Nalcor's Stan Marshall is Lying

Stan Marshall, the newly appointed CEO of Nalcor Energy is lying to the people of Newfoundland and Labrador. He is deliberately misleading the people of the province about the ramifications the Quebec Superior Court decision has on the Muskrat Falls dam. It's as plain and simple as that, and it needs to be exposed. Our provincial media have attempted to get unfettered interviews with both Marshall and Premier Dwight Ball on the matter, but have been completely rebuffed. The only commentary made by Marshall was made during his quarterly report to shareholders (us) via teleconference, and he only answered certain questions before the live feed of the teleconference suddenly discontinued leaving media and citizens alike shaking their collective heads. However, what he did say is simply not true.

"That court case will have no major impact on Muskrat Falls whatsoever" Stan Marshall.

That is just a blatant lie to the people of the province. A deliberate attempt to mislead. Here's why:

The Quebec Court:

[1151] The Court declares that the rights granted to Hydro-Quebec under section 4.1.1. of the renewed contract, including its right to programming and planning of power and energy, are in no way limited, circumscribed or restricted, on a monthly basis, for the purchase of blocks of power subject to a ceiling the amount would be established on the basis of the concept of 'Continuous Energy' laid down in the renewed contract, and they can be exercised in relation to any of the available power and all the energy produced at the plant, excluding power and energy associated with the block of 300 MW and the Twinco block."

What does that mean?

Well this is what Section 4.1.1. of the Power Contract requires:

Operational flexibility the parties hereto acknowledge that it is desirable for Hydro-Quebec to have the benefit of operational flexibility of CFLCo's facilities in relation to the Hydro-Quebec system. Accordingly:

i)  Hydro-Quebec may request CFLCO to operate the Plant so as to supply Hydro-Quebec's         schedule of power requirements; and

ii)  Hydro-Quebec may require deliveries which have the effect of varying the amount of water to be carried in storage at any time, providing that, in so doing, sufficient water is left in storage so the Minimum Capacity can always be maintained.

Translation? Hydro-Quebec has the right to force CFLCO to run the Upper Churchill dam for its needs - free of any restriction (ie: Water Management Agreement) : " (Hydro-Quebec's) right to programming and planning of power and energy are in no way limited, circumscribed or restricted". It's very plain English.

Here is what the Water Management Agreement states is the purpose of the WMA:

"The objective of this Agreement shall be the coordination of the Power generation and Energy production in the aggregate for all Production Facilities on the Churchill River to satisfy the Delivery Requirements for all Suppliers, in a manner that provides for the maximization of the long term Energy - generating potential of the Churchill River, while ensuring that the provisions of any Prior Power Contracts are not adversely affected."

So the WMA "requires" the "coordination" of power and energy producers on the Churchill River for the "maximization" of the power potential for Muskrat Falls. Later on in the document the WMA requires that "all production facilities run at full capacity". In other words, Nalcor and the government are trying to take away the right Hydro-Quebec has to determine the production scheduling at the Upper Churchill so they can run enough water down river to keep Muskrat Falls producing power. Unfortunately for them, the Power Contract states that is NOT allowed, and the Quebec superior Court just found that as well as noted above. They didn't find like that because they are a "Quebec Court". They found that based on being able to read the English written in the Power Contract, which apparently Nalxcor and this government cannot.

A further illustration of that exact same point comes from the illustrious VP of Nalcor Gilbert Bennett (October 22, 2012):

“The water management agreement between Nalcor Energy and Churchill Falls defines how the two companies manage the flow of water on the upper and lower Churchill River to optimize and maximize output of the river,” said Gilbert Bennett, Vice President, Lower Churchill Project. “No agreement or consent by Hydro-Quebec is required to provide water management certainty for the lower Churchill developments.” The full press release is here .

Unfortunately for Nalcor, and this province, Quebec does have to give consent, because it just had that right reaffirmed in the latest court decision. The WMA also allows the government through its controlling interests in both Nalcor and CFLCO, to appoint a Water Management Committee, who then in turn appoint an "Independent Coordinator". Here is the duty of that so-called Independent Coordinator as per the WMA:

"The Independent Coordinator shall, based on the information provided by the Suppliers, and in the exercise of reasonable judgment, establish short and long term Production Schedules for all Production Facilities on the Churchill River, through the coordination of production scheduling of the Suppliers based upon the use of the aggregate generating Capability, storage and transmission facilities of any Supplier on the Churchill River, in accordance with the objectives set out at Section 3(1) of the Regulations and with this Agreement"

There you have it. The government of this province was trying to wrestle away control of the Upper Churchill from Hydro-Quebec by installing an "Independent Coordinator" to take over production scheduling - essentially from Hydro-Quebec. As you can see from the Court's declaration above, that in itself is a violation of the Power Contract.

So, the number one pillar of the Water Management Agreement has fallen. Hydro-Quebec, not the provincial government's "Independent Coordinator" has the absolute right to set its production requirements at the Upper Churchill. There never was a question about this if you had read the Power Contract (and its renewal). Now it's been reinforced in a Declaratory Order by the Quebec Superior Court. So it is enshrined in a court order. So to do otherwise would be too deliberately breach an order of the Court.



"What we were hoping for is we'd get more power for ourselves, and that will not be the case under this decision." Stan Marshall.

That's an understatement that frankly an attempt to mislead the public. In fact, if you recall Cathy Bennett's statement the there was a "a complex interweaving of multiple business cases" then you are closer to the truth. (Here's the story on that). Perhaps the best way to illustrate their plan was a conversation Gilbert Bennett had with John Samms back in 2012 when these arguments were flying about:

Bennett:  I agree with this – the GWAC is effective during the winter months. However, section 2.1 of the Renewed Power Contract entitles HQ to take the Continuous Energy in each month, including during the winter. Referring to Volume 1 of our application to the PUB for the water management hearing, the average production at CF is about 34 TWh. If we deduct the 2.36 TWh and 1.97 Twh for recall and Twin Co respectively, we’re left with approximately 29.7 TWh for HQ, or approximately 2.5 TWh per month. Interestingly enough, this means the plant will deliver on average just over 3470 MW for HQ + 525 for NLH/Twinco (or 3995 MW out of 5428 MW) over the course of a month, meaning that HQ can have “additional capacity”, they cannot have it all of the time, as they will exceed their energy allowance. This point ensures there will be lots of opportunities to withdraw stored energy from CF, even in the winter. (The math above is 2,500,000 MWh/mo [30 days/mo]/[24 hr/day] = 3472 MW

So, doing the math, Bennett was stating that Nalcor could take approximately 1500 MW of power/energy from the Upper Churchill, and that Hydro-Quebec would have no right to it, because the "Energy Allowance" imposed on Hydro-Quebec by the WMA would deny Hydro-Quebec the right to that power. Of course, that was an absolute farce from the get go. The Power Contract, and its renewal, clearly states Hydro-Quebec has the right to all power produced at the Upper Churchill - other than 300 MW recall and the Twinco Block. There was never any dream in hell that this province could get 1500 MW from the Upper Churchill.

In fact, here is what the recent Quebec Court decision stated:

" [1154] The Court declares that until August 31, 2041, CF{(L)Co will have no right to any amount of power and energy produced at the plant (Upper Churchill), with the exception of the power and energy associated with the block of 300 MW and the Twinco block."

Plain and simple, and exactly what the Supreme Court of Canada found in its 1984 decision in the Water Reversion Rights reference case. What don't they understand about only 300 MW of recall and the Twinco block? It was ruled on by the highest court in the land 36 years ago...

