[Note: This is an opinion piece, intended to offer one possible explanation of events.
The following is an account of the offshore discussions between the Government of Canada and the Government of Newfoundland and Labrador between January 2004 and January 2005. It is based on anecdotal information, correspondence between both governments, previous posts to the Bond Papers and on the research report submitted to the provincial government in January 2005 and recently released to news media.
References to strategy by the Williams' government are solely those of the author taking inferences from events and publicly available information.]
Getting the deal
Through the fall of 2004, attitudes grew increasingly gloomy among the Premier's Office staff in St. John's.
The original plan had been to snag a quick deal for extra cash from the offshore before the federal election. There was no detailed position paper, no legal argument that the federal government had somehow failed to live up to the 1985 Atlantic Accord.
What there had been was passion and attitude, playing up the sense of alienation from Ottawa and dissatisfaction among Newfoundlanders and Labradorians documented in research done for the Royal Commission on strengthening and renewing our place in Canada.
Premier Danny Williams found policy gold in the Young commission. A fiscal paper written by a former deputy minister of finance under Brian Peckford was readily adopted; one of its keystones had been an elaborate explanation of how the federal government was making billions from the offshore while Newfoundland and Labrador made a relative pittance from its "own" resource. Roger Grimes had been the latest of a series of provincial premiers to fail at having Ottawa rework the cash portions of the 1985 Atlantic Accord.
Here was a ready-made triumph for Williams.
Williams would tackle Ottawa like it was an insurance company, using a combination of the charm and bluster that had worked so often before in his private law practice.
Shag the facts.
Point to the shameful injustice of it all. Press Ottawa for cash. If they made an offer, up the ante and then seek more cash in public using whatever means possible. Ottawa Liberals would not want to be jammed up before a federal election, as Williams himself said in the early spring of 2004.
Play up the drama.
An impoverished province in desperate financial straits.
A new government in a province full of promise and hope, forced to slash services and freeze wages while billions in cash poured to ever-rich Ottawa.
Fight the case in the court of public opinion where, as Williams had learned through years of experience, the judge and jury are less concerned with pesky matters like details than in a real court-room. In public opinion's court, the more tears shed, the more money in the settlement.
And so it had rolled out.
The letter to Prime Minister Paul Martin in January 2004. Lengthy and relying entirely on a supposedly independent outside financial analysis, it made the case for a financial settlement from Ottawa that would make a modest adjustment to the existing Equalization offsets in the original Accord. This wouldn't be for grievance or indeed for justice. Rather, the feds would help because the money was needed to put a roof over the heads and food in the belly of Williams' 520, 000 clients.
The Prime Minister accepted the idea for further discussion later in January, sending his regional minister, John Efford, to meet with Williams and his officials in late February. Williams charmed Efford, couching the whole matter in the simplest of simple terms, ones that Efford was sure to accept. There was the news conference after the meeting in which Williams talked of there being a two-headed horse fighting for Newfoundland and Labrador.
Never mind that Efford would never, ever grasp either the political manoeuvering around him or the substance of the offshore revenue issue. If the feds coughed up cash, Danny would claim victory. If they stalled or rejected the idea, Efford was the easy scapegoat. He was no Crosbie, whose grasp of the facts and vicious tongue could dissect an opponent with the finesse of a broadaxe. Nor was he a Tobin. Efford was an easy mark.
There were claims by Williams of support from all the premiers. There were comments on the frustration of waiting for Ottawa to act. Behind the scenes there was little substantive provincial activity. There was no written proposal that spelled out Williams' ideas in legal detail. What they did slap together was an overhead slide show that would surely have suggested to anyone familiar with the Accord that the provincial officials didn't understand the history of the deal or the original deal itself. Anyone, like say Efford's deputy minister, who had helped negotiate the Accord in 1985 and who would likely remain opposed to the province's arguments based on his own knowledge of the original deal.
There was the odd short letter to the PM or telephone call. The letters said little more than: "Come on bye, ye gotta do something."
The goal was a commitment from the prime minister. No officials. No intermediaries. No getting bogged down in give and take. Williams wanted the words from Paul Martin's own lips: "I agree".
