historically influenced greatly by that of it's southern neighbour, the United States. Some major causes of panic on the market originated in the US, and as such their economy will likely show clear effects. Thus, Canada is poised to feel them as well.
However, Canada has been slowly wrenching itself free of America's economic grip and as such has become an attractive destination for foreign investors. Our economy is more secure as Canadians are traditionally less likely to take major risks. And an influx of production of our abundant natural resources is pumping dollars into our government coffers and potentially shielding us from (or hiding) various economic perils.
Along with the protection given to us as citizens of a wealthy nation, our provincial economy has been improving as well. Just in terms of revenue stream, our government has recently signed a memorandum of understanding (MOU) with a consortium of oil companies. Once finalized, this project (Hebron-Ben Nevis) will pump about $16 billion into the province over 25 years.
This massive number ignores the other economic benefits, many of which are near-immediate, that the project will bring to the province. The number of jobs alone will surely increase the population and inject further millions into regional economies. Not to mention the family members who will be looking for and making their own work.
One expects that premier Danny Williams intends to avoid the types of problems that are still being faced in Alberta thanks to a booming oil and gas industry. Shortages in all areas of social services and infrastructure plague the province despite record budget surpluses and salaries.
The proof that Williams is planning for a major economic boom in our province can be found in the many initiatives his government has undertaken in the four years of his first term as premier.
Millions of dollars have been invested in infrastructure and education. Mandates to reduce poverty, violence, and crime have been reinforced by action plans and policy amendments. Immigration policy has become a priority for the current government. And within government itself major overhauls are occurring with respect to health care, governance, and bureaucracy (though stimulated by scandal).
So as the world goes through its rapid transformation into a truly global village, our province is preparing itself. And while the global economy takes a natural stumble, the people of Newfoundland and Labrador will begin to enjoy a new era of prosperity.
Showing posts with label oil and gas. Show all posts
Showing posts with label oil and gas. Show all posts
Thursday, August 30, 2007
Thursday, June 21, 2007
what we know we don't know
I am from the province of Newfoundand and Labrador, Canada. Currently there is a dispute between our premier, Danny Williams, and the Prime Minister, Stephen Harper. Williams has been very vocal about a perceived injustice committed by the PM.
The issue is that Mr. Harper promised, in writing, to uphold an agreement made by his predecessor with the province which states that NL will receive 100% of its offshore revenues regardless of the existing federal equalization formula. (The equalization formula disperses funds throughout the provinces to maintain a national standard of services. It is revised every few years.)
Newfoundland and Labradorians are mostly very supportive of Williams' stance, while much of the rest of Canada has the impression that the premier is whining and asking for more than his fair share. This national view is based on historic impressions of NL as a province of complainers who want handouts and are not willing to work for them. Most Newfoundland and Labradorians, of course, reject this notion.
Many Canadians have, through the national media, condemned Williams' response to Harper's action as irresponsible and child-like. Several commentators and experts alike have expressed the view that Williams' is bad for the provincial economy. It is through these commentaries that the gaps in Canadians' understanding and knowledge of Newfoundland and Labrador become evident.
There is a factual misconception that Newfoundland and Labrador is a drain on the Canadian economy. A major independent study has shown that NL actually contributes billions of dollars to Canada's coffers. As well, it is widely believed that most Newfoundland and Labradorians are dumb or slow-witted. Nothing could be further from the truth, and this can be seen by the high-profile posts held by NLers in government, business, media, and the arts.
This is the root of the problem. But the ignorance behind the headlines today in Canada is with regard to our premier, Danny Williams.
Williams was elected Premier of Newfoundland and Labrador in 2003 in a landslide victory, and his ratings have been at historic levels for most of his tenure. To those outside of the province, this fact coupled with the premier's national image as a 'scrapper,' it must seem as though the citizens of this province are supporting him simply because he is 'standing up for the little guy.'
While this is certainly part of the premier's popularity, what those outside the province don't seem to know is that there is much more behind his high ratings in the polls.
Danny Williams is from St. John's, Newfoundland and Labrador's capital city. And while it is the capital city, it has a relatively small population. For this reason, Williams' varied public life is well known, and many (if not most) citizens are likely separated from the premier by no more than three degrees. The strong sense community which defines the province has enabled knowledge of Williams' track record to spread across the province by word of mouth.