In any case what does it mean? Well, right off the top it means the people of the province were obviously manipulated right from the beginning. It is just so evident to be utterly, blatantly obvious. But, what does it mean for the Muskrat Falls dam? Well, it's the death nail.

First of all, Nalcor can no longer take "banked power" or "banked energy" from the Upper Churchill - a key component of the agreement. Essentially, the "banked" refers to Nalcor taking power from the Upper Churchill, and at some point down the road returning it so their would be "no adverse" affect on the Power Contract. One problem. Hydro-Quebec is and was, and will be until 2041 entitled to that power and energy period. That means that if Nalcor wants it, or needs it to make Muskrat Falls operational, then Nalcor will have to pay Hydro-Quebec for it. So instead of getting that "banked power" from the Upper Churchill at the same price Hydro-Quebec gets it at (.0020 of a cent a kwh) Nalcor will have to negotiate a market price for a power purchase agreement with Quebec - which could range from 5-10 cents a kwh. A massive cost increase to operate Muskrat Falls. Or worse case scenario, Hydro-Quebec may not agree to a power purchase agreement at all - which would mean Muskrat Falls could only operate at about 29% firm capacity (look at your bill tripling at a minimum if that happens).

So recall if you will the often made statements by the provincial government and Nalcor that Muskrat Falls would have profits of $500 million a year. Guess what. That was based on getting that free 1500 MW of power a year they planned on illegally taking from the Upper Churchill (see Gilbert Bennett's comments above). Now, they have zero free MW to sell, so the first and most obvious impact of the court decision is there will be no profit from Muskrat Falls, and no $500 million to create "revenue" for the provincial government or to subsidize your power bills (as they promised they would). The next big effect is that Nalcor's ability to pay for the project will be disastrously crippled with Muskrat Falls running at 20% capacity. In fact Nalcor admitted the planned Gull Island dam would be in the same straights. Here is an excerpt from their pre-filed evidence to the PUB when they sought the WMA in 2009:

" Under average conditions, the resulting production at Gull Island would be 1,519 MW for the first 20 days and 443 MW during the last 11 days of March. During a dry period, this scenario would require production levels of 1,471 MW during the first 20 days of March, and 395 MW during the last 11 days. Consequently, without a water management agreement, Nalcor would be limited to approximately 400 MW of continuous delivery in a power purchase agreement for Gull Island. Such an arbitrary constraint on lower Churchill delivery schedules is unnecessary and is incompatible with the concept of the efficient use of the resource."

In other words, the Power Contract is an arbitrary barrier to the Lower Churchill dams. Yet, that is what the Court's decision just found - the Power Contract guarantees Quebec that right.

The same Nalcor evidence stated:

"In the absence of a water management agreement, Nalcor would not even have advance knowledge of expected flows from the Churchill Falls facility to enable it to take steps to
mitigate spillage through advance drawdown of the lower Churchill reservoirs In the absence of a water management agreement, Nalcor would be required to utilize the  water as it became available.  Given the limited storage capacity in the Gull Island reservoir  (approximately three to four days of maximum flow from the upper Churchill facilities),

Nalcor would have to turbine the water and produce energy at the time that it was 

available; it would be required to “chase the flows” from the upper Churchill."  

There you go, Nalcor's own words as evidence. The court's decision makes it clear that Nalcor will now have to be "chasing the flows".

So without the ability to take over the operations of the Upper Churchill, Nalcor cannot control the flows of water or power. It also cannot control the reservoir levels at the Upper Churchill. It cannot take banked power or energy from the Upper Churchill to sell on the US market and then return that power back at some later time for free. It cannot take 1500 MW of power from the Upper Churchill and sell it to the US or any other market and make $500 million a year in additional profit. In fact it can't do one single thing the Water Management Agreement attempted to do. In fact, the Water Management Agreement itself breaches the Power Contract as it was obviously, and admittedly created to manage the Upper Churchill and Lower Churchill as if it ever had the right to do so with the Upper Churchill. It never did after 1969, and we knew that back in 1984.

So is Stan Marshall lying and misleading the public about the effect of the Quebec Court decision on the Muskrat Falls dam? Yes he is. No different than the man that preceded him with the exception he was trotted out as being the "straight shooter". Does the Quebec court decision kill the Water Management Agreement? In enforceability yes. The government can leave it on the books, cover its ears, and continue with the dam construction if it wants, but that doesn't change the inevitable. When the dam is ready it won't be able to operate past 20% capacity - except in a month or two around spring runoff. When the bills come through, and there is no way to pay them, that reality will be there for all to see. Apparently it takes that hear before people act to save their own hides. In any case, yes Stan Marshall, you are lying and misleading the people of this province on what that Quebec Court decision really means for Muskrat Falls - and of course that's all of us.

The Muskrat Falls U-boat cover up - emails

The best way to start an article like this is to just come out with it: we have been mislead. After numerous appeals by a "third party" my access to information request for any maps, drawings, pictures or communications regarding a German U-boat wreck at or near Muskrat Falls from the provincial Department of Natural Resources has been granted. What it discloses, despite the government not being fully forthcoming in its disclosure, is a web of secrecy and deceit regarding the U-boat wrecks at Muskrat Falls.

That's right I said "wrecks" as in plural. Government emails disclose their are actually two U-boat wreck sites at Muskrat Falls. One site, directly at the foot of the falls, being explored by Ray Tremblay of "Bomb Hunters" fame, and the other about 900 meters from it (the one I previously wrote on and that was first pictured in sonar image by Mr. Corbin). In an email from Natural Resources Assistant Deputy Minister Paul Scott in July, 2012, the provincial government acknowledges there may be two U-boat wrecks at Muskrat Falls and nearby. However, and perhaps even more importantly, the email proves Nalcor new of the one U-boat wreck as early as 2012, and had its exact location on a map.

Then in later 2012, provincial archeologist Martha Drake fired off an email to Mr. Tremblay which questioned whether he was focusing on the u-boat wreck or "... on the reported bunker site on land." That was a first for me. A bunker site on land? A German bunker site? This just keeps getting stranger and stranger. And all of it is well known by our provincial government. Here's that email:

However, the big bomb comes when, in July, 2012, Nalcor's Senior Communications Advisor Karen O'Neill sends an email to Paul Scott, copying in Nalcor's senior management team, which admits to the U-boat wreck and its exact location. The government wouldn't release the sonar scans or maps but gave a big "redacted" square instead. In the email O'Neill states:

" Attached is the side-scan of the submarine and the exact coordinates of the wreck."

Here is the complete email:

Ray Tremblay indeed sent a picture of the U-boat wreck to the provincial government in August of 2012. However, the provincial government blackened out the picture for my ATTIPA request:

What seems quite strange is that an email from Diana Quinton, Director of Communications at Tourism, Culture and Recreation which details written responses to the provincial CBC for a request on details of the U-boat. In the response Quinton clearly states:

" It has come to our attention that two groups have reported the discovery of wrecks near Muskrat Falls in the Churchill River. One group made their discovery in 2010 (and reported it to Transport Canada's Receiver of Wreck this week), while the other group made their discovery in June, 2012. The coordinates for the two wrecks are different. Therefore, we assume there could possibly be two wrecks involved."

