Throughout the Nation’s Capital and beyond, the
loud drumbeat of an impending General Election is heard. The pundits forecast
that the new GG will be asked to dissolve Parliament around the end of August.
That may leave as little as six weeks for PM Trudeau to stop dithering over
“rate mitigation” and address the Muskrat Falls debacle.

Newfoundlanders are doing themselves no favours
ignoring the fact that such an agreement remains outstanding.

The public are witnesses to Premier Ball’s
failed attempt but have learned little from the experience.

Ball’s good intentions are echoed by Premier
Andrew Furey who seems content if a deal is done by November though he has no
proof such an outcome is assured.

By then, Ottawa will have forgotten – again –
that this place exists.

Some reminding, therefore, is required.

The operating
requirement for financing, Operations and Management was budgeted at around $840 million when when Muskrat was a $7.4 billion project. Fully allocated, the revenue requirement based upon $13.1 billion is
a lot higher – in the range of $1.4
billion annually if NL’s $5 billion equity was properly accounted for. Using even the lower figure, without rate mitigation, and ratepayers will entertain 23 cent/KWh power.

Though there is now some recognition that the Holyrood Thermal
Plant is needed, no source of makeup revenue has been identified. Declining domestic demand adds to the burden of this huge
“national” problem. In addition, no accounting has been undertaken to assess the cost of
continuing failures in relation to the synchronous condensers, deficient
bespoke software, structural issues on the LIL or the, as yet, largely untested power

explained in a recent Post that, on an economic basis, the Muskrat Falls project
is effectively a “write-off”.  GNL, Emera
and the Feds need to come to terms with this reality and move on. But so far,
all we have seen is footsie with the Feds.

public are not going to be happy with the consequences when Premier Furey wakes
up after the Federal Election to find out he’s been had.

about this:

Premier Ball and Finance Minister Chrystia
Freeland met in March 2018 and set a target date to conclude negotiations at
the end of January, 2020. Ball also addressed rate mitigation with PM Trudeau when
the two met in Ottawa on April 10, 2018.

No deal was done.

A campaign stop in NL – September 2019 – PM
Trudeau used the opportunity to talk up rate mitigation, leaving the clear
understanding that a deal was forthcoming from Ottawa. 

No deal arrived.

The Federal Liberals helped Furey through his Provincial Election Campaign, “deferring” a payment of
$844 million last December, $780 million of which was due by the end of
that month. 

Premier Furey
and the PM restarted talks saying, according to VOCM News, that he was working
on a
deadline…if we don’t have a deal by November (2021) the $600-million for rate
mitigation will kick in.” That was September, 2020.

Furey said he expected a deal signed in the spring of 2021.

That deadline
has come and gone, too.

More than
three years have passed and still there is no sign that the Feds want any part
of a rate mitigation plan.

Meanwhile, the
NL public enjoys a childlike faith that Trudeau will come through. 


Premiers Ball and Furey have been incredibly
naïve, especially having failed to inform either Newfoundlanders or the
Canadian public of the Harper’s Government’s complicity in the sanction of
Muskrat having, among other things, played the blind game with Nalcor’s contrived estimates.

Read any national newspaper column on the
subject, and you would swear that the Feds were “lily-white” in the Muskrat fiasco.
That’s a big mistake especially when the Harper Government was complicit in so
many ways. When no one knows about it, it means that your political
leadership is pretty damn slack.

The worry that presents, again, is that Premier
Furey will 
return the favour the Trudeau Liberals did him by not making rate mitigation an Federal Election issue, leaving it dormant until it is too late for the applied pressure of politics.

The public can’t trust the Tory Opposition to
raise the issue. Having (largely) caused the problem, they only want it to go

Ecept for Shamus, the MPs that you sent to Ottawa have not been
heard from since the last Federal Election. None, including Shamus, are “big issue” politicians anyway.

If you don’t want the problem landing in your
wallet, you had better communicate your quid pro quo to Premier Furey and to PM Justin directly. Yes, those 7 NL Seats – 6 Liberal – look
pretty good to a PM who wants a majority government badly, finding slim pickings among switch Seats elsewhere.

If you aren’t prepared to turn Facebook Page to
a better use than sending Birthday Greetings – telling PM Justin that rate
mitigation has to be settled before the Election, not after – I hope you got
really big wallets.

As the saying goes: “Fool me once, shame on you…fool me twice,
shame on me”.

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?