Sell Lower Churchill Power to Quebec at a Guaranteed Price for the Next 30 Years

Those are the words that have necessitated today's Web Talk commentary.

Web Talk usually does its best, within reason, to avoid entering the political fray inside the borders of Newfoundland and Labrador, preferring instead to focus on external entities that affect the province, either positively or negatively. I’m referring of course to entities such as the federal government, other provincial governments and even large industries that affect us on a regular basis.

This is one of the few times when an exception to that general guideline is not only warranted but where, I firmly believe, ignoring or avoiding the issue of our local political environment would constitute a clear case of negligence on the part of this forum.

I’m speaking about the current mindset of the leadership and perhaps some of the membership within the provincial Liberal party.

Before going any further let me get all the mandatory disclaimers out of the way.

First of all I am not a member of any political party locally or federally. In past elections I have supported individual candidates from all three mainstream parties in the province. I support the current PC government on many of its actions but have also disagreed with their direction on some issues, both privately and publicly.

The reason I say all of that is with the hope, as unlikely as it is, that my explanation will serve to lower the volume level of those readers who will try to write me off as just another one of “Danny Williams’ Kool-Aid drinkers”.

There really isn’t much hope of heading those readers off at the pass so to speak but it’s worth a shot.

I’ll leave the subject of closed minds (on all sides of the political spectrum) for someone else to tackle.

My concerns today rest with the current state of affairs in Newfoundland and Labrador politics. I believe, for the average voter, the problem is two fold.

As previously mentioned, I agree with the Williams government on most of its agenda, thought sometimes not on the all the details. I also adhere to the old adage that “absolute power corrupts absolutely”. In this light I would love to see a more diverse makeup at the House of Assembly after the next election. Specifically I believe it would be in the best interests of the province to see growth in the opposition ranks.

Most of us take it as a forgone conclusion (barring some sort of self destruction) that a PC government will be returned to power when the polls close next time around. That said, if left unchecked, too much power can lead to serious problems for us all and it’s for that reason I would love to see more Liberal and NDP members in the House. The status quo of a single party “invincible” majority is not a situation that should be allowed to continue in the longer term.

My previous point leads me directly into the second of my concerns, specifically the state of the Liberal party in Newfoundland and Labrador and the need to balance the opposition ranks without actually allowing the current contingent of party elite to gain any real power.

Call it partisan if you like (it isn’t) but that’s right I said we need to ensure that the Liberal party, as it exists today, shouldn’t be allowed to gain power in the province

To put it bluntly, as it now exists, should the Liberal party find itself elected as a future government, or more precisely, if the people of Newfoundland and Labrador were to find themselves governed by the Liberal party, in its current state, then God help us all.

No, that isn’t Liberal bashing, it’s self preservation in the face of recent events.

I’ve supported past Liberal governments in this province just as I’ve supported PC governments but when you look at some of the happenings at Liberal HQ these days you have to shake your head and pray that something changes, quite dramatically, before they are ever given the reigns of power again.

With their ranks nearly decimated in recent years and at a time when they should be focused on rebuilding they have actually gone ahead and named none other than Craig Westcott to spearhead their communications machine.

Really, Craig Westcott?

For those of you unfamiliar with the man, this is an individual who has done almost nothing in the past several years except bash the current Premier and not just when it was deserved, but incessantly and apparently for the sport of it. It’s almost like he has tunnel vision when it comes to the Premier and at the end of that tunnel is a set of crosshairs aimed squarely at the Premier’s head.

No doubt Westcott’s compulsion for Danny bashing was a major item on his resume that the Liberal leadership found attractive, but you have to ask yourself, does a compulsion to blindly attack make Mr. Westcott the best choice for the job?

Remember, this is the same person who was one of the loudest naysayers shouting from the roof tops that the sky was falling, yelling that Premier Williams was single handedly killing the oil industry in the province and driving away investment because a deal wasn’t signed on the Hebron oil project during negotiations a few years back. We all know how those negotiations eventually panned out now don’t we.

From the Liberal perspective, with Williams’ approval rating resting comfortabley near 80% for as long as anyone cares to remember, there is no doubt they would love to find a way to knock his numbers down. They need to realize however that when someone is THAT popular, no matter the reason behind the numbers, blind attacks are more likely to solidify his support base (it’s called closing ranks) rather that wearing away at it.