No such mention of two wrecks was ever reported by the CBC or any other media outlet. The question remains why not? They were clearly informed of two possible U-boat wrecks in 2012. The one they reported on is about 900 meters from the Falls. The one they didn't report on was Ray Tremblay's discovery right at the foot of the Falls. That is clearly a question the CBC must answer. Given the Muskrat Falls construction very nearby the wreck it would seem logical that it might be the bigger story then the other wreck they did cover. Here's the email:

The email records, particularly between Mr. Tremblay and the provincial government departments, show that Tremblay has been doing scientific scanning and diving on the wreck site every year since 2012 to the present. For those that aren't familiar with Mr. Tremblay he is a retired Canadian Forces combat engineer - an expert in demolitions. His company is featured on History Channel's "Bomb Hunters", and he has access to a wealth of all modern scientific technology for scanning below the waters surface. In an interview with me today he detailed a number of scientific, but classified methods he and his team have used over the last three years on the U-boat wreck. They'll stay confidential here, but suffice it to say he is very well qualified in what he and his team do. During his exploration he has been in constant contact with both the Canadian (more on that later) and the German governments giving them updates as detailed in this August, 2014 email:

Later in 2014, Mr. Tremblay conducted actual dives on the wreck site, but encountered wild currents and conditions (being that the site is at the foot of the Falls). He and his team did manage to film 60 hours of video though. This email gives a good description of their work in October, 2014:

In the lead up to the October, 2014 dives Mr. Tremblay requested a member of the provincial government's archeology team dive with his team given the province's interest in the matter and its historical significance. The province declined the initiation given the government had forbid Tremblay's team from removing any dirt or objects from the site, or even the touching of them:

In May, 2015, things really start moving along - especially in the email department. It's here when Mr. Tremblay first notes that the federal government is quite quietly involved with the u-boat wreck. In fact, Mr. Tremblay actually met with the Prime Ministers Office and the Department of Canadian Heritage in Ottawa. Furthermore, Mr. Tremblay states the Prime Minister (Harper) is personally interested in the wreck site. Also, at this time the German Embassy are involved with the project. In the same email though the dark side of the U-boat wrecks is revealed. Divers are highly zealous in keeping U-boat wrecks secret until they have established their name to the discovery. Of course with that established name comes lucrative contracts from media like the History Channel. To be fair though, discovering a wreck is expensive business and all out of pocket for the diving company. The email details spying by one group on the other group during exploration. In any case, here's the 2015 email detailing the PMO's involvement, and the rest:

A June 29, 2015 email from Mr. Tremblay details further contacts he has had with the federal government and advises the provincial government on his plans for a mid August, 2015 confirmation dive as well as press conference to announce the confirmation of the U-boat wreck to the world. According to the email, Tremblay states the Canadian War Museum wants to raise the wreck and place it in the museum in Ottawa:

On that same day June 29, 2015, Nalcor Senior Communications Manager fires off a rather panicked and confused email to Martha Drake stating she thought the U-boat would be left an undisturbed wreck. The more interesting response is Ms. Drake's:

"... In the meantime, the vessel belongs to the German government".

That is a big statement. It acknowledges the provincial government knows the wreck is that of a U-boat and that as such the wreck "belongs" to the "German government". Otherwise, the German government would have no claim on the wreck at  Muskrat Falls, let alone have the province's archeologist admit that Germany has ownership over it. Here's the email exchange:

On August 11, 2015 Mr. Tremblay notified provincial and federal officials of the plan for the dive (blackened out) and the date he expected to conduct his big press announcement - August 28, 2015:

In a somewhat panicked tone, Martha Drake informs other involved officials that: "..there is something in the river. I expect we can all agree on that..." She goes on to state she will craft a letter to prohibit any touching of the wreck by Mr. Tremblay's team and that she will inform Foreign Affairs of the situation:

And here is the hastily prepared letter Ms. Drake sent to Mr. Tremblay regarding the dive. It is interesting to note her cautioning of underwater unexploded munitions that may be on the site from the U-boat - especially given Mr. Tremblay's world class experience in unexploded munitions... She is very emphatic that: " ... the wreck and debris field shall not be disturbed, touched on manipulated ..." I find that a very curious instruction for a team of divers attempting to identify a U-boat. Here's why: I know of no U-boat dive that didn't require divers to touch, move and surface with articles in order to identify a German U-boat wreck. It's standard practise. Of course removing human remains is strictly forbidden (if there are any), but articles such as knives, breathing apparatus, etc are routinely removed from U-boat wrecks to identify them. For instance, in many cases U-boat numbers are on the backs of china used on the boat, or names are placed on individual escape breathing apparatus. Boat numbers are also found on torpedo doors or the ship's batteries. Most of which have to be extensively cleaned to remove decades of sea growth before they give up their information. Whether Ms. Drake's instructions are from a point of ignorance, or otherwise, they doomed the identification of the boat before the operation started.

Ms. Drake then sends an email to Nalcor and government senior staff letting them know that her letter to Mr. Tremblay was sent to Foreign Affairs. Odd that she should make that distinction if the touching of the U-boats debris field etc was for safety reasons. it is hard to see what interest Foreign Affairs might have in such a topic. It seems as though a number of people were quite determined to tie Mr. Tremblay's hands in actually identifying the U-boat, or perhaps its cargo, and that included the federal and German governments. Indeed, Reneta Lambreva, Senior Policy Advisor at Foreign Affairs responded to one Dan Mackenzie, federal government, Inter-governmental Affairs Secretariat:

"... To prepare the ground on our side, I have notified the desk for Germany as a heads up for the potential announcement involving a foreign vessel that might come out by August 28th. Keeping the desk informed will speed up things in case an action needs to be taken. "

Mr. Mackenzie then disseminates the details of the wreck that Foreign Affairs has supplied (which aren't included in the ATTIPPA release). He emphasizes the need for a coordinated approach:

Then on August 22, 2015 Mr. Tremblay fires off an excited email to Ms. Drake that confirmation diving will start on the wreck the next day. He states that the team saw a propeller with an underwater camera the day before:

Then, like a balloon that burst, a final email from Mr. Tremblay on August 31, 2015 to Ms. Drake:

" No announcement this time again..."

Given the big buildup to the dive in August, 2015, which included 10 divers, I was left somewhat dumfounded at the sudden end of email exchanges and the pronouncement of "no announcement this time again". Clearly it was a message of frustration (understandably) by Mr. Tremblay, but the reasons weren't detailed in an email. They came by way of a phone conversation he had with Ms. Drake. I contacted Mr. Tremblay to clarify what happened. His response was the sand had completely covered the wreck. Given the restrictive measures placed on him by the provincial government (my words not his) there was never any hope for identifying the U-boat number, but not being able to remove sand to expose the wreck now meant the announcement to the world had to be postponed for yet another year. Mr. Tremblay states that when the Muskrat Falls River is diverted (hopefully it won't be) his team will be able to work much better in the environment around the wreck as the currents and volumes of water will be dramatically reduced.

It's hard to visualize the U-boat wreck Mr. Tremblay has discovered as neither he nor the government will allow any pictures of it to be released. He told me the wreck is approximately 68 meters long and he believes it to be an intact type VII German U-boat. He remains completely committed and determined to be the one that exposes it once and for all, and given his work and financing of the project that should never be denied to him. that being said, as a point of history, the government and or Mr. Tremblay should release the images of the U-boat wreck so that the people of the province, and Germany, can see it once and for all. In addition, those of us with experience in identifying these sort of things may well be able to identify the boat's type by its distinctive structures. I don't believe that would in any way take away from Mr. Tremblay's exclusive claim to having discovered the wreck - it would simply share the images of it with the rest of us. For history's sake.

