“There are no discussions between this government and the Quebec government.”
That’s part of a statement sent out by email to local reporters from natural resources minister Siobhan Coady’s office. You can’t find it on the government website or the party website. Coady was responding to a release from provincial Conservative leader Paul Davis challenging Dwight Ball to state the administration’s plans for the province’s hydro resources in Labrador.
Words matter. No one has suggested that the two governments were talking about anything. The talks would take place between Nalcor and Hydro-Quebec and, whether we take Nalcor boss Stan Marshall’s own words or the local scuttlebutt, the talks are going on between the two companies.
They can’t dodge a wrench, either
Coady and Premier Dwight Ball need to stop playing dodge-fact. They suck at it.
Coady’s misleading denial is the same as Ball’s deceptive statement mentioned in yesterday’s post that there are “no talks about Hydro-Quebec taking over Muskrat Falls.”
No one said anything about HQ “taking over” Muskrat Falls then or now. The rumble around town is that Nalcor and HQ are in talks that would see HQ taking a major role in an expanding Lower Churchill project.
To really signal the administration’s her difficulty with a simple, true statement, Coady tried to claim the Tories were “fearmongering.” That just comes across as looks silly. The simple truth is that if Nalcor and HQ weren’t talking, both Coady and Ball would have said precisely that. Based on the way Ball and Coady are carrying on, we know something’s up. We should be even more concerned given the fact that – yet again – Coady and Ball prefer to be cute rather than make simple statements that deal directly with the issue.
Constable Clueless Strikes Again
As for the Conservatives, they don’t get off much better in the fact department. Davis’ statement said that the “Muskrat Falls project was designed to end Quebec’s longstanding stranglehold on our hydro exports by creating a new route through the Maritimes to give our province new leverage after Quebec played hardball for decades, costing us enormous amounts of potential revenue a year,.”
That was what Danny Williams claimed in 2010 but, as Williams surely knew at the time and Davis should know now, it just isn’t true. Changes to American trade rules in the late 1990s made it impossible for Quebec to trade electricity into the United States without opening up their grid to competition. They did, which is how Nalcor was able to sell electricity to Emera starting in 2009. In fact, when Williams announced the deal in 2009 he said that the deal proved the stranglehold was a thing of the past. Williams claimed the Muskrat deal with Emera broke the stranglehold, but it wasn’t true then and it isn’t true now.
The Road to Perdition
of hydro-electric development in Labrador since 1949 made it plain that by the late 1990s, two specific changes in the province’s situation brought us close to deal on Lower Churchill development. One change was the FERC rules on open access to transmission. That broke Quebec’s stranglehold on development by providing access to the shortest route between Labrador and potential, profitable markets. The second was the advent of oil production. Even at oil prices forecast in the early part of this century, oil royalties meant that Newfoundland and Labrador was no longer desperate to develop the Lower Churchill.
As a result, the primary obstacle to Labrador development became a combination of a market and transmission line capacity, not politics. Danny Williams brought superficial considerations – like politics – back into the equation. In the process, he failed to develop the Lower Churchill on a sound financial basis. He spent a lot of time trying to blame Hydro-Quebec for his failure to develop the Lower Churchill but in the end, simple economics made his project completely idiotic.
No one wanted the power because it was too expensive. But with a desperate political need – for Williams to leave open politics – Williams and Nalcor concocted the Muskrat Falls project as a way to solve a completely fictitious problem. They cooked up a wild scheme to force local taxpayers to cover all the costs of the least attractive option on the Lower Churchill.
Brian Tobin and Roger Grimes came as close as possible to developing the Lower Churchill successfully. They had a market for the power, interest in developing the transmission grid and, as it turned out, enough cash from oil to ensure the provincial government and its energy corporation could have covered any cost over-runs.
Sadly, that project went into the bin. Grimes’ successor had a solid proposal from Ontario and Quebec to provide a market for Lower Churchill power. Williams rejected it out-of-hand. Then he spent four years trying desperately to find someone to buy his dream. Williams failed.
And 12 years after the Grimes project died, we are over a barrel. We’ve maxed our credit with Ottawa. We owe perpetual megawatts to Nova Scotia, have no friends left in New Brunswick, can’t offer anything marketable to New England, and are essentially left to beg for assistance from Hydro Quebec.
