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Thursday, September 27, 2007

Big oil seeks help from NAFTA

You gotta love Newfoundland Premier's Danny Williams' tough guy persona--his willingness to fight the feds at the drop of a hat is refreshing. Plus he always accommodates an interview request. But  I have to disagree with his eagerness to get involved with his province's offshore oil industry. And now, it looks like one of the scraps he won from the feds, forcing oil companies to spend $50 million worth of r and d money in Newfoundland, violates NAFTA (for all you unabashed partisan Tories out there, don't worry the concession came from the Liberals).

CP claims the companies are planning to sue the feds over this. It could be interesting, simply because this might be the first time I can think of that Williams doesn't get his way. Also interesting is that this lawsuit comes at a time when Williams is seeking another mandate.

Posted by Cyril Doll on September 27, 2007 | Permalink


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All regional Industrial Benefits or "Offsets" generated by Major Crown Projects like large scale DND purchases are contrary to NAFTA which is the principal reason the US Department of Commerce refuses to give IRB's credibility -No significant
benefits have been generated from US suppliers on
any of the Contracts awarded to Sikorsky, Boeing
General Dynamics, General Electric -etc. same applies to European suppliers like BAe and EADS
something we warned Harper's flunkies about, but
they preferred to listen to the Liberal patronage dominated Public Service of Canada -such as it is. MacLeod, not surprised in the least in Monckton NB

Posted by: Jack Macleod | 2007-09-27 10:54:18 AM

The last time Newfoundland "won" a battle over "offsets" with Big Oil -they managed to sink the Ocean Ranger. Big Oil will win in a lawsuit, which
will eliminate all Industrial Regional Benefits (Offsets) associated with Major Crown Projects
which even DND Mandarins say, do not work. We were
associate consultants on the New Fighter Aircraft Program working with Northrop on the FA-18 and F18L Program -and saw first hand the problems associated with "Offsets" which today, just don't work, and in fact never did. The offsets McDonnell Douglas generated on the CF-18A were directed to
their own plant in Malton Ontario for manufacture of components for the DC9 and DC 10 series of commercial carriers -in other words DND and Public Works Canada subsidized their Ontario work force
to about 100, plus percent - Macleod

Posted by: Jack Macleod | 2007-09-27 11:48:25 AM

Seems strange that the US companies ignore NAFTA when it comes to soft wood lumber and grain but seem to want to champion it when its about oil...hmmmmm bargaining chip perhaps?

Posted by: Sean Whelan | 2007-09-27 12:58:07 PM

"...in other words DND and Public Works Canada subsidized their Ontario work force"

Not to mention Quebec's.

Posted by: tomax7 | 2007-09-27 2:55:15 PM

I fail to see a connection between regional offsets and the sinking of the Ocean Ranger. Thats quite a statement you're making.

Posted by: Gareth | 2007-09-27 4:07:44 PM

"Also interesting is that this lawsuit comes at a time when Williams is seeking another mandate."

The timing of the suit is not so "interesting". The deal went down in late August. Taking one month to announce that you have discovered grounds for legal action strikes me prompt action.

The only "interesting" timing is on the part of Williams, finally resolving a deal he had been having trouble with on the eve of an election. Now we see that Williams had good reason to make sure voters don't have too much time to scrutinize the deal.

Posted by: Peter_E | 2007-09-29 11:13:46 PM

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