Negative political attacks may work well in U.S. elections and perhaps even in other parts of Canada but most Newfoundlanders and Labradorians don’t get a warm fuzzy feeling when someone they support is incessantly attacked, no matter the source.

Besides, the best way to win Liberal support is to show the public the Party’s strong points, not simply attack for the sake of attacking. In this light Mr. Westcott might very well end up being a liability rather than an asset. Just ask local Liberal member and former candidate, George Murphy, also known for his great work with the Consumer Group for Fair Gas Prices, who resigned his position as a Liberal party organizer after calling the appointment of Mr. Westcott an “insult”.

Enough of Craig Westcott (something I believe the Liberals should consider saying as well).

My biggest concern has far more to do with the future of the province than with the internal workings of the Liberal Party, the common thread between the two being a clear display of poor judgment in both cases.

In this case I’m referring to the words of Danny Dumaresque, long time member, executive and former president.

If Mr. Dumaresque’s way of thinking is any indication of the mindset that exists inside the Liberal Party then voters should run away in droves and members should look for the nearest exit from Party HQ.

With recent comments from Danny Williams that the province is looking at a phased in approach to development of the Lower Churchill project, media is reporting that the Liberal opposition would like more details on government plans. That’s fair enough. In fact I’m sure we would all like to know how a phased approach using the Maritime route can be undertaken in an economical manner. I have no problem there.

What scares me is a comment on the subject attributed to Mr. Dumaresque in which he appears to be promoting the sale of Lower Churchill power to Hydro Quebec at a set rate through a long term contract. Read the following excerpt from the local media and tell me if I’m wrong to be concerned.

“ … Hydro Quebec was prepared to buy the power. He says the corporation has been a good, paying customer... He says they are the only customer in North America that can take on 3,000 megawatts of power and guarantee a price for the next thirty years.”

Was that as scary for you to read as it was for me?

In my book Danny Dumaresque’s words sound awfully similar to the reality of the Upper Churchill contract, a reality that has tortured Newfoundlanders and Labradorians for decades and been burned into our collective psyche. Far too similar.

It would appear, based on media reports that Mr. Dumaresque, a very influential member of the Liberal party, would have us sell the power from the Lower Churchill to Hydro Quebec at a guaranteed price for the next 30 years. Wow!!!!

The only thing that seems to be missing from his comment is any reference to an automatic renewal clause that would allow Quebec to continue using that power for a further 25 years at an even lower rate.

I have to say, if those words don’t make voters shake in their boots and question the province’s future should power be placed in the hands of the current Liberal brain trust, nothing will.

One high ranking member clearly would have caved into big oil during the Hebron negotiations a few years ago and another would have us sign a new long term, set rate, contract with Hydro-Quebec for Lower Churchill power.

Under the circumstances I hope readers will excuse this short foray away from the usual approach of keeping provincial politics off the agenda here at Web Talk and understand the reasons why there was a dire need to weigh in on the subject.

I Had a Dream.....of Genie

Have you ever had that dream, you know, the one where you’re walking along a beach when without warning you stumble over a lamp,(or perhaps a Screech bottle) and a genie with a thick accent, wearing a Sou’Wester, suddenly appears through the fog offering you three “fishy” wishes?

No? Never had that dream? Fair enough. In truth I haven’t either, but wouldn’t it be great, especially if those 3 wishes actually came true!!!

Just in case something like that ever actually happens (I like to be prepared for any eventuality) I’ve spent some time thinking about what I’d wish for and I believe I know what my three “fishy” wishes would be.

First I wish our federal politicians would actually take steps to protect the fish stocks on the Nose and Tail of the Grand Banks and on the Flemish Cap instead of just fishing for political points by talking about it.

Of course I wouldn’t want them to follow the same tired and useless direction they’ve taken in the past such as lobbying for unenforceable rules or penalties within NAFO or by plodding through tons of documents and legalese related to the dream of “Custodial Management”, the very definition of which seems to change depending on who speak with.

No, I’d ask for something far simpler and much easier to attain, in fact something that could be put in place in a very short time and with very little effort on Canada’s part.