It’s a sad position, made all the worse by the province’s politicians and their foolish political statements.
. . . → Read More: The Sir Robert Bond Papers: Grits and Cons play dodge-fact over Labrador hydro talks #nlpoli
If the rumblings from Labrador are correct, an opinion column in lapresse – “Why Quebec should regain Labrador” – this weekend both fits right in and provides a cautionary tale for us all.
Pierre Gingras – right – spent 31 years with Hydro-Quebec (1966 to 1997) building large hydro-electric projects like Manicouagan and James Bay.
Gingras thinks the time is right to rescue tiny Newfoundland from itself and a very old injustice done to Quebec. After all, Gingras notes, people in Quebec should recall that, owing to what Gingras calls the “shenanigans of certain [but unnamed] financiers” the Privy Council in London tore Labrador from Quebec in 1927 and gave it to the British colony of Newfoundland without any protest from Canada.
“On se rappellera que le Labrador a été arraché au Québec (et au Canada) par le Conseil privé de Londres en 1927, à la suite des manigances de certains financiers, pour être rattaché à Terre-Neuve, alors colonie britannique, et ce, sans la moindre réaction du gouvernement du Canada.”
Quebec cannot buy power from Muskrat Falls as it is right now, according to Gingras, since the existing transmission lines are at maximum capacity. But a new transmission line costing $3-4 billion would make it profitable to develop Gull Island. Such a project would also allow for the development of many smaller projects in Labrador and along the Quebec North Shore that are currently held up, according to Gingras, by the uncertainty over the border.
Talk of a potential deal with Hydro-Quebec on the Lower Churchill has been swirling for months. Stan Marshall has done nothing to dispel public concern with his comments in August that he is busily improving the relationship between Nalcor and HQ. In June, Marshall said that Nalcor was looking at ways of boosting revenue from Muskrat Falls in conjunction with Nalcor’s existing partners Emera and Nyro-Quebec.
Nor did Premier Dwight Ball calm concerns when he said a couple of months ago that there were “no talks about Hydro-Quebec taking over MuskratFalls.” That sounds like one of his patented denials using very precise and misleading language. The deal apparently in the works would have HQ buy a significant interest in a much larger project that, as Gingras described it, would involve development of Gull Island. That isn’t about taking over Muskrat Falls, so Dwight’s comment would be literally true, even if it did not tell the whole truth.
The worst possible time
This is the worst possible time for Nalcor to be talking with Hydro-Quebec about the Lower Churchill. Nalcor and the provincial government are more vulnerable than ever before. Not only is the Muskrat Falls project spiraling out of control and unable to deliver its promised electricity, the provincial government is in the midst of its worst financial crisis since 1933.
Then there is the fact that the current government is in third place in the polls and the Premier is at the lowest point in the polls for any Premier since we have had polling information. The last time a politician was even half as desperate to make a deal on the Lower Churchill, Danny Williams cut one for Muskrat Falls. It guaranteed free electricity for Emera for 35 years, partially privatized the electricity grid in Newfoundland, and bound the province into the current mess. Don’t forget either that Williams himself spent five years desperately – and secretly – trying to get Hydro-Quebec to buy the Lower Churchill.
Dwight Ball has already made it clear he, too, is desperate to complete the Lower Churchill, despite the incontrovertible evidence that it is a mistake. His administration never completed a proper assessment of the alternatives to continuing the project, as it seems. Ball is in an even more desperate position than Williams was, if that is even possible. The government is vulnerable, therefore, to even the weakest offer that would beggar the provincial position and give Hydro-Quebec precisely the level of control of resources that Gingras is proposing.
Make no mistake, the provincial position had been strengthening in the late 1990s. It has deteriorated sharply since 2003, most significantly since October 2010. There is no reason to believe that the current Liberal administration – pot-committed to the ludicrous Muskrat Falls project – could produce a viable deal even with Stan Marshall. Indeed, Marshall is already jammed into an impossible position since Ball and the current Liberal administration have denied him the most power option anyone has in any negotiation: walking away from a deal. Marshall was interested in examining all options when he took over as chief executive at Nalcor. Dwight Ball has made it plain his only option is to finish the project.
