The Balvenie Affair – Part III

I want to acknowledge “JM” who again authored today’s
post.  While
respecting his desire for anonymity, he is, nevertheless, owed a debt of
gratitude for his contribution to the PUB’s review of the Muskrat Falls project
as well as for the research and analysis he continues to perform.
  Des Sullivan, Uncle Gnarley Blog.

Following our eventful meet with ‘JM’,
Uncle Gnarley requested a couple days ‘Close to the Ground’, as he was known to
say.  I assumed that this meant he had
departed for his annual moose hunting gallivant, where he would partake in a
week of reflection, introspection, and self- infliction.  This would all then be followed by a great
massacre on some remote barren in Central Newfoundland.

But after a number of days with no contact,
I decided to take a drive down the shore and pay a visit to my cantankerous old
friend.  As I neared his door I could
hear what sounded like rapid fire.  A
familiar sound from my youth, but one I could not readily place.  Concerned, I cautioned ahead, and peered into
the window.  Well, it was like seeing a
great moose in the headlights.  There
before me was the old economist himself, wearing only his wistered underwear.  His old frame was whiter than the fresh

The clanking which alarmed me was coming
from his old manual typewriter.  Although
I have never seen it in use, I know that the great man often referred to it as
his ‘arsenal of democracy’ in homage to one of his personal heros.  It was clear that Uncle Gnarley had a bee in
his bonnet, and I naturally assumed that it was related to our recent encounter
with ‘JM’.

To not startle the old man I knocked on the

“Nav… I have been expecting you.  Reach behind the door and you will find an
old soldier that I now want to finish off”. 
I was not surprised to find the half full bottle of Balvenie, the
liberated souvenir from our encounter of a week ago.   

“Can I pour you a wee dram Uncle Gnarley”

“Nav I thought you wouldn’t ask. But now on
to a more important matter.  Since we met
our man JM, I have had the opportunity to review his Volume II, entitled Labrador Mining – A Reason to Rethink which
investigates all the mining prospects in the Big Land.  He makes a compelling argument that Labrador
demand means that we should rethink the entire development on the Grand River.

But, it is JM’s conclusion that it may cost
us ratepayers more to transmit power through the Maritimes rather than through
Quebec that has me troubled.  Very
troubled indeed, Nav.  With this Uncle
Gnarley got up from the typewriter, took his glass, and proceeded to look out
from the front window over the cold North Atlantic.    

“The more that people look at the Muskrat
deal, the more questions there are Nav? 
These are questions that relate to the very basic structure of the project.  It is a sobering thought that Dunderdale and
Kennedy would potentially sign up to an agreement that would actually cost us
more to export power!  Why would they do
this?  Is it only an effort to correct
the mistakes of 40 years ago?  You
probably weren’t even born then Nav ,were you?”

I wasn’t sure if this was meant as a
compliment.  But the delayed laughter
from the old warrior was testament that a compliment it was most certainly

“Nav, this Muskrat venture is risky, but if
JM’s hypothesis is true, it would make the deal downright foolish!  Sobering thought indeed”.  With that he took his glass, quickly
finishing the contents in an personal effort to will JM as being wrong. 

Despite the magnitude of this statement
Uncle Gnarely was uncharacteristically calm. 
 I asked ,“Gnarley in your learned
opinion do you thing JM is correct”? 

“Nav… JM himself questioned the validity of
his conclusion….  Likely because he too
would question what government would undertake such an inane proposition?    He
concluded his Paper by requesting that Nalcor provide a full comparison for
public review during the upcoming debate within the House of Assembly”

To this, I replied: “A reasonable request in
my books Uncle Gnarley”

“Reasonable it is, but likely it is
not.  There is one thing about this
government, you don’t need to file an Access for Information request to hear
good news.  With this government the good
news is recycled more times than a Dominion Ale bottle.

But sometimes the lack of information is
even more telling.  The very fact that
Minister Kennedy did not produce statistics demonstrating how the Emera deal
would save money, compared with going through Quebec, makes me think that our JM
may be onto something. But no matter if JM is right or wrong, the question is
so fundamental to the debate that it has to be answered”. 