Williams got the commitment on June 5, 2005. The PM had accepted Williams' proposal, presumably the letter from January. Williams followed up five days later with a letter that thanked the prime minister for his accepting the province's position. Williams then restated the position increasing both the amount of money and duration of the deal from what had been discussed before, released it to the public and then set a deadline of the late summer for getting the thing finished.
The premier was not happy. He could never be happy. Every offer would be just short of what was required to make him happy enough.
and so the ante was upped.
A late summer deadline was set by Williams. Efford suggested it might be more like September.
By September, no deal had been reached.
The feds met a new October deadline for a proposal imposed by Williams but only just. Regardless of what was in the offer, Williams would never have accepted it. It wasn't his style. bad news for Williams though, came from the other provincial premiers who were finally waking up to a looming deal that had been, to now, underneath the national radar screen.
They realized that what Williams was asking for was a federal transfer to Newfoundland, equal to its offshore revenues, even if the province grew as rich as any other. Ontario's Dalton McGuinty would have none of it. He wrote to the feds stating Ontario's rejection of any such arrangement that smacked of Equalization as a provincial right. The letter of support he had written Williams finally surfaced, a note of such importance that his office couldn't find a copy. When faxed to them by Williams' staff it turned out to be little more than "the weather is here, wish you were beautiful" platitudes; certainly it didn't live up to the billing Williams had given it earlier.
So Williams stormed from a federal-provincial conference on Equalization without a deal and without suffering any closed-door gryping from his fellow premiers.
He sat with Don Newman on Newsworld and vented his frustration at Ottawa, his jaw clenching and unclenching visibly to the cameras. He started a news conference alongside his finance minister, cutting the whole affair off quickly by telling Loyola Sullivan that it was time they were going.
A confusing interview with CBC television's Carole MacNeil didn't help persuade national audiences that Williams wasn't looking to eat his oil cake and have his Equalization too.
More acrimony and then the December deadline.
In the meantime, the feds were hardening their position. They were refusing to play on Williams' terms or in his arena. Only Efford - his lack of influence in Ottawa painfully obvious with each passing day - would blunder to the public stage issuing a take-it or leave-it challenge on the October offer only to deny the plain facts of his statement when the public turned on him.
All the while, the province was being forced slowly to go where Williams had not wanted to go. After the October offer, St. John's started actually negotiating with Ottawa, sending off draft agreements, reworking clauses for the first time since the whole offshore issue had been raised with Ottawa 10 months beforehand.
No one in Ottawa would say much of anything publicly, neither repudiating nor accepting Williams' June letter. What was growing increasingly clear, though, was that Williams could achieve nothing even close to his June claim of doubling oil revenues in perpetuity.
With the realization, came the gloom.
One last deadline was set: December.
Time for a Christmas present if the news was good or to label the feds as the Grinch if need be.
Off to Winnipeg for a new federal offer which Williams praised to the media on the way up. Public optimism soared, especially on the province's radio call-in shows which had become, since Brian Tobin's time, a popular poll used by Premier's Offices to gauge what the public was thinking. Williams seemed to live on Open Line himself. Later he would implement a policy that required each of the senior public servants in the communications division to spend almost one entire day a week in rotation doing nothing but monitoring the radio and having someone on to counteract criticism. No negative comment was to go unchallenged for more than a few minutes.
Public optimism was shattered as Williams stormed from the meeting, flew back to St. John's and scheduled a media briefing for December 22. He announced there was no Christmas present from Paul Martin. Williams' talked of getting a slap in the face.
Then he ordered Canadian flags to be taken from every provincial building. "Why would we fly their flag and pretend everything is rosy?" he told reporters at Confederation Building.
There is no sign he had planned the announcement or had discussed it outside of a limited number of close confidantes. The province's most senior public servant, for example, normally unflappable, scrambled from the room to have public works security guards get the flags down. The security guard himself, who appeared on every TV set on every TV news broadcast in the country for days afterward appeared like he had been roused from a sleep and handed a dust-covered and seldom-used dress uniform cap to look his best.
At the news conference, Williams himself systematically pointed to each flag behind him intoning "That one will be coming down and that one and that one." The pointing wasn't as telling as the tone of his voice.
