An eventful, and somewhat predictable week begins the not-so-unofficial hydro war between Newfoundland and Quebec. You could say NALCOR and Hydro Quebec, but the reality is the massive dollars involved are targeted primarily for public coffers.
Things started with the disclosure that Newfoundland, in partnership with Nova Scotia, had officially requested P3 funding for an underwater electrical cable linking Labrador, Newfoundland, and Nova Scotia. While we in the general public have not heard the "deal" that obviously exists between Newfoundland and Nova Scotia, you can bet there is one. The Quebec government, Premier no less, wrote an official request to the Prime Minister to disallow such funding based on the presumption that it was an unfair subsidy to Newfoundland's hydro ambitions. By doing so Quebec not only "outed" Newfoundland and Nova Scotia's appeal for public funds, but also, and likely more importantly, they set the stage for the ongoing saga lovingy known as "the betrayal of Quebec".
This theme Quebec brings to the fore every time they feel their interests are threatened. Essentially it is a warning to the federal government that if such and such were to go through, well, they couldn't be held responsible for the reaction amongst the people of Quebec. Read here: revival of the seperatist movement and Quebec's march to "rightful" independance. We have seen this movie so many times now that the Canadian people know it by heart. That does not mean however that Canadians are not concerned about Quebec actually attempting to seperate. They just are no longer prepared to sign over whatever Quebec wishes to keep it in place. Certainly attitudes in this regard changed with the defeat of the Meech Lake Accord and the subsequent Charlottown Accord, and likely peaked with Jean Chretien's bold statement to the Quebec government that if Canada is divisable then so is Quebec.
Apparently, despite this strengthening of the collective Canadian will, some Quebec politicians believe that setting the old background up prior to the main match is still a comfortable strategy. Well, they may as well save their breath. The rules of engagement have changed, and Newfoundland is not going to back down on the Upper or Lower Churchill Falls, and nor should they.
Premier Danny Williams must reconvene the Newfoundland House of Assembly and pass the necessary legislation to ban hydro sales to any entity that does not recognize and practise English as it's primary language. Insert the notwithstanding clause to avoid any court action by the Quebec or federal government. Nalcor will have no choice but to cease selling to Hydro Quebec as to do otherwise would then break the law. The Power Contract of 1969 would still be alive, but it would be against the law to fufill it in other words. Why would the Premier wait, and in some ways dance around with Quebec and others on this issue. It is too crucial to Newfoundland's survival. He certainly has the people on his side, and a vast ocean of political capital to draw on should he need it. Quebec, and to some degree Ottawa, need to understand that Newfoundland is not begging for pennies. It is asserting it's rights over it's own resources, and no soft pedalled deal can come in between the way of that right. We can talk, but only after we have regained control over our own vital natural resource.
If you want to fight the Quebec government, then you must out do them at their own game. Do not try and be gentalmanly as they will see that as weakness. Do not compromise until you have achieved the primary goal as they will see that weakness. Do not lose sight of your reasons for fighting this injustice, as they will see that as opportunity. There is no longer any need to try and partner with Quebec. If you question that, then you should have been watching the news this week. Make no mistake, Quebec's strategic plan is to keep the 1969 contract until it's expiry date. In the mean time they will construct their own facilities so they are prepared to lose that power at that time. They do not have a long term interest in Newfoundland, and they know their time in Labrador is limited. They obviously no not care one iota how their policies have affected the people of Newfoundland - not in the least. Literally could not care less. We must meet this with our own strength, and with this knowledge in mind. As the Premier of Nova Scotia stated today: "Quebec does not have a veto." Perhaps the bigger question should have been: "Whatever gave them the idea they did?" In any case, let the games begin!
Showing posts with label Notwithstanding clause. Show all posts
Showing posts with label Notwithstanding clause. Show all posts
Thursday, August 19, 2010
Monday, May 24, 2010
Quebec - It's time for a new deal for Newfoundland
Hydro Quebec, the two words that have become synonimis with Newfoundlander's sense of their place in Canada. Although I personally believe that is not an accurate statement of the relationship, it is easy to understand why such feelings have developed over the years.
