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, May 6, 2012

Muskrat,Mines, and Railways - Liberally Speaking

Liberal Yvonne Jones has portrayed herself as a fierce critic of the Muskrat Falls deal in the past. As Liberal leader she attacked the ruling PCs for the costs to the public purse of such a venture, and the enormous impact it would have on electricity rates for the population. Her political life centered around an almost "consumer advocate" role in the House of Assembly, and on the airwaves of the province. Wow, do some things change.

Since stepping down from the leadership, two months before the 2011 general election, Ms. Jones' critique of the Muskrat Falls deal has become rather muted. To be fair to her, the Liberal Party in general has, for the most part, begun treating Muskrat Falls as just another issue amongst many, as opposed to the issue with some others in the background. It's an interesting turn of events.

Of course with Ms. Jones sudden decision to step down from leadership came amid many rumors. Some bloggers floated rumors of a backroom deal involving Dean MacDonald, and even the provincial CBC reported on it . Essentially, the story was Ms. Jones was offered money and a future major position if she resigned from the leadership. Ms. Jones denied it, and for a few weeks the story went away. Then, she resigned due to ill health brought on by a long struggle with breast cancer. Having met with Ms Jones at this time while involved with the Liberal leadership, I can assure you she was quite fatigued from her illness.

In the subsequent, and hurried leadership process, Kevin Alyward was chosen as leader. Brian Tobin, the former premier and iron ore executive, held two major fundraisers in Toronto and Calgary to modestly fund the Party's campaign in the subsequent election. Mr. Alyward did not win his seat, as most of us didn't, and resigned shortly thereafter as leader. Dwight Ball was then appointed by the Party's Board as interim leader.

A few weeks ago the provincial Liberals kicked off a Party "renewal" process. Who is the primary focus of this process? Dean MacDonald. A man with corporate and personal ties to companies hoping to profit from Labrador mining. A man heavily linked to both Danny Williams, who now sits on the board of Alderon Mining (the Kami mining project in Labrador) and Brian Tobin ( the former president and part owner of Thompson Consolidated - a Labrador mining operation). Two men that have been obsessed with bringing electrical power, one way or the other, to the mining developments of Labrador. In Tobin's case, a failed agreement with Lucien Bouchard, the former Quebec Premier and separatist, to develop the entire Lower Churchill in conjunction with Hydro Quebec. In Williams' case, the Muskrat Falls project currently under development.

The key to successful development of the mining properties in the Labrador Trough is of course abundant, cheap electricity to power them, and adequate railways to move the product to port for export. Quebec's own Plan Nord (North) calls for the construction of a major railway to move raw product from northern Quebec to its southern ports. The cost has been estimated at $5 billion dollars for the railway alone, which has caused Quebec's Liberal government to attempt a public/private partnership for its development. That being said, if Quebec proceeds with Plan Nord, and actually expends the projected $85 billion dollars necessary, a railway would be a necessity to make the entire project feasible in any way.

The question is does Labrador face the same issue? Ms. Jones made some commentary on the issue this week to provincial media:

"The Liberals say serious consideration should be given to the construction of a Labrador Railway System. Liberal House Leader Yvonne Jones says the province need only look at Sept – Iles, Quebec to see the potential benefits. Jones says the town is booming, thanks to the QNS and L Railway, put in place to transport minerals from Labrador. She says when the Iron Ore Company started in Labrador West, Sept-Iles was a fishing community with a few hundred people.

She says today the community has about 50-thousand people, with an industry that has expanded around the mining sector."

The truth of the matter is Ms Jones comments reflect a troubling double standard. On the one hand she advocates against the massive cost involved with Muskrat Falls - or used to - and on the other hand she advocates for massive costs to build a "Labrador railway system". On the one hand she argues that Labrador's mines should not be used to export minerals to foreign jurisdictions for secondary processing, and on the other hand she says there is a need for a railway to "transport minerals from Labrador". Her comments seem to insinuate that a Labrador or Newfoundland port could also be constructed to emulate the success of Sept-Illes, which would necessitate even greater expense for construction of port facilities. All told, the construction of a Labrador railway system, apart from the privately held one that currently exists in Labrador, and the construction of a new port could easily total twice the cost of the construction of Muskrat Falls.

The big question is where does all this come from? Did Ms Jones have a conversion on the road to Damascus? Is she now solely focused on creating some sort of "greater Labrador" with no serious consideration of the cost? Has she come under the influence of the corporate Williams and MacDonald? Has the provincial Liberal Party been muzzled as an effective opposition to Muskrat Falls by the influence, financially and otherwise, of Williams and MacDonald - hoping for a return to power? Is Jones falling into line with the mining companies and advocating for their needs as opposed to the needs of Newfoundland and Labrador citizens? Is it all of the above? It's hard to say.

One thing is certain, the cash that should be going to build promised hospitals, ferries, roads, etc is being held back to fund the down payment on Muskrat Falls. Anyone that opposes that strategy comes under attack. Even the PUB's decision to refuse a green light for Muskrat Falls was attacked as "baffling". It's curious to note all the folks that used that term in the last few weeks: Danny Williams, Kathy Dunderdale, Dean MacDonald, Ed Martin, and Jim Prentice. What does Jim Prentice, the Calgarian executive of CIBC World Markets Inc have to do with Muskrat Falls? Well, besides the fact that CIBC may be interested in the financing of some of this debt for Muskrat Falls, how about the fact the CIBC World Markets was a partner in Persona Communication with Dean MacDonald. Just a thought. In any case, it has become crystal clear that the march of business interests in the Labrador Trough is well underway. The only question left: Who is willing to sell their soul and who will stand and be counted.

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