You see while Canada’s legal right to unilaterally enact “Custodial Management” of fish stocks outside the 200 mile limit may be in question, the Country has every legal right under Article 76 of the United Nations Law of the Sea, to prevent foreign nations from disturbing the sediment and sea floor on the Continental shelf, which includes the Grand Banks and Flemish Cap.

No doubt the law was initially written to ensure mineral and oil resources couldn’t be pillaged by nefarious nations so you may well ask what invoking it might accomplish when it comes to protecting migrating fish stocks.

My response would be, “a great deal”.

You see the only way the 100 or more foreign vessels plying the Grand Banks and Flemish Cap at any given moment (with the approval of NAFO regulators) are able to turn a profit is through the use of bottom dragging gear that scoops up everything it encounters. Simple nets or lines just aren’t profitable any longer.

If you take away the ability to disturb the bottom sediment then you also take away the ability to bottom drag in the area. Take that away and you destroy their ability to profit from their adventures. It’s as simple as that.

No profit means no foreign fishing.

Other nations around the world have invoked the U.N Law of the Sea in a similar manner and with great success. Canada has not.

My second wish would provide Newfoundland and Labrador with some modicum of influence when it comes to fisheries management off our shores. Simply put, I’d wish for joint federal and provincial management of the fishery.

Some might say our politicians have been working on exactly that issue but it’s a difficult thing to accomplish. They might even tell you it would require opening up the constitution of Canada for amendment. Something very few political types even want to contemplate.

I’d question the accuracy of the information coming from those people if I were you and I’d also wonder just how hard those at the federal or provincial level have truly been working to resolve this issue.

In 1922, after years of refusal by Quebec to relinquish control of its coastal fisheries to Ottawa (even after multiple rulings against them) the federal Fisheries Minister invited Quebec representatives to a discussion on the issue. Following that meeting (that’s right, a “meeting”), full responsibility for management of coastal fisheries was transferred to the province of Quebec.

With the exception of the area around the Magdalen Islands, fisheries management was simply handed over to the province of Quebec. It wasn’t a case of joint management or of sharing responsibilities but of complete control.

Quebec continued to manage its own coastal fishery, unhindered by the federal government, until 1983 when the government of Quebec agreed to return control to Ottawa.

No constitutional changes were required, nor was there any need for decades of discussion, debate, reports, lobbying or pleading. It was simply done.

By comparison, over the past several decades the people of Newfoundland and Labrador have been practically begging the federal government, not for complete control of the fisheries, but simply for a shared management approach.

1986 – A Provincial Royal Commission recommended Joint Fisheries Management

1989 – A panel established by the federal Department of Fisheries and Oceans (DFO) recommended Joint Fisheries Management

1998 – Another panel established by DFO also recommended Joint Fisheries Management

2003 – Yet another Provincial Royal Commission recommended Joint Fisheries Management

2003 – The Newfoundland and Labrador House of Assembly unanimously adopted a resolution calling on Ottawa to implement Joint management of the fishery.

2003 – The Government of Newfoundland and Labrador released a white paper on Joint Fisheries Management

And in 2005, then leader of the Opposition, Stephen Harper, said he favoured joint management and the Conservative Party of Canada, in its Policy Directions document that year wrote:

“A Conservative government will adopt, with any interested coastal province or territory, a system of increased provincial management over fisheries through a system of joint management and joint fisheries councils modeled on the system proposed by unanimous resolution of the Newfoundland and Labrador House of Assembly and as detailed in the government of Newfoundland and Labrador’s white paper on the subject as released in
2003.”

The list goes on…

No constitutional changes were required to give Quebec control of their fishery, not constitutional changes were necessary to enact joint provincial / federal management of offshore oil resources and no constitutional changes are necessary to allow joint management of the fisheries off Newfoundland and Labrador shores. All that's requuired is the political will.

My third and final wish (it sucks to be limited to just three but Genies appear to be pretty strict when it comes to that rule) would be to provide certain protections and guarantees for small boat fishermen and coastal communities in the province.

By small boat fishermen I mean those who work reasonably close to shore and who still use traditional fishing methods. I’m not referring to larger corporate interests who share in the blame for the state of affairs we see today.