You have to go back to the early days. The devisive debates and then the vote on joining Confederation. A Premier desperate to prove to Newfoundlander's the wisdom of that decision. A province that was economically and industrially empoverished in comparison to the rest of the country. Newfoundland gave a monopoly, not unlike the monopoly Hudson Bay Company once enjoyed to develop the great unknown wealth of Canada, to Brinco - a private consortium to develop Newfoundland and Labrador's water and power potential. While the government in St John's saw the potential to begin the industrialization of Newfoundland, it is clear that Brinco was seeking only to convert the monopoly to profit.
The development of the Upper Churchill, to provide hydroelectric power, became the sole focus of Brinco, and Hydro Quebec it's sole partner. No other potential business partners were available to finance the project and, unlike say Hibernia, the federal government did not step forward with any loan guarantees. That left Brinco at the mercy of Hydro Quebec, and of course Newfoundland at the mercy of Brinco. At a time when Newfoundland needed a hand up to join the more industrialized ranks of provinces, Hydro Quebec turned on her.
The nationalistic Quebec government, using Hydro Quebec as it's instrument of choice, dictated terms to Brinco. Hydro Quebec even came back after the intial agreement was signed and added further prejudicial clauses that essentially left the people of Newfoundland without the benefit of their own resources. The basic hi-lites of the deal being: an extremely low price for the power - even by 1969 standards; automatic renewal clause of the agreement in 2016 that does not even require further signatures; a 37.5% stake in the Corporation that runs the Upper Churchill; construction of almost all the equipment used in the project done in Quebec; transmission lines designed to meet Hydro Quebec's specifications; a 99 year renewable lease on the Upper Churchill; and so it goes. In other words, if you want us to use our money, our loan guarantees, and you want us to buy the power we will take everything. The kind of deal you find abhorant if it were conducted between separate countries, let alone fellow provinces. The irony is that even if Newfoundland chooses not to renew the deal in 2041, Hydro Quebec still gets 37.5% of the profit from any new deal Newfoundland may find.
If that didn't make your blood boil consider this: Quebec has earned approximatley $22 billion on the deal to date. Newfounland has seen $1 billion. Consider that Newfoundland's current debt is $11 billion dollars. If Newfounland would have been even 50 - 50 partners with Hydro Quebec on the Upper Churchill, and recieved half of that 22 billion, Newfoundland would be debt free today. Conversely, the Upper Churchill agreement made Hydro Quebec into the player it is today - doubling its corporate size.
Several Premiers have since tried to undo this "deal with the devil" in the Courts. The lawyers of the day apparently ensured they had every angle taken care of - including a clause stopping Newfoundland from raising taxes on the power until atleast 2016. And, just to cover all their bases, the Quebec government has filed a complaint over the border between itself and Labrador which, if successful, would see Newfoundland lose the Upper Churchill - plant and all. Oh brotherly love.
The answer lies in politics. During the sixties and seventies Quebec sought to become "masters in their own house". Instruments like Hydro Quebec assisted in that effort, but it was politics that allowed the instruments to be deployed. Quebecers instinctively, and through substantial practise, have mastered the art of wedge politics within Canada. Their biggest success in this regard is their ability to not have those same politics used against them. One of the only successful attempts to do so was the recent failure of Hydro Quebec to take over New Brunswick's power utility - a move that some might say eerily resembles the nationalistic expansion policies of Gazprom in Russia.
If the answer lies in politics, then the silver bullet lies in the Constitution. The Government of Newfoundland might as well forget pursuing the Americans for help, as they will likely turn the whole matter on its head for their economic advantage - if they even choose to get involved, which is unlikely. Newfoundland's best hope lies in the Constitution, and more specifically the "notwithstanding clause". Both documents were not even envisioned in 1969. The not withstanding clause allows a province to override legislation, or create legislation, that is within its jurisdiction, but contrary to certain constitutional principles. Ordinarily, I would not advise, nor approve of such a measure. However, the Government of Quebec, as represented by Hydro Quebec, has stepped way over the line in it's treatment of Newfoundland, and by association the good people of Newfoundland and Labrador.
