Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.

Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Friday, December 31, 2010

Leadership for Newfoundland and Labrador

Political leadership is the cornerstone of all societies. It can be used for the the good or the bad. It can take societies to the greatest heights or piles of rubble. We can view it in the warm comfort of hindsight, or see it up close in the chaotic financial meltdown of today. Either way, it surrounds us continuously. The big question is: What is political leadership and how can it work for us?

Leadership has many different components, depending on who is explaining it, but some of the main components are generally described as: Integrity; Energy; Self-belief; Vision; Decisiveness; Drive; Creativity; Communication; and Courage. I will add a modifier to vision - political foresight. Great leaders of recent history that we recognized as having these qualities include Winston Churchill, Martin Luther King, Gandhi, and so on. Great names associated with larger than life contributions. Many in this province would include our recent Premier Danny Williams as a great leader with the required qualities. It is easy to see by the small amount of names, compared to the great numbers of people, that these folks are extremely special and do not come around everyday.

Unfortunately, the problems do. In our case we have numerous historical and current problems that, as the saying goes, "keep on giving." The Upper and Lower Churchill, Old Harry oil, offshore drilling, boundary disputes, an aging population, a shrinking tax base, a large provincial debt, a destroyed fishing industry and the list could go on. A big part of leadership is knowing the past. Without knowing the past you cannot understand the future, and you are doomed to repeat the same mistakes. A good leader understands this, and uses those lessons to change the future for his people.

A good leader understands the roots of issues, and communicates those to his people. Together they take the journey, and together they finish it. A good leader understands that he is nothing without the people, and that their well-being is his mission. A good leader places himself last and the people first, at all times, and demands the same of those that work for and with him. A good leader makes sure justice is not just seen to be done, but is done.

In the Newfoundland and Labrador context it means changing historical wrongs, and setting new courses for the future. It means rewriting the Upper Churchill agreement, building the Lower Churchill, affixing maritime boundaries to exploit the Old Harry oil field, getting the best possible return for our resources, expanding our economy, building our infrastructure, increasing our population, eliminating our debt, breathing new life into our fishing industry, and fending off the wolves. Any leader of Newfoundland and Labrador can expect to be challenged from within and from without by those who seek their own self-interest, and could care less about the consequences for us. That has been a historical fact, and remains true to this day. Any leader of this province must therefore be reinforced with a powerful courage of conviction.

The next leader must be able to deal with Quebec and Ottawa, and withstand an incredible amount of pressure in order to successfully achieve this province's goals. That kind of leadership requires the ability to project yourself onto the national scene, and achieve a very divisive victory, without ripping the country apart in the process. The ability to fight in the trenches and in the end ... diplomacy. Our leadership in this respect has normally achieved one or the other of these qualities, but not normally both. It is absolutely critical to our future that this be handled properly. However, should it not be possible to do so, the leader must have the courage of conviction to look after this province's interests first. In other words, the quality of an extremely thick skin will be necessary.

Once it is all over, and the challenges have been met, the future direction of the province will take shape. Leadership will then be required to set priorities on spending in a post-debt era. What do we value the most? Is it a low tax, low debt, and minimal government society? Is it a high tax, low debt, government stimulated society? These are issues for the future, though not too distant future. They will require a leadership that is open to the cultural and societal needs of this province.

Perhaps the most elusive quality of leadership today is humbleness. We live in the "me, me, me" era. The ability to listen to people, to take your guidance from them when they wish to give it, is absolutely necessary. Many leaders fail to understand that while you can not please all the people all the time, you must at a minimum please the silent majority. Be humble, open your ears and mind and listen to them. They will not let you down - don't let them down.

**caveat: his = his/her

Sunday, December 26, 2010

The Labrador Shuffle

The Labrador - Quebec border dispute has been resolved for 93 years. It was sent to the British Privy Council in 1927 by the then Dominion of Canada and the Colony of Newfoundland for binding arbitration. The dispute was initiated over logging rights between the two. In 1927 the Privy Council rendered the following decision:

... a line drawn due north from the eastern boundary of the bay or harbour of the Anse au Sablon as far as the fifty-second degree of north latitude, and from thence westward ... until it reaches the Romaine River, and then northward along the left or east bank of that river and its head waters to the source and from thence due northward to the crest of the watershed or height of land there, and from thence westward and northward along the crest of the watershed of the rivers flowing into the Atlantic Ocean until it reaches Cape Chidley.


The decision was clear enough, and is even added to Quebec's official road map, albeit in dotted lines and referred to in brackets as undetermined - see map below. In keeping with Quebec's major political commandment, "everything old is new - if we want it to be", she refuses to recognize this arbitrated decision. Instead, Quebec ignores the westward line of the 52nd degree of north latitude, and places that line much further north encompassing the head waters of the Romaine River - amongst others.
 
Quebec's strategic blind eye came into focus with the proposed construction of the four dam complex on the Romaine River by Hydro Quebec in 2008. The environmental agencies of the governments of Canada and Quebec conducted mandatory assessments of the impacts of the proposed dams. Yet, despite formal submissions and complaints by the government of Newfoundland and Labrador, the dams were given the go ahead - with conditions. Unfortunately, none of those conditions included recognizing the legitimate border of Newfoundland and Labrador. The government in St. John's was not even recognized by the Canadian government's own environmental agency as having jurisdiction over the area awarded in the 1927 decision.
 
This is unforgivable considering the wording of the Terms of Confederation between the Government of Canada and Newfoundland and Labrador, by which Newfoundland and Labrador agreed to enter into Canada:
 
TERMS OF UNION


UNION
1. On, from, and after the coming into force of these Terms (hereinafter referred to as the date of Union), Newfoundland shall form part of Canada and shall be a province thereof to be called and known as the Province of Newfoundland and Labrador.

2. The Province of Newfoundland and Labrador shall comprise the same territory as at the date of Union, that is to say, the island of Newfoundland and the islands adjacent thereto, the Coast of Labrador as delimited in the report delivered by the Judicial Committee of His Majesty's Privy Council on the first day of March, 1927, and approved by His Majesty in His Privy Council on the twenty-second day of March, 1927, and the islands adjacent to the said Coast of Labrador.


Not unlike the current federal government's refusal to force Quebec to negotiate a formal maritime border with this province prior to signing an offshore petroleum agreement, the Canadian Environmental Agency simply ignored Newfoundland and Labrador's constitutional rights. The reason - Quebec economic interests. The excuse - Quebec separation. Same as Old Harry is shaping up.

The only way to defeat the sacrificing of Newfoundland and Labrador is to be more determined and more creative than the collective will of Quebec City and Ottawa. It should not be the way it is in a country such as Canada, but it would be foolish to think otherwise. It is within our province's ability to successfully manage both challenges but, that aside, the Government of Canada must be reminded it is the national government and as such has the responsibility of applying the Constitution equally amongst it's citizens. To "cherry pick" the application of law is to invite deep discontent. A further question goes out to the Liberal and NDP members of the House of Commons representing Newfoundland and Labrador federally : Why are you not standing in the Commons and demanding that the federal government recognize the Terms of Confederation and thereby our proper border in Labrador? Why are you not standing in the House and demanding the federal government not grant an offshore petroleum board agreement with Quebec until the proper maritime borders are agreed to? The only federal representation coming from our Mp's seems to be MP Todd Russell who is surveying Labradorians as to whether or not they want the Lower Churchill project built - in seeming conflict with the provincial government here.

The unholy trinity of Quebec separatists, Quebec federalists, and the Federal government must be brought to the realization that Newfoundland and Labrador will not be pushed. Our previous Premier, Danny Williams, ferociously fought for that cause. To his undying credit he refused to let one undermining action go unchallenged as he likely knew all too well that to do so was to invite more of the same - at the cost of our province and her people. Our federal government needs to rediscover the fact that it is a national government, with national responsibilities, and national obligations. The first and foremost of those responsibilities is ensuring all Canadians are treated properly in accordance with their Constitution. To do otherwise is irresponsible, and places the future of the country in peril.


Government of Quebec Official Map - note their idea of the border and
maritime boundary. Actual Labrador border is the dotted line running east
and west on the 52nd.

Thursday, December 23, 2010

Separation Quebec's Best Insurance Policy?

When it comes to negotiating with Quebec on topics like the Upper Churchill, maritime boundaries, Old Harry, or even the upcoming talks on equalization payments, you need to know who and what your dealing with. The common refrain throughout Canada is that Quebec likes to have it both ways. In this article by Kevin Dougherty of the Montreal Gazette you will see that played out in their own words.

It goes back to my blog - Poker Quebec Style. The gullible will be eaten by the politicians of Quebec. There are just too many examples of that happening to ignore it. It is not being anti-Quebec. It's just reality. Newfoundland and Labrador requires the vision and courage of conviction to battle this mentality, and prevail in order to look after the welfare of our people and province. What the Quebec politicians in this story are saying is that if you don't follow our will, then we will tear down your house. They will bank on the media to turn public opinion in their favour, because to do otherwise would be to risk the country.

It is a blackmail of the lowest order. We in Newfoundland and Labrador will not sacrifice our people or province any further on the alter of pacifying Quebec. We did not enter Confederation to become the economic colony of Quebec. It's time for the Quebec government to look for a new insurance policy.

Sovereignty threat is Quebec's 'best insurance policy': Drainville


By Kevin Dougherty, Gazette Quebec Bureau October 24, 2010 •Story•Photos ( 1 )


"The reason we have bargaining power in Ottawa with questions such as Old Harry is because they know they have to respect Quebecers," says Parti Québécois MNA Bernard Drainville. “Because Quebecers are masters of their decisions and might decide one day to be sovereign.”- Bernard Drainville, the Parti Québécois MNA for the South Shore riding of Marie-Victorin, says the prospect of Quebec sovereignty is “the best insurance policy” the province has ever had.

