Deal Inked on Lower Churchill Development

After decades of waiting and wondering the people of Newfoundland and Labrador learned today that the Provincial government has inked an agreement with Nova Scotia for development of a portion of the Lower Churchill Falls hydro project.

The agreement was announced at a press conference today attended by representatives of NALCOR (Newfoundland and Labrador’s energy company), Emera (owner of Nova Scotia Power) and the Premiers of Newfoundland & Labrador and Nova Scotia, Danny Williams and Darrell Dexter.

At this point all that is publicly known is that both NALCOR and Emera will partner in the development which will see 800 megawatts of power produced from the Muskrat Falls section of the Lower Churchill. The Larger Gull Island generating station which had been a part of the original development plan for the river will not be developed at this time and no timetable for its development was given.

NALCOR will build a generating facilities at Muskrat Falls (Cost 2.9 Billion). This facility will be fully financed and owned by Newfoundland and Labrador.

Emera, a publicly traded company, and NALCOR will jointly develop the transmission route to wheel the power from Labrador, through Newfoundland and on to Nova Scotia.

The subsea link between Labrador and Newfoundland will be built as a joint venture 71 per cent owned by NALCOR (cost 2.1 Billion) and 29 per cent owned by Emera (Cost = 600 million). Emera has agreed to finance 20% of the ongoing maintenance costs for the life of the agreement.

The subsea link, also known as the Maritime route, between Newfoundland and Nova Scotia will be built and wholly owned by Emera. (Cost 1.2 Billion)

It would seem there are still details to be determined relating to the Maritime link itself as officials with Emera have said that they are still negotiating agreements with NALCOR to build the subsea transmission link between the two provinces in return for access to 20 per cent of the energy from Muskrat Falls for a period of 35 years.

At the end of the 35 year contract the undersea transmission line will revert to Newfoundland and Labrador ownership for the sum of 1 dollar.

Investments by all parties into the project total an estimated $6.2 billion.

Click here to view Fact Sheets (NALCOR and NL Govt.)

Although both Provinces have asked the federal government for a loan guarantee and funding assistance to develop the sub sea link they announced today that they will move forward even if funding itself is not provided.

The entire development is still subject to regulatory approval in both provinces as well as to the approval of the boards of directors of NALCOR and Emera. In addition a native land claims treaty in Labrador must be ratified by Ottawa before the project can proceed.

Based on past history and the political implications of any Churchill Falls power contract, one might also expect that the voters of Newfoundland and Labrador will also have their say in the future of this deal.

Construction is expected to begin in 2013 with first power transmission by 2017

Based on what is known so far there are still many outstanding questions the people of Newfoundland and Labrador will be asking in the coming days.

The answers or lack of them is likely to have serious implications, either positive or negative, for the current Provincial government in the next election, scheduled for less than a year from now. Far more importantly they will have a far reaching impact on every individual in the Province for generations into the future.

Some of those questions include:

1) What are the remaining issues to be addressed in the reported “agreements” to be reached between EMERA and NALCOR for building the Maritime Link?

2) What is the overall capacity of the Labrador to Newfoundland link and the Maritime Link to Nova Scotia? Will one or both have the capacity to wheel at least a portion of the undeveloped portion of Lower Churchill Power if Gull Island is developed?

3) How will the proponents (NL and EMERA) finance their shares of the project? Is this financing in place or is the project contingent on finding financial backing?

4) Putting aside the employment created by this development, what is the actual return on investment for Newfoundland and Labrador in the short and longer term? In other words, will this project provide the Province with increased revenues in its coffers?

I’m sure as the next few days and weeks go by and we begin to learn more about this agreement a longer list of questions will begin to form. Hopefully answers will be given when those questions are asked. As they say, the devil is often in the details and while an agreement has been announced one has to wonder exactly what those details include.

At any rate, today is a time to have a quick (and well deserved) celebration before digging into the details in earnest (as we all should) to ensure that our future is as bright as it appears today.