It’s these small boat fishermen who built this province and it’s they who did the least damage to fish stocks for the hundreds of years they practiced their way of life.

Unlike the unsustainable fishing practices of larger foreign and domestic enterprises, the small boat fishermen were not to blame for the collapse of the ground fish stocks yet they and the communities that depend on them have suffered disproportionately as a result.

Joint management of the fishery would put some control back into the hands of the provincial government which is far more answerable to the people than federal agencies and could even pave the way for the issuing individual quotas small boat fishermen.

All these fishermen need is some guarantee of fish to catch and legislation making it illegal for processors to refuse fish at the wharves, simply because a fisherman isn’t “beholden” to that fish plant, might go a long way toward ensuring the survival of the small boat fishery as well as many coastal communities.

So, with all that said, and with the likelihood of me actually stumbling across a “Fisheries Genie” being slim at best, the questions each of us need to ask ourselves and our political representatives, both federal and provincial, are:

Why hasn’t Canada taken the simplest of steps at the U.N. in order to protect Newfoundland and Labrador’s offshore fish stocks; and

Why haven’t the Harper and Williams governments been able to enact joint fisheries management when a precedent, that doesn’t include a constitutional debate, already exists with Quebec and while both levels of government claim to believe it’s the right thing to do?

Flashback - Nationalism and our Place in Canada

I recently came across an article written by Craig Westcott for the "Express" about 10 years ago. I found it to be a a piece that clearly shows the broad spectrum of citizens in Newfoundland and Labrador who question our place in Canada and also speaks to a number of the deep rooted issues we face in the Canadian federation.

Clearly the arguements for change coming from individuals like myself are not just the realm of what the mainstream media might like to marginalize as "wingnuts" or the "fringe element".

Read on.


Newfoundland's business and political elite make the case for a re-examination of Confederation
By CRAIG WESTCOTT, The Express

It started with Craig Dobbin. The Canadian Helicopters Corporation chief was sick of hearing mainlanders slag Newfoundland for being an economic sinkhole.

When Canadian Alliance strategist John Mykytyshyn said Newfoundlanders were too lazy to move away for work, Dobbin lost it. He wrote a speech. Then he delivered it in a venue where no one in the local who's who could miss it -- a St. John's Board of Trade luncheon.

"Let me pose a question to you," the former John-Crosbie-ally-turned- Brian-Tobin-backer began. "Who got the better deal from Confederation? Newfoundland? Or Canada?

"If we're such a drain, such a sinkhole, let us go. Cut us loose, baby."

It was a startling speech.

But even more surprising was that several months later, a similar one was delivered by none other than Vic Young, president and chief executive officer of Fishery Products International.
Young, a former senior government bureaucrat and executive with Newfoundland Hydro, turned his verbal assault on Ottawa and Quebec, lambasting the Churchill Falls deal.

"I can assure you, if it were Newfoundland and Labrador that had a geographic stranglehold over the export of Quebec's hydro resources, then Quebec would have fought," said Young. "Quebec would have won, and Canada would have changed national energy policy tout de suite."

To the appreciative ears of the 600 people attending the Board of Trade luncheon where Young came out of the closet with his feelings about Confederation, he shouted, "Vive Terre Neuve libre."

With two of Newfoundland's most successful businessmen questioning the quality of the ties binding Newfoundland to Canada, all that remained to completely open debate was for somebody from the provincial government to weigh in.

And that's just what then-Intergovernmental Affairs Minister Walter Noel did in an address to the Rotary Club of St. John's earlier this month.

"I've long felt some of the ways our federal system operates have to change to enable us to enjoy Canadian standards," Noel confessed. "Important interests are working against us."

Strong words indeed. But why do they sound so familiar?

Confederation's costs

Memorial University of Newfoundland historian John FitzGerald has been listening attentively to the questioning about Newfoundland's place in Canada.

As an expert on the Confederation issue, FitzGerald can't help but be fascinated by it.

"I'm not sure that it's new," FitzGerald said of the points being raised by Dobbin, Young and Noel. "Although quite clearly, the people who are saying it now would have very little in common with A.B. Perlin and the Responsible Government League who were saying these kinds of things back in '48 and '49.

