Wednesday, July 25, 2012

GEOGRAPHY IS GEOGRAPHY, OR IS IT?

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"We have in our provinces the right to
 income from resources. We have Confederation, 
which allows for people in each  province to
 benefit from the resources they have  to
 retain jurisdiction over those resources"

Alberta Premier 
Alison Redford
July 24th,2012
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The rumble out West over revenues from Enbridge's proposed $5.5 Billion Northern Gateway pipeline is intensifying.

British Columbia is attempting to put the squeeze on Alberta. They want more than the projected $1.2 billion in revenue that will come to that province over the course of the lifetime of the pipelines.

 On top of the construction jobs, Enbridge estimates there will be about 560 to 600 full-time jobs.

 B.C. Premier Christy Clark says her province is taking the lion's share of the environmental risks and is demanding a fair share of the revenue generated from the export of the oil. They want a share of the oil royalties! Alberta's oil!

The power play has thrown Alberta's premier into a tizzy. She says transfer payments deal with those issues. She says Alberta will not be negotiating royalties over her provinces resources with another province.

She is getting support from Saskatchewan Premier Brad Wall who says BC's bid could set a "troubling precedent," especially for landlocked provinces that have no ports to get their exports to foreign markets.

Hmm. I gather that Redford and Wall must have missed the history lessons, constitutional law and political science lessons regarding Quebec's "powerplay" in the 1960's that screwed landlocked Newfoundland and Labrador out of Billions of dollars in revenue from the Churchill Falls Development because we could not transmit our "natural resource" through Quebec.

 We know how confederation works, and how "landlocked provinces that have no ports" do not get their exports to foreign markets without paying the gatekeeper. The Privy Council decision of 1927 might have awarded the treasure to Newfoundland but the keys to unlocking it are firmly in the hands of Quebec.

We have asked Quebec to correct this gross inequity. Nalcor Energy president Ed Martin requested that Hydro-Quebec, weigh "good faith" changes to the pricing terms of the contentious 1969 agreement. They gave us the finger and proclaimed, a deal is a deal, is a deal.

How about this quote from the Montreal Gazette "The infamous Churchill Falls hydro agreement -giving Quebec long-term access to discount-priced power from Newfoundland and Labrador - was not only a bad financial deal for Newfoundland, it was also signed under coercive conditions, which may raise "substantive questions of business ethics and mlaw," according to newly released research  on the 1968 deal"

Even the Globe & Mail sees the Quebec has this province jammed - you can not sign contracts for power if you can not guarantee that you can deliver it.

As the 2016,  automatic 25-year renewal clause in the Upper Churchill Contract gets closer, the manner in which the renewal clause (and the original deal) was unscrupulously  forced on us ,will come into clearer focus.


In 2016, when the original 40 year term expires, the renewal clause ensures Hydro-Quebec gets another 25 years at a fixed rate which was low even in the 1960's when it was negotiated. The price is set at .2 cents per kilowatt hour. Hydro Quebec has been receiving in the range of 85 mills for the electricity that it exports. That is right, we will get percentages of pennies while Hydro Quebec makes Billions on our resource!

The federal government should play a role in assisting the province to get power from the Lower Churchill to markets in Central Canada, Nova Scotia and the United States. They have never been prepared to step up.

I guess the nasty little footnote that is this provinces experience with the lopsided Churchill Fall's deal, and the continued struggles with the development of the Lower Churchill, might already be a "troubling precedent"against Alberta's argument of the free flow of energy.

If Quebec can get away with it, why can't British Columbia? Perhaps, Alberta should be looking to the states of Montana, Idaho and Washington about an alternative American route!

This should make for an interesting political pickle for the federal Conservatives. Prime Minister Harper is facing a serious domestic challenge. No doubt it is a recipe for potential strain on the national unity front.

This squabble on the West Coast could be an excellent opportunity for Newfoundland and Labrador Premier Kathy Dunderdale to rise out of the shadow of Danny Williams and provide a blueprint for a national energy policy that entrenches the rights that Premiers Redford and Wall appears to think they already have.

That opportunity could come at this weeks Premier's Meeting in Halifax.

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