Friday, May 14, 2010

‘We should all be equal partners in this Confederation’

Premier Danny Williams was more pissed than usual this week.

Which is saying something.

But then Quebec tends to drive Newfoundland premiers right over the edge.

Quebec has punished us silly for years with the monumentally lopsided 1969 Upper Churchill contract.

And the 31 years left on it.

It punishes us too with the Lower Churchill — “the best undeveloped large-scale hydroelectric asset in North America” — and the decades NL has been unable to move it forward.

What’s worse is that Ottawa hasn't lifted a finger.

There have been points when the Government of Canada could have stepped in.

Ottawa can still step in.

But then Confederation seems to work better for some provinces than others.
As for where relations stand today …

NL is suing Quebec for a better deal under the 1969 Upper Churchill contract.

In a December speech to the Calgary Chamber of Commerce, Williams said in 2008 alone, Quebec made $1.7 billion from the Upper Churchill contract, compared to $63 million for NL.

“How would Albertans feel if another province profited from their resources at more than $1 billion a year?”

I bet Albertans would go off their heads too.

“Our province for one will not stand for Quebec assuming it can do what it wants in the country,” Williams told the Calgary audience.

“In my opinion we should all be equal partners in this confederation.”

Should be, he said.

Meaning we're not now.
As for where things stand with the Lower Churchill …

In its decision, released Wednesday (May 12th), Quebec’s energy regulator, the Regie de L'energie, concluded that Hydro-Quebec "was entitled to refuse to negotiate" a contract with Newfoundland's hydro utility, Nalcor Energy, to transmit power from the province to other parts of Canada and the United States.

Any unused capacity on Hydro-Québec lines is apparently already spoken for by its own hydro projects.

Nalcor — which argues there is sufficient capacity on Quebec's existing network— claims Hydro-Quebec asked it to pay $3 billion to build the necessary transmission infrastructure.


NL said it's willing to pay for some upgrades, but put the cost at well under $3 billion.

The Williams administration was also willing to pay a $200-million annual tariff for a 30-year period.

“What Quebec has done today is to tell the people of Canada and the United States that they will go to any lengths to ensure they have market dominance over electricity markets in northeastern North America,” Williams said this week, as quoted by the CBC.

“It’s completely anti-competitive.”
Expected to take 10 years to build, the $6.5-billion Lower Churchill project would involve the construction of two hydroelectric generation stations in central Labrador — at Gull Island and Muskrat falls.

The combined capacity of 3,074 megawatts of energy would be enough to supply the energy needs of 1.5 million homes.

In the Calgary speech, Williams appealed to Canada’s environmental conscious.

He said the more than 3,000 megawatts “would reduce green house gas emissions by 16 million tonnes.”

The equivalent of taking 3.2 million cars off the road.

“It is an outstanding green project and low hanging fruit in the world of clean energy,” the premier said in his speech.

Only it’s useless to pick the fruit if Quebec is only going to take it for herself.

Like the fruit from the Upper Churchill tree.

Williams sums up the Churchill quagmire, Upper and Lower projects, with the following quote:

“I do have a very serious problem with one province consistently being the beneficiaries of substantial federal government assistance, while at the same time reaping an inordinate and extraordinary benefit from my province and then to add insult to injury, doing everything in its power to inhibit our moving forward.”

The premier plans to appeal the decision of Quebec’s energy regulator to the courts, as well as file a complaint with the U.S. Federal Energy Regulatory Commission.

So it’s no wonder he’s more pissed than usual.
That, and Quebec and NL have been going at it for years.

The animosity is almost bred into us.

The province is now back to the Maritime route, sidestepping Quebec as a means to getting Lower Churchill power to market by transmitting power to the Island and on in to Nova Scotia and New Brunswick.

Only that’s said to be the more expensive route.

In 1980, the local CBC Television show On Camera investigated the lower Churchill and where things stood at that point.

The next post on Fisherman’s Road will include an overview of the 30-year-old On Camera two-part series, which was included in The Independent newspaper’s 2004 cost-benefit analysis of Confederation.

It's a great weekend read.


kwlem said...

I couldn't agree more that it's a maddening, lousy, lop-sided deal. But the thing we NL-ers need to bear in mind in our complaining about it is that we (being Smallwood) did sign it.

Fisherman's Road said...

The contract was signed, you're right, and a contract is a contract.

But it's not as simple as that.

Fisherman's Road said...

In 2005 Dr. Jim Feehan and Melvin Baker wrote a report called The Origins of the Coming Crisis: Renewal of the Upper Churchill contract.

The paper raises questions of conflict-of-interest, economic duress, and business ethics.

It's a fascinating read.

Good it and you'll find it right away.