“Even non-sovereignists should not let it go,” Drainville said during a pause in a weekend meeting of the PQ to discuss Quebec’s energy independence. Just having a sovereignist party in Quebec bolsters even the federalist cause in the province, he added, “because it is their bargaining chip.” “The day that Mr. Legault or others drop sovereignty, not only do they drop the best collective project we could have, but they drop the best insurance policy we will ever have in Quebec.”


Drainville was referring to François Legault, the former PQ minister, who is rumoured to be creating a new party that would shelve the idea of another sovereignty referendum. Drainville is also his party’s spokesman on Old Harry, a huge hydrocarbon structure in the Gulf of St. Lawrence where drilling is allowed in the Newfoundland sector, but not in Quebec’s sector, pending federal approval. “The reason we have bargaining power in Ottawa with questions such as Old Harry is because they know they have to respect Quebecers,” he said. “Because Quebecers are masters of their decisions and might decide one day to be sovereign.”


Drainville told about 500 delegates and observers at the weekend meeting that Ottawa is delaying an agreement with Quebec to develop its undersea resources to keep the province dependent on equalization payments. “Is the federal government afraid Quebec will be too strong, too rich, too free?” Drainville asked PQ delegates at the end of his presentation on Old Harry.


Old Harry is 460 metres below the Gulf of St. Lawrence, with possibly as much as 2 billion barrels of oil. The formation straddles the disputed undersea border between Quebec and Newfoundland. PQ finance critic Nicolas Marceau estimated Old Harry is worth $160 billion to Quebec, enough to pay the accumulated provincial debt. Newfoundland and Labrador has had an agreement with Ottawa, which according the constitution owns offshore resources, for 25 years. That agreement allows Newfoundland to collect royalties on its undersea oil and natural gas.


Drainville noted Prime Minister Stephen Harper only said this week, after the National Assembly unanimously adopted a PQ resolution on Old Harry, that he favours a similar accord with Quebec.
Equalization is money paid by Ottawa to the poorer provinces, including Quebec. Newfoundland, because of its oil wealth, no longer receives equalization.


Drainville called equalization payments “compensation for damages” Quebec receives because Ottawa favours other provinces, such as Ontario and Alberta. “If we were independent, we wouldn’t have to go to Ottawa,” Drainville said. “If we pump our own oil, we don’t have to buy from others.”

I REST MY CASE.

Wednesday, December 15, 2010

In Case You Missed It

The government of Quebec is hard at it - trying to stop Newfoundland and Labrador from getting too much of the oil from Old Harry. The big question is how does the federal government enter into an offshore agreement with Quebec when the border dispute is unsettled? Can we expect another betrayal at the hands of our federal government? Is our provincial government going to stand up and let it be known we claim all of Old Harry in accordance with the Convention of the Seas - which our country has signed onto? There is absolutely NO time to waste in making our position clear. Or do we trust that our federal Natural Resources Minister, Christian Paradis, a Quebec MP, will negotiate with Ms. Normandeau taking into account our provinces' interests and claims. We must be on guard for a shady, and quick, back room deal here. The following news story came out today in the Montreal Gazette, but was not reported in any of our papers...

By Kevin Dougherty Gazette Quebec Bureau, Montreal Gazette December 15, 2010 5:02 PM
Quebec will ask the federal government for 100 per cent of the resource royalties from oil and natural gas developments in the Gulf of St. Lawrence, which could bring the province as much as $8.7 billion.

Natural Resources Minister Nathalie Normandeau emerged from a regular meeting of the Charest cabinet Wednesday to announce that the cabinet has given her a mandate to negotiate a royalty agreement with the federal government.


Several potential drilling sites have been identified in Quebec’s portion of the Gulf, but Normandeau admitted Quebec has been pushed to act by plans to start drilling on the Newfoundland and Labrador side of the disputed underwater boundary between the two provinces at a place called Old Harry.

Corridor Resources Inc. of Halifax wanted to drilled on Quebec’s side of the line, but cannot without an agreement between Quebec and Ottawa.


So Corridor will drill instead on the Newfoundland side.


Geologists estimate that there are about 2 billion barrels of oil in Quebec’s portion of Old Harry. But the deposit could also be natural gas or perhaps a salt dome.


“We want 100 per cent of the royalties,” Normandeau told reporters. “Our priority in the short term is Old Harry.”


The federal government, backed by a Supreme Court of Canada ruling, claims full ownership of Canada’s offshore resources. Quebec also claims full ownership of undersea gas and oil deposits.


Normandeau said reopening the constitution to resolve the dispute is a dead-end.


So, like Newfoundland and Nova Scotia, Quebec will seek an administrative agreement with Ottawa, which will leave the ownership issue unresolved.


Under the administrative agreements reached by the two Atlantic provinces, joint federal-provincial boards manage offshore hydrocarbons.


Normandeau said Quebec wants to collect all the royalties itself, without federal participation.


She said the fact Christian Paradis, a Quebec MP, now is the federal natural resources minister represents an opportunity to resolve the dispute.


“I would be totally irresponsible not to seize this opportunity,” the minister said.

Normandeau added that Paradis is expecting Quebec to make this offer and talks will take place at the “top level” between deputy ministers, but that she plans to get actively involved in the talks as well.

Sunday, December 12, 2010

Why Old Harry Belongs to Newfoundland and Labrador

The "administration line" dividing Newfoundland and Labrador's maritime economic zone and Quebec's is in dispute. At the heart of the dispute is the Old Harry sub sea oil/natural gas formation - a 29 km long aquifer of  up to 2 billion barrels of oil and/or massive quantities of natural gas. The oil there is so plentiful that satellites pick up at least 6 natural oil leaks from the sea floor. Newfoundland and Labrador are already exploring it on the eastern side, but Quebec cannot start as it does not have an agreement with the federal government to proceed. One issue Quebec has is it's demand the federal government recognize it's sole jurisdiction to these waters - which the feds won't do. The other major problem is a lack of agreement over where the "administration line" is between the two provinces.

Quebec historically clings to the argument that an unofficial agreement in general between the Atlantic provinces and itself settled the boundary issue in 1964 - the so-called Stanfield Line. Newfoundland and Labrador has always challenged that boundary stating that not only was it general in terms, but that it was not ratified by an Act of Parliament as would be required under the Constitution. In actuality, the 1964 agreement was more an effort by the provinces to secure sub sea minerals (oil and gas) for themselves. The boundary issue was loosely agreed to in connection with this strategy. In 1967 the Supreme Court of Canada, in a constitutional reference on the matter, found that the seabed belonged to the federal government.

In 2001, Newfoundland and Labrador and the Province of Nova Scotia went to arbitration in order to establish the validity, or lack thereof, of the 1964 Stanfield Line agreement. The following is the finding of that group:                                            
                                                                AWARD
             For the forgoing reasons, the Tribunal unanimously determines that the line dividing the respective
             offshore areas of the Province of Newfoundland and Labrador and the Province of Nova Scotia
             has not been resolved by this agreement.
             Hon. Gerard La Forest
             Leonard Legault
             James Richard Crawford
In other words, there is no agreement upon which any maritime boundaries could be established or recognized.

The old 1964 agreement had an administration line that essentially brought Quebec's maritime border all the way from the mouth of the St Lawrence to 80 kms east of the Magdelen Islands - a massive 350 kms or so. Without such an extension to encompass a tiny set of islands Quebec's maritime boundary would not surpass 50 km east of Anticosti Island into the Gulf. In reality, the Magdelen Islands actually lie more in Nova Scotia's waters than they do in Quebec's. There have been legal precedents set for small islands lying off the waters of another's jurisdiction, and not conforming to the natural coast line of the host jurisdiction. One in particular case, St Pierre and Miquelon Islands (France), is a very good example.

St Pierre and Miquelon Islands are the last territorial remnants of France's once great empire in North America - located just south of Newfoundland. In fact they are so close they are located within Canada's Exclusive Economic Zone (EEZ). Canada and France had been squabbling for many years over the territorial waters that such an island deserved, and the effects on Canada's EEZ. In 1992 it was finally submitted for binding arbitration with three neutral international panelists, and one each from Canada and France. In a three to two decision, the two being Canada and France, the committee decided that France kept a 22.5 km territorial sea surrounding the islands and an additional 22.5 km contiguous zone. It was only 18% of the claim that France had made. The remainder of the territory was to remain Canada's EEZ, with the exception of a small corridor to the open seas. The committee used a straight forward interpretation of the Convention on the Law of the Sea, which Canada was a signatory to.

Based on this very close example, The Magdelen Islands would only have a very small "territorial sea" surrounding them, and not essentially the entire Gulf of the St Lawrence. Quebec's "administration line" or maritime boundary would then stretch in a line following it's mainland coast, but encompassing Anticosti Island. The result of this alignment is that Old Harry is not actually situated in Quebec's maritime economic zone. Far from it. The same territorial sea argument can likely be made for Anticosti Island as well.

According to the Constitution, boundary changes between provinces themselves must be agreed upon by those provinces involved and then sent to the federal government for ratification. The federal government can arbitrate, but only if requested to do so by the affected provinces. Without a settlement of the boundary issue Quebec cannot form a joint board with the federal government to oversee and grant licences for offshore exploration and development. It is highly doubtful that Newfoundland and Labrador would subject themselves to that process. Although, if they did, precedents seem to indicate that Quebec would lose and Old Harry would belong to Newfoundland and Labrador. However, should Quebec continue to cut it's nose off to spite it's face, Newfoundland and Labrador might as well develop the east side of Old Harry and, as they say, oil has no borders.