For a man who needed national public opinion to be on his side, Williams' actions could not have produced a more disastrous result. Over Christmas the public dismay mounted at using the national flag as a political tool. Letters, faxes and e-mails poured into the Premier's Office. National opinion polls turned against Williams, including one in the Globe and Mail, Canada's erstwhile national newspaper which had already endorsed Williams' offshore goal.
Locally the move was a hit, especially among the province's anti-Confederates. Williams' tried later to blow off the national public reaction as being orchestrated by the federal Liberal communications team. He was well off the mark with this, the latest of his conspiracy theories.
Coming back after a Christmas and new year's break, Williams launched an offensive. He would head to Toronto to make the case to national media. [As it turned out, the Globe editorial the day after its editorial board met with Williams was hardly positive for the premier. Others would follow suit, telling WIlliams he should accept the deal in front of him.]
Williams would soften his line on the flags a bit, hinting that they might go back after a suitable period and no longer, as he previously wanted, once Ottawa met his demands. He would write the prime minister and announce so publicly, to shift focus to Ottawa.
In the meantime, Williams commissioned a poll. Ryan Research and Communications was a firm which Danny had come to rely upon increasingly for insights into public moods. The principal consultant, Karen Ryan, was an experienced market researcher who had worked for one of the country's leading marketing firms before branching out on her own. Ryan did work for Vic Young on the Royal Commission and had polled for Danny himself virtually every month from December 2003 onward. She was a natural choice.
On January 3, 2005, Ryan was asked to survey attitudes in the province on the offshore negotiations and on the flag. Work was to start on the 4th of January and finish as quickly as possible. The Premier's Office quickly decided on a national survey and so 800 surveys were administered across the country from January 4 to January 9, 2005 on top of the 400 in Newfoundland and Labrador that had been wrapped up on January 5th. Its purpose, as the research report's executive summary stated, was "to gain insight into and understanding of Canadian's support for Premier's Williams' efforts to secure 100% of provincial offshore royalties and whether they perceived that the Prime Minister should honor his commitment of June 5th, 2004."
On that basis, the research report, subsequently obtained by The Telegram is a curious document. Aside from the standard questions about age, education and income, there are only five specific questions about different aspects of the offshore oil issue. That is typical in simple surveys.
What isn't typical is the wording, the ordering or the structuring of the questions. It wasn't a push poll - not a poll at all, really, but a propaganda technique pioneered in the United States - but the Danny Williams' messages would get across nonetheless, if that was the goal. If nothing else, the poll would give Williams something he could talk about publicly to give the appearance things were going better than they were.
The first one basically asked if the respondent believed the Prime Minister should live up to his commitments, but it did so with wording that would likely lead a respondent to answer in the affirmative.
Specifically it asked: "On June 5th 2004, Prime Minister Paul Martin publicly committed to accepting the proposal put forth by Newfoundland's Premier Danny Williams that would see Newfoundland and Labrador keep 100% of its provincial offshore revenues. Do you believe that Prime Minister Martin should honor this commitment to allow Newfoundland and Labrador to keep 100% of its provincial offshore royalties?"
The question contained the Premier's key message, not once but twice, that the whole discussion was about the province keeping its own money. Intuitively, few would argue with the point, except those that understood the intricacies of federal-provincial financial arrangements or the Atlantic Accord. Few did, including cabinet ministers and former ministers. Facts weren't important; the message was.
Nationally, 72% of respondents agreed with the idea of honoring the commitment. Fully 96% of Newfoundlanders agreed, along with 72% of Westerners, 68% of Ontarians, 73% of Quebeckers and 84% of Martimers. Even with the polls margins of error - 2.83% nationally, almost five percent in Newfoundland and almost 8% in the other regions, the figures were unmistakable.
So too with the second question, which asked: "Overall, all things considered, how supportive are you of Newfoundland's Premier Danny Williams' efforts to secure a deal with the Federal Government that would see 100% of Newfoundland's offshore revenue kept in that province?"