Each and everyone in Newfoundland and Labrador needs to take some time to look at this with their eyes fully open and unfiltered by political bias or spin from any direction.

It does nobody any good to simply attack the deal for the sake of attacking. It also does no good to approve of it simply because it’s being presented by a popular government. Remember, nothing is written in stone until the people of Newfoundland and Labrador say it is. The strong people of New Brunswick proved that point not so long ago when the Provincial government there tried to ink a deal with Hydro-Quebec.

On the surface the agreement seems reasonable, and I hope it is, but until all the questions are answered nothing should be allowed to proceed. Nobody should ever forget the Upper Churchill. NEVER. If more questions were asked back then perhaps things would be far different in the Province than they are today.

Ask informed, unbiased and non-politically motivated questions. Probe the situation fully and rationally to determine where this deal ranks among past options.

the Province can’t run away from this or any deal because it has been burned in the past but neither can it simply accept the deal on blind faith.

Once bitten, twice shy. The outcome of this, for good or for bad, rests squarely on the shoulders of the public. If Newfoundlanders and Labradorians have learned anything from the Upper Churchill it’s that once a final agreement is in place there’s no going back.

This time around can be no excuses and nobody else to blame for not ensuring a better outcome.

From Today's Halifax Chronicle-Herald

The bus driver’s attack: A completely acceptable, harmless counter-protest

By STEPHEN MAHER
Ottawa Bureau

LAST SATURDAY, a Metro Transit driver stopped his bus and jumped out to disrupt an anti-seal-hunt protest at the corner of Spring Garden Road and South Park Street by pretending to beat a stuffed seal.

The driver has not been interviewed, but protest organizer Bridget Curran said he was trying to be funny.

"He obviously thought that it was quite funny to simulate an act of violence against a seal," she said.

It is quite funny, I think, the kind of offbeat news item that gave us a crucial smile in a week when the newspaper — and life — was full of grim economic news.

The driver, whom Metro Transit has suspended with pay, likely should not have abandoned his bus, but it is difficult not to be cheered by his display of impish humour if you, like me, are an instinctive supporter of the seal hunt.

But Ms. Curran, director of the Atlantic Canadian Anti-Sealing Coalition, said it’s "extremely alarming" that no charges have been laid against the driver.

"What the police are saying by not charging him is that it’s completely acceptable," she said.

I hope that’s what they’re saying, because it seems to me like a completely acceptable impromptu counter-protest, harmlessly making fun of the protesters.

This whole issue comes down to one question: whether or not you think it’s acceptable to club seals.

Like a lot of Atlantic Canadians, I think it’s an acceptable — even praiseworthy — part of our East Coast tradition of making a living from the sea, tied up in my mind, in a muddled, romantic way, with our beautiful fishing and seafaring traditions and my admiration of the stoic outport fishermen of Newfoundland.

Thus, for me, being in favour of the seal hunt is a question of loyalty.

For opponents, though, it’s plainly awful to use clubs to smash in the heads of juvenile seals, skin them and leave the bloody carcasses on the ice.

The people opposed to the hunt — many of them young women — are motivated by a real love of animals, a deep affection that is incomprehensible to me and that I think rests on flawed, anthropomorphic ideas about animals but that is deeply meaningful to them.

While some of them, like Clayton Ruby, are hypocrites who eat meat and wear leather while protesting the seal hunt, others are vegans, who believe it is wrong to kill animals.

You can disagree with them, but if they are willing to forgo strip loins for extruded wheat gluten, you can’t question their sincerity.

But you can question their accuracy. They are motivated exclusively by a desire to stop "sadistic baby-killers" — the words of activist Paul Watson after three sealers died during last year’s hunt.

Since they are protecting helpless babies against killers, activists therefore feel comfortable bending the truth.
For years they warned that the hunt was not sustainable. When those warnings started there were two million seals. Now there are 5.6 million.

They routinely use images of cute whitecoat seals in their fundraising, although we haven’t hunted whitecoats for 20 years.

The American Humane Society has been caught lying about the effectiveness of an American boycott of Canadian seafood, part of their effort to show that the hunt costs the Canadian government more than sealers make.

In this, in fact, they may in fact be right. The coast guard provides icebreaking service to sealers every year, at some considerable but unknown cost, and the plunging price of pelts means the industry is not the bonanza it once was.

But I don’t care, any more than the anti-sealing activists care about the fact that the herd poses a threat to fish stocks if left to grow unchecked.

I believe the hunt is ecologically sustainable and as humane, more or less, as farmyard practices, but if I were to learn that it does cause suffering to seals I still wouldn’t care very much.

Those of us on either side of the issue are immune to reason, because we support or oppose the hunt for emotional reasons.

The struggle is for the hearts and minds of people who don’t already have deeply held opinions and, on that front, foes of the hunt are winning, which may mean the hunt is doomed, since it depends on foreign markets that are vulnerable to public opinion.

In the 1970s, activists managed to persuade the United States to ban the import of seal products. Now, they are about to win a ban in the European Union. Even former KGB man Vladimir Putin has bowed to pressure to end the Russian seal hunt.

In Spain this week, where they routinely torture bulls to death for sport, several hundred Spaniards stripped down in the street and splashed themselves with fake blood to protest our seal hunt.

There have been about a dozen protests in Canada this year, and the hunt hasn’t even started.

The only pro-hunt demonstration was the impromptu act of a Halifax bus driver.

The sealers had better hope that the Chinese are slow to catch on to this animal rights business.

Web Talk Comment: It's too bad there aren't more "metro bus drivers" across Canada.

Newfoundland & Labrador No Longer Only Atlantic "Ghetto"

Nova Scotia is a “low-wage ghetto,” according to the co-author of a report released today.

The report recently co-written by Professor Larry Haiven of Saint Mary’s University in Halifax shows that while productivity has increased over the past 20 years in Nova Scotia wages have lagged behind.

“If workers have been contributing to an overall productivity increase, then what have they gotten out of it? The answer is nothing”, says Professor Haiven.

“Workers are actually making less than they did 20 years ago.”

According to the professor, Nova Scotia has the third highest number of low-paid workers in Canada, behind P.E.I and Newfoundland & Labrador and has the third lowest hourly wage, just a little better than New Brunswick and Newfoundland & Labrador.

The situation has led professor Haiven to label Nova Scotia as a “low-wage ghetto”, a term reminiscent of Globe and Mail columnist Margaret Wente’s attack a short while back when she referred to Newfoundland & Labrador as a “scenic welfare ghetto”.

The report goes on to say that increases in profits over the years are not filtering down to workers but instead are being raked in by the business community. No doubt this is a valid point but the reasoning given in the report, that corporate executives believe workers in Atlantic Canada are somehow less productive, is a little off base.

Having been a part of the work force with a major corporation in Newfoundland & Labrador for many years I’ve had the dubious honor of hearing executives speak of the true reason for not increasing wages and misconceptions over productivity are not a factor. In fact my experience has shown a high level of productivity in the area.

The conversation around compensation usually boils down to one of supply and demand. If someone is working in Newfoundland & Labrador, for example, corporate leadership often feels that since there are few alternatives for that worker to find another competitive job in the region that worker will put up with what they get.

On the other hand, those working for the same company in, let’s say, Alberta, often receive higher wages and larger annual increases than their counterparts in Atlantic Canada doing the same job.

Let’s face it, corporations are in the business of making money. It’s that simple. In that sense it’s hard to blame them for taking advantage of any opportunity to reduce costs and increase profits if they can get away with it. Remember that unemployment levels in Alberta are around 3.5% but better than 13% in Newfoundland and Labrador and more than double Alberta’s rate in the rest of Atlantic Canada.