Of course, the other side of this story is that Nalcor, the Government of Newfoundland and Labrador, the Government of Canada  and the Government of Germany have kept total silence on the ongoing explorations and discoveries since the initial sonar picture of the other wreck hit the media in 2012. They have left those of us trying to expose the truth, for history's sake, on the sidelines like a bunch of crazed conspiracy theorists. Now the truth is coming out, and these emails (there are more I haven't published) prove that the U-boat wrecks at Muskrat Falls are not ghosts of the fanciful, but very real hulks of history. The question remains why? Why are these governments and Nalcor trying to cover them up?

UPDATED Nalcor Has Sold Bull Arm

UPDATE:

Both Nalcor and Irving Oil (just answered inquiry today) have stated there is no deal on Bull Arm sort of. Irving Oil's response was "Hi Brad, thanx for asking, but we have no involvement at Bull Arm". There you have it.

Insiders report the buyer of the Bull Arm site is Irving Oil. This, as the rest of the story, has yet to be confirmed or denied by the Government or Nalcor despite requests for the same.

In the latest of now a long list of insider info being leaked to this blog, apparently Nalcor has sold (privatized)  the Bull Arm site. Details are still coming in and I will update this post as those details come in. The leak is that Nalcor and the government have sold Bull Arm to a ship building company. The news of the sale has been held back from the public due to the scandal involving Nalcor, Natural Resources Minister Siobhan Coady, and Premier Ball.

Premier Ball caught in a big Lie

Some people say that you know a politician is lying when you see his or her lips moving. I like to think that isn't true, but today's news is shaking that faith. David Vardy filed an access to information request to gain access to the employment contract of former Nalcor president Ed Martin. What a bombshell that was.

Premier Ball, and Ed Martin himself went public, speaking to the people of Newfoundland and Labrador and claimed Ed Martin resigned. It was subsequently released that his severance package was just under $1.4 million dollars. Weeks later it was revealed that he was paid just under $200,000 in bonuses as well. As Ball slashed jobs, and severely increased taxes, he made the case that Martin's excessive severance was required by his contract, and there was no choice in the matter. However, with Vardy's release of Martin's contract, that was not true. In fact it was a boldfaced lie that was spoken to the public as if it were the truth.

Here is Martin's employment contract . You can see for yourself that the only circumstances that require a severance for Martin is dismissal. That makes sense because if Martin quit he would be the one breaking the employment contract, and therefore would not be entitled to compensation. In any case, he is not entitled to a severance package if he quit according to the terms of his employment outlined in the contract. So did he quit or was he fired and allowed to save face? Right now we don't know for sure. The bottom line is that either way Premier Ball lied, and now he's caught in it. If Martin was fired, then he was entitled to a package - but Ball said he quit for "family reasons". Now if he did quit, then Ball is lying when he said that the contract required him to receive a severance package. So, either way Ball lied to the people of the province. In case you don't recall his exact words, here are some of the stories that covered the severance storm that Ball addressed publicly: Telegram story ; and CBC story .

Ball needs to resign now for his deception - hell let's just call it what it is: boldfaced lie to the people of the province. The people already consider themselves betrayed by Ball's broken promises made during the election, but this takes things to an all new level. A level where people know their own premier has lied to their face and been caught in the act. It's a disgrace to his office, to the province and to democracy. Resign, Mr. Ball. Do the honourable thing if you're capable.

The Big Muskrat Falls Lie

Here's a trivia question for you: Who said "If you tell a big enough lie and tell it frequently enough, it will be believed." Answer: Adolph Hitler. I get it. The first one to invoke Hitler's name loses the argument. It's just that a better quote can't be found for the die hard proponents of Muskrat Falls dam.

The most recent Muskrat Falls "story" was published today by CBC Newfoundland and Labrador. The CBC here has been as big a proponent of Muskrat Falls as anyone since 2010. It's almost as if there is some official policy to support the project over there. The story here is from an access to information request, but almost sounds as if it's a leak - which the reporter involved quickly pointed out it was not. Nevertheless, the story gives six reasons why Muskrat Falls cannot be stopped or postponed: the province needs power; a lot of money has been spent; the feds could take the project over if we stopped it under the terms of the loan guarantee; we'd still owe Nova Scotia power; it would put a lot of people out of work; and the province wouldn't be weaned off fossil fuels. No advantages were identified in the heavily redacted briefing paper. There you go. Can't be stopped. Oh well. The big lie get's repeated yet again to the public.

Here is the truth:

1. All contracts signed to build Muskrat Falls were signed by Nalcor, not the provincial government. That is significant because the province passed legislation in 2012 that designated Nalcor as essentially a private corporation for the purposes of contracts to build the project. It pulled their "Crown Agent" status. That means only Nalcor can be sued for breaking the contracts. Critically, that also means that the government can halt Muskrat Falls and Nalcor can claim a Force Majeure event. A Force Majeure event in contract terms means an event outside the control of the parties to the contract that puts the terms of the contract on ice until the event is resolved. Nobody can be sued, and no monies or penalties can be levied. So, the government could stop the project without getting sued by the contractors building and supplying Muskrat Falls.

2. The federal government does have the right to invoke the default clause in the federal loan guarantee if the province halts construction. It also has the right to do that if the project becomes over indebted as well. So the federal government takes over the project? The permit to construct the dam itself is a provincial permit authorized by the provincial government. Our provincial government can simply revoke the permit which means the river can't be dammed. So the federal government is left with a huge pile of concrete that can't produce a single watt of electricity. That is really no threat. There is no real threat to us until the dam across the river itself is built. Then we couldn't cancel the permit to alter a waterway, and that would be more troubling. Bottom line is though we are no where near that now.

3. Yes there would be jobs lost if the project were cancelled, but look at the jobs- permanent jobs, being lost now due to budget cut backs as a result of spending on Muskrat Falls. In addition, many of the jobs at Muskrat Falls are employing people who aren't from the province in any case. And, all those jobs they keep talking about are over when the project is over in any case. Short term gain for long term extreme pain.

4. Yes Nova Scotia is entitled to power from Muskrat Falls - 20%. When I say Nova Scotia I really mean Emera - a publicly traded corporation. Emera's contract for the supply of power is not with the government here - it's with Nalcor. Again, Nalcor can exercise the Force Majeure clause and Emera is out of luck, that's why the Nova Scotia Premier has been frantically calling our Premier to make sure Muskrat Falls is still a go.

5. The argument about the need for power is just a three way circus. For starters, the new Maritime link could import power into the province if we needed it. There are also many wind options that could cover many anticipated shortages. There are policy changes that could be made to preserve the power here - too many to mention. The argument that a dam in Labrador is needed to do this is frankly intellectually lazy at best. On top of all that, consider that the province has the quickest aging population in all of North America. There aren't going to be as many around in the near future. Our population will be shrinking. So what kind of power consumption will we really need in 10-20 or more years down the road?

6. The argument we aren't weaning ourselves off fossil fuel for power is almost laughable. Ok, it is laughable. The amount of oil used to power Holyrood in a year amounts to four days of production from the oil platforms off our coast. In other words, you foolish hypocrites, you can't beat your chest for becoming 98% green when you're harvesting every bit of black grease you can get off the ocean floor, and will until there isn't one drop left. In any case, wind, solar and tidal are options that would ease our conscience about exporting oil everywhere else in the world.

