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Friday, March 25, 2011

Federal Election Sparks Side Deal with Quebec


At the eleventh hour, after more than a decade of backroom negotiation, the Province of Quebec and the Federal Minister of Natural Resources, Christian Paradis, who also happens to be the MP for the Quebec district of M√©gantic—L'√Črable, have inked a deal on offshore oil and gas revenues.

The deal side steps Newfoundland and Labrador’s long standing Provincial boundary dispute with Quebec and could see Quebec reap as much as 9 billion from a disputed 30kilometer long oil and gas deposit situated between the two Provinces.

At issue is the “Old Harry” oil and gas reserve estimated to contain as much as 2 billion barrels of oil, a field nearly twice the size of the Hibernia oil field on the Grand Banks of Newfoundland.

Quebec Premier Jean Charest said Thursday the deal to give his province the royalties from the “Old Harry” oil and gas reserve is "historic".

With this agreement Quebec will retain 100% of the royalties from their section of the oil field and the Federal government can head into the next election saying they have delivered for Quebec, but what becomes of Newfoundland and Labrador?

With the boundary dispute between the two Provinces left unsettled nobody really knows just how much of the oil field actually rests within the boundaries of Quebec making it impossible to determine just how much of the revenue truly belongs to La Belle Province.

In its rush to prop up political support in Quebec the Federal Conservative government has agreed to the arrangement with Quebec based on a much disputed boundary document worked out by the Premiers of Quebec and the four Atlantic Provinces back in 1964 but which was never signed off on by Parliament, as is required by the Constitution.

Decades after that agreement came into being, when the boundary between Nova Scotia and Newfoundland and Labrador was finally settled, the courts ruled that the 1964 agreement was not valid but that hasn’t stopped Quebec or the Conservative government from using it in this case.

Newfoundland and Labrador Liberal leader, Yvonne Jones, says she is worried the Old Harry deal is federal "election bait" for Quebec.

"We could stand to gain a lot, or lose a lot. I think it's a real game of Russian Roulette for us”

"We need to get into the details of where the federal government is headed with Quebec on this particular deal. Is it election bait? How much of it are they giving away? Where is our stake into it, and at what point do we come into the picture?"

"I'm absolutely dismayed to learn today that the province of Newfoundland and Labrador was not engaged in this negotiation in any way."

For her part the newly minted Newfoundland and Labrador Premier, Kathy Dunderdale, said that the agreement with Quebec contains a dispute resolution clause the Province intends to invoke in an effort to ensure that the boundary recognized is not the one stitched together in 1964 but one that adheres to the International Law of the Sea as set out by the United Nations. A similar process was used to settle the Province’s boundary with Nova Scotia.

The concern for many in Newfoundland and Labrador is the speed with which the deal seems to have been finalized, what the details of the “accord” entail and the fact that Newfoundland and Labrador will be expected to utilize a dispute mechanism setup without any input from the Province.

Meanwhile, Parti Quebecois Leader Pauline Marois has been quoted as saying that Quebec shouldn't have to get involved in an arbitration process to determine the boundary issues.

5 comments:

ck said...

As a lifelong Quebecer, let me tell a few things.

Pauline Marois is a hypocrite and will probably lose her leadership review vote next month anyway. PQ MNA, Bernard Drainville has been wanting a deal for the longest time; been wanting to dig up our part of Old Harry, sayin' he no longer wants to be the ROC's favourite whipping boy and be dependent on transfer payments.

Personally, I have concerns with deep water drilling, no matter who's doin' it since disasters like Exxon Valdez and most recently, BP, but I also believe that fair's fair: if you guys struck a deal with the feds over your portion of Old Harry, why shouldn't we have ours'?

Patriot said...

CK, I agree with you that fair is fair and that's all that NL is asking when it comes to the boundary between the two provinces. Unfortunately you are mistaken when it comes to the agreement. NL does not have an agreement on Old Harry (which Quebec now does).

NL has an agreement with the government of Canada on offshore oil revenues but by virtue of the fact that the boundary dispute exists no oil has been pumped from Old Harry by NL to date and even the exploration underway is in an area of Old Harry that is not in dispute as it sits far enough inside territorial waters that even the Quebec government doesn't dispute that specific area.

The point being, until the boundary is settled (NL would like it settled based on Law, not on political decisions) then nobody should be able to reap any benefits from Old Harry, NL or Quebec.

Why should Quebec reap royalties from the oil when nobody knows exacly how much of that oil is on the Quebec side of the boundary and how much on NL's side?

Anonymous said...

"The concern for many in Newfoundland and Labrador is...the fact that Newfoundland and Labrador will be expected to utilize a dispute mechanism setup without any input from the Province."

But why should they?

Newfoundland is not a signatory to the agreement and was not consulted so why the hell should the province be expected to fall in line and abide by whatever dispute mechanism is set out in that agreement?

You can bet that with Ottawa and Quebec negotiating the dispute mechanism it's been setup to benefit Quebec.

NL should go to the Supreme court for a decision rather than agreeing to anything in that agreement. At least there (even though Quebec has influence on the Court) they might have some chance of getting a fair shake.

ICFATCATS said...

NL MUST seek justice in an international court. Quebecs influence within this confideration is far to great for any justice.

Republic Of said...

" which was never signed off on by Parliament, as is required by the Constitution." , the same as Term17

" Newfoundland is not a signatory to the agreement and was not consulted so why the hell should the province be expected to fall in line and abide by whatever dispute mechanism is set out in that agreement? "

Its called Black mail.Fall in line or you don't get that Federal Loan you need for the Lower ChurchHill. As a conservative would say for Mr Harper checkmate.Why do you think he used this to get rid of our Danny.The only way for Newfoundland and Labrador to become a truly have province is for us to throw off the chains of Bondage and to finaly learn to stand on our own.Whatever happened to no more give aways.To hell with Canada, may she burn in hell like she deserves.



" Republic Of "