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Wednesday, June 04, 2008

UPDATE June 5th - Govt. of Canada to Have Say on Lower Churchill

The article below has been updated with the contents of correspondence from a representative of the Newfoundland and Labrador government. It seems the situation outlined in this commentary is perhaps not as dire as was first believed. According to this recent correspondence the govenment of Newfoundland and Labrador has taken steps to rectify this sad situation.

If I've inadervertantly caused any concern on the part of Web Talk readers I sincerely apologize.

Please see the Update section at the end of this article for more information.

Recently there’s been a lot of talk about Newfoundland and Labrador’s plans for the Lower Churchill hydro project. Newfoundlanders and Labradorians are eagerly awaiting what they see as a way to finally benefit from Churchill Falls power after decades of being fleeced on the Upper Churchill development by Quebec.

Most Newfoundlanders and Labradorians will tell you they want things done differently this time. They believe this is as a chance to finally control their own destiny without Ottawa or Quebec pulling the rug out from under them.

They may need to think again.

While all eyes are focused on the new Newfoundland and Labrador Energy Corporation as the lead on the project what hasn’t been widely discussed is the existence of the Lower Churchill Development Corporation or the impact it could have.

Incorporated in 1979, under then Premier Frank Moores, the Lower Churchill Development Corporation is the legal entity actually tasked with moving this development forward. It also controls all of the water rights on the lower Churchill

The new NL Energy Corporation, on behalf of government, will act as the parent company of the Lower Churchill Development Corporation but that doesn’t mean it fully controls the actions of this subsidiary.

The Lower Churchill Development Corporation, not the new Energy Corporation, controls the development, distribution and sale of power on the Lower Churchill (NL Hydro would actually purchase power from its “sister” company) What’s more, the Development Corporation is only partly owned by the people of Newfoundland and Labrador.

According to the Lower Churchill Development Act, by which the corporation came into existence in ‘79, the company’s shares are owned jointly by Newfoundland and Labrador and, here it comes… the federal government.

Newfoundland and Labrador has a controlling interest, 51% to 49%, however this arrangement does not give the people of Newfoundland and Labrador a final say in the decisions made by the company.

Neither the Energy Corporation nor the government of Newfoundland and Labrador can make any major decision about the Lower Churchill development without the agreement of Ottawa’s representatives on the board.

The following are excerpts from the incorporation legislation relating to this:

The general policy for the operation of the Corporation shall be determined by its board of directors consisting of 12 persons of whom 6 shall be nominees of Newfoundland, 5 shall be nominees of Canada and 1 shall be the chief executive officer…

(the following) shall require the consent of a majority of the nominees of Canada and a majority of the nominees of Newfoundland…

…any agreement with the Province of Quebec relative to water flow in the Churchill River, any arrangements with respect of the transmission of electricity from the Project, the sale of electricity from the Project…

In other words the government of Newfoundland and Labrador does not actually have the final say on Lower Churchill development and isn’t the only government that stands to profit from it. It also means, among other things, that the decision on whether or not Hydro Quebec’s grid is used to access export markets depends on the agreement of representatives for the federal government.

Under these circumstances, and given the political clout Quebec has with Ottawa, how likely is it bypassing Quebec will be acceptable to the board. How likely is it that once again Quebec will attempt to profit as much as possible from the Churchill River?

Because of the existence of the Lower Churchill Development Corporation and the 49% stake held by the federal government, Newfoundland and Labrador may once again be at the mercy of Ottawa and Quebec over Churchill power.

Rather than simply dreaming of the day the Lower Churchill is developed, the people of Newfoundland and Labrador might be better served to ensure that their government is focused on regaining full control of the project for the owners of the resource. If they don’t, Newfoundland and Labrador’s aspirations of becoming “Masters of our Own House” will only come to pass if it’s acceptable to Ottawa and, by extension, Quebec.

IMPORTANT UPDATE:

Hello Mr. Higgins,

The answers to the questions you posed to Minister Dunderdale regarding Bill 36 are below. I hope the following explanation is sufficient. If you require anything else, please let me know.

Thanks,

Q: Does the Lower Churchill Development Corporation still have a role to play in this potential development and if so, what is that role?

A: The Premier announced in May 2006 that the province, through the energy corporation, would lead the development of the Lower Churchill Project.