Be aware of the big lies that the government and Nalcor have been putting out there, and which are essentially being repeated in the media without question. Beware of the big lie.

Where we're at

There is no question that Newfoundland and Labrador is in the "hurt locker". A self-inflicted hurt locker. During the period of 2004-2014 oil gave the province a sense of invincibility - fueled by the nationalist oratory of then Premier Danny Williams. He had massive, overwhelming public support. The kind of support I often refer to as the pied piper of Newfoundland leading the children into the sea. Over the last five years I have done my best through the open waves and the courts to stop the damage his agenda was going to inflict, but to no avail - a personal failure on my part. The people here simply, and blindly followed him into the sea. Now they are underwater. The betrayal will last as long as this place lasts.

But where does that leave us now? Now that the oil-fueled potential has been frittered away ($25 billion in 10 years), and the normal revenue brought in by taxation, etc has been similarly blown ( about $60 billion in 10 years), the window for making Newfoundland and Labrador a place we can all live in with ease has gone. That leaves us with the aftermath. Those of us that remain. People like David Cochrane of the CBC, who regularly trounced those of us that tried to stop the government from  building the suicidal Muskrat Falls project, will probably leave. Cochrane was gone off to Ottawa's CBC office before the ink dried on the Liberals devastating budget. Expect to see a lot more of that.

Here is where we are at today. The government is borrowing another $3 billion this year - for normal operations and capital projects ($1.3 billion of it going to Muskrat Falls). In addition, they are looking at borrowing similar amounts for at least the next five years. If that transpires as planned, Newfoundland and Labrador will have a gross debt of $33 billion by the end of 2021. Now, that's not the end of it, because that doesn't include Nalcor's debt. Nalcor right now owes just north of $10 billion. That puts the gross debt at $43 billion. That's not the end of it either. Our population was already on the downswing as the fastest aging demographic in North America. That means a lot less people to pay for this new massive debt.

That's not the end of it either though. Within the next three months the Quebec Superior Court is about to hand down a decision on who has the right to operate the Upper Churchill and how much power Nalcor is entitled to take from it. We are going to lose on both counts. Not because it's a Quebec court as all the nationalistic types will proclaim. No, the language of the Power Contract is very clear - very clear. This is simply another Williams/Nalcor bid at the high stakes gambling department with our money, and, as I've said in Court and on public media, we will lose. What happens when we lose? Our Water Management Agreement, which is basically a hostile takeover of the Upper Churchill, will be null and void. It will be unlawful to "bank" power. Without that provision, and the provision to force the Upper Churchill to run at full capacity, Muskrat Falls can only operate at 20% firm capacity. That means in order to break even power bills in this province will have to triple at  a minimum.

Think that's far fetched? Well it isn't. The math has already been done. That math by the way used the original cost figures for Muskrat Falls, and as we know those figures have grown from $5 billion to now over $9 billion including construction interest on the debt.

The point is that we are now on the edge of insolvency - bankruptcy. The same people who called us nay-sayers and alarmists, even dangerous zealots, will say this statement is similarly untrue. However, they were wrong then and they would be wrong now. At some point in time people must look past the spin and recognize the people who have been right all along. Not with parades, but with their ears and minds. Realize that a combined debt of $43 billion renders a population of 500,000 (or less) bankrupt. In default. That is the truth. You won't hear it come from the lips of the lying politicians in Confederation building, but do the math for yourself. Read the annual budget estimates. Understand the debt we have accumulated already and the debt the government intends to accumulate. Understand that failing to stop Muskrat Falls, with serious damage already caused by it, is a death sentence to the province. That is the fact and the truth.

The Liberals are already spinning in the press that we would default on the federal loan guarantee if we stopped the project. So be it. At this point defaulting on the federal loan guarantee is preferable to provincial bankruptcy. That being said, how many of you believe a Liberal government in Ottawa, who owns all seven seats in Newfoundland and Labrador, and which contains a Newfoundlander as Trudeau's right hand woman (Judy Foote) would place this province into a position of default? With a Liberal provincial government? It is do or die time Newfoundland and Labrador. We either stop the bleeding with emergency surgery or we die on the operating table. It is that simple and clear cut. Recovering from our current debt is almost impossible for a population this small to sustain. Recovering from the combined debt of Muskrat Falls and government operations over the next 5 years is impossible - period. Don't be fooled by what the politicians say about it. Don't be led by any more pied pipers. Do the math. Stand up. Be counted. Don't be a sheep to the slaughter. Fight. Be a fighting Newfoundlander and Labradorian.

Nalcor Steals From the Upper Churchill 2015

Now you won't find a single Newfoundlander who thinks taking power from the Upper Churchill dam is stealing. It's just taking our power that the Quebecers are stealing from us under the guise of the Power Contract 1969. Simple as that. Well, it's not as simple as that. Emotionally perhaps, but legally not so much.

For some reason, as yet unexplained to the public of this province, Nalcor, via its wholly owned subsidiary Newfoundland and Labrador Hydro, and its majority controlled CFLCo, has stolen power from the Upper Churchill. A lot of power. Way more power than it is allowed under the Power Contract. Yes, the contract the Supreme Court of Canada has already found is binding (1984 Reference Question).

For fiscal 2014, 2014 sales from the Upper Churchill to Newfoundland and Labrador Power (NLH) were $6, 067,000.00 according to CFLCo's financial statements. However, and it's a huge however, in fiscal 2015 NHL was sold $43,610,000.00 worth of power from the Upper Churchill representing almost 30% of CFLCo's sales for that year. According to the Power Contract, NLH can only buy about 6% of the power generated at the Upper Churchill. That means that NLH took 500% more power in 2015 than it was lawful to do. In other words, they stole it.

Correspondingly, Nalcor lost $51 million in oil sales revenue on the year. Was that massive power grab of Upper Churchill power an attempt to make its balance sheet look better than the $19 million over all it did lose? Hard to say, and legally speaking makes no difference. The bottom line is Nalcor, presumably with the approval of the Davis PC government, stole $37,000,000.00 in power (once you subtract the ordinary $6,067,000 from the gross sales for 2015 of $43,610,000.00.

What does that mean for us? It means the taxpayer/ratepayer is now liable for that in damages - plus interest, plus costs, including special costs. It also means our provincial utility is stealing. Shocking as it may seem, and yet to be discussed in the public for some reason, the quiet release of Nalcor's 2015 Business and Financial Report here says it all. 

Dumping Canadian Hydro Power in the US Market

Electrical power exports from Canada to the the United States have traditionally made sense. The Americans had a seemingly endless need for more and more power that they couldn't keep pace with from their own resources. Conversely, Canada had massive hydroelectric sites - tapped and untapped. However, that hydro power relationship no longer makes economic sense. It can be argued that hydro is severely damaging environmentally, and that far better alternatives like solar, wind and wave make far more environmental sense. However, the argument has never been made that Canadian electrical power sales, created primarily by hydro dams, actually break US law.

Consider the following quote from the US Department of Trade:

 "What is Dumping?

Dumping occurs when a foreign producer sells a product in the United States at a price below that producer's sales price in the country of origin ("home market"), or ar a price that is lower than the cost of production. The difference between the price (or cost) in the foreign market and the price in the US market is called the dumping margin."

IN ADDITION:

"Countervailing duties. United States law provides that a countervailing duty (CVD) be applied to imports when a foreign government, person or organization is providing a subsidy conferring an economic benefit to a "class of kind" of merchandise exported to the US. Actionable subsidies may include benefits conferred directly on exports or benefits that indirectly subsidize exports."

