In the normal sense of the word Quebec is not a true market-based energy pricing province.
Notwithstanding this reality the new MOU passes 90% of NL’s energy pricing control to Quebec — a government influenced energy market place.
Quebec is a government-influenced hybrid market system that for decades and with the aid of our infamous 1969 contract has ensured that its energy prices remained at or below inflation and has remained the lowest energy market place in Canada.
Low energy market prices in Quebec however will mean continued low revenues for NL. They also mean that for another very long time Quebec will continue to be the principal beneficiary of Labrador’s Churchill River power.
Accordingly, Newfoundland and Labrador should not again be passing control of its economic and energy marketing future to Quebec.
The Churchill River alone, if properly managed and given its (already built) green, renewable and future energy potential can and should be a transformative economic benefits driver, with significant benefits flowing especially to the residents of Labrador and Newfoundland, not principally to Quebec.
The Churchill River can be Labrador’s green energy/economic driver equal to or surpassing the value of the carbon based energy resources that have driven the island’s economy for the past several decades.
Negotiations with Quebec or other potential customer(s) should be driven by this reality, not a backward looking MOU. A transformative Labrador/Newfoundland vision should be the driving force underpinning any new Churchill River negotiations. Such a change in thinking is long overdue.
As written, the MOU will ensure that our children, grand-children and great grand-children will never be the principal beneficiaries of their own world class green energy and renewable resource.
If this MOU proceeds, Newfoundland and Labrador will have handed over control of Labrador’s Churchill River to Quebec.
Newfoundland and Labrador’s victory will be to have, once again, guaranteed Quebec’s position as the lowest energy priced market in Canada, and for at least the next 50 years — very little revenue for Labrador and Newfoundland.
In court case after court case Quebec has denied the people of this province redress, fairness and justice. The MOU as written will not change that. In fact as written the MOU will ensure that Quebec will continue to take advantage of NL.
A fair MOU decision-making authority would have shared the benefits fairly and proportionality. Its design would have fairly taken into account resource ownership,
infrastructure investment, replacement costs, the contributions of each province and a fair formula that would counteract historical inequities.
While an equitable revenue-sharing formula needs to take Quebec’s role into account — it is Quebec that needs the power, and NL that has the resource.
No government should give up 90% control of its most valuable renewable, clean energy resource the way this pricing formula does.
A MOU pricing formula needs to include a weighting based in part and fairly on the NL market price. It should also include clearly established review periods (e.g., every 10 years) that would reassess terms and make adjustments based on economic, market, and technological changes and include opportunities for renegotiation that over its duration would ensure the agreement remains fair for both provinces.
Fairness might dictate e.g., a 60/40 NL-Quebec split or similar, more equitable pricing formula ratio. A 90/10 Quebec/U.S. pricing formula is an insult to the people of this province — an insulting, unfair and disrespectful slap in the face to the people of Newfoundland and Labrador.
NL’s revenues and economic interests must be protected. Quebecers should be embarrassed to have their negotiators attempt another 1969 — but they have.
Given the historical inequities combined with the Churchill River’s future revenue and economic potential, those who drafted this MOU should be shown the door.
While balancing competing interests is a complex process and requires good faith negotiations and compromises, the 2024 MOU is a two party agreement designed and weighted in the long term to only benefit and protect Quebec.
For Labrador and Newfoundland, the MOU is a fatally flawed document — one that is void of respect, fails to meet Labrador’s and Newfoundland’s transformative vision for the future and out of step with a balanced and reasonable distribution of benefits from the development of its own resources.