The Lower Churchill Development Corporation was formed in 1978 as a means to develop the Lower Churchill. You are correct that the corporation, which is now inactive, is co-owned by the Government of Newfoundland and Labrador (51 per cent) and the Government of Canada (49 per cent). An option to obtain water rights on the Lower Churchill is currently held by the Lower Churchill Development Corporation, however, the Provincial Government will not be exercising this option.

Instead, Bill 36, which recently passed the House of Assembly, provides the authority to Cabinet to grant water rights to the Lower Churchill to the energy corporation, when requested.

Q: If the project moves forward, who controls the water rights and electrical capacity generated (who would capture the revenues from the development). NL Hydro or the Lower Churchill Development Corporation?

A: The water rights and electricity generated will be controlled by the energy corporation. Revenues from the development will be returned to the energy corporation and ultimately the Government of Newfoundland and Labrador .

Q: Is the Lower Churchill Development corporation still owned 51% by the Province and 49% by the federal government?

A: Yes, however, this corporation is inactive and not involved in the development of the Lower Churchill Project.

16 comments:

Starrigan said...

Sickening, absolutely sickening. I'm always amazed at how short sighted and incredibly stupid some of our premiers have been. The worst part is the mistakes these morons made are still haunting us today and will continue to haunt us well into the future.

One question, is the Lower Churchill Development Act federal or provincial?

Anonymous said...

Based on the quotes below from your article, I want to say that the Federal Government was up to its' eyes and ears on the construction of the Contract which was drawn up on the Upper Churchill Hydroelectric Energy Project, and how it came down the chute in favour of Quebec Hydro and Ottawa, in that it made Quebec Hydro the beneficiary of the coveted Hydro Energy for 72 years and maybe forever. Of course with such a fine contract which was finessed by Ottawa, Quebec separatism was ameliorated for a few years, that meant a great reprieve for Ottawa?

Given as you stated in your article that :” The general policy for the operation of the Corporation shall be determined by its board of directors consisting of 12 persons of whom 6 shall be nominees of Newfoundland, 5 shall be nominees of Canada and 1 shall be the chief executive officer
(The following) shall require the consent of a majority of the nominees of Canada and a majority of the nominees of Newfoundland…

AND;"…any agreement with the Province of Quebec relative to water flow in the Churchill River, any arrangements with respect of the transmission of electricity from the Project, the sale of electricity from the Project…


Patriot in my opinion from what I deduce from your writings: In other words the government of Newfoundland and Labrador does not actually have the final say on Lower Churchill development and isn’t the only government that stands to profit from it. It also means, among other things, that the decision on whether or not Hydro Quebec’s grid is used to access export markets depends on the agreement of representatives for the federal government.

AND given as you stated and in my opinion again; Because of the existence of the Lower Churchill Development Corporation and the 49% stake held by the federal government, Newfoundland and Labrador may once again at the mercy of Ottawa and Quebec over Churchill power.

You say Patriot that rather than simply dreaming of the day the Lower Churchill is developed, the people of Newfoundland and Labrador might be better served to ensure that their government is focused on regaining full control of the project for the owners of the resource. If they don’t, Newfoundland and Labrador’s aspirations of becoming “Masters of our Own House” will only come to pass if it’s acceptable to Ottawa and, by extension, Quebec". I AGREE WITH YOUR SENTIMENTS PATRIOT.

PATRIOT; ISN'T it quite plain to see from what you wrote in your informative article that the Federal Government favoured Quebec with the Upper Churchill Contract; and it put legislation in place to keep doing so in the future and to make sure that any development of the Lower Churchill would be placed in the Feds lap as well?

Patriot; If it is correct what you wrote and I have no reason to believe it isn’t, I think we have a case here against the Federal Government. I believe we were hoodwinked in this province into passing over a resource to Quebec Hydro under a 72 year Contract which was orchestrated by the Federal Government. And which could have made the province of Newfoundland and Labrador, one of the richest in the nation a long time ao. Shame on them, and when is the legal battle going to start to undo this evil deed?

Is it any wonder that we have not had an appointee to the Supreme Court of Canada? This country makes me ill.

We have seen manipulation by Ottawa on every one of our natural resources which have come up for development over the years. The manipulation has been in the form of the lobbyists who had the eyes and ears of the Feds through influence peddaling; and those lobbyists saw to it that once our resources were dug out of the ground or the sea that some other jurisdiction would be the beneficiary of either the processing, refining or the smelting.