This isn’t to say I agree with the status quo or condone these acts of corporate greed, quite the opposite, but we might as well face the facts.

The solution to the problem isn’t to attack industry for taking advantage of a situation that exists or to explain it away as a misperception about productivity. The answer is to remove any advantage they believe they have.

As the economy in this area improves through mega-projects, oil and gas developments and other development opportunities, the demand for workers in many fields will increase. It’s up to workers themselves to then pick and choose where they want to work and to walk away from any employer who is not willing to provide them with a reasonable salary and benefits package.

Taking this approach will soon see the tables turn.

Yes, there will be moaning and groaning from the business community but that’s life. We are already beginning to see this happen.

Even with a 13% unemployment rate and with thousands of citizens migrating back and forth to work in Fort MacMurray, there are constant reports of companies in Newfoundland & Labrador complaining that they can’t find enough workers to meet their growing needs or to staff planned future projects.

Too bad! Do something about it.

The management of these companies always follow up on their plea for help by saying that, “of course we can’t compete with wages in Alberta.”

My question is, “Why the hell not?”

The cost of raw materials, jurisdictional tax regimes, etc, being relatively similar across Canada how is it that a company in Alberta, Ontario or for that matter EVERY other jurisdiction right across Canada can offer higher wages than a company in Newfoundland & Labrador?

It’s B.S.

The truth is that they can and will pay more if they want to stay in business.

The reason wages are low is because for years companies have gotten away with it because there were few alternatives for anyone who wanted to work. Those days are quickly coming to an end and if the companies out there whining about a lack of workers don’t solve their own problem by paying a competitive salary then they might as well close up shop, get out of the way and let someone else come in who will.

As angry as Ms. Wente’s, “scenic ghetto” remark made many people in Newfoundland & Labrador feel, including yours truly, there is little doubt the strong wording used by Professor Haiven will have a similar effect in Nova Scotia.

The term used by Professor Haiven about his home province may have been harsh but it begs the question, “What should we call a “Have” province, like Newfoundland & Labrador, that has even lower average wages and a larger number of low-paid workers than a “Have Not” province like Nova Scotia?

Prime Minister Stephen Harper would likely call it a place suffering from a distinct “culture of defeat”. Personally I don’t believe that sort of defeatist attitude ever existed here and I find the current situation disgusting. I also believe it’s one that won’t last much longer.

With new projects planned to come to fruition in Newfoundland & Labrador over the next several years it’s time for any company operating in this region to begin treating local staff in the same way as workers are treated in the rest of Canada. The days of the free ride and of quasi-slave labor are over. Any companies that have become dependent for their survival on that little extra edge they gained by offering low salaries or who simply don’t want to level the playing field won’t last much longer.

On the bright side, for any company management who feel bad about having to close up shop, there is a bright side. With any luck they can find a well paying job out West like they’ve watched so many others do.

Nova Scotia Eyes Lower Churchill Power

The following contains excerpts from today's Halifax Chronicle Herald. The entire article is available at the following link:

Chronicle Herald Article.

Excerpt:

TAPPING INTO power generated by the proposed Lower Churchill Falls hydroelectric project probably won’t lower the cost of electricity in Nova Scotia, says the president and CEO of Nova Scotia Power. But Ralph Tedesco says it could go a long way toward providing price stability for an extended period and help the provincial utility "decouple from volatile international fuel prices."

...The opportunity to acquire power generated by the Lower Churchill project offers the most promising option because it could bring up to 600 megawatts of power to Nova Scotia by undersea cable, he says. That represents about a quarter of the total generating capacity required by the utility to serve its customers.
"One of the things that got us very excited about it was when Newfoundland indicated they were bringing power down from Labrador onto the island. As soon as I saw that, lights went off in my head because that then opened up what I called, at least from a conceptual perspective, the opportunity of bringing that power economically to Nova Scotia."