It was clear that the great economist was
troubled.  He wanted to analyze the
numbers for his own benefit.  Before I
could speak, Gnarley jumped in.

“In the conclusions, JM requested that
Nalcor release the final numbers with all the inputs.  He called them the Open Access Tariff
pro-forma.  They were referenced in the
1500 pages of Emera agreements, but they were not included for public review”.

With this Uncle Gnarely returned to the old
typewriter, and due to the generous backlight, was momentarily a silhouette of his
younger self.  “You know, Nav, it has been
20 years since I have participated in reasonable political debate in the
province.  I thought I was done.  But these questions have to be answered, and
I am compelled to act”.  With this
statement the entire scene was now clarified in front of my eyes.  Uncle Gnarley had his ‘Arsenal of Democracy’
dusted off, the mound of paper was ample evidence that it had been in use. 

“You see Nav… I am putting in my very own
Access to Information request to get a hold of these Tariff proforma.  They will tell me once and for all what we
will pay to Emera for each and every kilowatt hour exported to the United
States.   If it is true that it will cost more  to go through the Maritime Route, compared to
Quebec,  then it nothing more than
deception of the purest form”.

Now with this Uncle Gnarley’s blood
pressure was beginning to rise.  In an
effort to play the diplomat I asked.  “Gnarley
do you not think that the media, Navigant, the Joint Review Panel, Manitoba
Hydro or the PUB would have picked this up. 
It seems like a pretty big deal to me”.

“Nav… the Government was very deliberate in
the review process.  The Emera component was
excluded from all these third party and independent reviews.  Only Nalcor and the Department of Natural
Resources have seen these numbers.  So
now we are in the precarious position of depending upon a debate in the House
of Assembly to bring these questions to light.  
The lack of public review and oversight in the first $400 million spent
should not be extended to the next

$8 billion. 

as you know I do not play favorites to any political party.  In my opinion they have all been reduced to
the lowest common denominator in the Muskrat debate.  However, the Liberal party’s recent proposition
of witnesses, questions, and an unrestricted terms of reference is something
that must be considered.  It is such a
sensible proposal, how can it be denied? 

More than that Nav, in the absence of
committees, it should be considered as a minimum standard for a democracy.   The
people of the province should demand it. 
Dunderdale has recklessly said no… it as if she did not learn anything
from the Bill 29 debate.  It is to lead
to her demise, and it will define her legacy”.

As Gnarley finished his great lament, I
could not but think about a great quote attributed to President Roosevelt. 
Democracy cannot
succeed unless those who express their choice are prepared to choose wisely.
The real safeguard of democracy, therefore, is education

For when it comes to this debate education will be the
true ‘Arsenal of Democracy’, and it should not be thwarted by those trying to
maintain power.  The politicians tasked
with this decision should be given the basic right to education on the subject,
and that should be unrestricted.  Nalcor
are the only ones who can properly educate the public on the entire deal,
including the Emera portion.  They should
defend their project to those who have to pay for it.  Premier Dunderdale should do what is right and
concede to the Liberal request. 

To draw the night to a close Uncle Gnarley finished the
last drop from the
bottle, and that was the end of the
Balvenie Affair. 





Bill left public life shortly after the signing of the Atlantic Accord and became a member of the Court of Appeal until his retirement in 2003. During his time on the court he was involved in a number of successful appeals which overturned wrongful convictions, for which he was recognized by Innocence Canada. Bill had a special place in his heart for the underdog.

Churchill Falls Explainer (Coles Notes version)

If CFLCo is required to maximize its profit, then CFLCo should sell its electricity to the highest bidder(s) on the most advantageous terms available.


This is the most important set of negotiations we have engaged in since the Atlantic Accord and Hibernia. Despite being a small jurisdiction we proved to be smart and nimble enough to negotiate good deals on both. They have stood the test of time and have resulted in billions of dollars in royalties and created an industry which represents over a quarter of our economy. Will we prove to be smart and nimble enough to do the same with the Upper Churchill?


  1. Des:

    Great stuff. Keep it up. I published a number of articles based on this very report last spring. great to see it getting more exposure. The author is brilliant and knows his stuff. The PUB refrenced this document as well.