Ball and Marshall don’t have many options. The federal government cannot increase its financial exposure in the project as it currently stands. It is a boondoggle and, as a recent court decision in Quebec confirmed, Nalcor does not control water flows on the river. As such, Muskrat Falls can scarcely produce enough electricity to meet the freebie Williams and Ed Martin gave Nova Scotia. The federal government will not pour more cash into it.
Having cut off every option for himself, Ball is clearly left with Hydro-Quebec and its deep pockets and experience as the only way to go. That’s why Ball must stop any discussions involving Hydro-Quebec and the Lower Churchill immediately. If he persists and, God forbid, he tries to implement a deal, Ball will precipitate a political crisis the likes of which the province has never seen. Given the government’s precarious financial state, such a political confrontation crisis over what can only be an inevitably bad deal on the Lower Churchill would be one the province cannot afford.
. . . → Read More: The Sir Robert Bond Papers: Worst possible time for HQ deal #nlpoli
Ocean Choice International is in better financial shape today, having successfully dumped a surplus shrimp processing facility on the people of Port Union. The plant – seriously damaged in 2010 during Hurricane Igor still needs major renovations…. . . . → Read More: The Sir Robert Bond Papers: OCI dumps troubled shrimp plant on taxpayers #nlpoli
If you’re not on offense, you are on defense.And in politics, if you are on defense, you are losing.The Liberals wound up on the defensive yet again Wednesday with the resignation of Ed Martin and the entire Nalcor board.To be sure, Williams-era appoin… . . . → Read More: The Sir Robert Bond Papers: Offense and Defense #nlpoli
As if on cue, Danny Williams’ publicist tweeted praise for Ed Martin as soon as news broke that Danny Williams’ right-hand for so many years was leaving the energy corporation Williams created.Almost an hour later, she flipped out a statement fro… . . . → Read More: The Sir Robert Bond Papers: Getting while the getting is good. #nlpoli
This is the story of two politicians.One is a successful business man with major land developments in the works. He got into politics to defend his people against foreigners out to exploit them. With a quick temper, a tendency to just make stuff … . . . → Read More: The Sir Robert Bond Papers: Us and them #nlpoli
“There was a very good job done … of boxing this province out [of the Equalization program] a few years ago,”That was Premier Dwight Ball talking to reporters on Tuesday after the Throne Speech that set the agenda for his new administration. He w… . . . → Read More: The Sir Robert Bond Papers: The inexplicable persistence of nonsense #nlpoli
American media circles were all abuzz this weekend about a little episode on Twitter featuring Donald Trump and a quote he liked.Gawker created a Twitter account last year that spouted quotes from Italian fascist dictator Benito Mussolini but attributi… . . . → Read More: The Sir Robert Bond Papers: Lions, jellyfish, and a quotable Italian fascist #nlpoli
By Roger GrimesReflecting upon becoming the eighth Premier of Newfoundland and Labrador 15 years ago this month, I found myself chatting with a few friends and associates about where the province found itself fiscally at that time, what happened during… . . . → Read More: The Sir Robert Bond Papers: From a decade of prosperity to $2 billion deficits: What happened?
“It was a previous Liberal government that wanted to actually privatize Hydro. This particular government wants to strengthen Hydro, wants to make it a very valuable corporation: a corporation that will ultimately pay significant dividends ba… . . . → Read More: The Sir Robert Bond Papers: Selling energy assets a good thing: Danny Williams #nlpoli
In 2004, Danny Williams fought for three months against a federal government decision that had been settled – at least for the federal government – earlier in the year as part of the usual budget cycle.
Williams got the money the federal government had allocated but won the domestic war for public opinion.
. . . → Read More: The Sir Robert Bond Papers: The ABCs of ABC #nlpoli
PHOTOS: Liberal Party Leader Justin Trudeau during a visit to Edmonton last year. Below: NDP Leader Thomas Mulcair and Prime Minister Stephen Harper. It should have been natural for the leader of the NDP to finally be the one who clearly called out Prime Minister Stephen Harper for his unprincipled and unpatriotic campaign of dog-whistle . . . → Read More: Alberta Politics: Fortune favours the brave? Trudeau risks advocating sane gun laws and ripping PM’s dog-whistle bigotry
Some people have a hard time with the idea that a great many political decisions are not the product of deep thinking, extensive research, and agonizing debate.
They come from brain farts.