What should be:


The 1964 Stanfield Line:

Monday, December 6, 2010

Dec 6, 2010 news story that did not make the press. Wonder why?

QUEBEC - Danny Williams threw one last curveball at Ottawa before exiting politics by asking the federal government to help finance energy transmission from Newfoundland and Labrador's Lower Churchill project despite Quebec's long-standing opposition.
Click to Enlarge
Photo: JOE GIBBONS/The Telegram
Outgoing Newfoundland and Labrador Premier Danny Williams, left, speaks during a news conference announcing the $6.2-billion Lower Churchill deal. Others are Nova Scotia Premier Darrell Dexter, Chris Huskilson, chairman and CEO of Emera Inc, and Newfoundland and Labrador Natural Resources Minister Kathy Dunderdale. Photo: Joe Gibbons/Postmedia News
Whether Ottawa agrees to lend a helping hand, observers say it ought to carefully craft its response because it could trigger a fresh dispute between two old energy foes.
"If the feds buy into the Quebec argument, it will go down very badly, not just in Newfoundland but in all Atlantic Canada," said Donald Savoie, a leading economy expert at the Université de Moncton.
"This is a very divisive issue."
Quebec has opposed federal subsidies for the construction of transmission lines, including an underwater cable, for the joint $6.2-billion Newfoundland-Nova Scotia Lower Churchill hydro project, on the grounds federal help could distort the price and market for electricity.
Newfoundland and Nova Scotia have asked Ottawa for some $400 million in federal infrastructure funding to help with the cost of building the sub-sea cable from Newfoundland to Cape Breton.
Quebec Premier Jean Charest warned Ottawa any financial involvement in the construction of the transportation line would violate international trade agreements.
Meanwhile, Quebec's natural resources minister has said the province is looking at all its options to make sure Ottawa doesn't throw a penny into the project - and she didn't rule out legal avenues.
"We are putting all the necessary energy into this to tell the federal government: 'You simply won't finance the transmission line between Newfoundland and Nova Scotia.' We, too, are able to put our foot down," Nathalie Normandeau told reporters.
Jean-Thomas Bernard, a Laval University economist specializing in energy analysis, said Quebec could have grounds to sue the federal government if the financing leads Newfoundland - as laid out in the agreement with Nova Scotia - to sell power from Lower Churchill to the U.S. northeastern market.
"That would have an impact on the electricity markets," Bernard said.
Ottawa is trying to distance itself from the dispute. A spokesman for Finance Minister Jim Flaherty said the application for infrastructure money is being reviewed by PPP Canada, a Crown corporation that operates "in an objective, arm's-length manner."
The spokesman added the decision will be made on a "merit basis."
The Newfoundland government and Nalcor, its provincially owned power utility, declined to comment on the potential battle.
This is just the latest episode in a long-running energy battle between Quebec and Newfoundland. It all goes back to the controversial 1969 agreement that has allowed Quebec to reap windfalls by transmitting through its territory cheap power from the Upper Churchill hydro project, and selling it for large profits in North American markets.
Newfoundlanders still harbour a deep resentment against Quebec for this deal and the provincial government has tried for years to overturn that agreement. However the courts, including the Supreme Court, have sided with Quebec and declared the agreement between the two provinces valid.
To add to the division, both provinces also have a historic quarrel over Labrador's frontier.
When Williams, who left the premier's office last month, announced the deal with Nova Scotia with great fanfare on Nov. 18, he said this would put an end to Quebec's long dominance over the fate of Labrador power.
Like many observers, Savoie and Bernard feel the N.L.-N.S. agreement is still a long way from reality, notably because of the financial and technical challenges of building an underwater cable.
They both noted it would be in Quebec and Newfoundland's best economic interest to seek a deal to transmit power from the Lower Churchill project through Quebec's existing transmission grid to markets in Ontario and the United States.
"Quebec's best response would be to cut a deal with Newfoundland," Bernard said.
However, Savoie believes it might be too late for the two sides to reach an agreement.
"I think the relationship between both provinces is sealed," said Savoie.
He said it might be up to Ottawa to solve this long-running battle by forcing Quebec and Newfoundland to negotiate.
"I don't think Ottawa can sit idly by. I think in the interest of economic fairness, they should get involved and solve this dilemma in some way," he added.
However, ex-Parti Québécois minister and former Hydro-Québec executive Rita Dionne-Marsolais said it would be politically very difficult for both provinces to reach a deal considering how Newfoundland has used the Upper Churchill deal to attack Quebec.
"The popular pressure in Newfoundland is high and people feel they were swindled by Quebec. This prevents the two provinces from making a smart decision," she said. "I think no one is winning that

Sunday, December 5, 2010

Understanding Old Harry

In 2008 Corridor Resources, an exploration company, agreed to give up it's permit to explore the "Quebec side" of Old Harry - a 29 km long undersea basin of oil and gas. In that same year it signed onto a five year exploration permit with Newfoundland and Labrador. Corridor is fully involved in the Quebec on shore oil and gas exploration, including the Anticosti Island project.

Things in the oil and gas industry have changed in Quebec in the last little while. Prior to 2003 Hydro Quebec was functioning in it's usual state sponsored role as controller of the resources - including oil and gas. The Parti Quebecois, Quebec's separatist political party, had placed the rights for drilling and exploration in Hydro Quebec's hands. The purpose was to know doubt develop Quebec's oil and gas industry in a monopolistic, and state controlled fashion - not unlike their role as purveyors of hydro power. However, with the election of the Liberals in 2003 that function was to change drastically.

Hydro Quebec's role in the oil and gas industry was rolled back. Small junior exploration companies, with a distinct Quebec accent took Hydro Quebec's place at the helm. Companies such as Gastem Inc., Junex, Petrolia Inc, and Questerre Energy Corp. Raymond Savoie, former Minister of Mines in the previous Liberal government founded Gastem. Sitting on that Board of Directors are people from the former Hydro Quebec oil and gas division to the legal representative to the Royal family of Luxembourg. Junex has the famous Andre Caille, retired head of Hydro Quebec, on it's Board. International players have also become involved as partners to these smaller entities: SCDM Energy (Bouygues Group France), Pilatus Energy(Switzerland), Sprott Asset Management(Toronto), Forest Oil(USA), and Talisman Energy(Canada). Bouygues Group is a massive international conglomerate that coincidentally built the James Bay Hydro Electric dam, among others, for Hydro Quebec.

The latest trend appears to be consolidation, and quasi-take overs of massive properties and their hidden treasures. In June, 2010, Petrolia Inc bought out the interests of Junex and Gastem in the Haldimand field, Gaspe region, Quebec. Don't feel bad for them though as Junex owns 9.4% of Petrolia. One month later Petrolia entered into an agreement to develop the property on a 50/50 basis with Investcan, a subsidiary of SCDM Energie France. SCDM Energie owns 18.6% of the massive Bouygues Group - a controlling interest. Coincidentally, Investcan also has oil and gas operations in Newfoundland and Labrador - three separate on land exploration projects - one in partnership with Newfoundland's own Nalcor.

In 2008, Petrolia bought out Hydro Quebec's interests in Anticosti Island, becoming an instant partner of Corridor Resources. And so it goes. The big one came when Gastem took over the exploration rights to Old Harry on "Quebec's side". Of course it can't do anything with it, because although the Quebec government agreed to give it the rights, it does not have the legal right to action those rights - without an offshore exploration agreement with the federal government - who owns the seabed and it's bounty.

Of course all levels of government know this as do the companies, but what it does do is position them should the time come when an agreement happens. The problem for Quebec is that before the federal government will enter into an offshore agreement Quebec must first negotiate a "maritime economic boundary" with Newfoundland and Labrador. The chances of that happening under current circumstances are worse than nil. If Quebec wants a snow balls chance in hell it must first renegotiate the Upper Churchill agreement - radically altering it's terms. The government of Quebec needs to decide whether a large financial loss to Hydro Quebec's bottom line is worth tapping into the massive Old Harry field. While it may sound akin to extortion it's just business - just as the Power Contract of 1969 was.

It may be a case of 'a bird in the hand is better than two in the bush.' However, waiting too long will likely result in Quebec being too late to join in on Old Harry's fabulous wealth. After all, Corridor Resources is already doing the exploratory work off Newfoundland. It already has an offshore agreement with the federal government. It already has most of the world's largest oil companies in play at it's other offshore sites. Quebec is at least five years behind the eight ball already. Rarely has Quebec been so caught off guard when it comes to this kind of business exploitation. Perhaps, just perhaps, Quebec better get to the negotiating table and repair the damages of the Upper Churchill contract. God guard thee Newfoundland.

Sunday, November 28, 2010

Taking Back the Upper Churchill Falls Now

Hydro Quebec is our number one competitor now for hydro electric generation. They know it and so do we. With the announcement of the Lower Churchill development, and more importantly the sub-sea cable links, Newfoundland and Labrador are officially walking in Hydro Quebec's perceived turf. Hydro Quebec are the type of people who don't like to share their turf. Be that as it may, we are there. The question is: Do you allow the other crowd to survive fiscally or do you go for the jugular.

It seems that there are those in the province that are resigned to allowing the Power Contract of 1969 to expire naturally in 2041. I disagree. The economics of that issue can not be ignored for another thirty years. Some are suggesting that a large tax will be placed on the power delivered after the renewal term comes into force in 2016.  They argue the lost revenues can be made up while utilizing Hydro Quebec's transmission system. On the surface that sounds like a reasonable idea. However, it is not utilizing the economic dependancy that Hydro Quebec has developed on the Upper Churchill. In other words, it allows Hydro Quebec to continue on relatively strong until 2041 which is not in our long term interest as a competitor.