There was absolutely nobody minding the Shop for the WELFARE OF THE ELECTRORATE in the province of Newfoundland and Labrador with regards to creating real market economies from their natural resources. THE PATRONAGE SYSTEM which exists in the Tool Kit in Ottawa makes sure that politicians will always toe the line for what Ottawa wants, since the politician who do obey will always be well greased. Once a politician toes the line in assuring such a large resource is safly in the hands of whoever Ottawa wants the resource to be in, that politician has no more worries about anything for the remainder of his/her life.


The sad part is, if someone, who would want to join politics simly to expose such rot offered him/herself, that person would not get a nomination, because no matter what the party flavour would be, whether it be Liberal, Conservative or NDP, a person with such aspirations would not be welcomed to run unless they toed the party line. The system is full of ROT. It needs a complete overhaul!

Patriot said...

It's a provincial act. I've contacted Minister Dunderdale to confirm if the situation it oulines is still in effect or if the government is working to somehow "buy" ottawa out of the partnership (the act allows for that). To date I've had no response from the Minister.

Anonymous said...

What does the Lower Churchill Development Corporation which was incorporated in 1979 have to do with the Upper Churchill contract which was signed 10 years or more before?

NL-ExPatriate said...

Doesn't the constitution of this country mean anything?

Anonymous said...

Anon 3:02 asked:

"What does the Lower Churchill Development Corporation which was incorporated in 1979 have to do with the Upper Churchill contract which was signed 10 years or more before?"

Answer: Nothing but it has a lot to do with the Lower Churchill.

Vernacular Song said...

The answer is simple folks.When we finally get sick of relising that we have given the house away and that the province will amount to nothing within canada.We shall see that it is simply time to leave ,before it is too late.

As I stated in your last write up Patriot ,the gathering of the central overlords has had more to do with Ontario getting what it wants more then anything.Clean ,crisp ,green energy that just won't go away.How did Dalton put it " to make a strong ,and prosperous Canada ,that is centralized "

I have a hundred bucks and a Guinness Myles ,that says Ontario's manufacturing sector gets it's hands on that energy before anybody.

Screwed by the big "RED" winnie again ,ya gotta love the irony of it all don't ya !!!This country is so rightouse it's even making me sick .

OH ,and to answer NL-Expat's question ,( June 04, 2008 3:52 PM ) you have to be considered canadain for that to come into affect ,go figure.

Anonymous said...

Ugghh..

Hearing this kind of stuff rots me.

Anonymous said...

The government of canada or the government of any province can own shares in a corporation. Nothing unconstitutional about it.

Vernacular Song said...

June 04, 2008 7:20 PM, well anon .I really don’t know if your are referring to my last rant but I would love to turn this into a discussion on national unity .As the writings of some in this forum show, our forefathers turned what “National Resources “we had over to the central government of what country we were joining at the time.

Now look at us .We are the laughing stock of the union. Look how the upper house views Danny Williams for God sake .Anyone here can look at how Senator Terry Stratton views the province, and who they want to place blame on for the lack of employment in the province of Newfoundland and Labrador

http://www.youtube.com/watch?v=SKnxM3Pzc4Y

Simply listen to how he blames the province and its government for creating the situation we find ourselves in today.

Has the federal government compensated the Province for the collapse of the fishery and those that are displaced,” NO “?

Has it help in the re-construction of that industry “NO “

Has it helped create an industry and or economy to replace the one it destroyed “NO “

Who has benefited from Newfoundland and Labrador becoming a province? It certainly was not the people of the Island and it’s certainly not the people in the Big Land.

Were we would the Province be today ( ask yourselves this honestly ) if we had not produced leaders like Danny Williams, thinking of his Province first and foremost. I can say with all honesty were I am today he is looked upon as a “messiah “for the province. And, he is looked upon as a huge stone in the shoe of those that want free give a ways.

Canada has not come to help the province in any shape or form, especially in the eyes of those that have been displaced by the collapse of the fishery. We are nothing more then Fodder for their guns .Are we angry, just come into our clubs in Ontario with a Big I love Canada T-Shirt on. See the reaction you get. We know that those that do server in our military and abroad do so because they couldn’t find jobs near their home and loved ones.
Canada be dambed I say, and if the people of Labrador do not become the full beefier of that resource then I say let the damb water run down the river. They have given nothing to those that suffer in Labrador, why should we allow them to continue the rape and pillage of our resources.

