On March 31, 2009 – the 60th anniversary of Newfoundland and Labrador’s confederation within Canada – New Brunswick premier, Shawn Graham, fired a shot across Newfoundland and Labrador’s bow by saying that his province might well do to Newfoundland and Labrador’s Lower Churchill hydro project what Quebec did to with its Upper Churchill project decades earlier.
In 1969 - twenty years after entering confederation, and while development of the Upper Churchill project was well under way, the province of Quebec refused to allow Newfoundland and Labrador the ability to wheel power across their jurisdiction.
This situation led to the Newfoundland and Labrador government of the day to sign a contract that continues until 2016 (44 years), a contract that has already seen Quebec Hydro reap billions upon billions in revenues by purchasing power from Newfoundland and Labrador at bargain basement prices while reselling it at market values.
At the end of the initial 44 year contract, in 2016, an automatic renewal phase kicks in. That contract phase, which extends until 2041 (a further 25 years), will see Quebec Hydro, purchase power at even lower prices than under the initial contract, prices that were considered an unheard of bargain even in the 1960s.
During the life of the contract Newfoundland and Labrador, the owner of the resources involved and producer of the power generated, has and will continue to receive just enough revenue to keep the turbines turning, the power flowing and the revenues rolling into the Province of Quebec.
Based on his comments this week, New Brunswick premier, Shawn Graham, appears to be hoping history will repeat itself.
Because of the terrible contract Newfoundland and Labrador signed onto in 1969 and has lived with ever since, NALCOR, Newfoundland and Labrador’s energy corporation, is currently in negotiations with several utilities throughout the Maritimes, with an eye to circumventing Quebec by wheeling power from the new Lower Churchill project through Atlantic Canada.
Now, on the 60th anniversary of Newfoundland and Labrador’s entry into Confederation the Premier of New Brunswick, which sits on the U.S. border, is saying provinces should not expect to build energy projects and then ship the electrical power to the United States through his province.
“Not so fast”, Graham said this week.
"The marker that we're putting in the ground is: we're not just going to (permit) the erection of lines for electricity transmission in New Brunswick that benefit other regions, but not (us)."
"We don't begrudge our sister provinces in the region for having taken full advantage of their resources and their geographic location," he said in his speech to the Economic Club of Canada.
"But in New Brunswick, we are going to leverage every advantage we have to the absolute fullest and since our geography is so advantageous to us we are not going to give it up for another jurisdiction to simply run wires through our province.”
It seems that, just like the Quebec situation 40 years ago, after 60 years of a continually rocky relationship with Canada, nothing has changed for Newfoundland and Labrador.
The province was geographically and politically isolated from the rest of the Country in 1949 when it joined, in 1969 when Quebec walked over the people there and in 2009 New Brunswick is looking for its opportunity take full advantage of Newfoundland and Labrador’s resources.
Today however there are three key differences between the current situation and the one that took place in 1969.
In 1969 the citizens of Newfoundland and Labrador, by and large, were not as informed or educated as they are today.
In 1969 the North American Free Trade Agreement(NAFTA) was not even heard of.
Today the U.S., as a potential consumer of Lower Churchill power would likely have a great deal to say under NAFTA if such an attempt were made.
In 1969 Newfoundland and Labrador was led by the so called “Father of Confederation”, the proud federalist, Joey Smallwood.
In 2009 Newfoundland and Labrador is led by a premier, who has shown himself to be a proud and very outspoken Newfoundland and Labrador nationalist in Danny Williams.
Nobody in Newfoundland and Labrador expects any province to provide electrical transmission infrastructure free of charge, but any attempt to force another one sided contract by placing the province under duress is simply out of the question.
When Quebec threw its weight around and blocked Newfoundland and Labrador’s ability to reach energy markets 40 years ago Premier Joey Smallwood met with Prime Minister Lester Pearson to discuss the matter.
According to historians, Pearson looked Smallwood in the eye and said, “Please don’t ask me. If you ask me I’ll have to say yes.”
Pearson was of course referring to the fact that the Canadian Constitution clearly states that no Province can impede another from moving goods or services across their jurisdiction.
At the time Smallwood approached Pearson Newfoundland and Labrador had only been a part of Canada for 20 years. Quebec was in the throws of a separatist crisis, terrorism was on the rise there and Pearson did not want to go head to head with the Quebec leadership or people in an effort to protect the Constitutional rights of Newfoundland and Labrador. Smallwood let him walk away from his obligation to do so.
Smallwood never asked the question and Newfoundland and Labrador, for the “good of Canada”, has lived with the resulting blow to its troubled economy ever since.
Today not much has changed in Ottawa but times are certainly different in Newfoundland and Labrador.
The current premier of the province and the citizens that have lived with the ghost of the Upper Churchill might not only ask the government of Canada to defend the Constitution of the Country but will likely demand it.
New Brunswick premier, Shawn Graham, may simply be blowing steam for some unknown political reason. He may not truly intend to take a page from Quebec’s past by attempting to block energy exports from Newfoundland and Labrador but if he does he’ll find that his Eastern neighbour isn’t as easy to take advantage of as it once was.
If such an attempt is indeed made and if Ottawa refuses once again to perform its Constitutional duty, their lack of action will serve no purpose but hasten the ultimate break up of the Canadian federation.
How can a nation exist when neither it’s provinces nor its federal government respect, defend or live by the very Constitution that defines it?
As of publishing, the region’s senior Federal Cabinet Minister and Minister appointed by Stephen Harper to represent Newfoundland and Labrador interests, Peter MacKay, has not commented on Premier Graham’s position.