As a result, NSP and its parent, Emera Inc., are in negotiations with Newfoundland and Labrador Hydro, a provincial Crown corporation, to do just that. The talks are still in the early stages, says Tedesco, but the utility feels good about the negotiations so far and is pushing forward in the hope of reaching a satisfactory arrangement.

...The landing point in Nova Scotia will partly be based on the capacity of the utility’s transmission lines.
NSP plans to spend $50 million to $100 million to improve its transmission system in Nova Scotia by 2016.
That will help it accommodate more wind and tidal power but should also be useful in determining where the landing point for Labrador’s hydro power might be.

The undersea cable costs about $3 million a mile to install, says Rob Bennett, Nova Scotia Power’s executive vice-president of revenue and sustainability. It also costs about $1 million a mile to run the cable overland, so that will be a determining factor, he says.

The power passed through the undersea cable would be converted to direct current, which allows less power loss than if the cable were a traditional alternating current line.
The special stations to convert the power from alternating current to direct current and back again would be about $150 million each, says Bennett.

One station would be in Newfoundland, the other in Nova Scotia.

The total cost of putting the Newfoundland-to-Nova Scotia transmission line in place would be about $500 million.

But Bennett says the cost of the entire project would be several billion dollars if the development costs of the generating facilities at Lower Churchill Falls are included and the entire transmission system to get it across from Labrador to Newfoundland underwater and then again to Nova Scotia are added in.

If a deal cannot be reached to bring Lower Churchill Falls power to Nova Scotia, Tedesco says the company will continue to develop a mixture of power-generation options.

Harper's Big Election Gamble

With Wednesday’s announcement of a compromise deal over the Atlantic Accord, Stephen Harper sent another clear signal he plans to force an election in the coming weeks. The question is whether the gamble to shore up support in Atlantic Canada will actually help him or cost him in the long run.

Although the deal will provide additional funds to the province, the amount will be far less than Nova Scotia had been fighting for. The move could, and likely will, be seen as an attempt by Harper to buy off the province before an election and to shore up a weak Conservative governemnt in that province.

Some analysts believe Harper wants to continue to govern but based on recent events it’s far more likely that, even with less than perfect polling numbers, the PM sees the time as ripe to make his move and force an election.

All sorts of scenarios are being tossed around by strategists and party insiders. Anything and everything that could possibly help or hinder the party’s election chances are being examined. Correction, almost everything. Clearly something has been overlooked in Harper's quest for glory.

What has not been considered is a factor outside the control of Stephen Harper and his party. An intangible that has the potential to do some serious damage to the Conservatives in light of recent events, and one that has once again moved to the forefront with Wednesday’s announcement.

That uncontrollable and indefinable factor is none other than the outspoken Premier of Newfoundland and Labrador, Danny Williams.

It may sound a little odd that the Premier of one of Canada’s smallest and poorest provinces, one with only 7 federal seats, might somehow be able to throw a monkey wrench into the PM’s chances for re-election, but odd or not, the possibility exists and Stephen Harper is not giving that possiblity the attention it deserves. It's an oversight that could prove far more expensive than he knows.

Williams has already verbally attacked the PM over back peddling on equalization promises and for making unilateral changes to the bi-lateral Atlantic Accord agreement. At the time of those changes Williams complaints were easily brushed aside as those of a premier with limited political experience but my how times have changed.

Today the Premier is viewed in many parts of Canada as a bit of a giant killer, a leader who isn’t afraid to fight with anyone standing in the way of his province’s future. Simply put, he's a street fighter that Stephen Harper has just poked with a very big stick.

Williams has already told the people of Canada that the PM can’t be trusted to keep his word. He warned them that by breaking a written promise to Newfoundland and Labrador Harper proved he was not above doing the same thing to them. Now, with the Nova Scotia agreement in place, Harper has done just that.

The PM would have been better off if he had simply done an about face, for whatever "technical" reason, and honored the Atlantic Accord. At least then he could have claimed he was bound by a contract signed by the preceding Liberal government and that his hands were tied. Instead he has opted to do something he told the Country he would never do.

