Newfoundland's Final Humiliation

There are few things that Newfoundlanders, and the province in general, are more afraid of than being made to look stupid. No body does. However, here it is taken to a higher level. There is a history of the "Newfie jokes" or even the just the term "Newfie" by itself, that boils the blood. The connotation is that somehow a Newfoundlander is doomed by birth right to be inferior to the rest of Canadians.

There are a lot of theories on why Newfoundlanders are so self-conscience about what others think of them. My own theory is that losing your country to become a province is a hard pill to swallow. It affects the collective psyche in ways that run deep and can last a long time. It's doubly hard for a proud people. That's why even today you will commonly hear the young and old refer to Canada as a separate entity: "just got back from Canada". Of course the reality is one doesn't leave Canada if travelling to the mainland. The reality is we are one country now, but the ground between the soul and reality is murky at best.

Another source of humiliation, that has become anger and resentment, is the Power Contract 1969 with Hydro-Quebec. In that case Premier Smallwood, all busied with big names like Winston Churchill and the Rothschilds, had the province agree to a 198 year lease of the Upper Churchill that allowed the Power Contract to be signed and gave Quebec control of the facility for a pittance. The actual annual pittance today is about $2 billion for Quebec and $65 million for Newfoundland and Labrador. Since the early 1970's the dollars from the project have left the province and the people followed. Smallwood's great cry was "industrialize or perish". The result was Quebec industrialized on cheap Labrador electricity and Newfoundland perished.

Fast forward to 2003, and the election of Danny Williams and the PCs. Williams got elected just as the beginnings of oil money started coming in. Williams was determined to undo the wrongs of the Power Contract, bring back nationalistic pride that he saw as robbed by the agreement, and show Hydro-Quebec the door. He created the "Energy Plan" in 2003, created a state owned monopoly (Nalcor) in 2007, and amended/created all types of legislation in between time to put the path in place. Come hell or high water he was going to make things right. Most Newfoundlanders, including this one, applauded at the notion of historical redress.

Then it came off the rails. Hydro-Quebec's directors on the board of CFLCo (the corp jointly owned by Hydro-Quebec and Newfoundland and Labrador Hydro 'NL Hydro') vetoed the Water Management Agreement that Nalcor's directors on NL Hydro and Nalcor itself had negotiated. Within a month Nalcor was knocking on the Public Utilities Board's (PUB) door for an imposed Water Management Agreement (WMA) - as per the aforementioned  amendments Williams did to legislation back in 2007.

The PUB passed the Water management Agreement, without as much as a coma being changed, just as Nalcor had put it forward. Apparently, in June 2012 Nalcor began taking more MW from the Upper Churchill than it was allowed - which the WMA authorizes them to do. Quebec sat back and waited.

As part of my own lawsuit against the Government and Nalcor regarding the Muskrat Falls project, I served Hydro-Quebec with a letter inviting them to be an intervenor in the case. I informed them contractual rights under the Power Contract would be at issue. My purpose was to put them on formal notice, that if they refused to act they would be acknowledging the province's right to usurp their Power Contract rights. That would set a legal precedent, and they would be unable to come back at a later date and argue they were unaware of the case. In a sense, I pushed them from waiting in ambush for us to finish Muskrat Falls and then take us to court. Within 2 days of my initial injunction failing at the Supreme Court of Newfoundland and Labrador, Hydro-Quebec filed suit in the Superior Court of Quebec - ambush firmly tripped.

On January 20, 2013, 11 days from now, Hydro-Quebec's motion will be heard. It asks the Court to declare two things: 1. That Newfoundland and Labrador is not entitled to more than 300 MW of recall power plus the old Twinco block; and 2. That it has the right to manage the facility (which includes roads,switchyards,etc) in accordance with its needs - and only its needs. Both these rights are firmly established in the Power Contract and the Supreme Court of Canada's Review of the Reversion Act 1984. This province has no chance, and when I say no chance I mean zero chance, of winning these issues in court.

Getting to the meaning of the title of this article - the final humiliation. Estimates of exactly how much money has been spent on Muskrat Falls so far are hard to get. Conservatively it ranges from $800 million to $1 billion. Now the people of Newfoundland and Labrador, blinded by the nationalistic rhetoric of the Williams years, have to face the reality that the very foundation of the Muskrat Falls/Lower Churchill project is not valid. Without it there is no "banking" of power, no lines to mines, no power for the Island and no power for Nova Scotia. It is the kind of disgrace you don't wish upon your worst enemy. Williams will have succeeded in giving the province one last real humiliation on the national stage - one his old friend Harper was only too eager to assist with. For that I can not forgive him.