Da Legal Stuff...

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Monday, February 18, 2008

UPDATE: Who do you Believe

Back near the start of February I wrote a posting about an apparent conflict between statements made by Natural Resources Minister Kathy Dunderdale and Premier Danny Williams regarding the development of a smelter in Labrador (to take advantage of Lower Churchill power). See post.

That posting contained a copy of a letter I sent to Premier Williams just after the new year asking him to reconcile both positions. Clearly my email to the Premier was bounced back to Minister Dunderdale for response. Just this past week I received a letter from the Minister (copied to the Premier) addressing the issue. It doesn't provide much information but it does attempt to reconcile the two positions. I guess you need to be careful what you ask for.

Here are the contents of the two letters:

My letter to the Premier

January 2, 2008
To: Premier Williams
From: Myles Higgins

I am writing to ask your office for clarification of the statements you have recently made to various forms of media which appear to be in direct conflict with those made previously by your cabinet representative, Ms. Kathy Dunderale.

Recently you have made it very clear that one of the mega-projects you hope to see come to fruition is the development of a smelter in Labrador that would make use of Lower Churchill power and create much needed jobs in the area. I congratulate you for investigating this approach to utilization of the Lower Churchill as I have long been a proponent of using that power to attract industry to the region rather than for export alone.

My concern lies in the fact that when I approached Minister Dunderdale in November of 2006 on behalf of the Newfoundland and Labrador Defense League (NLDL.org) to ask her why your government did not appear to be very proactive in pursuing a smelter for the region she responded to me that a study, conducted by ALCOA, had shown that, “…it was not a viable option and in fact required almost $1 billion of Government financial assistance.” (Please see attached letter “Dunderdale_Nov_2006.doc)

When questioned about the details of these costs Ms. Dunderdale said she could not go into the details of the study but reiterated that a smelter in Labrador , using Lower Churchill power, would cost ALCOA $1 billion more than other alternatives. (Please see attached letter “Higgins.pdf which was sent to me by Judy Beckwith on behalf of Minister Dunderdale in March of 2007)

My concern does not lay with the government’s intention to attract industrial development to Labrador , in fact I applaud the move. My concern lies instead with the apparent conflict in message between your office and that of your Minister.

I am also concerned over which message is the correct one and as I expressed to Ms. Dunderdale at the time, my concern is also what the province might be lacking that would require an expenditure of $1 billion dollars in order to make Lower Churchill spin off development competitive with other options available to large organizations like ALCOA.

Your latest comments on the development of a smelter in the region have once again raised my concerns and additionally, I wonder why this massive expenditure no longer appears to be a factor. Has the cost simply disappeared for some reason, are we to expect that if a smelter is developed it will cost the provincial government a massive expenditure to make it happen, or is there really a drive underway to build a smelter at all or is this simply political posturing of some kind? I sincerely hope the latter is not the case.

Myles Higgins

Kathy Dunderdale's Response:

Dear Mr. Higgins:

I am replying on behalf of the Premier to your letter of January 2, 2008, in which you expressed concern about what you interpreted as conflicting statements regarding the possibility of establishing an aluminum smelting facility in the Province. When I wrote to you in November 2006, I conveyed to you the general outcome of studies done by ALCOA, and referenced the additional cost of almost $1 billion that the company had estimated. That work was done by ALCOA in 2001-2002.

More recent preliminary discussions with other potentially interested parties are placing the issue in a different perspective. The global picture for the aluminum industry has changed considerably in the time since ALCOA did its study, in terms of new capacity, price, and other fators. Aluminum companies, as well as other energy intensive industries, have shown interest during our preliminary discussions with them.

I hope this addresses your concerns, and I trust you will understand that I cannot go into details about current discussions. Please be assured that this government will take every possible measure to ensure that we obtain the absolute best overall balance of benefits for the Province from teh Lower Churchill development, as well as from all other major natural resource developments in the Province.

Yours Sincerely,

Kathy Dunderdale, MHA

c. Premier Danny Williams

Well folks, that's it in a nutshell. I'm not sure that I'm any more informed than when all this began over a year ago.

In her letter Ms. Dunderdale said she was responding to what I had "...interpreted as conflicting statements", I beg to differ. I still believe they were (and still are) conflicting statements but at least her response has clearly shown me two things:

1) When a government doesn't want to do something they have no problem digging up studies and numbers to back up why they shouldn't do it. Even going so far as to accept as gospel the word of a major corporation when it says it needs a billion dollar handout to make a project worthwhile.

