Businesspeople like Fred Cahill, Brian Dalton, Mark Dobbin, Sean Leet, Robert Patten, Derek Purchase and Peter Woodward support the MOU, but you will never see them deliberately undervalue their assets, sell oil and other commodities less than fair market value, or agree to perform construction contracts at a loss. Why should you? Are they putting their own interests ahead of the people of the whole province? Some of those names supported Muskrat Falls. They should have known better.
The effect of the Churchill Falls MOU will be long lasting, depriving this province of the benefits it is due, both as owner of the water resource, and as the majority shareholder in Churchill Falls (Labrador) Corporation (CFLco), which operates the Churchill Falls hydroelectric plant.
Premier Andrew Furey failed to be diligent about the Churchill Falls negotiation; that he initiated the process when Newfoundland and Labrador was finally achieving leverage over Quebec after 55 years was his first mistake. No capable business person would have squandered the opportunity that time and growth in electricity prices have afforded us. He set no objectives for the negotiating committee and failed to consult the public, many having watched the inequity of the 1969 Contact play out over all that time.
Premier Furey’s rush to have the House of Assembly approve the MOU when, arguably, no Member of the House understood the agreement, amounted to a clarion call to everyone to be wary over how their government, and other institutions, can still be misused (remember Muskrat Falls) for partisan purposes. Equally, they should be concerned when a group of wealthy individuals are trotted out to create an impression that the MOU’s construction does not support.
In contrast, the people who spent enormous amounts of time performing financial analysis on the MOU – David Vardy, Gabe Gregory, the anonymous blogger, PlanetNL, Jason Muise, former oversight panel member, Mike Wilson, Gil Dalton, CPA, and more recently Memorial University Economist, Dr. Doug May – have nothing to gain from their public service. We should acknowledge and thank them for their work.
Indeed, Mike Wilson deserves our commendation for his courage and integrity for resigning from the Government’s (fake) independent oversight committee. In the same context, Dennis Browne, considering his partisan history, should never have been offered, nor should he have accepted the role of Committee Chair.
Premier Furey’s enlistment of NL Hydro to help enshroud the details of the MOU in a propaganda campaign, and of CEO Jennifer Williams’ compliance with the scheme, evokes the all too recent memory of the selling of a business case for Muskrat Falls that was bogus from the start.
It is easy enough to dwell on NL Hydro’s incompetence – we know it well – and on Premier Hogan’s easy reinforcement of former Premier Andrew Furey’s inexplicable willingness to go on bended-knee to Hydro-Quebec for a second time. However, other reminders are now necessary, too.
Throughout the 1970s, ’80s and ’90s, the Newfoundland and Labrador public repeatedly vowed that we would never repeat the colossal blunder committed in 1969. But we are in that predicament again, and we need to address the issue now.
So, why is the MOU a bad deal? Some of those reasons will be addressed here, others in the second part of this piece.
First, any agreement of this kind should be based on first principles. Those principles must include our rights as owners of the water resource and our rights as the constitutional owners of the land on which the Churchill River and all of its tributaries flow. This is basic.
The MOU fails even on this fundamental level.
The MOU is dramatically skewed in Quebec Hydro’s favor. How is this consistent with the principle of ownership?
Remember that Churchill Falls is capable of producing 5,428 megawatts of power. The 8th largest in the world, it is a massive renewable resource. On average 1MW will support 1000 American homes. What is more, few hydro sites globally can operate at full output daily on demand like Churchill Falls.
It is a massive resource, and its value is massive, too. Problem is, in our haste for a quick (though paltry) cash grab now, we have transferred much of that value to Quebec.
It is likely that most people in this province do not fully appreciate this simple fact, else so many people would not watch the current giveaway transpire or allow partisanship – and self-interest- to guide their analysis of the sell-out under way.
You should know that, based on replacement cost of Churchill Falls, the existing generation facility warrants a value of around $100 billion, more as the cost of electricity continues to grow. We can base this specific figure on Quebec-Hydro’s estimate to develop the Gull Island – $29 billion including transmission lines – (though you should be warned that this estimate is likely low). