Quebe's Shameful Power Play - National Post

From the National Post
The Bloc Quebecois are the W.C. Fields of politics -- they never vote for anything, they always vote against. Paule Bruelle, a Bloc MP from Trois Rivieres, provided the latest example of her party's ability to drain any room of positive energy by calling on the federal government to turn down Newfoundland and Labrador's application for $375-million in federal infrastructure funding -- not on the grounds that it may be a bad investment but because it would provide competition for Hydro-Quebec.

Newfoundland and Labrador, through its energy subsidiary Nalcor, and Nova Scotia's energy giant, Emera, have sought $375-milion in federal funding from the government's Private-Public Partnerships Canada infrastructure fund to help build a transmission link between a new generating plant at Lower Churchill in Labrador and Nova Scotia. The logical route would be through Quebec but Hydro-Quebec has already closed down that option by complaining it needs all its existing transmission capacity and the province's regulator has agreed.

Not only does the Bloc not want Newfoundland and Labrador's new green hydro power to go through Quebec, it wants to stop it going around Quebec too.

The worrying thing is that Jean Charest's Liberal government agrees with the separatists, claiming that federal funding would create an unfair trade advantage and result in a government subsidy for each kilowatt of electricity transported to Nova Scotia.

Only a Quebec government could make such a statement without feeling a sense of shame. The province likes to tout its green-energy credentials, but its environmental record is almost entirely dependent on the notoriously one-sided 72-year deal to buy Newfoundland and Labrador's hydro power, generated by the Upper Churchill Falls, for a fraction of its market price.

It seems hard to believe but the 1969 deal, which has seen Quebec make $20-billion to Newfoundland and Labrador's $1-billion, is about to get worse for residents of the Rock.

In round numbers, Quebec currently pays $2.50 per megawatt hour and then sells on the power at the market price of between $40-60 mw/h. Bad enough you might think, but that amount is set to fall to $2 per megawatt hour from 2016 for the remaining 23 years of the deal's duration. Wars have started over less.

This is the background to the screaming match that is brewing between Mr. Charest and Newfoundland and Labrador's Danny Williams. Mr. Williams is appealing the Upper Churchill deal on the grounds that there has been such a fundamental change in market conditions because of open access to the United States that there has been a breach of good faith.

The case is likely to be mired in the Quebec court system for years.

Undeterred, Nalcor has struck a deal with Emera that will see a new $2.9-billion generating plant at Muskrat Falls, linked by a new $2.1-billion transmission line to the Rock and then connected to Nova Scotia by the $1.2-billion subsea link. Newfoundland will keep 40% of the power generated, Nova Scotia will take 20%, leaving the remainder for sale to markets in the northern United States, a market where Hydro-Quebec is already strong. Muskrat Falls will leave Newfoundland and Labrador 100% emission free.

Ed Martin, Nalcor's chief executive, was in Ottawa Tuesday, trying to drum up support from the federal government. He said the deal will remove two to three megatonnes of carbon from Canada's total emissions and create about 6,500 jobs a year during the seven-year construction period. "It's a great investment opportunity for Canada and I don't want to leave them out," he said in an interview.

Whether or not the numbers add up is for the federal Finance department to decide. Ottawa's 8% stake in the Hibernia project that Nalcor has already bid upon adds the possibility of a side deal being added into the equation.

But what is clear is that the federal government should ignore bleating from the Bloc and the Quebec government about unfair trade practices, experts though they both may be on the subject.

The decision should be made on what is in the national interest -- something over which Mr. Charest, far less the Bloc, loses any sleep. If this federation is to flourish, Ottawa needs to speak for Canada.

By John Ivison