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Is Democracy Dead or Just on Life Support?

What’s happened to democracy in Canada? Is it still alive and kicking, on life support, or as many now believe, truly dead?

On the federal level we have a Prime Minister in office that believes he can simply dismiss the elected representatives of the people with a phone call any time the heat is too much for him. The public continues to rail against his undemocratic actions while the PM simply circles his hand picked team power brokers and does as he pleases.

It’s an attitude that has become more and more prevalent throughout politics in Canada. Examples of the growing belief by elected officials that they have “absolute” power can be found right across Canada and at all levels of government.

Take the example of the government of New Brunswick and its determined effort to sell off the provinces publicly owned power utility.

The Graham government in New Brunswick was elected on a platform that promised not to privatize NB Power. It was a platform plank that helped propel them into office. Now, in their first term of office the Premier and his Liberal caucus are hell bent on doing the exact opposite of what they were elected to do.

Tens of thousands of citizens have joined an online group opposing the sale and even though the group, on a per capita basis, is 6 times larger than one fighting the prorogation of Parliament, the Graham government is refusing to listen.

Protests are held on a daily basis at the Legislature and in front of MLA offices yet they refuse to listen.

Letters, emails, phone calls and public confrontations with members of the Graham government, by the hundreds, are happening daily yet they refuse to listen.

The volume of letters to local papers and the public opinion polls show that a vast majority of the public is opposed to the sale. Court challenges have been brought forward and native groups are seeking an injunction to stop the sale yet they still move forward with the planned sale.

What does that say about democracy other than sounding the death knell?

The Graham government is claiming they are not privatizing the utility because they are selling it to another crown corporation, even though that corporation is owned by the Quebec government, not the New Brunswick government. Clearly this is a case of quoting the letter of their platform over its clear intent”.

They are also claiming that their recent decision not to sell the transmission capacity is a case of them “listening to the people” but is it really? When you consider that they are not selling the poles but giving up all the capacity on those lines to Hydro-Quebec for eternity the self serving hair splitting taking place in New Brunswick is flagrant.

As with the proroguing of parliament, the actions of Premier Graham are clearly self serving. They are certainly not intended to serve the public interest.

In recent days elected MLAs in New Brunswick have even resorted to attacking the voting public to whom they should be answerable.

According to several witnesses, MLA Wally Stiles, a Cabinet Minister in the Graham government, told protestors outside his constituency office in Petitcodiac on Monday, “If you f--king a--holes think you are going to win this you had better think again! And I am f--king well going to run for the Liberal Party again!"

Stiles later got into an altercation with a resident in a local restaurant. The situation had to be brought under control by a retired RCMP officer who happened to be dining in the establishment at the time.

These sorts of incidents are becoming more and more prevalent among elected MLAs each day.

When the Stiles situation was brought to the attention of Premier Graham and members of his cabinet the only response came from Energy Minister, Jack Keir who, in addition to showing no concern about the actions of someone representing his government appeared to indicate that because this writer is a Newfoundlander I must be unemployed. Either that or when he said, “…Come on over, we'll see if we can help you land a job?” I have to wonder if he was actually offering me something to gain my silence?

Indeed, the sort of undemocratic and unprofessional actions we’ve seen in Ottawa lately are spreading like wildfire across the entire Country and it’s a slippery slope when those elected to office respond to their constituents, as both Premier Graham and his Energy Minister recently did, by saying they intend to do what they want regardless of the feelings of the public because:

“I'm not concerned. Politics wasn't a career for me.” – Minister Jack Keir

By Myles Higgins

Hydro Quebec / NB Power Sale – Debunking the Myths

Shades of Churchill Falls

Much like the Upper Churchill Contract, it appears New Brunswick is about to enter into a one sided deal with the devil, Hydro-Quebec. Unlike the Churchill this deal is forever and again unlike the Churchill, this one is being signed in spite of mass protests and opposition.