2) When the tide of public opinion changes and that same government determines that voters do not support their position, they can just as easily dismiss those studies as outdated or only representing a single point of view and of not having any real importance.

Isn't it odd that as late as March of 2007, less than a year ago, the ALCOA study was used by Ms. Dunderdale as a means of making it clear to myself and others that a smelter was not a likely scenario in Labrador. At that time the study was apparently very pertinent and so secret that even after being asked on several occassions to elaborate the Minister refused to divulge what those costs included.

Now, less than a year later the study quoted has no bearing, new factors and studies have taken precedence, yet the Minister claims she cannot divulge anything about this new information either (and still hasn't provided anything about the old).

We now have two sets of facts that can't be made public, even though one is apparently outdated and useless.

I guess when it comes to politics the more things change the more they stay the same.


NL-ExPatriate said...

Maybe you don't give yourself enough credit. And your inquiries made the govt reassess their position and look elsewhere than ALCOA.

Alot of what is said in the response is also true, the resource economy and market has made a 180 degree turn in the last few years. That is to say if you don't look at markets like Iceland etc.

But hey isn't this what we are all looking for and a turn around from their original position of it can't be done.

We would be in alot better position to turn the screws if they reverse this position.

What we need now is support to try and get the govt bot h fede an prov to follow through.

As long as the feds don't do like they did with the CVRD buyout of INCO being conditional on CVRD keeping 1000 jobs in Toronto. Now CVRD has a long standing policy to keep their jobs close to the resource so it benefits the primaries.

Just one more example of Democratic Discrimination against the minority provinces in favor of vote buying from the majority provinces by the national parties in there never ending election campaign to win the nect election or re-election.

Anonymous said...

Myles - I think the point is that no amount of public opinion is going to change the billion dollar cost overrun that ALCOA or any other producer would have to cover.

Take two things from this: (a) As a Newfoundladner, I find it offensive that you and your friends still think that someone else form somewhere else with some outside pile of money will save us through megaprojects. I thought and hoped we had buried that defeatist attititude twenty years ago.

(b) If an aluminum smelter is viable as your brilliant advocacy suggests, why don't you start one? Or your friends? Or why not a consortium of Newfoundland businesses? Why does it always have to be an outsider?

Patriot said...

Anon 11:59 wrote:

"As a Newfoundladner, I find it offensive that you and your friends still think that someone else form somewhere else with some outside pile of money will save us through megaprojects."

Personally Anon, I find it offensive that you would, A) venture to put into words what me and anyone I know thinks. You don't.

B) I agree that we need to make our own future but mega projects are built by large corporations, not individuals. Do you have billions to build a smelter? OUR contribution to the exercise is to offer reasonably priced, stable and clean power that major industries need, not to look for a handout but a fair shake.

Anonymous said...

You are right Patriot.

Every where else in the world mega projects are built by large corporations with the given area's resources in the area where the resources present themselves. Why can't mega corporations do the same in this province, given the fact this province has the raw resources and a great location situated on shipping routes which are close to both the European and North American markets? Of course, the lobbyists have been so used to getting their own way in Newfoundland and Labrador with influencing our politicians that they didn't expect the people of this province to wake up and demand what the other provinces and other regions of the world were accustomed to getting. We now want our area to be industralized with our resources, so that our people can find work and stay in the place they love.

But in the case of the other provinces of Canada they have been so used to receiving the province of Newfoundland and Labrador's raw natural resources to run large mega projects in their areas, it maddens them that, we, as Newfoundlanders and Labradorians, have awoken to the raw deal we received and that we say our raw natural resources have to be utilized here in this province. We must stick to our guns and demand that no more resources get shipped out of here without further processing and manufacturing. It is ultimately up to us. Now that we know the difference, we must not bend.

As I said above those people who say such silly things as develop large mega-projects yourselves are the ones who were so accustomed to receiving our raw resources and having them developed in their provinces. What an evil attitude. These people want to keep us down forever and receiving what they call handouts, even though they are sucking the life blood out of our province and giving us back barely enough to put a bit a food on our table. It is a sick Federation that we got enmeshed with very covetous people.

I would like the Anon above of February 18, 2008 11:59 PM to give an accounting of the large mega projects which were bult and are run in Canada with our raw natural resources, where a bunch of ordinary people came together to do so. Anon, yes please give me some examples. That was a very inept comment that you uttered.

