Those who noticed
the decisions, out of Nova Scotia’s UARB and Hydro Quebec, should not be
content with being surprised.  Afterall,

by anyone’s standards, surprises
on a major scale, that appear after $7.4 billion has been committed, constitute
recklessness.  The public should deal with
this reality; it needs to tell the Premier to stop. 

The UARB has
stated, in uncommonly plain language, that the Maritime Link is not, now, the
lowest cost option for Nova Scotia.  It
says that 15 cents per KWh for the Nova Scotia Block is too high and
demands that all of the ‘surplus’ energy from Muskrat Falls be made available.  Altogether, the two blocks constitutes 60% of the power from Muskrat Falls. It says, only by levelling the price, with
cheap (5-9 cents KWh) “market-priced” power, can it achieve the desired blended rate of 10 cents, allowing
the ML, over time, to become the lowest cost option. 

Quebec style opportunism, NS could care less that Newfoundland rate-payers will
pay in excess of 20 cents per KWH.  They
are not concerned that Newfoundlanders and Labradorians will assume all of the
construction risk, including 80% of cost overruns on the Maritime Link (ML). But,
NS sees an opportunity to benefit and who can blame them.  They are doing what ‘states’ do: they act in
their self-interest. If Premier Dunderdale had consulted Brian Peckford on Nova
Scotia’s antics, during the Atlantic Accord saga, she and her Ministers might
not have so quickly earned the mantle, ‘babes in the wood’.

The Premier
has indicated that the Government will not commit power that is needed in
Labrador.  Still, access, says the UARB is
essential. It want’s Nalcor legally bound; it says the access must
be “codified”.  This is a fundamental
conflict which compounds the myriad reasons to not trust the Government. In remarks, on Friday, at the Premier’s Conference, reported by the Herald News of Nova Scotia, Dunderdale indicated she sees ‘enough flexibility’ in the UARB decision to allow Nalcor and Emera to strike a deal the NS regulator will approve. What new rationale will be proffered to
satisfy the UARB and keep this Project moving? What will be given away, this time? Does anyone not think it is within the capacity of this Premier to construct her own version of an Upper Churchill Contract?

We are
supposed to be savvy; a people intelligent enough not to engage in excessive
risk. Smart business people always retain the ability to say “NO” when other
parties, to a deal, want more than is reasonable or economic.  The Dunderdale Government cannot seem to get
its head around this essential fact.  At
Nalcor’s urging, it keeps looking for ways to let Nova Scotia and Quebec screw
us. The ‘bigger fool’ theory retains its currency in their midst.

From the very
beginning of the Muskrat Falls saga, one of its worrisome aspects was that the
Premier possessed little understanding of either its complexity or the risks
involved. Her most senior Cabinet Ministers did not, either.  The public has been repeatedly assured that
the ‘experts’ at Nalcor, have everything figured out; we now know they have

Ed Martin’s
second-in-command, Gilbert Bennett, aggressively took on critics, last year, who warned
Nalcor to seek certainty, because Hydro Quebec was sure to try and defeat the
Water Management Agreement. The effect of such naivety is that HQ has been
allowed to frame the issue, in its own Court.  
They were warned, too, for a host of reasons, that no money should be
spent without first obtaining the Decision of the UARB.     

A prudent
Government would never have proceeded with Muskrat without the greatest
possible certainty, because of the amount of money at stake. The fear is that it
will spend the last dollar before admitting that error.

endangered public purse needs protection. 
The Muskrat Falls Project must be stopped until we have clarified what
we have gotten ourselves into.

decision cannot be delayed one more day.

Premier, Brian Peckford released an “Open Letter” to the Premier advising the Government
to make sure it is in control of the Project, expressing obvious doubts that it
was. The 2041 Group has suggested the construction project should be
shut down until critical issues are clarified.

Why aren’t
the public making a similar demand? 
Likely, it is because people have a basic expectation that the
Government has their ‘back’. They cannot imagine that it would do anything to
cause our economy and society irreparable harm on the scale of Muskrat Falls.

Yet, after
last week, they are faced with clear and unmistakable evidence that they are
being taken down a very reckless road; that in giving Sanction, the Dunderdale Government was
merely submitting to Nalcor’s timetable. 
Now, the essential facets of the Project are murkier than ever.

The public
needs to tune in to the problem.  The
media needs to stop tuning out.

There is no
nice way to say this: the Government is incompetent. It is being advised and
driven by equally incompetent senior officials at Nalcor Energy.

No one ought
to make such a charge flippantly or take pleasure in the assessment.
Unfortunately, the evidence is overwhelming; it can be sustained against any
charge of bias or of partisanship.

We are being
governed by fools.

Even if the
Premier believes that the Government is already in too deep, hubris, or simply
an inability to follow through a bad decision with a good one, will cause her
not to act. The other fear is that she is frightened of the political
consequences; that she will proceed because she ‘may as well be shot for a
sheep, as a lamb’.

What if
neither the public nor the media become engaged?

They can
just wait until the money runs out.   


Des Sullivan
Des Sullivan
St. John's, Newfoundland and Labrador, Canada Uncle Gnarley is hosted by Des Sullivan, of St. John's. He is a businessman engaged over three decades in real estate management and development companies and in retail. He is currently a Director of Dorset Investments Limited and Donovan Holdings Limited. During his early career he served as Executive Assistant to Premier's Frank D. Moores (1975-1979) and Brian Peckford (1979-1985). He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB). Uncle Gnarley appears on the masthead representing serious and unambiguous positions on NL politics and public policy. Uncle Gnarley is a fiscal conservative possessing distinctly liberal values and a non-partisan persusasion. Those values and opinions underlie this writer's views on NL's politics, economy and society. Uncle Gnarley publishes Monday mornings and more often when events warrant.


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

    A very good post. We are in a position that we should have never been in. Committing to Sanctioning the project in December was incompetence. Continueing to spend money now without a partner in Emera, or legal certainty on the WMA is bordering on negligence. Ed Martin over the weekend wrote a piece in the Telegram which repeated the same lines that we have heard since November 2010. He must acknowledge the situation we are in, under his watch. He needs to present a plan. He needs to tell Newfoundlanders what this plan will cost us. Stating that Nalcor will make the decision which is in the best interest of the province is no longer acceptable. In fact considering Nalcor's record of bad decisions to date, it is downright scary.

    • It is also a good idea to tell Labradoreans, we are involved in this up to our eyeballs with the trampling of Aboriginal rights and environmental degradation. And as well poisoning our food.

  2. Mr. Sullivan, my comments, in response to Ed Martin's piece in The Telegram, were similar to yours…although admittedly not written with the same verve and clarity as yours.

    Thank you for saying what needs to be said. Now, who will listen and who will act? It is time for us to regain our fighting spirit and not let these incompetent fools lead us over that fiscal cliff we are so close to.