So, the question is: Do Newfoundland and Labrador hydroelectric power sales to the United States constitute "dumping?". The answer is yes.

The cost of producing Muskrat Falls electrical power and transmitting it to the Soldier's Pond transit station for export, was estimated at 23.9 cents per kwh way back in 2012 when the project was at the DG2 process and he price was in the vicinity of $6 billion (see here). Since then the project is now estimated to be over $2 billion more that originally forecast, and we have yet to see another "cost per kwh hour to Soldier's Pond" estimate. Furthermore, Nalcor must pay transmission fees to Emera of Nova Scotia to use the Maritime Link sub sea cable in order to transmit that power to Nova Scotia and then to the US. It must also pay transmission fees to New Brunswick for using its lines. It becomes very obvious that the cost to produce Muskrat Falls hydro power is atmospherically high.

Then consider that the entire project is being built by a Crown Corporation which is solely owned and subsidized by the Newfoundland and Labrador government, and the same government is investing over $3 billion directly into its construction. Then there is the issue of the Canadian government's $5 billion dollar loan guarantee to build the project, which reduced Nalcor's 50 year bond costs to below 3%. All in all, this project is a state owned and heavily subsidized venture. That in itself isn't a problem, but when you want to take that same power and export it to the United States it becomes one.

In the US 69% of plants are owned privately, but public ownership controls 73% of production - in other words there are a lot of small plants, but the big ones are owned by governments - primarily the US federal government. That is one aspect, but here is another - natural gas generated electrical power in the US is 5 times that of local hydro power (see here). In other words, natural gas generated electricity is a dominant player on the domestic US market.

Is Canadian hydro power sold into the United States at a loss? Take Muskrat Falls power as a case in point. As stated earlier, the conservative estimate of a kwh of Muskrat Falls power to the export point in Newfoundland was 23.9 cents at DG2 - it's much higher now. Now consider that the average price per kwh in the US for 2015 was about 2.5 to 3 cents a kwh (see here). That means Newfoundland and Labrador would be exporting power for sale into the US at about an 800% loss. Clearly, that is dumping in the extreme. In fact, and more importantly, it could cause US producers of natural gas to be less competitive in their own market by artificially depressing the market, and restricting their profits to expand - ditto for solar power or other such production.

Combine the obvious dumping of this province's power with the provincial and federal subsidies used to create it, and it seems like a very strong case of dumping could be made with the US Treasury and Commerce Department. Will it ever come to that? Frankly, I'm surprised it hasn't yet. It seems logical that US private producers would resent Canadian power being dumped on their market.

The Muskrat Liberals

There are two kinds of Liberals in Newfoundland and Labrador right now - those that oppose the project (as was the case for the party officially til Dwight Ball took over), and those that support it. Basically, it boils down to business interests vs the peoples interest.

As much as Ball appears to be a flip-flopper of gargantuan proportions, as much as he appears to be deceiving the public even pre-dating his election, Ball is firmly in the "pro-business" camp on Muskrat Falls. Oh ya, remember that group of pro-business backers of Muskrat Falls :"I believe in the power of NL.ca ? Remember them? Created by Peter Woodward in Labrador and Leo Power on the Island. Yep, they believed in it so much that they took the website down and erased all evidence of it ever existing - including the list of names on it that supported the project so publicly. But, you can still find a page or two of it here thanks to Peter Whittle of Polemic & Paradox.

Bottom line is that it existed, and the people who created it still exist to. Take Nancy O'Connor, Director of Communications, Office of the Premier. Her profile is here. You will notice that she worked on Cathy Bennett's Liberal leadership campaign while she did her 6 month contract for Bennett's company. You'll also notice  in her biography there is no mention that she worked for Nalcor on the PR campaign for Muskrat Falls. In fact, her firm was hired by the business crowd to create the "I believe in the power of NL" website and PR campaign. At the time I did a blog on Ms. Connor's involvement with the campaign and Nalcor (the blog). In 2015 she was given the cushy job of Senior Communications Officer to Ball - on the peoples' payroll. After the Liberals won she got her new job as "Director  of Communication".

It's a telling sign of Ball's, and the Liberals pro-business voice, that this person was hired on even before the election. It's also a telling sign she worked for Cathy Bennett's leadership campaign first. Bennett of course has been a huge supporter of Muskrat Falls from the beginning, and was of course Chairman of Nalcor's board of directors. Then of course you have Al Hawkins, who sat on Nalcor's board as well, and was named by Ball as Minister of Transportation and Works. Not to be forgotten in all this is Shioban Coady, now Minister of Natural Resources, and theoretically in charge of the Muskrat Falls project. I did a blog on Coady before all this (here) . I would just add in the recent campaign she ran as "President of Novocom Inc" "an international resource procurement company with partners in Hong Kong, Australia and Singapore". (her Liberal bio) That's all fine and dandy, and sounds very impressive... until you find out that in fact Novocom is simply a numbered company run out of her very modest home in St. John's, which lists her husband as the only director, and is in fact "not in good standing" with the province's corporate registry. Talk about trying to pad your resume...

In any case, Coady was associated with Alderon Mining in Labrador. Remember them? Those are the folks that Danny Williams was with, joined their board as a "strategic adviser", etc. They were all the rage and now they are a penny stock (as predicted here). Coady belonged to the pro-Muskrat Falls business group "I believe in the power of NL". She's been a strong advocate for it from the get go. So have all her friends.

And now, shock of all shocks, Coady won't put the closure of the Muskrat Falls project as an option for dealing with the massive debt crisis in this province. Another shocker - Ball won't end it now either. Bennett, who is in charge of the province's destroyed finances, won't float the idea either. In fact, Ball and Coady gave us this disingenuous excuse of an "investigation" into the Muskrat Falls project to "open the books" on it. What a load. The company doing the "investigation" had contracts with Nalcor and the government even before it was named to do the study. In a supreme twist of irony, the same company that was in charge of creating the "independent oversight" process of the Muskrat Falls project is now doing the review of the project - one would assume that the oversight process would be a part of that. I contacted the company and asked for comment regarding the conflict of interest inherent in working for two entities that you're essentially doing a review of. There spokesman at first promised a response, and then, shocks of shocks, disappeared never to be heard from again.  You cannot make this stuff up. This is what passes for politicians, policy and intelligence amongst Newfoundland and Labrador's "political elite" (b'ys, I say those two words with the sharpest tongue in cheek you can possibly imagine).

To put it bluntly, don't expect anything other than a white wash of Muskrat Falls by Dwight Ball and the Liberals. The Muskrat Liberals are bent on finishing Danny Williams' project. They don't care what it costs us. They don't care how many people lose permanent jobs in the public sector to help stabilize the budget. They don't care what programs they have to cut, or how much they will have to increase person taxes and fees. They don't care. The only thing they do care about is bullshitting you enough so that you believe they do care, and that they are People-Liberals. They aren't. They're Muskrat Liberals. To the core. It will come back on them just as it did for the PC's - perhaps worse. The first sign of their betrayal will be the next budget. Watch and see how many people fall before the ax, but Nalcor will remain untouched. That should make Ed Martin and Gilbert Bennett happy. Those two Danny appointments. Those 2 PC appointments. Oh wait, they're still there. I guess they're Liberals now. Muskrat Liberals.