The proof is in the numbers. Hydro Quebec purchases power from the Upper Churchill for $0.0025425 cents per KWH until 2016. When the agreement automatically renews in 2016 the price will be $0.0020000 cents per KWH. Hard to believe, but yes, we will be receiving 20% less for the power until 2041. The cost of the profits lost by that reduction over the life of the contract, at today's rates and without inflation, will be between $71 billion and $95 billion. A staggering figure of lost revenue.

The real question is how important to Hydro Quebec is the Upper Churchill. Again it's in the numbers. You will hear many people, especially in Quebec, say Hydro Quebec has a surplus of power and is bringing on new power generation all the time. That while it's nice to have the 5428 MW of power from the Upper Churchill it's not the end of the world if they lose it. Those people base their assumptions on the quantity without looking at the profitability.

Hydro Quebec's average cost to produce power from it's many plants and dams is approximately $0.06 cents per KWH. That does not include transmisssion and distribution costs. They receive our power for $0.0025425 cents per KWH. Translation: It takes 25 James Bay Dams to equal 1 Upper Churchill Falls - profitability wise. Further translation: Hydro Quebec can not lose the Upper Churchill or all the profitability of their corporation will be lost. They will be forced to try and raise domestic Quebec rates to make up the difference, which in turn would be taxed back by the federal government in equalization transfers.

A larger problem would be debt sustainability. Most Hydro Quebec projects are built on 35 to 50 year projections of revenue and costs. All their financing, primarily through bonds, are based on those projections. The corporation's credit ratings are similarily affixed. In other words, the loss of profitability effects all the corporation's operations - nationally and internationally.

Conversely, NALCOR could strike at the heart of their chief competitor early in the game. Gain the upper hand on the long term battle, and be in position to compete on a much better fiscal footing. Strategically, it is as important to stop your competitor as it is to try and advance yourself. Hydro Quebec certainly understands this principle.

Friday, November 26, 2010

A Little History Lesson

Premier Jean Lesage, 1965:

"The primary and absolute condition is that all energy that will enter Quebec becomes property of Hydro Quebec. That condition ... has always been the same, and we will never negotiate from another basis. We will never permit, under any condition, others to build a transmission line on Quebec territory, or let others transport the energy produced at Churchill Falls whatever the destination of that energy, whether it be to the United States or the other provinces." Le Devoir, 1965.

"And they think Newfoundland and Labrador are being irrational and disruptive to the national fabric."
Brad Cabana, Rock Solid Politics, 2010.

Wednesday, November 24, 2010

Just a thought for today

Montreal Gazzette, 30 March, 2010 : Pauline Marois, Leader of the Opposition in Quebec: " Every time we raise hydro rates, it lowers transfer payments from Ottawa."
Montreal Gazzette, 19 November, 2010: Jean Charest, Premier of Quebec: " They (Newfoundland and Labrador) can ask for it (subsea cable subsidy), but they know Quebec is opposed to it because it would be an intervention in the market."
Montreal Gazzette, 19 November, 2010: Nathalie Normandeau, Minister of natural resources Quebec: "...has received assurance from federal minister Christian Paradis that Ottawa will not directly fund the construction of transmission lines."

Sunday, November 21, 2010

Quebec INC vs Newfoundland and Labrador

Like their ancestors before them, the bedrock of Quebec's modern economic prowess pushes forward into the world to carve out their place. The push to overcome harsh environments, survival, linguistic challenges and a never ending need to prove themselves to the world may sound like the New France of old, but it equally reflects the corporate culture of modern Quebec. The need to master and conquer all before them. That leads us to today.
Power Corporation of Canada, Hydro Quebec, Casse de Depot et placement du Quebec, GDS Suez, Areva, Transcontinental Media, and so on. Massive corporations, operating on an international basis, and controlling more and more economies - strategically. They are also all French. They also all share members of their boards and often have a part ownership of each other with the exception of Hydro Quebec and the Casse which are controlled by the government of Quebec - although the government of Quebec is highly "influenced" in it's operation and makeup by these corporations. Total Oil of France, partially owned by Power Corp of Canada, will likely be a player in Quebec's offshore future - if it has one. It is already active in the Alberta oil sands - recently taking over a smaller Calgary competitor for a large ownership of a tar sands project. The Casse has taken over Hydro Quebec's Gas Metro, now Valener, freeing it of the costs of a gas industry in decline, and taxes. SNC Lavelin, another Quebec multi-national followed suit and sold it's shares this month to the Casse. Hydro Quebec, through it's subsidiary Hydro Quebec International, has bought controlling interest in distribution lines and power generating facilities in the US, Australia, South America, Panama, and China. Most recently, the day after Premier Danny Williams announced the Lower Churchill project, North East Utilities, the largest utility in New England (in the process of getting bigger by taking over NSTAR -Massachusetts largest utility) made formal application to build a massive transmission line from Windsor Quebec to New Hampshire. A message of sorts.
In the bigger picture, GDF Suez (France) is in the process of taking over International Power (Britain) with the assistance of an American corporation's 7% proxy vote. The new corporation will be easily the world's largest utility. Unfortunately, it will also be in a strategic partnership with Hydro Quebec - making an already monolithic Crown corporation even more monopolistic. The nimble, and seemingly well coordinated Quebec corporate class has shown itself to be world class players, and that must be recognized.
That brings us to the Lower Churchill deal. Newfoundland and Labrador, as represented by Premier Danny Williams, is bucking this trend. One could better describe it as a tidal wave. A brave stand by a brave man. A bravery that most people of the province don't fully understand, but should. Even though Danny is a wealthy man, his funds are coffee money for these other people. That is why Quebec scoffs at the government here and it's deal. However, that scoffing is superficial. A people that want to be the DeBeers of energy do not want any players in the market other than themselves. They cannot set the rate the market will pay if another is under selling them. If they cannot set the market then they cannot predict the serviceability of their debts. If their revenues decline, then their debt serviceability declines and their bonds get downgraded. If their bonds get degraded their debt servicing costs go up. Then the cycle keeps repeating itself to the point where the massive monolith collapses. Make no mistake, this is their main concern.
The problem for Newfoundland and Labrador, as illustrated by Hydro Quebec's alliances, is that it does not have a large enough strategic partner in this sector. It is not tied into the corporate circle if you will. The large oil corporations are willing to come in and develop the oil/gas resources, but have not been involved in developing the province's hydro power or it's distribution. Emera, Newfoundland and Labrador's strategic partner, is a small and publicly traded company. As such it would be an easy target for any one of Quebec's alliance to take over - hostile or otherwise. It would seem a logical move on Quebec's part to have any smaller power distributor, which agrees to do business with NALCOR, taken over by another larger friend. While Newfoundland and Labrador may have the resource, Quebec may have the friends to stop it's distribution rendering it useless. Do not be surprised to see a takeover attempt of Emera in the coming year or, even better for Quebec, after the deal is finalized. This is one of the reasons Hydro Quebec normally takes a controlling interest in it's distributors.
What Newfoundland and Labrador desperately needs is a very large friend in the jungle. An international corporation large enough to withstand the other alliance, and with access to the US market. An access that can be defended and guaranteed. Perhaps some of the oil corporations with large investments in the offshore might be a logical choice. After all, if you can learn one thing from studying Quebec's economic development, alliances are based on intertwined interests based in the province and projecting outwards.
Until then, I fear, Newfoundland and Labrador's government will be subjected to a covert, if not overt, campaign by those that wish to see Quebec's monopoly stay in place. By way of example, The Telegram has been assaulting the Premier, without balance in it's editorials. The Telegram is owned by the previously mentioned Transcontinental Media - Montreal. The Liberal Party of Newfoundland has recently signed on some major Conservative talent for it's public relations. The former Liberal premier of Newfoundland and Labrador, Roger Grimes, has suddenly come out of the woodwork to attack  Premier Williams. The aforementioned Power Corporation of Canada is publicly known to be the source of primary influence within the Liberal Party in Canada. Although, Jacques Parizeau's brother, and Bob Rae's brother have sat on it's board of directors. As does the Conservative's Don Mazinkowsky.
Then of course there is the CBC, with it's head office in Montreal, that has been at the forefront of attacks on the William's government on many fronts as of late.
In the end, Newfoundland and Labrador deserves to control and exploit it's resources without interference. The people here have suffered through the economic enslavement of the Upper Churchill contract for too long. If Quebec wants peace, and to carry on, perhaps it should recognize the imperialist approach taken toward Newfoundland and Labrador was a historical misjudgement. Perhaps they should re-open the Upper Churchill Falls contract and renegotiate the rate to at least a 50% share of the profits on that power. Such a gesture would go along way with the people here - and likely the Premier. After all, hydro is just one source of energy. This battle will rage through all parts of Newfoundland and Labrador's economy to the unnecessary detriment of many of Quebec's companies and interests. Perhaps Quebec should go to it's own perceived grievances and realize that we should "do unto others as you would have them done unto you."

Thursday, November 18, 2010

Prime Minister Harper, It's Time

Mark this day, the 18th day of November, 2010 on your calender and heart. Today our Premier, Danny Williams, announced a deal to develop the Lower Churchill. It was also signed by the Premier of Nova Scotia, NALCOR energy of Newfoundland and Labrador, Emera Energy, and the Innu people's representatives. A deal that will establish a power plant at Muskrat Falls, Labrador with power lines and sub-sea cables ending at North Sydney, Nova Scotia. A hybrid of private enterprise and Crown corporations. A partnership between two, and likely three, Atlantic provinces. In short, the people who live here for the people who live here. As it should be.