You have to go back to the early days. The devisive debates and then the vote on joining Confederation. A Premier desperate to prove to Newfoundlander's the wisdom of that decision. A province that was economically and industrially empoverished in comparison to the rest of the country. Newfoundland gave a monopoly, not unlike the monopoly Hudson Bay Company once enjoyed to develop the great unknown wealth of Canada, to Brinco - a private consortium to develop Newfoundland and Labrador's water and power potential. While the government in St John's saw the potential to begin the industrialization of Newfoundland, it is clear that Brinco was seeking only to convert the monopoly to profit.
The development of the Upper Churchill, to provide hydroelectric power, became the sole focus of Brinco, and Hydro Quebec it's sole partner. No other potential business partners were available to finance the project and, unlike say Hibernia, the federal government did not step forward with any loan guarantees. That left Brinco at the mercy of Hydro Quebec, and of course Newfoundland at the mercy of Brinco. At a time when Newfoundland needed a hand up to join the more industrialized ranks of provinces, Hydro Quebec turned on her.
The nationalistic Quebec government, using Hydro Quebec as it's instrument of choice, dictated terms to Brinco. Hydro Quebec even came back after the intial agreement was signed and added further prejudicial clauses that essentially left the people of Newfoundland without the benefit of their own resources. The basic hi-lites of the deal being: an extremely low price for the power - even by 1969 standards; automatic renewal clause of the agreement in 2016 that does not even require further signatures; a 37.5% stake in the Corporation that runs the Upper Churchill; construction of almost all the equipment used in the project done in Quebec; transmission lines designed to meet Hydro Quebec's specifications; a 99 year renewable lease on the Upper Churchill; and so it goes. In other words, if you want us to use our money, our loan guarantees, and you want us to buy the power we will take everything. The kind of deal you find abhorant if it were conducted between separate countries, let alone fellow provinces. The irony is that even if Newfoundland chooses not to renew the deal in 2041, Hydro Quebec still gets 37.5% of the profit from any new deal Newfoundland may find.
If that didn't make your blood boil consider this: Quebec has earned approximatley $22 billion on the deal to date. Newfounland has seen $1 billion. Consider that Newfoundland's current debt is $11 billion dollars. If Newfounland would have been even 50 - 50 partners with Hydro Quebec on the Upper Churchill, and recieved half of that 22 billion, Newfoundland would be debt free today. Conversely, the Upper Churchill agreement made Hydro Quebec into the player it is today - doubling its corporate size.
Several Premiers have since tried to undo this "deal with the devil" in the Courts. The lawyers of the day apparently ensured they had every angle taken care of - including a clause stopping Newfoundland from raising taxes on the power until atleast 2016. And, just to cover all their bases, the Quebec government has filed a complaint over the border between itself and Labrador which, if successful, would see Newfoundland lose the Upper Churchill - plant and all. Oh brotherly love.
The answer lies in politics. During the sixties and seventies Quebec sought to become "masters in their own house". Instruments like Hydro Quebec assisted in that effort, but it was politics that allowed the instruments to be deployed. Quebecers instinctively, and through substantial practise, have mastered the art of wedge politics within Canada. Their biggest success in this regard is their ability to not have those same politics used against them. One of the only successful attempts to do so was the recent failure of Hydro Quebec to take over New Brunswick's power utility - a move that some might say eerily resembles the nationalistic expansion policies of Gazprom in Russia.
If the answer lies in politics, then the silver bullet lies in the Constitution. The Government of Newfoundland might as well forget pursuing the Americans for help, as they will likely turn the whole matter on its head for their economic advantage - if they even choose to get involved, which is unlikely. Newfoundland's best hope lies in the Constitution, and more specifically the "notwithstanding clause". Both documents were not even envisioned in 1969. The not withstanding clause allows a province to override legislation, or create legislation, that is within its jurisdiction, but contrary to certain constitutional principles. Ordinarily, I would not advise, nor approve of such a measure. However, the Government of Quebec, as represented by Hydro Quebec, has stepped way over the line in it's treatment of Newfoundland, and by association the good people of Newfoundland and Labrador.
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