The Keystone Cops were fictional
incompetent policemen, featured in silent film comedies. In Confederation Building these days, it seems a comedy of errors is
being played out by our very own version of the Keystone troupe; though no one
is laughing.

Loss of federal funding in relation
to the Canada/European Trade Agreement (CETA) has stirred up a new war with
Ottawa.  Premier Davis might like you to pick
up placards and show your outrage. My advice: save your energy.  The ineptitude is right here.

Even though the CETA issue is not
about high sounding principles or constitutional rights, the controversy involves
a lot of money. Whether the Province ought to have levered funding from a trade deal in which it was also a beneficiary is moot. Now we are left to ask: how could a deal deemed by Dunderdale to be “done” completely fall
off the rails?

This story involves more than just a
dispute over phraseology or even intent; it is about naivety and over bearing
confidence. It calls into question the judgment of the former Premier (one more
time) and the professionalism of the bureaucrats who headed the negotiating

Was Premier Cathy Dunderdale too
eager to boast a “we got it” moment?

Provincial politicians and
bureaucrats may believe they had negotiated a deal on dropping Minimum
Processing Requirements (MPRs). They may have thought the exchange of letters
between the two governments adequate. But agreements are all about enforceability.

The Province argues tying funding to
MPRs was never part of the deal; the Feds say the complete opposite. This is
not an argument about a phrase left ambiguous or undefined; the dispute is over
the reasons the funds can be used – essentially the guts of the deal.

That is why Senator David Wells’
comment to the Telegram to the effect the deal was just “an agreement in principle” is simply

That said, if the province was
certain all loose ends were tied up, why were they seeking clarification from
the Feds on key contents soon after the letters were signed?

To that point: given the deal’s high
value (“up to” $320 million of Federal money) it seems inconceivable the letters were not
converted to a Memorandum of Understanding (MOU).   

The MOU is a common legal instrument
used by governments and their agencies for prescribing the terms and details, requirements and responsibilities, of the respective parties. It
would have voided all reference to superfluous issues.  It would have confirmed the deal in legal language,
eschewing as far as possible, ambiguity. 
It would have brought specificity to the amount of compensation, the
terms under which the amount could be drawn down and the timing; critically, it
would have defined a plethora of items missing from the letters.
Premier Davis acknowledged that the matter was complex. The requirement for
specificity was reinforced by him.

Was the MOU overlooked? Did the members of the
Committee suggest it was necessary? Was their advice rebuffed?  Was there no lawyer on the negotiating
committee? Politicians are amateurs over matters such a legal form; senior
public servants ought to know.  

The Province hung its hat on an exchange
of letters. The correspondence uses words like “up to $400 million”
which provides a ceiling but no floor on
funding.  It suggests the program’s assistance
should be extended to “any other province that is also affected”, and makes
reference to a “regional fund”. These items confirm the need for additional
clarity in a solely NL agreement. 

The Feds are masters of obfuscation
and far less prone to running to the media prematurely. The Province got snookered; another amateur hour.
The Feds got the Province’s signature
when they needed it. NL’s leverage dissipated once the deal with the Europeans was
struck. CETA will proceed because the Government of Canada is empowered to
enter into international agreements. NL’s latent change of mind may be an
irritant; but it will be a small one.

A few additional comments are

One is Premier Davis’ admission that
the Province might not suffer adverse impacts over the removal of MPR’s.  Why would the Feds agree to compensate this
Province with a large sum of money, to be spent on the “five pillars” of the
fishery, if NL is the sole Province to benefit?
Likely both this Province and
the Feds initially overestimated the impact of eliminating MPR’s. As that prospect became doubtful and in the absence of a single Tory MP in Ottawa, it is not surprising the Feds might look to exit the agreement. This just speaks to the naivety of local politicians and negotiators.

There is a second point.

Premier Dunderdale ran off to the
media to announce the supposed $400 million deal on October 29, 2013. No
federal politician joined her.  The Feds
would not even permit their bureaucrats to attend Dunderdale’s Press
Conference. They feared their presence might lend credence to the claims
Dunderdale was about to make. It ought to have been a tip to Dunderdale and to
her officials, greater certainty was required. 

Since the days of Danny Williams when
the Feds reversed his “we got it” arrangement without the courtesy of informing
him, local Tories have been advised not to trust Stephen Harper. Even
Dunderdale will recall Harper’s “take it or leave it” Federal Loan Guarantee
for Muskrat which nearly left her napping in St. John’s while he headed to
Goose Bay to make the announcement. Yet, she accepts a ‘loosey goosey’ exchange
of letters as the basis for $400 million CETA arrangement! A baffled public
might ask: when had Stephen Harper become a nice guy? 

Now, before I tuck away my placard in
the expectation of a more propitious occasion for an outpouring of vitriol, and
at the risk of seeming cynical, I would offer this final comment:

announced the CETA deal on October 29, 2013. Six days later, on November 4,
2013, a Writ of Election was issued for a by-election in the electoral district
of Carbonear –Harbour Grace to fill the seat left vacant by Jerome Kennedy.

That was
just a coincidence. Wasn’t it?
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?