In October New Brunswick Premier, Shawn Graham, announced his intention to sell NB Power to Hydro Quebec after being elected on a platform that promised the corporation would not be sold. Opposition to this unexpected move was swift and has grown with each passing day. Currently 10’s of thousands of people have joined a group opposing the deal and, according to NB Power sources, even the CEO of utility has encouraged employees to write their MLA demanding the sale be stopped.

Since the surprise announcement much has been said on both sides of the debate, often making it difficult for the average person to know what the truth really is. This problem was only exacerbated when the Graham government hired an international Public Relations firm, at taxpayer expense, to “sell” the deal to voters.

Coincidentally, this is the same firm the former Bush administration hired to sell the Iraq war to the people there. Enough said.

It isn't just the people of New Brunswick who stand to suffer from their government's short sighted actions. Newfoundland and Labrador will also come out on the losing end of yet another Hydro-Quebec contract by losing any hope of accessing markets for Lower Churchill power through New Brunswick. The deal may also kill any chance Newfoundland and labrador has of dealing with anyone but Quebec when the Upper Churchill contract finally expires in 2041.

The problems this agreement bring with it are far too many in number to present in a single commentary but to uncover the truth about the "deal", at least from the perspective of New Brunswickers, all one really has to do is look to that provincial government’s literature on the subject. No, not to find the answers but to understand some of the Myths and spin the government is attempting to “sell” to the New Brunswick public.

With that approach in mind, I’d like to offer up the same 10 key points the Graham government recently sent out in brochures to the voters of New Brunswick as well as an analysis of those points, without the political spin.

Point 1: The $4.75 billion dollars received from HQ (for the purchase) would reduce the provincial debt by 40%!

Not true.

New Brunswick’s Auditor General, Mike Ferguson, clearly stated “…there will be no impact on the provinces net debt…”

In fact NB Power’s debt is held, maintained and paid separately from the provincial debt. NB Power has a debt to assets ratio similar to other utilities in Canada, including Hydro Quebec, and is quite capable of paying down those debts through customer revenues.

Not only would removal of that debt not impact the province’s overall exposure it has been clearly stated that the payment it (or not) has no impact on the province’s credit rating and in fact selling the corporation would decrease government revenues (from the utility’s profits, taxes and fees) by hundreds of millions of dollars that could be used to pay down the province’s actual debt.Instead those profits will accrue to the government of Quebec.

As an aside, Hydro Quebec plans to borrow the 4.75 billion dollar purchase price, in effect simply transferring NB Power’s dept to Hydro Quebec. Either way the rate payers of New Brunswick will end up paying those costs off through their power bills. It’s like buying a house vs. renting. It’s just a matter of whether you prefer to pay off your own home or someone else’s.

Point 2: The average household heating with electricity would save nearly $1,400 over the next five years.

Not True.

Government’s numbers are based on households using far more power than the average homeowner might expect to use. While a 5 year rate freeze may seem attractive the real savings, even accepting government’s highly inflated numbers, are close to .35 cents per day during the 5 year period, but that’s not the end of the story.

After the 5 year “grace” period rates will begin to rise with the rate of inflation and any power used beyond the so called “heritage pool” during the 5 year holiday (barely enough power to meet provincial needs today) will be calculated and those overruns plus all interest charges will be tacked onto the bills of every rate payer going forward. In addition, those increases don’t take into account additional charges for such things as system upgrades, new power sources, new transmission costs and the like which will also be added to bills.

The Auditor General noted “ordinary rate payers have been told that their rates will be frozen for five years and will only increase by the Consumer Price Index after that.” He continued to say, “The province needs to be clear about whether NB Power customers might face higher bills through other charges.”

As one individual recently put it, are a few pennies a day worth our future and the future of untold generations to come? This deal is forever.

Point 3: Don’t worry, after five years your rate increases are tied to inflation. Independent expert forecasts inflation should remain under two percent over the next 20 years.

The question here is just how accurate those forecasts really are. Most economists can’t predict when we’ll come out of the current recession let alone what the CPI will be in 20 years! Looking back through history is of little help (though it shows that using strictly CPI as a guideline rates would now be far higher they currently are) and no educated guess on the rate of inflation will be of any help going forward if oil reaches $140.00 a barrel driving up the cost of all the goods and services and taking inflation to entirely new levels.