Doesn't this anon know that billions of dollars of our taxpayers' monies go into those large corporations? That is the reason that they have become mega-corporations.

Anonymous said...

Ah right. Before we find someone else to come build us a mega project we have to go out and find someone else to build us a hydro dam. I forgot about that part.

And if, as you suggest, corporations build megaprojects, why are you still sending letter to the government?

And if, as you also suggest, corporations build megaprojects, don't they also build mines, oil refineries, smelters and the like? And if so, does this put to an end for once and for all your sill stupid long running diatribe about the federal government "taking" our resources?

Patriot said...

anon 5:28 , you are just so simplistic in your thinking that it would take several years of education to make you understand why you are so off base. Personally I don't have the time to educate you. Maybe you should try on your own though because your statements certainly speak to the need for some real information.

NL-ExPatriate said...

Governments are the people so when the federal govt built ythe Saint Lawrence seaway for the people of QU/ON it wasn't large corporations but all of the people of canada. Same goes fro the Railway, Highways, Bridges for your cross border shopping, etc etc.

But because our political system is systemically flawed. Everything the national parties do is to gain votes and thus win the next election. Democratic Discrimination against he minority provinces by the national parties in their never ending quest for power and votes and vote buying from the two most populace provinces ON/QU where 181 seats out of a possible 308 exist.

With no eqality for the miority provinces in this Colonial Empire of ON/QU.

It's the (National party political) system Stupid!

No national party representative MP you vote for or elect will ever choose his people and province over his national party line of getting electing in the next election because it would mean he would be out of a job.

It's Time for real change!
www.nlfirst.ca , 709-722-NLFP

Edward G. Hollett said...

Anon wrote: "But in the case of the other provinces of Canada they have been so used to receiving the province of Newfoundland and Labrador's raw natural resources to run large mega projects in their areas,...".

Absolutely utterly, totally and completely false.

70% of the goods produced in Newfoundland and Labrador are exported to other parts of the world, not to the rest of Canada.

The single biggest trading partner is the United States.

You can easily check those figures with the provincial government's statistics division on line.

Patriot said...

Welcome back Ed. By the way, the anon that you quoted said "Natural Resources" not "Goods" as you identified. There is a big difference between Resources and Goods. Care to recalculate your numbers?

Anonymous said...

Thanks Patriot! Indeed I did say Natural Resources not Goods. And yes Mr. Hollett there is a big difference between Resources and Goods.

Did Mr.Hollett try to pull the wool over the reader's eyes here?

Yes, Mr. Hollett if you wish to do the accounting most of Newfoundland and Labrador's natural resources are shipped out of this province with very little payment in return and for most of the natural resource, very little processing, for example
1. Hydroelectricity - Quebec Hydro receives it from the source and sells it to the Eastern Seaboard of the U.S. at 1960s prices.
2. Fish - Everyone should know by now what the valuable renewable Fish Resource enables to be traded in Canada's Manufacturing and Agriculture Sectors.
3. Iron Ore
4. Nickle Ore
5. Oil

Yes I would like to see the balance sheet giving the accounting of what value those resources are to Newfoundland and Labrador versus the value to the places where they are exported for processing. As in the case of the Hydroelectricity Energy, the price Quebec Hydro receives from the market place for a mega watt or kilo watt of electricity energy in today's prices compared to what Quebec Hydro paid for it in in the 1960s is Shocking! Yes, indeed, the difference is SHOCKING! SHOCKING! SHOCKING!

I see certain contracts were repealed even in Canada recently. Why could this contract which is outrageous for the poor province of Newfoundland and Labrador not able to be repealed? Many countries have repealed contracts. Just go to the internet and find out which countries, including Canada have repealed contracts down through the years.

Patriot said...

No problem Anon. It's one of the few times I could actually make a comment that wans't pro or con on a subject, but simply point out the straw man arguement used by Mr. Hollet.

Ed Hollett said...

No I don't.

They are accurate.

If you took the time to go visit the provincial government's statistics site, as I suggest you'd see that the numbers include natural resources.

The caculation uses two categories: goods and services. natural resources fall into the category of goods.

70% exported internationally, to to the rest of Canada as the Anon claimed.

A matter of fact.

Sadly, for the Anon and presumably others, a fact that completely contradicts the point he or she made.

The truth sometimes hurts, but it is still the truth.

So with that first bit of myth put to bed, let's try the other bit that she trots out dutifully:

"Yes, Mr. Hollett if you wish to do the accounting most of Newfoundland and Labrador's natural resources are shipped out of this province with very little payment in return and for most of the natural resource, very little processing, for example."