In other words, the people of Newfoundland and Labrador know Danny Williams well. He is trusted by a people who value keeping one's word, and have a history of viciously voting out politicians who turn their backs on the province. Because Williams has shown time and time again that he has the best interests of the province at heart, his ratings remain high.
And for those who prefer to base their opinions on empirical data rather than subjective intuition, the Williams administration has, in its first four years in office, shown that it can produce meaningful results. A brief look at just a few of the government's achievements since taking power can give some insight into the effectiveness of Williams' leadership.
Newfoundland and Labrador is the second province in Canada to have established a comprehensive poverty reduction plan. The province has pledged to reduce its poverty level from the highest in the country to the lowest by 2015. There are measurable goals in place and action is already being taken through violence awareness programs, a healthy living strategy, increased funding for education on all levels, and job creation initiatives, to name a few.
To spur business investment, the Williams administration has set up an office dedicated to addressing the issues confronting businesses of all sizes. The government is using a proven model from British Columbia to reduce 'red tape' by 50% and has already made considerable changes in this area. As well, the 2007 provincial budget announced that the government has reduced provincial income tax levels from the highest in Atlantic Canada to the lowest.
In light of a devastated fishery -- once the life-blood of the province -- the government is supporting economic diversification. Funding has been increased and is being strategically spent in the arts, aquaculture, and tourism, among many others. Business trade missions sponsored by the government to nearby trading partners as well as countries like Iceland, Ireland, and the Netherlands, are commonplace. And at the top of the premier's priorities is the energy sector.
The province's offshore oil reserves are a major source of revenue, and while talks regarding a fourth major project have been stalled by the premier, there are conservative expectations that new exploration will continue to reveal deposits well into the future. In fact, one might speculate that it is for this reason that Williams' wishes to secure 100% of oil revenues into the future.
Of course, no matter how much oil is lying off of Newfoundland's rugged shores, it will still run out someday. And the premier knows this. The province is therefore posed to release a long-awaited energy plan. The plan will outline the government's stance toward investors in the energy sector, as well as set up an energy corporation that will house the existing crown electricy company as well as other energy initiatives.
The plan appears to be to maximize non-renewable revenues in the short term while investing in newer, renewable sources of energy such as hydro and wind power. The province has decided to take on a major hydro project in Labrador instead of giving the contract to an outside organization. This should allow the province to receive maximum benefits from the project.
It remains important to Williams' and the province, however, that the Atlantic Accord continues to guarantee 100% of offshore revenues. Newfoundland and Labrador has the highest per-capita debt in Canada, and the oil will not be in the ground forever, so the crux of the argument is that this is the province's chance to attain self-sufficiency.
Many in the province feel historically ill-treated by its parent country, Canada. There are several examples of how the province has been denied opportunities to improve its economy. And compounding the problem is an underlying misinterpretation of Newfoundland and Labradorians as unintelligent whiners.
With school children in provinces like Quebec and Ontario growing up taunting each other with calls of "you big Newf," not even knowing its origins, how will the country ever cure its ignorance towards one of the most intriguing provinces in the Federation?
The issue is that Mr. Harper promised, in writing, to uphold an agreement made by his predecessor with the province which states that NL will receive 100% of its offshore revenues regardless of the existing federal equalization formula. (The equalization formula disperses funds throughout the provinces to maintain a national standard of services. It is revised every few years.)
Newfoundland and Labradorians are mostly very supportive of Williams' stance, while much of the rest of Canada has the impression that the premier is whining and asking for more than his fair share. This national view is based on historic impressions of NL as a province of complainers who want handouts and are not willing to work for them. Most Newfoundland and Labradorians, of course, reject this notion.
Many Canadians have, through the national media, condemned Williams' response to Harper's action as irresponsible and child-like. Several commentators and experts alike have expressed the view that Williams' is bad for the provincial economy. It is through these commentaries that the gaps in Canadians' understanding and knowledge of Newfoundland and Labrador become evident.