The Newfoundland Nightmare

Newfoundland's economic problems are all structural, and now those problems are all coming home to roost. The structural part is not new. In fact, they trace back to the "merchant" days here - which in many ways have not changed. A small group of select families have controlled everything from insurance to resources, and everything in between for centuries here. Looking through that prism it is easy to see "modern" Newfoundland and Labrador's key structural problems.

Everything that is worth anything is controlled privately. Now, pure economists or extreme capitalists will argue that isn't a structural problem, but rather the way it ought to be. However, a province with such a small population must have a revenue stream greater than more populated provinces in order to adequately support its operations. In Newfoundland's case, successive governments have sold that revenue generating capacity away. The province is at the point where its major streams of Crown corporation revenue, other than oil royalties, rests really in liquor and gaming, and to some extent Nalcor Energy/NL Hydro.

It is quite easy to see why NL Hydro and Nalcor are still in government hands. Firstly, NL Hydro is not a money maker. Its primary function is to generate power - not retail it (where the money is). In other words, taxpayers pay for the generation of power, and NL Power (Fortis Corp) sell the power at retail prices while avoiding the costly problem of infrastructure to produce it. It's a win-win for NL Power, and a lose-lose for the average citizen.

Another industry which should be nationalized, or never privatized as it was, includes the insurance industry. The provincial government sees almost nothing of the car insurance, house insurance industry revenues that regenerate annually.

Telecommunications is another example. There is no provincial phone/cable company that could generate annualized revenue for provincial coffers.

Now all this may sound a little socialist in its undertones, but the bottom line is all the worth while wealth of the province has been transferred from the public's hands. That means there is not sufficient cash flow returning to the provincial coffers to adequately fund a modern quality of life. This becomes glaringly obvious when the one gravy train,oil, falls on its face. That is exactly where we are at today, and where we keep finding ourselves in the future. Structurally there can be no other result.

However, it isn't just the "little" people that get hurt in this cannibalistic economy. Small and medium sized businesses, municipal governments, non-governmental actors, and even the provincial government suffer as well. Eventually the loss of revenue from the local economy results in: less consumption of goods and services; higher government taxes; and uneven business cycles. That makes economic activity and necessary governmental wealth unstable and inadequate. And all that combined puts Newfoundland and Labrador's economic and social existence on thin ice - which in turn results in out migration, which in turn makes the core problems even worse.

Eventually all this must come to a head and fail. I believe we are almost at this point now. With an accumulated deficit now reaching almost 9 billion dollars, and structural budget deficits of at least a billion dollars a year for the foreseeable future, there is no answer for this province's nightmare. Raising taxes further will kill whatever consumption economy is left here, while failing to do so will kill governmental activity. Cutting civil service jobs may make governmental activity somewhat more efficient, but it will also severely damage the one "stable" economic driver for consumption. In short, the economic elites in the province have managed to paint all of us into the proverbial corner. There are no immediate solutions left. Nationalization of key industries like power, cable and insurance would provide some long term stability, but would require putting out money now that the province doesn't have. All in all it's a nightmare - a Newfoundland nightmare to be sure.  

Nalcor Exposed

What's the old saying...people lie, the evidence doesn't? Welcome to the world of Nalcor, our illustrious provincially-owned energy company. And, the truth, or the evidence if you will, isn't pretty. If you want to glimpse that evidence yourself you can see it here in Nalcor's Report.

Here's the bottom-line:

1.  Nalcor is in default of the Federal Loan Guarantee;
2.  Nalcor's corporate debt is now over $10 billion;
3.  Nalcor already owes Emera over $300 million in power sales;
4.  Nalcor can't be sold/privatized for at least 38 years; and
5.  Nalcor can't build Gull Island for at least 38 years.

All these things might come as a shock to you, but in this post I'll detail the evidence.

First, Nalcor is in default of the Federal Loan Guarantee (FLG), and in a big way. The FLG requires that Nalcor have established "at all times" a Debt Reserve Fund (commonly known as "sinking funds") to, at "a minimum" cover interest payments for six months on its borrowings for the Muskrat Falls dam and transmission system, the Labrador/Island sub-sea cable link and the Maritime Link. As of December 31, 2014, or a few months ago, Nalcor had zero dollars in any sinking fund for the money borrowed to fund any of these projects. In fact, Nalcor has borrowed the full maximum $5 billion authorized by the FLG to fund the projects, and did so in 2013. So, in fact, Nalcor has been in default of the FLG for almost two years.

 Nalcor's long term debt now stands at $6,248,900,000. That's up from $1,222,200,000 at the beginning of 2013. Nalcor's total liabilities, as of December 31, 2014 stood at a mind-numbing $10.6 billion. $1.5 billion of that is money the Government has directly invested in Nalcor from the general revenue of the Province. $6.2 billion is long term debt. The rest is deferred payments, power/money owed to Emera on account of the Maritime Link, and so on. To cover all these liabilities, especially the long-term debt, we have sinking funds totaling  $267 million. Now, picture this, Nalcor actually withdrew $126.5 million from its sinking funds in 2014. In other words, Nalcor took money from its own funds dedicated to repaying its debt...instead of adding to it. In a further note, Nalcor has decided to refinance, rather than pay off, $425 million of Hydro's long-term debt when it comes due shortly.

Adding to Nalcor's debt problems is the ongoing commitment to Emera for the Maritime Link. Contrary to what many people may think, that 20% of "free" power to Emera has already kicked in. Nalcor is showing that as of December 31, 2014, it owed Emera $330 million dollars for "deferred energy sales", which means Nalcor owes Emera $330 million worth of power from the date the Maritime Link began construction - which means Emera is collecting that 20% in advance - even during construction. At that pace, Nalcor will owe Emera somewhere near $1 billion in free power by the time the power is switched on at Muskrat Falls. Which, of course, means Nalcor will have to dedicate the Maritime Link to solely giving free power to Emera for several years just to pay off the "banked up" "deferred power sales" it owes Emera on completion of the project.

In another strange, and definitely not publicized twist, Nalcor will not be able to build Gull Island for at least 35 years. The FLG states:

"4.8A Additional Debt: No additional debt may be incurred by the Borrowers during the term of the FLG (other than a $10 million line of credit, and additional debt to finish Muskrat Falls, the Island link, and the Maritime Link)

The there is the stipulation that Nalcor can not be sold during the term of the FLG:

"4.11 Change of Control:   ...There shall be no sale or change of control of Nalcor."

In other words, the taxpayers will remain on the hook for all Nalcor's debt until at least the end of the FLG - which is 38 years from now. No option. Stuck.

Combine all these financial facts on Nalcor with the state of our provincial finances, and it's evident this Province is financially...doomed. The gross provincial debt is now over $13 billion, and the government is projecting $5 billion more in borrowing over the next five years. That $5 billion is on the low side unless the government chops about 20-25% of its annual expenses - which is almost impossible in the near term. Impossible because those kind of cuts would take the Province from its current recession into a depression. With 30% of pay cheques in Newfoundland and Labrador being issued by the government, well, it's kind of obvious the impact those cuts would have.

Unfortunately, if Muskrat Falls is allowed to continue and the government remains on its current spending levels (or even close to them) this place is doomed to financial collapse in the not too distant future. It's simple math. All of this is of course predicated on Muskrat Falls coming in on budget and time. Should those two come off the rails, and many knowledgeable people have argued that has already happened, then that collapse is coming even sooner. Either way, it's coming. Look to 2016, after the provincial election, and the first budget to see just how bad it will be. Nalcor, like its birth parent, has acted in such a way as to sacrifice the economic well being of the Province and its people. Irresponsible, unaccountable, gross negligence.  