You can hear that pretty clearly in the most recent episode of On Point. The political panel talked about a couple of cock-ups . . . → Read More: The Sir Robert Bond Papers: Brain Farts #nlpoli
In the 1980s, local entrepreneur Craig Dobbin bought a batch of helicopter service companies across Canada and merged them with his own company – Sealand – to form Canadian Helicopters.
By the time Dobbin died in 2006, CHC was one of the largest providers of helicopter support services in the world.
Not just . . . → Read More: The Sir Robert Bond Papers: Experience and government #nlpoli
Like clockwork, about two weeks after Danny Williams last got his mug on the news, the most thin-skinned media hound on the planet got himself a ton more ego-stroking attention.
Every two weeks or so.
If you don’t believe it, just do some google searching.
The official media advisory describes the event at Confederation Building this morning as an opportunity for Premier Tom Marshall to thank public servants “for the support provided by their work over his time as Minister and Premier.”
In reality, this is another one of the grandiose celebrations that have become the trademark of Conservative Premiers . . . → Read More: The Sir Robert Bond Papers: The Spectators and the “Me” Generation #nlpoli
Friday is trash day in the world of political communications. It’s the day when you slip out stuff that is unpleasant in the hopes people will miss it.
If you can slide in another story, like say the completely unnecessary appointment of a finance minister who will have the job for a mere two . . . → Read More: The Sir Robert Bond Papers: Trash, Give-aways, and Conservative Policy #nlpoli
John Crosbie, the elder statesmen of Conservatives in the province took a shot at Danny Williams for his continued interference in the internal affairs of the provincial Conservatives.
Danny blew a gasket and willingly gave interviews to every media outlet in town, thereby guaranteeing that the story that can only do even more damage to . . . → Read More: The Sir Robert Bond Papers: And then things went horribly wronger… #nlpoli
Every now and again, someone will talk about voter apathy.
Last week, Steve Kent was circulating the link to an article that claimed that youth engagement – getting young people more involved in the community and in politics – was a way of getting more people to vote at election time.
That’s what voter . . . → Read More: The Sir Robert Bond Papers: John, Danny, and voter apathy #nlpoli
Pretty well every Conservative who is anyone in the province turned up on Wednesday night at Danny Breen’s by-election headquarters.
Every Conservative, that is, except the fellow who is the heir-apparent to the leadership. Frank Coleman wasn’t anywhere to be seen according to reporters at the headquarters after the polls closed.
It turned out that . . . → Read More: The Sir Robert Bond Papers: Premier Peek-a-boo #nlpoli
The provincial Conservatives lost a crucial by-election in Virginia Waters on Wednesday, but not for lack of effort. The could not possible have pulled out any more stops to try and win the seat in the last two weeks of the campaign.
Even on polling day the Conservatives mounted a prodigious effort and the . . . → Read More: The Sir Robert Bond Papers: Ripples #nlpoli
Danny Williams appeared in Virginia Waters on Saturday to campaign for Danny Breen, the Conservative candidate in the by-election.
Breen’s campaign wasted no time in pushing out pictures of The Appearance, like the one above, another one showing him with some young fellows out posting Breen campaign signs in the district, or the one below . . . → Read More: The Sir Robert Bond Papers: Kremlinology 44: Optics #nlpoli
The story of the 2014 provincial Conservative Party leadership contest is a study in politics on its most basic level.
It is a story of those with influence and of those who have less of it or none at all.
It is a story of how politics actually works inside the Conservative Party, instead of . . . → Read More: The Sir Robert Bond Papers: The Insiders #nlpoli
There’s no greater fraud, former Premier Danny Williams once said, than a promise not kept.
In the House of Assembly on Monday, his successor claimed that Conservatives “do as we say.” Premier Kathy Dunderdale was making a dig at opposition leader Dwight Ball over his leadership campaign expenses.
That’s a rather dubious claim of moral . . . → Read More: The Sir Robert Bond Papers: The Old Fraudsters #nlpoli
The following originally appeared at nottawa on September 2, 2009 as a comment on the emergency session of the legislature to deal with changes to legislation about the Churchill River.
It includes a mention of an earlier political controversy, the December 2008 expropriation bill. The two are linked and in light of Friday’s ruling by . . . → Read More: The Sir Robert Bond Papers: Nottawa Repost: Legislative oversight in an era of "patriotic correctness" #nlpoli