This is not the massive octopus that is Hydro Quebec, GDF Suez, and Enbridge. Put in another way: the Quebec government, the French government, and natural gas. You see Hydro Quebec is not just a little power company minding it's own business in northern Quebec. In reality Hydro Quebec is a huge multi-national corporation, with strategic partners that are foreign to this country, and are involved in: electrical power, natural gas distribution, banking, telecommunications, and even small water companies. Despite being prohibited from operating outside Quebec by their founding charter, Hydro Quebec owns several American power companies. They get around this by owning holding companies such as Noverco, Meg Holdings, and the list goes on. They own American companies such as Bucksport Energy (Maine), Green Mountain Power (Vermont), and Vermont Gas Systems (Vermont) among others. In the same week as Hydro Quebec made an offer to purchase New Brunswick's power utlity GDF Suez purchased a Montreal electrical company that will supply all of Hydro Quebec's power transformers up to 100 MVA. Not to mention the 800 million dollar liquified gas plant near Quebec city that GDF Suez is planning on building.

No our little deal is nothing like that. We do not have a foreign country involved in our strategic alliance. What we need is OUR federal government to come in and do the right thing. This is where you come in Mr Harper.

We expect, and when I say we expect - I mean we expect, the federal government to satisfy it's national obligations to the Province of Newfoundland and Labrador. Those obligations are: to provide the requested funding to subsidize the construction of the sub-sea cable links as per the joint provincial request for said subsidies; to provide loan guarantees for the construction of the project; and last, but NOT least, complete it's obligations under the New Dawn Agreement between the Province of Newfoundland and Labrador and the Innu peoples of the province. This must be done without delay.

You may ask why should the federal government become involved, and why should it offer up the loan guarantees. Simple. This Province is owed atleast that. It has been living under a draconian agreement since 1969 that has taken 22 billion dollars from the economy thus far, and will take a further 75-90 billion dollars before it expires in 2041. The federal government, despite the usual separatist politics, should have stepped in years if not generations ago to right this wrong - but chose to turn a blind eye. Now the inevitable result of that policy is here. This current deal is the best case scenario for Canada now. Should the federal government not follow through, and do the right thing, I suspect Newfoundland and Labrador could be in the balance. There is such a feeling of treachery in the province that should the federal government side with Hydro Quebec (Quebec) on this issue the end result would be catastrophic and tragic.

Mr Harper, rise above the politics, rise above your connections, and do the right thing by the people of Newfoundland and Labrador. Do it now.

Monday, November 15, 2010

Newfoundland and Labrador's Doctor Decision

Everywhere around us Healthcare is front and centre. Whether here in Newfoundland and Labrador, or in a wealthy place like Alberta. Just yesterday the CBC reported that Alberta Emergency rooms were aiming for a success rate of 45% admitted within 8 hours of waiting. That is really sad, and in a place where most of us believe doctors are aplenty - atleast by Canadian standards. The causes are well known: aging populations; upside down demographic trends; shrinking tax bases; deficit budgets; sky rocketting intergovernmental debt; and of course a shortage of medical personel.

In Newfoundland and Labrador the boiling point has been reached between the government and doctors. The doctors claiming to be under paid compared to others in the region and country. The government claiming their offer is more than fair. Those are the essential battle lines. Issues such as quality of life, working conditions, and doctor shortages being implied symptoms of the primary cause - money or lack thereof. According to Canadian Medical Association Journal (CMAJ), figuring in all forms of income for doctors, whether salary or fee for service, doctors in this province are 6.78% less than the national average of $224,875 (2008/09 numbers). Dr. Lewis, President of the Newfoundland and Labrador Medical Association, states the doctor's offer would result in an eighty million dollar increase to the existing three hundred and thirty million dollars currently spent on physician's compensation - or a twenty five percent hike over all.

The problem with just throwing money at the problem is that it does nothing to fix the problem. If that were the case Alberta would have no problems - but they do. It seems the issue is not fixing the problems inherent within the health care system, but rather supplying enough funds to keep the bandaids in place. Not a good solution for anyone in the long run. Afterall, even doctors will one day need a doctor they can count on. If all things, even the medical field, are driven by financial reward, and if financial reward is determined not by what you make, but rather what you keep, then perhaps a thought outside the box is in order.

For starters, the cost of living in Newfoundland is far below that of most of the country. A home that would cost you $150,000 here will cost you easily $350,000 elsewhere in Canada. Consider that the cost of borrowing for a mortgage normally doubles the initial cost of the home and the dollars become even more significant. The costs for insurances, groceries, utilities, recreation and property taxes are either much less or competetive with the rest of the country. Certainly, personnel costs and salaries are much less. From a business point of view, the overhead here is very competitive. Then factor in the upcoming and ever growing industrial resource build up of Newfoundland and Labrador. One of the few, very few, provinces with a "boom" unfolding for atleast a generation. Sounds like a good place to be, and as good a place to do business.

Medicine is a business afterall. It is a calling - without doubt. However, strip all the warm and fuzzies away from it and healthcare is a business. Perhaps the solution to our current labour strife, and a very possible answer to some of our recruitment issues, lies in a business approach to the matter. Whether it be personal or business income the truth is the bottom line. Not so much necessarily in what we make, but rather in what we keep. In a word - taxes. Perhaps the solution lies in an outside the box approach to taxes - provincial income taxes to be precise. By way of example, Alberta has a flat income tax of ten percent. Whether your income is 30,000 or 300,000 it's 10%. So for a physician, who would normally make anywhere from 220,000 to 450,000, that is significant when compared to a place like right next door in Saskatchewan. In Saskatchewan that same doctor would be paying in the range of say 36 %.

Perhaps our government could pass legislation designating physicians a "strategic service" and offer them a break on their provincial income tax. Make their provincial tax even less than Alberta's - say 5% flat. That would save the average physician more money than the current raise request. It would entice other doctors from different jurisdictions to practise here. The people of Newfoundland and Labrador would likely view it as a necessary step to help retain and grow the essential service that doctors are. This approach emphasizes the business advantage to doing business here for doctors. More money thrown, simply to be clawed back by higher tax brackets, federally and provincially, does nothing to improve the doctors bottom line, and therefore their morale. Let's think outside of the box, and move forward, as we are in almost every other aspect of Newfoundland and Labrador society.

Tuesday, November 9, 2010

Poker Quebec Style

Throughout Canadian history the politics of Quebec have been a virtual theatre for the rest of the country. We watch the never ending charades play themselves out from decade to decade and generation to generation. It is almost like being at a perpetual state of war from the Orwellian 1984. Never is it satisfied. Never has just the right peace been achieved. Many in this country consider this type of politics to be deliberately designed to "milk the system" for all it's worth. Some say it is just a symptom of the underlying inferiority complex that seems to pervade most utterances from the government of Quebec. Yet others will argue, while not excluding the previous two points, that the government of Quebec is in a sense brainwashing it's people to believe they are constantly persecuted and wronged and therefore are entitled to separate for the good of all. In the west, some folks think it's a deliberate strategy to cause such resentment that not only would we not fight to keep Quebec, but that we would in fact be happy to see her go.

Some or all of these arguements may have an element of truth, but how do they manage it? How does the government of Quebec keep coming up with claims over this or that? What is the basis for their grievances?

Purely and simply - it's poker. They are the best political poker players in the country, and they are playing against people who for the most part don't want to offend them by calling their bluff. Often, it takes a Quebecer to call the bluff of the government of Quebec. A few instances: Prime Minister Trudeau invoking the War Measures Act and putting troops on the street in Quebec; and Prime Minister Chretien stating that if Canada can be divided then so can Quebec. That one got the separatists so riled up they proclaimed that Quebec's territory was sacred. This is the line of thought I wish to follow.

Is Quebec's territory really sacred? Based on what? While prior to the Conquest of "New France" in 1760 there was no Quebec. Quebec was formed by the British in 1763. The inhabitants were granted the use of their language and civil code. Those that did not want to accept British rule were given eighteen months to leave. That was the eternal birth of the Province of Quebec. A small strip of land running from Montreal to the large opening of the St Lawrence to the Atlantic. That was the "sacred" territory. Whatever other territory that may have had a French presence in New France was given to Britain, by France, with the exception of St Pierre and Miquelon - which remains a French possession to this day. So that part of the Treaty of Paris has been respected.

The Quebec Act of 1774 further enlarged the territory. However, losses of territory during the War of Independance and the creation of an Upper and Lower Canada again split the new territory - esentially in half. Again, the sacred territory of Quebec was decided by Britain and reduced and enlarged at will.
The modern growth of the territory of Quebec really happened in 1898 with the creation of the Quebec Boundaries Act, passed into legislation by the Parliament of Canada. A second edition of this Act was passed by Parliament in 1912. Modern day Quebec's "sacred territory" was therefore permitted by an Act of the Parliament of Canada. Remembering Prime Minister Chretien's comment on Quebec's divisibility, it is easy to see that should the Parliament of Canada decide to rescind the Quebec Boundaries Act, the entire portion of territory granted in that Act would revert back to the Crown - Government of Canada. Many argue that it is completely illegal for Quebec to separate in any case, but there is no question that a national Parliament can rescind it's own legislation.

The problem with telling a lie is that bigger and bigger lies become necessary to explain the first. To give it legitimacy. To make it historical. That brings us to another more present myth. The Old Harry oil field. Located some 80 kilometers from Quebec's Iles-de-la-Madeleine this 29 kilometre long oil/gas field is becoming central to a dispute over provincial maritime borders. Only one problem. There are no provincial maritime borders. There are no provincial maritime economic zones or maritime territorial waters. None. Another bluff by the government of Quebec. Another lie told to the people of Quebec by their government, and it's separatist opposition. The government of Quebec refuses to sign an accord with the federal government, as every other province must do, should they wish to explore for offshore oil and gas. It insists the federal government must recognize Quebec's sole jurisdiction to it's territorial waters. Of all the guff!