Well, what exactly does that mean, "very little payment in return"? Compared to what? Perhaps you'd care to actually put some fact to that so we can discuss it. Otherwise it is just a meaningless claim.

Then there's this old chestnut which has already been disproven countless times:

"2. Fish - Everyone should know by now what the valuable renewable Fish Resource enables to be traded in Canada's Manufacturing and Agriculture Sectors."

Everyone who has never cared to check into the claim might believe it, but the claim simply isn't true. There is not a single example of fish quotas being traded for wheat, beef, Alberta oil, Hyundai cars or anything else.

[Just so that someone doesn't try to be cute or clever: yes, 5,000 tonnes of northen cod were included as part of a deal to get the St. Pierre boundary to arbitration. That's not what the myth claims]

Again, if anyone would care to offer just one single example - just one concrete, verifiable example, I'd be happy to discuss it.

And Myles, by suggesting I was using a strawman, you were making an argument against my point.

You did so without checking what I said as being both thorough and accurate. I gave you an impartial source to use as confirmation.

You made your comment without considering the basic economic division into goods and services. Iron Ore isn't a service, so it must be a good. Oil isn't a service so it must be a good.

Now with that repeated and made absolutely clear, let's see if either you or Anon care to offer some proof to back your claims.

Of course we know the "export" myth is a myth, so now we have the other two myths to tackle.

Got any evidence at all to back your argument?

Patriot said...

Once again Ed you are making up your own arguements. Yes, government may divide the calculations into two categories, goods and services, but goods naturally include more than resources. Resources only make up one part of that number. The number also includes everything from newsprint exports to Garrison guitars, not just resources and to deny that resources taken from this province help support industries in other places is an out and out lie.

You are either the most misguided individual around, the most federalist to the core or the most paid off.

I noted before that I wouldn't indulge your convoluted arguements so consider this the end of my input but just remember, you aren't fooling anyone.

come home year said...

Without the St. Lawrnce Seaway, there would never have been any ironore mines in Labrador to give 20000 Newfoundlanders jobs to.

Anonymous said...

Along with the Canadian opaque accounting methods used concerning how the "fish quotas" got doled out to almost every nation on the face of the earth when the Federal Government signed on to the Free Trade Movement, the other valuable tool utilized by the Federal Government is the employment of a few straw men (Patriot that is how you refer to them) to deny, deny, deny the mishandling of the fish quotas when someone mentions the fact that the fish quotas were the enabler to conduct international trade for the Manufacturing and Agriculture Sectors of Central Canada. Why else would Canada have allowed so many nations to fish in Canada's waters fish quotas which the province of Newfoundland and Labrador passed over to Canada for maintenance and protection?

Ottawa thought that opaque accounting of the dispensing of the fish quotas would be enough, but at last, we as ordinary Newfoundlanders and Labradoreans have figured out that Canada never would have allowed all those extra foreign nations to fish off its coast unless it had gotten something in return. That something, no doubt, is the international trade agreements that included fish quotas traded for the Manufacturing and Agriculture Sectors for the Central regions of Canada.

I will repeat the question again, why else would all those extra nations appear off Canada's Coastal fishing waters fishing quotas of fish that Ottawa was entrusted with for protection?


It would have caused a Trade War or and External Affairs debacle. Does anyone remember any such dispute happening over the past 40 years in Canadian waters? I don't.

Just recently a person came forward and quoted a specific agreement that he said he knew of where fish quotas were traded for a car plant in Quebec, he said he was party to it. An ex-premier came forward in The Telegram and stated that he has documents to support fish quotas being traded for international trade for Canada.

I do not know what we need to present to these straw men to convince them that those countries did not appear there out of the blue without a contract. But, I guess, when you have a master to serve and that is your source of employment, I guess all I can say is the poor devils have to eat and they don't care whether the rest of us eat or not. It is sad what our Federal Government will do to cover up its dirty deeds, all the while letting the province of Newfoundland and Labrador die on the vine by having our life blood sucked dry and our population dwindling to a figure where soon we will not be able to run our institutions. It is a Sad Story Indeed!

Anonymous said...

Ed Holett - I can't find any statement where an Anon on this site makes any reference to 70% exported internationally. The only reference to the 70% figure is made by you Ed Hollett.

Am I overlooking something? If I am Patriot please do not add this comment to your site.