Point 4: Hydro Quebec will not have control over our future rates. These will be controlled by the New Brunswick Energy and Utilities Board.

This appears to say that selling NB Power will not mean relinquishing regulatory control. Under normal circumstances one might expect this to be true, however in this case it may not be.

The MOU clearly states (section 3.1) that “the Government of New Brunswick will change the regulatory framework governing the generation, transmission and distribution in New Brunswick to conform to the framework currently in effect in Quebec.

In other words New Brunswick’s regulator must conform to Quebec’s regulations regardless of what those might be, in effect putting Quebec in control of regulations in New Brunswick, not the local regulators who will serve as little more than a rubber stamp.

Point 5: New generation needs won’t mean larger rate increases because these will be controlled by the EUB.

The MOU limits the amount of power available in the so called heritage pool to 14 TWh for both residential and industrial customers. According to NB Power’s 2007-2008 financial report the province used 14.25 TWh during that period, exceeding the heritage pool allowance being put in place for the next 5 years and almost guaranteeing that the pool is too small to meet existing needs, let alone any future growth. This will mean any new industries hoping to move into the province will not be able to compete on an even playing field with existing industry, impeding all future growth.

As for the pool being too small to start with, according to the MOU section 2.2(b)ii the incremental cost of any power used over the allotted heritage pool will be deferred or set aside until the 5th anniversary when all costs plus interest will be recovered by Hydro Quebec through rate adjustments. This is over and above the annual rate increase based on the Consumer Price Index or other costs to be passed along to consumers.

Point 6: It’s OK to rely on another province for our energy needs because we have a long history of co-operation with the Province of Quebec.

In truth Quebec has no reason to look out for the interests of New Brunswick citizens and this is clear in the MOU. Creation of an artificially low heritage pool will prohibit new industries from accessing favourable power rates and seriously impede new growth.

There is also much reason for concern among exiting companies in New Brunswick that have supplied equipment, tools, vehicles and other necessities to NB Power for decades. Hydro Quebec already has relationships with suppliers outside of New Brunswick and will likely continue to leverage those suppliers that they are comfortable with going forward. In this regard the future for those local companies looks bleak.

Point 7: Don’t worry, New Brunswick would continue to have absolute control over energy policies and the agreement identifies New Brunswick as an energy hub.

In reality “New Brunswick’s” energy hub will be owned by Quebec, not New Brunswick, as will the 20,030 km of transmission lines and the crown lands they sit on.

While Hydro Quebec will indeed have to face the New Brunswick EUB when seeking rate increases several increases are built into the MOU (see previous points) and according to the MOU the New Brunswick regulator, far from being independent, will be obligated to conform to Quebec’s regulations.

So much any guarantees of total control over energy policies.

Point 8: This agreement is beneficial because Hydro Quebec is responsible for such costs as upgrading and maintaining aging NB Power facilities.

Not true.

Section 2.5 of the MOU ensures a fair return (fair being open to interpretation) through a contractual or a legislative guarantee to the owner of the assets (Hydro Quebec) through transmission and distribution rates! This is over and above the CPI rate increase and heritage pool overruns.

In addition, within 12 months of Hydro Quebec issuing the demand, New Brunswick is obligated to shut down and pay all decommissioning costs for Belldune, Coleson Cove and possibly Mactquac and the Lepreau generating stations, none of which Hydro Quebec is financially responsible for and all of which will be paid for by New Brunswick taxpayers, adding to the provincial debt. The bill is for this effort is potentially several billions of dollars which will have to be borrowed and paid back.

Point 9: We are told not to worry our power supply is secure and our NB Power employee’s jobs are secure.

This is difficult to believe since Union leaders have raised concerns that the MOU hasn’t convinced them that existing job or labour agreements are safe at all.

As for power security, when New Brunswick’s thermal power plants (see previous point) are shut down, power will need to be imported from Quebec’s James Bay or Newfoundland and Labradors Churchill Falls plants. Those plants are more than 1250 km from Fredericton. One doesn’t have to go too far into the past to see that greater distances mean greater risk of supply or that putting all dependence on a single supplier, one the province has no control over, is far from what most thinking people would consider energy security.

