When electricity's involved, the Rock
has its own version of
Canadian federalism's version of
the Wars of the Roses has resumed,
with Labrador's hydroelectric power
potential again at the centre of
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.
--
J-L K
Sent from Kigali, Rwanda
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