: Newfoundland's never-ending power politics

 Jeffrey Simpson

The Globe and Mail

When electricity's involved, the Rock

has its own version of

"Je me souviens"

Canadian federalism's version of

the Wars of the Roses has resumed,

with Labrador's hydroelectric power

potential again at the centre of

the battle between

Newfoundland and Quebec.

As usual, the federal government is

sitting on the sidelines of the battle,

desperately eager not

to become involved.

No federal government wants

to irritate Quebec, and this

federal government does not want

to help Newfoundland,

whose Premier Danny Williams

has so annoyed

Prime Minister Stephen Harper.

The latest battle is part of a much

larger struggle with tens of

billions of future dollars

at stake, as many as

six provinces implicated directly

or indirectly, and the possibility

of bringing either greater harmony

or severe discord to

the Canadian federation.

At issue is the proposed takeover

of New Brunswick Power

by Hydro-Québec. Whatever

the benefits for New

Brunswick – lower short-term rates

and the elimination of debt – the deal

is going down badly in

that province, where the latest polls

showed opposition outstripping

support by more than 2 to 1.

In Newfoundland, Hydro-Québec's

takeover has infuriated Mr. Williams,

who, in typical rhetorical style,

has attacked Quebec for

"declaring war" on his province

and New Brunswick Premier

Shawn Graham for selling out

his province's interests.

Viewed from St. John's,

the Hydro-Québec offer is

part of a decades-long effort

to prevent Newfoundland from

being the principal beneficiary

of Labrador's huge hydro potential.

If N.B. Power falls into Hydro-Québec's

hands, then the massive Quebec

utility will geographically

encircle Newfoundland.

No matter how Labrador power

moves – through Quebec to Ontario

and/or the United States, or

underwater to Nova Scotia and then

through New Brunswick – Hydro-Québec

will have Newfoundland squeezed.

Quebeckers, whose motto is

Je me souviens, remember lots

of things about their own history,

mostly the bad things done to

them by les anglais, against

which French-speakers

valiantly battled. In Newfoundland,

the province's own sense of

Je me souviens revolves, in part,

around what bad things

Quebec did to it.

Specifically, every Newfoundlander

above the age of 3 learns how

their province negotiated

a deal in the 1960s with Hydro-Québec

to develop the Upper Churchill Falls

power in Labrador. The deal

seemed fine at the time,

but as the world price of energy,

including hydro, rose way

beyond what the signatories

intended, Quebec reaped

the benefits.

Newfoundland has tried every

strategy to renegotiate the deal,

from which Quebec derives a profit

of about $2-billion a year.

Newfoundland has tried moral suasion,

shame, rhetoric, negotiations,

court challenges, all to no avail.

Quebec's response has always

been the same. We helped you

get the project going. We took risks,

too. A deal is a deal is a deal.

Tough. Especially galling for

Newfoundland, the deal

runs to 2041.

Courtesy of American regulatory

rulings, hydroelectricity destined

for the United States is supposed

to pass from one jurisdiction to

another with only a negotiated

tariff to the transmitter.

Newfoundland is using this ruling

to insist Hydro-Québec open up

its transmission lines to the

large power potential waiting to be

exploited in what is called

the Lower Churchill project.

But Quebec authorities have delayed

a hearing on the Newfoundland

action for almost four years.

It is finally supposed to start

in January, but Quebec's delay

strikes Newfoundlanders as

typically hostile and premeditated.

At the very least, Newfoundland

wants the same guarantees

from New Brunswick for

transmissions access, whether

its utility is taken over by

Hydro-Québec or not. Otherwise,

Newfoundland fears its power will

be bottled up, or might be sold

to Hydro-Québec at prices that

will allow that utility to capture

most of the profits.

Lower Churchill is essential for

Newfoundland, in part because

it would send cheap power

from Labrador to the island

of Newfoundland and allow

eventual large-scale wind power

projects in Labrador to have

access to the new transmissions.

For Quebec, the Lower Churchill

project is just one among many.

Quebec is developing big projects

within its own borders, and

can wait for Labrador.

Newfoundland, by contrast,

wants Lower Churchill up

and running by 2017 as part of

a long-term plan to become

an energy powerhouse.

Quebec apparently now sees

Newfoundland as a competitor,

not a potential ally. Squeezing

a competitor by purchasing

New Brunswick Power is part

of how to deal with the situation

in a cut-throat world.

That the two provinces are both

in Canada, and might therefore

try to work together, certainly

doesn't seem to bring them together.

Ontario, strangely, is almost

silent in this struggle, although

it could desperately use clean,

cheap power from Labrador.

As for the federal government,

it decided decades ago not

to involve itself, lest it

irritate Quebec.

In a country without a national

energy policy or a national

electrical grid, and with no

political appetite for intervening

in interprovincial struggles

over natural resources, the only

movement from Ottawa is

that of heads ducking.

Meanwhile, the bad relations

between Newfoundland

and Quebec deteriorate further.

Link here

Sent from Kigali, Rwanda

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