The responses were structured as a Likert scale, in which respondents are usually offered an equal number of positive and negative choices in order to gauge the intensity of their attitudes. In this instance, respondents were offered three positive choices (completely, mostly or somewhat supportive) and only one negative choice (not supportive at all), likely leading them to pick a soft positive one, even if they were actually opposed.
The total level of support was unmistakable with 72% picking one of the positive choices, but nationally, the individual positive choices were almost even. Outside Newfoundland and Labrador, where 73% supported the premier's efforts completely, or the Maritimes where 42% did so, the results were similar to the national figures, suggesting strongly that people had some reservations about the efforts.
The third question was about the flag and again was structured as a Likert scale with three positive and only one negative choice:
"To what extent do you support Newfoundland's Premier Danny Williams' decision to remove Canadian flags from Newfoundland's government buildings to protest Prime Minister Martin and the Government of Canada not living up to the commitment to allow Newfoundland and Labrador to keep 100% of provincial oil revenues?"
There was no question as to how familiar people were with the issue, nor was there a simple question about the respondent's feeling about removing the flags. The question included the Premier's rationale for the move in detail.
Despite the leading nature of the question, having heard the same rationale about commitment's and revenues in two previous questions and despite the skewed nature of the scale which would tend to have respondent's pick a positive response, 60% of respondents nationally picked the sole, extreme negative choice.
The view was as clear in the regions across the country, even allowing the poll's margins of error. Respondents strongly opposed the flag move in every region except Quebec and Newfoundland. Even 63% of Maritimers were not supportive at all. In Quebec, where flag flaps were old news, the figure was 45% not supportive at all, the single largest response category by more than two to one.
In Newfoundland and Labrador 38% were completely supportive and 29% were not supportive at all. With a margin of error of almost five percent, those figures could be 33% completely supportive and 34% completely unsupportive. Those results were available to the Premier possibly as early as January 6 and may have prompted his admission to news media on January 7 that the flag issue had cost him support. Even at home, as Williams may well have known, his flag flap was a loser at worst, a distraction at best.
There is no way of knowing for sure, but it is interesting the coincidence that this polling was completed nationally on January 9 and that Premier Williams ordered flags raised on January 10. The move surprised everyone, coming, as it did, in the midst of a news conference to announce a call for expressions of interest in developing the Lower Churchill.
There is no specific date on the polling research report. Those familiar with polling know that it is possible to produce quick results that simply tally responses. Those could easily have been available to the premier by late on the 9th or early on the 10th.
With the flags back, the Premier removed a issue that had overshadowed his campaign on offshore revenues. On January 14, the Prime Minister released his reply to Williams' letter both accepting Williams' request for a face-to-face meeting as an attempt to resolve the ongoing offshore issue and making it clear that the federal government was never going to accept the June double-up scheme.
The deal reached in late January 2005 has been discussed in detail elsewhere. The first clause of the agreement repudiates the very basis on which Williams made his public case: the provincial government already received 100% of offshore revenues. ("This agreement reflects an understanding between the Government of Canada and the Government of Newfoundland and Labrador and the Government of Nova Scotia that both provinces already are collecting and will continue to collect 100 percent of offshore resource revenues as if these resources were on land.")
In the end, the province accepted a cash lump sum of $2.0 billion, as had been offered in October but increased to reflect then-current oil prices. Other details of the deal did nothing to change the fact which had served as the foundation of the Young commission's report and Williams' case as well: Equalization and Equalization offsets would not continue if the provincial government no longer qualified for Equalization.
The lump sum was more than was on the table in the beginning but it fell far short of the provincial government's June objectives. It even fell short of its January 2004 goal.
But the deal was done.
And the Premier claimed victory.
The message was important, not the details.
Postscript:
Is there other provincial government Accord polling? Maybe.
Ryan Research conducted polling for the Williams administration almost every month from December 2003 to August 2004 and again in January 2005. Those are the polls that were paid for by the provincial government and which have been acknowledged publicly.
Despite a ruling by the province's access to information commissioner, the Williams administration is withholding any polls done by Ryan. They have released research done by other firms, despite the claim that polling done for Executive Council reveals cabinet deliberations.
Only work by Ryan Research is being withheld.