Whether you support the fight over equalization or not, yesterday’s agreement, with Nova Scotia, is clearly a new side deal for that province. When Harper brought down the equalization formula in March, the one that got him into this mess in the first place, he told the Canadian people there would be, “No more side deals”.

All Williams has to do now is lock and load for an attack that will surely resonate with Canadian voters. On Wednesday Stephen Harper provided the ammunition he needed and he also gained the scrappy Premier an even more emboldened ally in the form of the normally reserved Saskatchewan Premier, Lorne Calvert.

The Premier of Newfoundland and Labrador is often accused of picking fights for the sake of fighting but that’s a misperception that has come back to haunt several of his opponents. In reality he more often picks fights he feels he should, and can, win. Stephen Harper is aligned squarely in his crosshairs and Williams' finger is poised on the trigger.

Since first elected Williams took on former PM Paul Martin over the very same Atlantic Accord contract. He won.

He fought big oil over an improved royalty regime and a provincial equity position. Big oil closed up shop and moved away. A year and a half later they quietly returned and agreed to an enhanced royalty regime and the very equity position he wanted. He won.

Williams, while in his first term, took a hard line by legislating over 40,000 public sector employees back to work, laid off highway staff after shutting down a number of depots, sent the provincial oil industry association into hysterics by walking away from Hebron development talks and completely alienated two federal governments. This week he sought re-election from just over 300,000 voters, most of which were impacted in some way by his previous actions. He won in a landslide vicory with the largest percentage of popular vote in the province’s history.

Williams is now much more widely recognized across Canada than he was even a few short months ago. His exploits have led to a re-evaluation of oil royalties by the Alberta government. He has emboldened provinces like Saskatchewan - which is now tackling the federal government in court and threatening to campaign against Harper- and his fighting persona has even led some in Nova Scotia to jokingly muse about him leading their province as well.

When he walked out on meetings with Paul Martin and he proved he doesn’t pull his punches.

When he waved goodbye to oil companies, as they packed up and left the province over stalled negotiations, he proved he doesn’t pull his punches.

When he went on a media tour and took out full page ads across the Country criticizing Stephen Harper he proved he doesn’t pull his punches.

When he told the electorate in Newfoundland and Labrador to vote “ABC” (Anyone but Conservative) during the next federal election he proved he doesn’t pull his punches.

And when he won his second mandate on the day before Harper's Accord announcement, with a majority that even the first Premier of Newfoundland and Labrador and late father of Confederation, Joey Smallwood, would have been envious of, Williams greeted the crowds by saying,

"There's a message here, Steve. If you want to take me and my team on, you have to take on all the people of Newfoundland and Labrador."

Once again, he proved he doesn’t pull his punches.

Any federal election will naturally center on the issues and personalities directly involved but who really knows what kind of chaos one very determined premier can create when he puts his mind to it.

It’s one thing to force an election when you’re sporting minority level numbers but are in control of the agenda. It’s a completely different game when you're faced with an unknown and volotile variable like the Premier of Newfoundland and Labrador.

Unfortunately for the PM he has no control over which issues the public ultimately decide to latch onto, especially when a wild card like Williams is waiting in the wings stockpiling his ammunition and patiently preparing to fire.

I don’t know about Stephen Harper, but if I were planning to go to the polls any time soon I’d sure as hell be looking for some way to neutralize the Williams factor first.

Editor's Note: As an aside, Both Harper and MacDonald claim this deal was in the works for months (and not just a quickly engineered election ploy) there may be some evidence to the contrary.

The announcement of this deal (also offered to Newfoundland and Labrador) was made on October 10th, but as late as October 5th someone at the department of finance in Ottawa was spending a little time investigating the numbers involved. Check out the following link to another article on my site a few days ago:

http://freenewfoundlandlabrador.blogspot.com/2007/10/atlantic-accord-revisited.html