Then there is Quebec's arrogant assertion that it does not recognize Labrador as a part of the Province of Newfoundland and Labrador. Unfortunatley, for Quebec, that issue was legally settled. The dispute over Labrador was between the then countries of Canada and Newfoundland. Unable to reach a compromise they submitted the dispute to the Privy Council of Great Britain for arbitration, and in 1927 it was reaffirmed by that body that Labrador belonged to Newfoundland. When Newfoundland and Labrador entered Confederation in 1949 the Terms of Confederation recognized that territorial fact. Yet the government of Quebec continues to place Labrador as part of Quebec on it's website.

Here's were the poker comes in. The very nature of a bluff is that you have nothing in your hand, yet you want others to believe you do. Here's what happens with a bluff. Your opponent folds blindly, or he calls your bluff and you must eat humble pie and lay down your cards. Despite any purported agreement on maritime boundaries for the provinces between the Maritime provinces, Quebec, and the then Leader of the Official Opposion Mr. Stanfield (1964), no such agreement could exist without a constitutional amendment or an Act of Parliament at the least. Therefore, to say this group defined the boundaries, as Quebec argues, is akin to saying some folks got together at Tim Horton's and came up with the deal. It has no legal, or even logical basis in fact. The oceans belong to Ottawa from the low tide mark out. The Supreme Court decided it. Hey Quebec, wake up! Your bluff has been called. Newfoundland is exploring for natural gas and oil at Old Harry with the permission of the federal government. It is not sawing off it's nose to spite it's face. There are no sea borders for provinces. Deal with it or lose out altogether.

The same goes for Labrador. It was stripped from France before there was a "Quebec" by force of arms. It was granted to Newfoundland by Britain. It has been recognized by the British Privy Council, the Parliament of Canada, and the Government of Newfoundland and Labrador. There is no debate, and your recognition of the facts is not required. I suspect that should the time ever come that Quebec hopes to separate, and I hope it never does, that the Government of Canada will call your bluff too. Afterall, should they rescind the territorial expansion act, Newfoundland and Labrador might very well inherit all of current day northern Quebec, and all it's bounty therein. Did you hear that Mr. Ducceppe? Oh sorry I forgot you are in Europe promoting and getting the world ready for Quebec's separation.

Wednesday, November 3, 2010

In defence of our Premier, Danny Williams

This blog should not have to be written. The attacks against our Premier, and leader need to be answered. The big political question would be: "Why now?" Why are certain segments of our society picking now as the time to character assasinate Premier Williams? Perhaps the answer lies to the West.

Seems to me that recently our Premier made it official that Hydro Quebec (read: government of Quebec), was no longer a player in future hydro development in Newfoundland and Labrador. Coincidence? Perhaps. It does seem though that they have a lot of scores to settle with the Premier. First there is the oh so close loss in the gamble to take over New Brunswick's hydro utility, thereby permanently shutting Newfoundland and Labrador out of the hydro business. That failed. Thank God. Then there is the secret little letters going to Ottawa to try and prevent two maritime provinces from coming together and building a sub sea cable with federal help. That was exposed. Quebec's motives bare for all to see. Then there was the promise of a new and agressive approach toward Quebec on the renegotiation of the upper Churchill Contract. Finally, the declaration at the PC convention that Newfoundland and Labrador, and Nova Scotia were going it alone in the Lower Churchill. Perhaps there is also the chance that France's hydro giant may lose it's bid to build a nuclear plant in New Brunswick now that a "friendly" government is in place there? That will not make them happy.

Sounds like a stretch, but is it? The remaining value on the Upper Churchill agreement for Quebec is about 73 billion dollars with zero inflation based on today's rates. The Lower Churchill will be less, but still significant. Then factor in Newfoundland and Labrador's early exploration and drilling on the disputed Old Harry site. Again billions at stake. The numbers start to get into the hundreds of billions. Is it a stretch to say that perhaps the government of Quebec, and their supporters, have launched a war of their own on Danny Williams? Do they see him as the only wall between them and Newfoundland and Labrador's resources. Is this a covert attempt to destroy the reputation of the Premier and cause some sort of "regime change?"

No? Well explain how it is that of all the politicians in Canada, our Premier is being singled out as a bully. Their is a certain premier who is refusing to respect the will of his people and is ramming an HST down their throat - despite a legal democratic challenge. Isn't he a bully? There is a certain Prime Minister that fires people out of caucus and party without legal cause. Is he a bully? There is another Premier to the west that tries to stop our province from recieving funds through a federal funding program to the detriment of our people. He must be a bully? The list goes on. So why target our Premier?

Danny Williams, a man of his own wealth, does not need politics. He did not need the publicity of politics to be known. He did not have to subject himself, and his family, to the rigour of public life. He did so soley out of his concern for the future of our Province and her people. Pure and simple. The rarest of politicians. The people love him for it, and, just as importantly, for what he and his government have achieved on their behalf. At 85% popularity Mr. Williams is in a stratosphere of his own. Perhaps he would not have such a high popularity in other provinces where personal sacrifice and monumentous achievement go unappreciated. This is Newfoundland and Labrador, and these qualities are seen and appreciated. At 85% Premier Williams has his place in history as the most popular politician in Canadian and probably North American history. That's history. Not just the last month, or the last year, that is as in history! An achievement that other politicians can only fantasize about. His place is assured not only in Newfoundland and Labrador's history, but also it's folklore. In other words, he is a folk hero to the people here.

Personally, I believe the people of Newfoundland and Labrador should hold a huge rally in St. John's to show support for our Premier. To send a message to those that are trying to undermine him, and what he stands for. We will not tolerate the personal attacks on our Premier. You won't influence us to turn against him. Our ties are stronger than your will to break them. Let's rally for the Premier not out of hero worship, but out of solidarity with him, and against those that are trying to divide and conquer Newfoundland and Labrador's people and their destiny.

Sunday, October 31, 2010

Not So Swift Afghan Policy

This week Russian military forces conducted operations in Afghanistan...say what? The news of the joint American-Russian military operation against a drug target in Afghanistan was interesting to say the least. Only those in the corridors of power would know why this particular drug operation was targeted or why the Russians of all people were involved. There must be a very good reason. Question is: "Does the means help the ends?"

Think for a moment that it was only just over a two decades ago that the Russians left Afghanistan thus ending their nine year occupation of that country. It took the Russians only two days to capture Kabul, but nine years to realize they could not hold it. They suffered 25,000 dead and 37,000 wounded depending on which set of numbers you believe. Nothing compared to the massive attrocities inflicted upon the people of Afghanistan. Estimates of Afghan deaths are between 1-2 million people. 1.2 million people disabled. 3 million mamed or wounded. 5-10 million people fled to Pakistan or Iran - one third of Afghanistan's pre-war population. A further two million displaced internally within the country. As mind boggling as those numbers are, consider the destruction of the country itself. Irrigation systems, crucial to agriculture all but destroyed by Soviet aerial bombing. Water systems poisoned. Villages, towns, cities destroyed and depopulated. In other words, the Soviets/Russians layed Afghanistan to waste.

Consider then how the Afghan population must have felt when Russian troops entered their territory in force for an organized military operation - and as guests of the Americans. The Taliban must have been doing cart wheels at the sheer magnitude of the publicity this presented to them. A recruiting tool unmatched since the first Soviet invasion. Unbelievable. You have to think that at the highest levels these decisions must be well thought out, and sanctioned. The pros must out weigh the cons. Yet that is hard to see or believe in this case.

Certainly if you are the Russians, read: Putin, you are happy to be flexing muscle back in the old neighborhood. You can go in, get out, and suffer relatively little expense. It's a hint of "what we could do, should we choose to." A little macho strut - not unlike some of the other macho goings on in Russian politics prior to the next Presidential election. However, this time everyone has egg on their face.

Our alliance, NATO, has been battling for control of Afghanistan now for some nine years. The stated objective has been to win the hearts and minds battle with the Taliban for the proverbial soul of the Afghan people. The stated purpose of our occupation being to help rebuild Afghanistan and create a viable democracy for the benefit of its people. And then we invite the Russians in? The people that layed waste to the country and within living memory. The Afghan President was dumbfounded and embittered. Easy to understand why when you consider he is the one that must explain this to his people.

It is really a complete breakdown of intelligence to allow such a slap in the face to the Afghan people. It is the height of insensitivity to allow Russian soldiers across the border and into a country that they so recently committed such atrocities to. It almost begs the question: "Are they trying to win the war, or are they trying to amp it up?" Is such a small, and relatively insignificant raid worth undoing nine years of work, and legitimizing the Taliban in the eyes of those undecided or leaning Afghans? Don't the Afghan people deserve better, and more sensitive care at our hands than that? We believe in upholding to them a different standard than the cut throat, barbaric world that has been much of their lives. And then they bring in the Russians. You really have to feel for those people.

Monday, October 25, 2010

The Quebec route vs Under the Sea

This weekend, at the annual convention of the Progresive Conservative Party of Newfoundland and Labrador Premier Danny Williams made it known - Newfoundland will proceed with a sub-sea cable to transmit power from Labrador to eastern markets. Thus, hopefully, ending the debate of selling further power to Quebec for it to retail to the rest of the east.

Of course much of the debate, if not all, was created by the duplicitous actions of Hydro Quebec and the Power Contract of 1969. While hopefully the debate ended this weekend, politically there was absolutely no other option open to the Newfoundland government. To be exact, the cost of the Upper Churchill Falls contract to date, and projected to 2041, at current rates will be aproximately 91.5 billion dollars. That is 91.5 billion dollars Canadian. That is Newfoundlands direct cost. It is necessary to view it in that light as these are revenues that the Newfoundland people did not get to realize. This is money that is floating the mammoth Hydro-Quebec and the neo-nationalist agenda it and the political elite of Quebec perpetuate. On the backs of Newfoundlanders and Labradorians. They know it and we know it. The animosity this betrayal has created will last intergenerationally, and now has the potential to permanently imprint itself on Newfoundland's political culture.