As far as I’m concerned it’s time to start the carving boy’s and girls, before we have nothing left. Listen to our forefathers as they have seen the future of our great country being raped by the Canadian wolf. Open your hearts and see how we have been mis managed and abused by Ottawa .Its time to stand up and say “ NO MORE “

http://www.youtube.com/watch?v=jUBAnpONuDI

How many of our sons and daughters have to be placed upon the alter of Confederation before we see the errors of our ways .I only hope Patriot that the people of our Great Province do not sit down and take this with a grain of salt. If Labrador and its people do not become the benefit of their national resource, then I say it’s another point of discussion for the republican side.

My one concern Patriot is the lack of voice that I hear coming from our great province today. Were are the people like Sue Kelland-Dyer? Were the voices in the Labrador? C’mon folk’s if they are going to destroy what we have then lets make sure they know who they are dealing with .This is one fighting Newfoundlander that won’t go quietly into the night .

Canada be Dammed, I come from Newfoundland and Labrador

" Republic Of Forever "

Anonymous said...

Well at least the questions were asked Patriot. I'm glad someone is questioning the issues.

I'm also glad something has been done about the situation, if it wasn't we'd be in one hell of a mess.

Keep up the good work, mistakes and all, at least you aren't afraid to take on the issues and make sure things are done right even if sometimes you, like most of us, don't know every detail of what government is up to.

Joey Smallwood's ghost said...

It's an inactive corporation.
It's meaningless.

You people are paranoid and crazy.

The province has always had, and will always have, complete and unfettered jurisdiction over its natural resources. That has always been the case, and will likely never change.

The province can do whatever it wants with the Lower Churchill. It can turn it into a water slide if it so desires.

And to your other points, The federal government had absolutely NOTHING to do with the Upper Churchill. (Which, in the long run, may have been the biggest problem...)

Anonymous said...

I like your nickname, "joey smallwood's ghost" because you're as full of BS as he was.

Of course Ottawa had a lot to do with the Upper Churchill, only a desperate Liberal would say different. When they have the right, as they did, to force a national power grid and don't stand up to Quebec they have a big impact. It was all about keeping Quebec from seperating and to hell with NL.

I love it (not) when desperate Liberals invoke revisionist history as an arguement. What a joke.

i like waterslides said...

I like waterslides!

Anonymous said...

It was good to see the followup Q&A on the posting. However, the answers upon reflection raised more questions than provide closure.

Since the LCDC is inactive, how can it transfer back to the province the responsibility of the development itself? Conversely, if the province has determined that the LCDC will not control the usage of the Lower Churchill energy potential, how will the province protect itself from the inevitable legal challenges that the province is in essence breaking the original agreement with the government of Canada through this action?

It looks to me like the unilateral action once initiated by the province will cause a further halt to the development. Potentially, this could make the Innu claims look like a hiccup compared to the time it would take to run through the courts until it reaches a final decision.

Vernacular Song said...

June 05, 2008 7:24 PM, as seen by those on your Blog Patriot, can you believe that this is the conception of reality that has fallen on the people?

“The province has always had, and will always have, complete and unfettered jurisdiction over its natural resources “

Would you include the fishery in that statement or Churchill falls for that matter?

“The province can do whatever it wants with the Lower Churchill “,

I sure hope so, anon after Ottawa and the overlords of Ontario and Quebec have something to say about it, that power will be sold for peanuts and given to whomever they see fit. Read the article again .I think you’re missing the point.

“The federal government had absolutely NOTHING to do with the Upper Churchill “

Look out the window anon, do you see those Pink pigs flying past your window. I thought so .Such statements are absolutely ludicrous .I think when you take Grade 9 history in Newfoundland or Labrador, you‘ll have a different opinion.

“You people are paranoid and crazy.”

Well ,I think that Patriot could write a handful on that one .This is were your lack of knowledge shine’s thru .If you could but pick up a history book and listen to what our fore-father’s said in regards to the Union then you might say that about them as well. But, as I look around the province today, everything I see supports what they have said 100%.

So Joey ,if I can call you that cause that’s your name .can I ask one simple question seeing how you’ve come back from the dead to screw us over one last time .

“Why did you sell out your own people to get your name in the history books? Don’t you know now how you’re looked down upon by those you swore to serve? .For shame on YOU “