Muskrat Falls Injunction Update

Over the last few weeks, a number of people have contacted me through social media and other means to find out what's happening with the Muskrat Falls injunction application. So here it is.

After the Appeal Court of Newfoundland overturned all of Justice Butler's decisions on the first injunction application, and imposed an unprecedented ban on her for having anything to do with any future cases I may be involved in, I resubmitted a new Statement of Claim and injunction application. The first Statement of Claim was based too much on ethical principles and not enough on legal principles in a sense. I can't go further than that, because the issue of costs I was awarded has yet to be settled with the Government and Nalcor.

The new Statement of Claim focuses on one primary theme - unlawful action by the Government, Nalcor, and CFLCO in the development and building of Muskrat Falls. Specifically, the Government committed the unlawful tort of "unlawful interference with economic relations" (description) . Essentially, one party, by its actions against a second party, knowingly causes harm to a third party. One Party = the provincial government. Second Party = Hydro-Quebec. Third Party= taxpayers/ratepayers. The adage goes that the Government knows the water management agreement imposed on CFLCO breaches the Power Contract, which gives Quebec sole access to the power of the Upper Churchill until 2041 (except a small recall). By proceeding with it, and building Muskrat Falls based on it, the government has violated Hydro-Quebec's rights. Hydro-Quebec is now suing us for that breach. We, the taxpayers and ratepayers, will be responsible for the damages awarded and the costs of a useless dam that can only operate at 20% firm capacity without the water management agreement. Hence, the unlawful interference with our economic relations.

In addition, I have included the unlawful treatment of the Nunatukavut and Nunatsiavut governments. The Government is bound by a land claims agreement with the Nunatsiavut that it has broken, and is bound to the Nunatukavut government by constitutional requirements for consultation and accommodation. These three issues of lawfulness have left taxpayers in a position of risk, and all three matters are before the Courts now as a result. To put it simply, my new suit focuses on protecting our economic rights against unlawful government action. It's what is commonly referred to as a "taxpayers lawsuit".

In order to prosecute a "taxpayers lawsuit" I have to qualify for "public interest standing". A hearing date was set to determine public interest standing with Justice Stack presiding over it. However, Justice Stack had already presided over the permanent injunction application granted to Nalcor against the Nunatukavut so I requested he recuse (step down) himself from hearing the matter. The day before the recusal issue was to be heard in Court, the new Chief Justice of the Trial Division named Justice Stack to be Chair of the Independent Boundaries Commission to reduce our seats in the House of Assembly from 48 to 40. I was notified in writing by the Court that, as a result, he would not be hearing the matter - or any matters.

A date still exists on the books for March, so I am hoping a new Justice can be named for that date, and the matter of public interest standing can be successfully determined, so the important issue of an injunction stopping the development of Muskrat Falls can be heard and implemented. This whole process started in November, 2012, and here's hoping it will come to a conclusion within the next 4-6 months. That is my update.

Cathy Bennett's Smoke and Mirrors

There is something troubling about a politician that feigns to represent change, but yet defends their own self-interest as if it were that of the people. Cathy Bennett fits that description. For those that don't know her, Bennett's biography states she owns eight McDonald's franchises in the greater St. John's area, a partnership in Sunny Corner Enterprises in New Brunswick, and a partnership in Diamond Global International Recruitment Newfoundland and Labrador. She is also listed as having served, or serving, on a number of boards of corporations  - including chairing Nalcor Energy's board of directors. At first glance her CV seems to speak to a woman dedicated to the business of business. That's fine. However, Bennett has now entered elected politics here, and that's the business of the people.

Conflicts between her corporate held beliefs, and interests, and that of her position as a representative of the people in the province have been emerging for some time now. It began when she ran for the leadership of the Liberal Party here. As a Liberal supporter, I attended the first leadership debate in Gander. During the debate she reacted negatively to a proposal by one contender to implement a "fat tax" on fast food restaurants. It was quickly pointed out that she might be against such a proposal due to her McDonalds businesses. She was roundly assailed by the crowd when she attempted to defend the Muskrat Falls project. The feeling was that her association with Nalcor's board, and her role in advancing the project may colour her view - to put it politely.

She didn't win the leadership, but went on to run in a by-election in Virginia Waters district - which she won by 40 votes. Now, before she is even sworn in, Bennett finds her business interests in the spot light. Last week, Bennett came on live radio in the province to promote Muskrat Falls as the best thing since sliced bread, and a project that could not be stopped. There is a problem with that though. She was asked by the host if she had any business interests intertwined with the Muskrat Falls project. She said no. But that isn't quite the whole story. Bennett is partnered up with Sunny Corner Enterprises out of New Brunswick. Sunny Brook has bid and won seven contracts in 2013 with Nalcor Energy, including the lucrative ten year "Hydraulic Gates and Embedded Parts Program for Churchill Falls." http://www.nalcorenergy.com/awarded-tenders.asp

So, when Bennett speaks about Muskrat Falls, Nalcor, the Upper Churchill, and the like, it helps to know what her business interests are here. Incidentally, Sunny Corner Enterprises also has a large contract to supply the New Millennium mining project in Labrador during its construction - a mine that will need power from Muskrat Falls.

Getting past Bennett's obvious interests in Nalcor, etc, and into the scandal that's striking at her other enterprise - McDonalds. The hiring of foreign temporary workers by McDonalds, and their treatment/working conditions has made national headlines. The abuse of the program being a central issue. CBC Newfoundland and Labrador interviewed Cathy Bennett on the local side, given her ownership of the franchises here. During the interview, she is quoted as saying:

"I think it's important to remember this program is about people. I'm very comfortable that our company, and we as a company, have acted ethically and honestly as an employer... We always put people first and will continue to employ Newfoundland and Labradorians first."

 http://www.cbc.ca/news/canada/newfoundland-labrador/cathy-bennett-not-worried-about-mcdonald-s-foreign-workers-1.2622311

In a twist to this story, that was not uncovered by the media, Diamond Global Recruiting lists as one of its clients McDonald Restaurants - meaning Bennett is involved with the recruitment and use of foreign temporary workers.
http://www.diamondglobal.ca/

That changes things somewhat. First off, Bennett hasn't disclosed this according to the media interviews I've read and listened to. Secondly, Bennett's company may have a far deeper role in the temporary workers scandal than has come to light yet. What is clear, as in the other business relationships outlined here, is that Bennett routinely vigorously defends business projects and practices which she has a direct interest in, without disclosing the nature of her business interests on the topic.

That's troublesome. It may be okay to spin things like that in the business world to a degree, but when it comes to the world of public office, well that's different. In the public sphere a representative is supposed to be putting the interests of the public first, and declaring conflicts of interest. Has Bennett placed her businesses in a blind trust? Not that I've heard or seen. She strikes me not as something new, but rather something old. Sure she is new to the business club, sort of, but her actions appear to reflect the old. The Liberal Party needs to move into 2015 with a vision of fundamental change for the province. Not a change of actors, and not just a few "motherhood" statements, but real fundamental change. Accepting candidates like Bennett hurt, at the least, the perception that we can expect that type of change from the Liberals in 2015. That 's troubling. That needs to change dramatically before 2015. That change needs to be more than just words. It needs to be action. Creating a star candidate, or any kind of candidate, out of people who conduct themselves like Ms. Bennett has so far is damaging to that cause.