In reality, therefore, there was never really any chance Quebec would get it's hands on even one more nano watt of Newfoundland's power. Ironically, there are still some in the form of the provincial Liberal Party that espouse a positive view of any business relationship with Hydro Quebec.  Whether it be on open air radio shows or in the provincial media, they push the view that our business relationship with Hydro Quebec was, and is, a good one. Hard to imagine. In a sadomasochistic way I suppose, if you're into that, which most of us are not. Perhaps that is one of the fundamental reasons the provincial Liberals in Newfoundland are not even on the radar politicially. Or in the hearts and minds of the people.

In any case, with the partial development of the Lower Churchill, and just as importantly the laying of the sub-sea cables to Nova Scotia, a new era is on the horizon for Canada's "newest and coolest" province. Whether the Upper Churchill Falls contract expires by natural death in 2041, or suffers a more immediate termination, the sub-sea cables will be ready to transmit that power to the eastern seaboard. Energy, and perhaps financial, independence will become a reality and those blessings will give a long overdue bounty to the great people of Newfoundland and Labrador. They overwelmingly deserve it.

Sunday, October 17, 2010

A tempest in a ...

This week our Premier landed himself in some hot water - with some folks. During a press conference he assailed the Mayor of Marystown for assinine comments, and stated that he - the Mayor that is, didn't count. In fact, he essentially accused him of grandstanding over the federal naval ship building contracts. Perhaps the wording "doesn't count" was unfortunate. Perhaps it was said out of frustration.

The Mayor of Marystown is no innocent player afterall. To be specific - he's a bit of a political opportunist. At one point in his career he vied for the PC nomination in his riding and lost. He then ran for the liberal nomination and won. He then ran in the provincial election and lost. That about sums it up.

As a Mayor, and speaking as a former one myself, you don't attack the provincial government unless all avenues have been exhausted and you are certain the provincial side is not looking after your best interests. I for one, and probably atleast 85 percent of Newfoundlanders would have a hard time believing that Premier Danny Williams would do anything to harm the progress, financially or otherwise, of Newfoundland. The man has built himself the most envied political reputation, in recent political history atleast, as one who looks after the people of Newfoundland. Ask a Newfoundlander about Danny Williams and they will tell you: "the only Premier that's ever stood up for Newfoundland". Don't believe me? Try it.

He has taken on the major oil companies, the federal government, the Quebec government, and most recently it looks as though Vale may be next. The bottom line is he has the dollars to back up his talk, and he uses that for the benefit of the people of Newfoundland - to the best of his ability. He is only human, and makes mistakes from time to time, but not at the deliberate cost to his people - unlike so many politicians we have seen across this country. Given all his commitment toward the people and the province is it any wonder he would take great offence to the comments made by the Mayor?

Essentially, this liberal biased Mayor tried to embarrass the Premier for political gain. Pure and simple. It's no coincidence that the liberal party are all rushing to the Mayor's defence. It gives them a wedge issue to portray the Premier as arrogant and detached from the ordinary people. However, and under closer scrutiny, the questions should really be headed in the direction of the Mayor and not the Premier. Why would a Mayor on the short list for a life saving multi-billion dollar contract come out publicly, and the press is as public as you can get, and essentially question the Premier's integrity. Afterall, to say the provincial government needs to do something to help Marystown implies that it is doing nothing. In other words, the provincial government doesn't care enough to help create massive employment and substantial economic growth to the area. From my knowledge of Mr. William's, and for that matter his government, I would say that nothing could be further from the truth. Another question to the Mayor might be: "What do you expect the Premier to do when the military contract is a federal matter and soley under federal jurisdiction?" Clearly, this Mayor is not acting out of the best interests of his citizens, unless he sees publicly embarrassing the Premier as oil to grease the federal wheels.

Bottom line, as a Mayor you are supposed to act in a bipartisan fashion. Your focus is meant to build concensus, and not to be the agent of dissension. How does it serve the purpose of your citizenry to try and gain "sound bites" for your own apparent publicity? Sure the Premier could have chosen his words better, but very few people in Newfoundland question his loyalty to them. That is the highest compliment any politician can have. Perhaps the Mayor needs to learn that lesson. Perhaps the media should be asking the Mayor how his attacks on the provincial government, and it's leader, help the cause of Marystown?

Saturday, September 25, 2010

His name was Igor - we have a different one for him...

As the outer rain bands of Hurricane Igor pounded Random Island, my family gathered to watch at the dining room window - 15 feet from the ocean. We new something was not quite right as the eye of the hurricane was still some 400 kms off Cape Race. We were to find out the brutal, ferocious power of Mother Nature at her finest. The power went out in the early afternoon, followed by the phone service some ten hours later. Life was about to become much like that experienced by our ancestors. Gone were the electrical powered luxuries and distractions of modern life. Gone was the freedom of unimpeded motor travel - except of course bikes (ATV's).

We, the whole community of Hickman's Harbour, were hunkered down in our homes, isolated and vulnerable, ernestly listening to our emergency radios for any news of the events unfolding around our little Harbour. For us it was VOCM. We listened to the morning show, we listened to the afternoon show, and we listened to the evening show. All the family huddled around the table under candlelight. Like a few generations before us, the radio waves kept us enthralled and connected.

Newfoundlanders are, for certain, the great communicators of Canada, and for four uncertain days they communicated on the phone-in shows from coast to coast. At first, when events seemed centered around St John's, the shows seemed almost to downplay the events unfolding. The best, or worst example I can recall was talk show hosts and callers decrying the apparent fact that "townies" don't know how to use a four way stop. I recall this because it seemed so absolutely foolish, trivial, and out of touch with the hell unfolding around us. Yet, as the roads in town turned to raging rivers, and the fields and lawns to ponds, the tone seemed to get more grave. It was as if an understanding of something far more ominous was beginning to sink in.

Finally the news started to circulate of the massive devastation around the Burin and Bonavista Peninsulas. The news broke of the first, and thank God the only, fatality of Igor - Mr Alan Duffett. Although I never met the gentleman from Britannia, friends told me he had successfully fought cancer twice and survived several heart attacks. A man of obvious strong determination. It seemed particularily tragic that Mr Duffett should have to die in such a violent and random way. Yet, true to the nature of this storm, nothing was to be untouched by it's fury. The mood seemed to darken over the province.

In our Harbour, like many around the province, people began to emerge from their homes and check on their neighbours and friends. They started to clean their yards and streets. However, their hands were tied when it came to the massive destruction of the roads and flooded areas. The power, phones, water, and fuel were all out of their hands - although some determined souls managed to take bikes to distant communities for jerry cans of gas.

What we learned was that this old land was created by sea, travelled by sea, and populated by sea. The Bights, Coves, Harbours are all used to describe the sea shore at their communities - unlike many places in the country. We were reminded that there is really only one road that runs through the province, and how the link can be shattered at whim. Yet our sea links can not. Even after ferocious Igor pounded the Island, the seas were back to their original, unaltered, state within days. No reconstruction is required there. No intervention by governments. It's as if nature is reminding us of the basic truth that Newfoundland is, and will always be, a land tied to the water.

As we move to reconstruct this land, let us move together, as we always have, and rebuild it stronger than before. In defiance of the odds, and in the knowledge that we are preserving this beautiful land for those that will follow.

Sunday, September 19, 2010

In Politics there is a Right Way and a Wrong Way

Recently, actually for some time, I have often reflected on a story my father once told. A story he would have known, as he was there. It occured during the Italian campaign during World War II at a place called Monte Cassino. The German army had dug into positions on the slopes below the ancient abbey on top, recognizing and respecting it's historical and religious significance. The Germans even informed the Vatican of their positions so there would be no mistake. Unfortunately, the Americans deemed it to be a "possible" position for observation and or bunkering so they used their air force and leveled it. The Germans then occupied the position, using the ruins for maximum cover from air and land forces.

Getting back to my Father, he always maintained that the battle for Monte Cassino should have never happened. As a young Sargeant on the ground, and in regular contact with the Herman Georing Division, airborne, that was defending the area, I like to think he knew of what he was speaking. Interestly, my Dad believed that the allies could have simply driven right around Monte Cassino, without firing a shot, and the entire German contingent on the hill would have been cut off and forced into surrender. The lives that could have been saved on both sides, and the Abbey itself, would have been worth it.

Likely, somewhere up the command, a shiny four star felt that blowing it into oblivion was the right thing to do. Certainly it was one way. History, however, would suggest it was the wrong way. Just because the capability is there, we still have to consider how we use it. Clearly, the young Canadian Sargeant on the ground could see that. I like to think I got my sense of "the right way and the wrong way" from him. This picture of Monte Cassino after the bombing, illustrates the result of the wrong way...
Battle of Monte Cassino

Friday, September 10, 2010

Newfoundland 1 - Quebec 0

What can you say. There was a time when the province of Quebec produced some, if not most, of the great political people of our day. It looks like those days are behind us. In response to Premier Danny William's warnings to Quebec yesterday of a "new and aggressive" approach, in dealing with the Upper and Lower Churchill projects, the best the Quebec government can come up with is the PQ's Intergovernmental Affairs Critic - Bernard Drainville? Really. Drainville, apart from being a seperatist,  is not even a member of Mr. Charest's government. Perhaps a deliberate slight toward our Premier. Likely. A serious misjudgement though.

