Newfoundland and 'what army' - Power Struggle Part 2 of 12

Ambrose Peddle, opposition MHA during the infamous upper Churchill Falls deal, says no one disagreed with the agreement — it just wasn’t ‘fashionable’

“I was sitting across from (Smallwood), and I shouted across to him, ‘Why doesn’t the premier get his pal Lester B. Pearson and ask him to declare the transmission from Churchill Falls through Quebec to be in the national interest?’ And Smallwood’s remark, I can remember, it’s embedded in my soul: ‘And what army is going to maintain the transmission lines crossing Quebec?’”

— Ambrose Peddle, an Opposition Tory MHA during Smallwood’s Liberal reign. 

Second in a 12-part series.

The defunct weekly provincial newspaper, The Independent (2004-2008), carried out extensive research and investigation into the Upper Churchill. From the contract’s signing in the 1960s, to the realization of its incredible lopsided nature towards Quebec, the shadow of the deal looms today over the potential development of Labrador’s Muskrat Falls. The following is the 2^nd in a series of 12 articles published in The Independent. 

By Stephanie Porter
The Independent

Nov. 14, 2004

Although Ambrose Peddle was sitting in opposition the day Joey Smallwood brought the Upper Churchill development deal to the House of Assembly, he makes no apologies for allowing it through with little debate.

The agreement, signed in the 1960s, is now widely regarded as grossly unfair to Newfoundland and Labrador: Hydro-Quebec rakes in huge profits from Labrador-generated electricity; this province sees very little in return.

Peddle remembers well the day, some 40 years ago, when then-premier Smallwood made the Churchill announcement.

“There were five or six members of the opposition at the time,” he tells The Independent. “On this day Smallwood came down after lunch and invited us up to his office. He said, “I have a deal for the development of the Upper Churchill and I’d like to have it go through with as little opposition as possible. Would you agree to that?”

“We were all excited as anything about it and I tell you, not one of us disagreed.”

That deal has since been much maligned for its lack of any sort of escalator clause. Hydro-Quebec buys power from Newfoundland and Labrador at the same rate set in 1969. 

As the price of electricity rises, so do Quebec’s revenues — which stand between $800 million and $1 billion a year.

The deal doesn’t expire until 2041.

“They talk now about an escalator clause, we didn’t know what that was, how could we? The only thing I knew about an escalator was there was one in the Toronto airport,” Peddle says with a smile, settling into an armchair in his St. John’s home.

“Look, we were in a period of time when a pound of bologna was 17 cents for about 50 years and didn’t change. Nobody expected acceleration of this thing the way it happened. Nobody. But the Quebec people were smart enough to realize they had a bonanza — boy, did they ever.”

Although concerns may have been raised at the time, Peddle says he and his colleagues didn’t pay much attention to them, it “wasn’t fashionable, when everyone was so delighted to have a deal.” 

To this day, Peddle says the Quebec negotiators ‘absolutely’ took advantage of the situation — of the eagerness of the government to sign, get the project underway, and create jobs — and doesn’t blame them a bit for doing so. He says he won’t accept any of the blame for the agreement either.

He points his finger instead to Smallwood and his lawyers, who, he says, should have been ‘astute’ enough to draw up an appropriate contract.”

Peddle, a former mayor of Grand Falls Windsor, represented the area as an MHA during the 1960s. He went to Ottawa in 1968 for a term as MP for Grand Falls-White Bay-Labrador. Later, he was appointed as parliamentary commissioner (ombudsman) for the provincial government.

Since that position was cut in 1990 by Clyde Wells, Peddle says he’s been enjoying retirement, keeping close watch on the news, flipping through the records of parliament he keeps in his office to “refresh” his mind. 

In both federal and provincial politics, Peddle was always a member of the opposition. It suited him well, he says with a smile — “I can’t say I achieved any big things, I just was always the wisecracker.” 

He was ready with a quick jab for anyone — including the premier of the time. 

“Smallwood was a very self-centered man,” Peddle says by way of describing the atmosphere in the House of Assembly in the 1960s. “I didn’t like him well, but I respected his political acumen. He was a very shrewd politician. It’s fair to say I enjoyed him, poked a little fun at him.”

Peddle recounts one exchange lobbed during the Churchill debates.

“I was sitting across from (Smallwood),” he says. “And I shouted across to him, ‘Why doesn’t the premier get his pal Lester B. Pearson and ask him to declare the transmission from Churchill Falls through Quebec to be in the national interest?”

“And Smallwood’s remark, I can remember, it’s embedded in my soul: ‘And what army is going to maintain the transmission lines crossing Quebec?’”

(Peddle was referring to section 92 of the 1867 British North American Act, which outlines the powers of the province. Under the section, for example, oil and gas from one province can be transported across another via a pipeline — so that no one province could stop the transmission of oil and gas by another — because it is considered “in the national interest.” The same tenet did not hold true, as was discovered, when it came to transmitting power.)

Peddle says he sees the same shortcomings within the political system these days as he did when he was in the thick of it all; politicians elected for short terms, making quick decisions for maximum votes.

“And if you’re doing things just to get elected you can be sure you’re not doing them for the good of the people, long-term.”

“How do you change it? I doubt you can. All you can do is bitch about it like the weather … or you can have a good time trying to change it.”

Peddle says he’s been following the decades worth of discussions surrounding the development of the Lower Churchill. And as much as he thinks highly of the current premier, he doubts Williams is going to stick around long enough to see it through.

“I’ve been following the lower Churchill, I’m not sure I grasp what it’s all about. I still don’t, after all this time.”

“I do know there’s too much bad feeling between the federal and provincial governments, between provinces, and that shouldn’t be necessary.”