"What you have now is people stepping back and taking a cold hard look at this and saying, 'All right, what really is in our best interest?' I'm not sure you'd call it nationalism. I think you'd call it enlightened self-interest."

Call it what you want, but there's no denying Newfoundland's established interests -- including Noel, a scion of Joey Smallwood's Liberal Party -- are saying strong things.

Take Dobbin.

"This province pumps tons of money into Central Canada annually," said Dobbin. "The hydroelectric facility at Churchill Falls contributes almost $1 billion each year to the economy of Quebec. That one item alone equals our transfer payments from Ottawa each and every year -- that one item.

"We're sending Canada our graduates. The Department of Education has suggested that about a quarter of our university graduates cannot find jobs and end up leaving the province. We move away to work more than anyone else in the country."

But for real facts and figures on the costs and benefits of Confederation, Noel is the man with the numbers.

An economist by training, the Virginia Waters MHA has spent a fair part of his time in office analyzing Newfoundland's relationship with Canada.

He's still a proud Canadian, albeit a troubled one. That's because, according to Noel's calculations, the national federation is built around two provinces -- Ontario and Quebec. Every other province is secondary.

"Ontario has been the primary beneficiary of Confederation," said Noel. "When Canada began, Nova Scotia was wealthier than Ontario. Central Canada has prospered because it dominates the House of Commons and because the Senate never became what the Fathers of Confederation intended it to be."

As a result, Ottawa has developed policies that principally benefit Ontario, Noel said. Among them is the Auto Pact. Noel estimates that for every car made in Ontario, Canadians have to pay an extra $2,000 for it to cover the subsidies that are propping up that province's auto industry.
And Newfoundlanders pay higher prices for other Ontario-made goods because Canadian tariffs keep cheaper imports out.

"Years ago, we had to sell our cod in blocks to the United States because they had a tariff policy against having it imported in one-pound packages, because Canada had tariff policies that hindered the importation of American goods," Noel said. "That favoured Central Canadian industry. It constituted a cost for us."

It also delayed Newfoundland from developing its secondary processing potential.
Ottawa itself, added Noel, is a testament to how Confederation has benefited Ontario and Quebec.

"Ottawa is probably the leading economic growth centre in the country, primarily because of the extent to which the federal government is concentrated there," said Noel. "And the spin-off from having it there has generated the high-tech industry. Ottawa would probably be nothing more than a farm service centre if it wasn't for the federal government being located there."

Then there's Quebec. In 1996, said Noel, Quebec received 39 per cent of Industry Canada's research and development grants -- even though it has less than 25 per cent of Canada's population.

Quebec also got over 50 per cent of federal technology "partnerships" funding. The four Atlantic provinces combined got two per cent.

In 1998, Noel added, business subsidies to Quebec came to $528 per capita. In Newfoundland, the number was $202.

"We have always gotten a disproportionately low share of Canadian government spending for goods and services, and military purposes," said Noel. "Between 1995 and 1999, (federal) public service employment here was cut by 32.5 per cent, compared with the national average of 17 per cent and 12 per cent in Ottawa. Nova Scotia has 20 federal departmental Atlantic Regional Headquarters -- we have none."

Then there is the issue of equalization payments. In 1997, said Noel, federal payments to Newfoundland came to $2.1 billion. Off-setting that was the $2-billion Newfoundlanders paid in taxes to Ottawa. And once you calculate Newfoundland's per capita share of the national debt charges, pensions to public servants, and other costs, Ottawa's net contribution to Newfoundland was just over $1-billion.

"In 1997, Quebec Hydro alone received about $1.1-billion from the sale of Churchill Falls power, enough in itself to cancel our total net gain," Noel argued.

To these costs, Dobbin would add others -- loss of control of our fishery, which resulted in mismanagement that nearly wiped out the cod stock; paltry royalties from our offshore oil; and no control over our fiscal capacity to lower business and personal income taxes to attract business investment.

Incontrovertible proof

Noel and Dobbin raise good points, said FitzGerald.

"History is incontrovertible on some of this stuff," he said. "Ottawa did not support our request for a power corridor through Quebec -- Confederation failed us."