Mr. Drainville, try to ignore the last name, came back at Premier Williams today with the startling accusation that Newfoundland had a "special deal" for it's drilling on the offshore. His other charge: that Quebec has been "screwed" many times since Confederation. Let's deal with the last statement first. Everyone in Canada knows Quebec hasn't lost since it lost. Just some examples: keeping the language and culture; bilingualism; new anthem; new flag; draconian language laws; language police; preferential systemic hiring throughout the federal civil service; domination of federal politics and positions of power; undemocratic numbers of representatives in the House of Commons and Senate; apparently a hockey arena in Quebec City; Bombardier; the Canadian Space Agency; CSIS headquarters; the Museum of Humour; equalization payments; and so many others that they could not be fully listed here. It makes any thinking human being laugh out loud at such a statement.

Now for the "special deal" charge. Mr. Drainville states that Newfoundland enjoys a special deal to develop and drill off hore petroleum resources which Quebec does not. True, but only in the slightest sense. Newfoundland and Labrador negotiated an agreement with the federal government to drill on the offshore. Any province that wishes to do so can, and must negotiate an agreement with the Federal government first. That is the law. It lays out who gets what money, and the rules and responsibilities of those developing as well as the provincial and federal governments. Quebec has not negotiated an agreement with the feds for several reasons. Firstly, as Nathalie Normandean states, they want the agreement to " recognize Quebec's full jurisdiction in the Gulf of St Lawrence". As if any national government in the world is going to give a province jurisdiction over any water way, let alone a strategic one. Then again, the folks in Quebec City tend to see themselves, and want us to see them, as a nation.

Mrs. Normandean has found herself in a bad position as the Newfoundland government has issued drilling rights to Old Harry, the rich site at the centre of controversy between Quebec and Newfoundland. Corridor, the company awarded the rights is set to drill in 2012. Quebec wants this resource for itself, and is pressuring the federal government to grant it the offshore agreement needed to begin drilling - on their terms of course. According to Mrs. Normandean: "The federal government is telling us to go negotiate with Newfoundland and we'll see after that. We say no,no,no,no. Why would we negotiate with Newfoundland if we think there is no problem with the 1964 boundary?" One reason I can think of - if you don't, Newfoundland will empty Old Harry before you can reach a deal with the feds. Perhaps. The other interesting fact of note is that Quebec has a self-imposed drilling ban in place in it's "jurisdiction" until atleast 2012.

At the very least, Quebec has really shot itself in the foot on this one. So using this "special deal" as a comeback on the Churchill projects is really assinine. Throw in the hypothetical and say Newfoundland had a special deal. What possible relevance does that have to Quebec's plundering of the Upper Churchill, and blocking of the Lower? Is there an implication that Newfoundland should sit back and take it in the stomach, because it was forward looking enough to develop it's "own resource". It has not plundered or otherwise taken advantage of Quebec or it's resources. The Upper and Lower Churchill are, after all, Newfoundland's resources.

Premier William's should be sitting back and smiling after todays show. The weakness of Quebec's response correctly reflects the weakness in their position. The days of Quebec crying and the rest of the country running for paper towel are over. In all this, it is important to remember that the people of Quebec have no more say in the policy and actions of Hydro Quebec, or the Quebec government, than any other populace in the country. It's also important to remember that it is irrelevant how much money Quebec gets from the rest of the country - in so far as this battle goes. We can't be suckered into an anti-Quebec stance. We need to stay focused on the issues of the Lower and Upper Churchill falls. We need to use the tools availabe to us to achieve these ends, and we need not explain nor apologize to anyone for using them. All in all though, I would say one to nothing for us.

Thursday, September 9, 2010

Way to go Premier Danny Williams!

In a speech Wednesday to the St John's Board of Trade our Premier came out and stated: "the dispute with Charest will take a new, aggressive approach". I guess, when you consider that most people might think Mr. William's has already been fairly aggressive in his approach with Quebec, that the new approach will be a doozy. Certainly, if he hopes to be successful, it will need to be. Quebec's territorial strategy is long and deep, and they won't easily bend. Think I'm over stating it? How about this quote from then Quebec Premier Jean Lesage, 1965:

" The primary and absolute condition is that all energy that will enter Quebec becomes property of Hydro Quebec. That condition...has always been the same, and we will never negotiate from another basis. We will never permit, under any condition, others to build a transmission line on Quebec territory, or let others transport the energy produced at Churchill Falls whatever the destinationof that energy, whether it be the United States or the other provinces." quoted from Le Devoir, 1965.

Clearly, Quebec has taken a monopolistic, some might say anti-competetive, approach from day one in the development of their, and our, hydro electric power. I would suggest that Mr Lesage's quote from 1965, four years prior to the Power Contract being signed, clearly illustrates a lack of good faith from the outset.

In any case, when fighting any entity that hides behind the Law to fufill it's own inhumane agenda, the words of the great american Abraham Lincoln should be heeded:

" I did understand however, that my oath to preserve the Constitution to the best of my ability, imposed upon me the duty of preserving, by every indispensable means, that government - that nation - of which that constitution was the organic law. Was it possible to lose the nation, and yet preserve the constitution? By general law life and limb must be protected; yet often a limb must be amputated to save a life, but a life is never wisely given to save a limb. I felt that measures, otherwise unconstitutional, might become lawful, by becoming indispensable to the preservation of the constitution, through the preservation of the nation right or wrong, I assumed this ground, and now avow it. I could not feel that, to the best of my ablility, I had even tried to preserve the constitution, if, to save slavery, or any minor matter, I should permit the wreck of government, country and Constitution all together." Miscellaneous writings of Abraham Lincoln.

In these old words of wisdom lies a real grain of truth for Newfoundland and Labrador. We must fight, utilizing all the tools we have, to undo the 1969 Power Contract. Yes it is a contract, as was the American constitution of Lincoln's time, but when necessary for the survival of the whole it can be abrogated. If Newfoundland chooses to allow the Upper Churchill agreement to continue the result will be catostrophic for the people. Economically, as layed out here in previous posts, Newfoundland's economic survival is at stake. It's way of life is threatened. It's people's pursuit of happiness is not only diminished, but likely permanently thwarted. In other words, to remain in this agreement is to sentence the people of Newfoundland to an ever diminishing way of life.

Thank-you Premier Williams for seeing the fight, and taking it to those who need it. As you can see by history, when approached with submission, a great people step forward together in a singular purpose. It is in the leader's hands to show them the way.

Thursday, August 26, 2010

Debt, Hydro Power, and fighting for the Crumbs

The game of Hydro Power domination, currently unfolding in Maritime Canada, will be fueled by old faithful - debt. Or perhaps more accurately: debt capacity. Afterall, most businesses close their doors when their debts hopelessly outnumber their assets, and all the players involved in the Power War are in this diminshed position. Like the Emporer without clothes they strut, and yet their citizens dare say nothing, as to do so would force them to recognize their own naked place. And so we stumble on until the great international financiers force a mirror on us in the form of credit downgrades, credit freezes, devestating interest rates and terminal deflation.

When the government of Quebec proclaimed it's intention to buy New Brunswick Power, partner on the Lower Churchill, or any such project, it was really like the dog frantically chasing it's tail. Contemplate the following financial facts on the province: Quebec's gross debt today is 49.9% of it's GDP; it's gross debt is projected to be 53.4% of GDP by 2014; and it's current total debt is 94% of GDP. Those numbers place Quebec in the not so auspicious position of just behind Greece as one of the world's most indebted economies. Essentially bankrupt. If you combine that staggering debt with the lowest birthrate in North America Quebec's medium to long term prospects are dim - to say the least. It is estimated that should Quebec ever seperate it's debt would be aproximately 300 billion. To put that into context, Quebec would have to slash programs, and raise taxes 53% just to instantly become a member of the Third World.

It helps to put things into context. Here is another shocker. Hydro Quebec, the great propeller of  Quebec's Manifest Destiny, is in serious debt too. As of 2010, Hydro Quebec's debt is 36 billion dollars  with planned investments of 18 billion more by 2013. That's 54 billion. In that context it probably is not surprising that Quebec tries to thwart Newfoundland's entry into the market, or allow it to free the chains of the Power Contract, 1969. Essentially, through an extremely exagerated sense of self- importance, and a spending spree to match, Quebec has reached the limit. If it can not expand it's primary natural resource, hydro, then it will start to shrink and decline. In strictly financial terms it has already peaked and declined. Now they are trying to swim upstream just ahead of a massive water fall. The recent letter by Quebec's Premier to Mr. Harper, complaining that any funds given to Newfoundland and Nova Scotia would constitute an unfair subsidy to their hydro ambitions, rings hollow when you consider Quebec recieved at least 8.5 billion in equalization payments last year - including compansation for subsidized electrical rates for Quebec residents and business. Desperate people sometimes do desperate things.

The province of Newfoundland is not exactly in great financial shape either. Trapped in low wages, high taxes, shrinking revenues, massive debt, declining birth rates, net migration and surrendered resources Newfoundland is also on life support. Bravely, along the lines of the Emperor's new clothes, Newfoundland continuously fights to stay above water. However, without recapturing the Upper Churchill revenues, and developing the Lower Churchill potential, Newfoundland's future will echo that of Quebec's.

Both provinces have spent way past their means. Both have tried to build massives infrastructures in a relatively short period of time with declining birth rates. Bucking the wind as it were. Unlike say China, India, and Brazil where their population growth is positive and their development and spending is therefore sustainable, Newfoundland and Quebec have been living life on high. And for all, there comes a time to pay the piper. Now, rather than enjoying the benefits of our ancestors prudence and discipline, the things that differentiated the New World from the Old, we find ourselves like the world of Old - fighting for the crumbs.

So I say to the government of Newfoundland and Labrador: Fight. All you have to lose are your chains. But know you are in for the fight of your lives, and, therefore, fight accordingly. Please.