There is a factual misconception that Newfoundland and Labrador is a drain on the Canadian economy. A major independent study has shown that NL actually contributes billions of dollars to Canada's coffers. As well, it is widely believed that most Newfoundland and Labradorians are dumb or slow-witted. Nothing could be further from the truth, and this can be seen by the high-profile posts held by NLers in government, business, media, and the arts.
This is the root of the problem. But the ignorance behind the headlines today in Canada is with regard to our premier, Danny Williams.
Williams was elected Premier of Newfoundland and Labrador in 2003 in a landslide victory, and his ratings have been at historic levels for most of his tenure. To those outside of the province, this fact coupled with the premier's national image as a 'scrapper,' it must seem as though the citizens of this province are supporting him simply because he is 'standing up for the little guy.'
While this is certainly part of the premier's popularity, what those outside the province don't seem to know is that there is much more behind his high ratings in the polls.
Danny Williams is from St. John's, Newfoundland and Labrador's capital city. And while it is the capital city, it has a relatively small population. For this reason, Williams' varied public life is well known, and many (if not most) citizens are likely separated from the premier by no more than three degrees. The strong sense community which defines the province has enabled knowledge of Williams' track record to spread across the province by word of mouth.
In other words, the people of Newfoundland and Labrador know Danny Williams well. He is trusted by a people who value keeping one's word, and have a history of viciously voting out politicians who turn their backs on the province. Because Williams has shown time and time again that he has the best interests of the province at heart, his ratings remain high.
And for those who prefer to base their opinions on empirical data rather than subjective intuition, the Williams administration has, in its first four years in office, shown that it can produce meaningful results. A brief look at just a few of the government's achievements since taking power can give some insight into the effectiveness of Williams' leadership.
Newfoundland and Labrador is the second province in Canada to have established a comprehensive poverty reduction plan. The province has pledged to reduce its poverty level from the highest in the country to the lowest by 2015. There are measurable goals in place and action is already being taken through violence awareness programs, a healthy living strategy, increased funding for education on all levels, and job creation initiatives, to name a few.
To spur business investment, the Williams administration has set up an office dedicated to addressing the issues confronting businesses of all sizes. The government is using a proven model from British Columbia to reduce 'red tape' by 50% and has already made considerable changes in this area. As well, the 2007 provincial budget announced that the government has reduced provincial income tax levels from the highest in Atlantic Canada to the lowest.
In light of a devastated fishery -- once the life-blood of the province -- the government is supporting economic diversification. Funding has been increased and is being strategically spent in the arts, aquaculture, and tourism, among many others. Business trade missions sponsored by the government to nearby trading partners as well as countries like Iceland, Ireland, and the Netherlands, are commonplace. And at the top of the premier's priorities is the energy sector.
The province's offshore oil reserves are a major source of revenue, and while talks regarding a fourth major project have been stalled by the premier, there are conservative expectations that new exploration will continue to reveal deposits well into the future. In fact, one might speculate that it is for this reason that Williams' wishes to secure 100% of oil revenues into the future.
Of course, no matter how much oil is lying off of Newfoundland's rugged shores, it will still run out someday. And the premier knows this. The province is therefore posed to release a long-awaited energy plan. The plan will outline the government's stance toward investors in the energy sector, as well as set up an energy corporation that will house the existing crown electricy company as well as other energy initiatives.
The plan appears to be to maximize non-renewable revenues in the short term while investing in newer, renewable sources of energy such as hydro and wind power. The province has decided to take on a major hydro project in Labrador instead of giving the contract to an outside organization. This should allow the province to receive maximum benefits from the project.
It remains important to Williams' and the province, however, that the Atlantic Accord continues to guarantee 100% of offshore revenues. Newfoundland and Labrador has the highest per-capita debt in Canada, and the oil will not be in the ground forever, so the crux of the argument is that this is the province's chance to attain self-sufficiency.
Many in the province feel historically ill-treated by its parent country, Canada. There are several examples of how the province has been denied opportunities to improve its economy. And compounding the problem is an underlying misinterpretation of Newfoundland and Labradorians as unintelligent whiners.
With school children in provinces like Quebec and Ontario growing up taunting each other with calls of "you big Newf," not even knowing its origins, how will the country ever cure its ignorance towards one of the most intriguing provinces in the Federation?
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