But, FitzGerald added, Newfoundland has lost out on seemingly smaller, but vitally important items, too -- like no longer being able to regulate its own airspace.

Because they are independent countries, Ireland and Iceland were able to open their skies and markets to international carriers, FitzGerald pointed out, unlike Newfoundland, which has to put up with the Air Canada monopoly.

"I think it is a very good idea to question this relationship (with Canada)," said the historian. "It would certainly help demolish the myth that's put out there by The Globe and Mail and the National Post that we're a basket case, that we're a drain on Canada. They've been slandering us now for 50 years. And it's interesting to see who is exactly subsidizing whom. In fact, we're both subsidizing each other. But isn't that what the nature of the country is supposed to be anyway?"
Explaining the terms

While Newfoundland's business and political elite are publicly questioning the problems of Confederation, those problems are not new. They find their origins in the famous Terms of Union that Smallwood and a small band of politicians and local mandarins "obtained" for Newfoundland nearly 53 years ago.

"My interest in this as an historian is looking factually at the Terms of Union," said FitzGerald.
The terms were negotiated by people who were appointed, not elected, to go to Ottawa on Newfoundland's behalf, FitzGerald said. The delegation was appointed by the Commission of Government, which itself was appointed by the British government.

"And what they were up against?" said FitzGerald. "They were up against the Mitchell Sharpes and Hugh Keenleysides and the Jack Pickersgills and the Rhodes Scholars and the professional civil servants in Ottawa who had been studying the (Newfoundland) question for 10 years.

"We had nothing like that kind of advice. Essentially, we were told to take the terms or leave them. Mr. (Prime Minister Louis) St. Laurent put it to us, 'This is the best we can do.' But those terms were never submitted back to the Newfoundland people. There was never any discussion on them. They were signed, sealed and delivered before anyone here knew what was in them.
"And the whole time Smallwood was up there, he was trying to get himself appointed premier. His idea was, 'What we don't get now, we can negotiate later when I'm in charge.' You can see why people would be disgruntled with the Terms of Union if you factually look at the history of the thing."

Since the terms were signed, FitzGerald added, a whole raft of other arrangements between the province and Ottawa have been made, covering everything from the railway closure to the running of Marine Atlantic.

"The terms are not the only thing we've got to look at," FitzGerald said. "We've got all these subsidiary agreements. The point is, we don't have a road map and until we do, we're really at the mercy of all these civil servants up in Ottawa."

A new deal

For Noel, changing our place in Canada will mean changing the minds of important interest groups on the mainland. But before Newfoundland can do that, he said, Newfoundlanders themselves have to realize that a new arrangement is needed.

"If we are going to get change, we have to agree on what it should be, pursue it with determination and work with allies across the country," Noel argued. "An effective Senate, like they have in America, would be the best means of strengthening our influence in Ottawa, in my opinion. What other way is there? Simply asking for more of a role in federal decision-making has not worked."

But longtime Newfoundland nationalists like painter Grant Boland believe Noel may have his work cut out for him. For too long the province has neglected its own culture and history, not even teaching it in schools.

"The absence of that kind of information leaves people ignorant," said Boland. "How can you expect people to be nationalistic if they don't know where they came from?"

Some nationalists suspect the powers-that-be are afraid to open up the curriculum to Newfoundland culture too much. It might lead to a reawakening of feeling for the independent country Newfoundland was.

"If separatism came, I think I'd embrace it," said Boland. "But it seems like a sleeping dog situation."

Separatism is the last thing Noel wants.

"I think if we explain our case properly to the rest of the country we will make progress," Noel said. "We don't have many alternatives. We are an integral part of Canada today and I think it's dreaming for people to talk about separating. Newfoundlanders don't want to separate from Canada. We're integrated economically and politically with the other provinces, and socially we have relatives all across the country. We want to be Canadians. But we want to have a fairer share of the benefits of being Canadians."

Questions of nationalism aside, FitzGerald believes the arguments being made by Noel, Dobbin and Young signify something important.

"The one thing that is overwhelming in this is that I think people are starting to realize generally that Canada's best interests are not necessarily Newfoundland's best interests," said FitzGerald.
"And that's a good thing."