Liberal Point 10: Will New Brunswicker’s be consulted? Yes your government is listening and urges you to join the conversation on the government’s website www.lowerratesnb.ca

This is doubtful. To date an overwhelming number of complaints, questions and concerns have been raised with government and the result (as is clear to see from the preceding points issued by government) is little more than lip service and spin being offered up.

Citizen’s are demanding a delay of the sale until after the September election so they can decide for themselves but the Graham government is refusing this and has gone so far as to say publicly that the citizens of New Brunswick are not capable of making a decision of this magnitude.

Apparently the New Brunswick government believes the electorate is not intelligent enough to understand what’s going on. One can only assume they arrived at that conclusion after this same electorate supported their platform which included a promise NOT TO SELL NB Power.

Say NO to sale of NB Power

New Brunswick citizens have been promised that they will save $1,400 over 5 yrs/household - that amounts to $1400/60 months = $23/month. NB industries (ie: Irving / McCain) on the other hand will get an immediate 30 percent reduction in power rates, but new industries will have pay market rates, reducing their ability to compete against existing industries and those in Quebec.

The Conservation Council of New Brunswick is which is reponsible for the enactment of the the Clean Water Act to guarantee safe drinking water, legal requirement for NB Power to supply 10% of its electricity from renewable sources, and creation of New Brunswick's energy efficiency agency agrees NB Power should not be sold.

This is one public corporation buying out another, so why doesnt the agreement allow New Brunswickers to pay the same rate, for the same electricity, as Quebec clients will. Instead New Brunswick rates will be frozen at 60 per cent higher for the next 5 years and then continue to increase.

The 2006 New Brunswick Liberal platform stated that NB Power will remain in public hands, but the Liberals are arguing they must break their promise because they couldn't foresee the debt situation at NB Power. They should admit they didn't perform due diligence before releasing the Charter for Change. NB Power's debt was known to be a problem in 2006.

Hydro Quebec has signed only a memorandum of understanding with NB Power. It is necessary that it passed by the House and the contract must be signed before March 31, 2010.

New Brunswickers need to contact their local MLA and everyone who is against this terrible situation needs to voice their opinion to their Federal Member of Parliament as soon as possible.

Contact informtion for Members of Parliament can be found in the links section at the left side of this web page.

All of Canada Impacted by Quebec/NB Power Deal

The following letter was sent this morning to federal members of Parliament, several members of the Canadian Senate, the Premiers of New Brunswick, Ontario, PEI, NL and Nova Scotia along with the Federal Competition Bureau and copied to multiple national and provincial news agencies in Canada.

RE: Hydro-Quebec’s proposed purchase of NB Power,

Consider that if this purchase is allowed to proceed, overnight 5 of Canada’s 10 provinces will become completely dependant on a single corporation for their ability to import or export electrical energy both inside and outside of the Canadian border. The remaining Canadian Provinces, Ontario and East, will be forced to pay power prices set by that same corporation for any power they might wish to purchase from the Canadian East.

Is this the sort of business climate the Governments of Canada and its provinces, other than Quebec, really want to foster for the future of the nation?

Some have argued that even after such a purchase the rates that can be charged to wheel power across Quebec-Hydro’s grid will be set by regulators, not by the corporation itself. This is true indeed true but this argument is a false one.

The very ability to wheel power through Quebec-Hydro’s grid, at any price, will depend on the corporation’s willingness to invest in the infrastructure capacity that will permit its competitors to access the grid. In other words, true competitive freedom will no longer exist and market access will not be possible without Quebec-Hydro’s willingness to permit it.

Putting all politics and rhetoric aside, the question that needs to be answered is a simple one:

Should a single corporation, no matter where it’s located, be permitted to completely control the flow of energy from half of Canada’s Provinces into the other half of Canada and beyond?

Sincerely,

To join the facebook campaign against this terrible situation and have your say visit: http://www.facebook.com/group.php?gid=25702989279