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)

Sunday, June 27, 2010

Upper/Lower Churchill

Almost everyone in this province knows the beating we took at the hands of Hydro Quebec in 1969. The infamous Power Contract that has seen Quebec reap 22 billion so far and Newfoundland a mere billion. The agreement that sealed our fate as a have not province - unless oil is high. Whatever news story we hear regarding out migration, lack of health care, social services, roads, etc can be directly traced back to the massive loss of money Newfoundland has suffered since 1969. Don't believe that? Consider that even a mere 50-50 split of that 22 billion Quebec has received so far, 11 billion, would be enough to pay Newfoundland's complete debt of today. Yes, like Alberta - debt free.

Now consider that Newfoundland has the largest per capita debt in Canada. A massive 11 billion for a population of less than 500,000 souls. We aren't getting any younger either. That means less people to pay the debt we already have - which is increasing by at least 200 million a year. That is where the hydro projects come in. Not one single shovel has been turned at the Lower Churchill. The reason - we can't raise the money locally or internationally. At an estimated cost of 6-7 billion for the Lower Churchill and another 3 billion for the under sea cable to transmit the power, well, let's just say we don't have the credit limit to cover that. Hence our Premier trying to twist arms in Ottawa to get it's Hibernia share, and other such revenue generating adventures. The only problem with that strategy is Ottawa's got it's own bills to worry about, and they need the cash.

Some here have said that Ottawa will intervene on Newfoundland's behalf, and help us finance the Lower Churchill development. That seems very unlikely. It would require the federal government side with Newfoundland in an energy war with Quebec. The political calculation is 9 million votes or 500,000 votes. Some say that we should be partners with Quebec in the Lower Churchill, but the reality is we are shaping up to be competitors in the continental energy market. Partnerships with Quebec in hydro tend to be one sided in any case. Think that is too strongly worded? Consider that when Quebec automatically renews the agreement for another 25 years in 2014 they will be paying us less than they do today. That's right - less.

There is one chance to undo all this history, recover our finances, end our financial decline, and even reverse our population lose. We must cancel the Upper Churchill agreement and recoup as much of those funds as possible moving forward. With that revenue coming in financial backers could realistically invest in our long term future. To change the deal has proven fruitless over the years, but only because the strategies have been flawed. Hydro Quebec's lawyers ensured their contact with us was air tight according to the laws of the land in 1969, and likely could not foresee any change in contract law. However, in the 1980's, we repatriated the Constitution - and the Notwithstanding Clause. Essentially, the Clause allows the federal or provincial governments to pass laws, within their jurisdiction, that would otherwise contradict the Constitution. One such area of provincial jurisdiction we can use, as others have, is language.

Our provincial government must pass legislation banning the export of hydro power to any jurisdiction that does not recognize English as it's primary language. This ties a provincial jurisdiction, which the law can be used on, to the Power Contract. I other words it would be illegal for Nalcor to sell power to Quebec. We could not be sued or even challenged in court as the Clause exempts the government that uses it from any legal challenge. It should have an inclusion that the law takes effect in 60 days, and the government may amend the law to allow sales to whomever it wishes on a case by case basis. It could also be cancelled at any time the government chooses. Suddenly, Quebec is in the same position that they put Newfoundland in back in 1969. With their American customers telling them to get their house in order, and their supply secured, Hydro Quebec will have no choice but to renegotiate. They should hurry with their offer as nobody likes a middleman.

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