US embassy cable - 04OTTAWA3471

UNCLAS OTTAWA 003471 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, CA, Danny Williams, Newfoundland and Labrador 
SUBJECT: NEWFOUNDLAND'S PREMIER ORDERS CANADIAN FLAGS 
LOWERED ON PROVINCIAL BUILDINGS 
 
REF: OTTAWA 2896 
 
1. (SBU) SUMMARY: Premier Danny Williams of Newfoundland and 
Labrador took the unusual step of ordering the Canadian Flag 
removed from all provincial buildings on Thursday, December 
23.  Williams was reacting to another failure to negotiate a 
deal with the Federal government on offshore oil revenue and 
equalization transfer payments, and contends that PM Martin 
broke his word, leaving Newfoundland and Labrador yet again 
on the short end of the federal-provincial stick.  While 
Newfoundland and Labrador thrive on a sense of historical 
alienation and the move may play well locally, it could also 
serve to generate ill will for his cause nationally.  END 
SUMMARY 
 
2. (SBU) Premier Danny Williams of Newfoundland and Labrador 
ordered that the Canadian Flag be removed from all provincial 
buildings on Thursday, December 23.  Williams was reacting to 
another failure to negotiate a deal with the Federal 
government on offshore oil revenue and equalization transfer 
payments.  The cities of St. John's and Corner Brook have 
joined the Premier by ordering that the Canadian flag be 
removed from municipal buildings, and Mount Pearl, a bedroom 
community of St. John,s, raised a pre-confederation 
Newfoundland flag.  To the best of post,s knowledge this is 
the first time in the recent past that a province has lowered 
the Canadian flag in a protest against the Canadian 
government. 
 
3. (SBU) Premier Williams and Premier John Hamm of Nova 
Scotia were invited to Winnipeg, Manitoba last week to 
negotiate an offshore petroleum revenue deal with Federal 
Finance Minister Ralph Goodale and Natural Resources Minister 
John Effort.  Williams left the meetings on December 22 very 
unhappy with the government,s proposal, stating &they have 
slapped us in the face at Christmas time. I can tell you we 
will not forget this, believe me.8  He immediately returned 
to Newfoundland and called a press conference where he 
announced the lowering of the Canadian flag.  Williams has 
not been quoted on the issue since the press conference. 
(NOTE: Minister Effort is the only Federal cabinet minister 
from Newfoundland. He has supported the Prime Minister on 
this issue, while other Liberal backbench MPs from 
Newfoundland have not. END NOTE) 
 
4. (SBU) PM Martin has responded strongly to the Premier,s 
actions, calling it &disrespectful8 and stating that the 
flag should not be used as a tool for partisan politics. 
Opposition Leader Harper has previously noted his general 
support for Premiers Williams and Hamm in their fight with 
the Feds and states that the problem is an example of the 
Prime Minister,s &chronic inability to make a decision.8 
He has, however, been conspicuously silent since the flag 
lowering. 
 
5. (SBU) William,s argument is that PM Martin broke his word 
in a deal he made with the Premier to change the offshore oil 
revenue transfer payment formula, and says this is only the 
latest example of an ongoing pattern of Newfoundland and 
Labrador getting bad deals from the Federal Government. 
Other historical examples, Williams contends, include 
hydro-electric power, fishing rights, and mineral rights. 
 
6. (SBU) Comment: Premier Williams may be taking this 
dramatic action to further solidify local public opinion, and 
by using the Canadian flag he gains a national stage for the 
offshore revenue issue as well.  Newfoundland and Labrador 
possess a sense of historical alienation as a resource rich 
province that is stuck in have-not status and Political 
Science Professor Stephen Tomblin of Memorial University in 
St. John's predicts that Williams' local popularity will only 
grow as a result of this recent action.  But bringing the 
flag into the debate also raises the risk of creating 
ill-will among potential supporters elsewhere, and could make 
it difficult for other provincial premiers or federal 
officials to support him in the future. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
POWELL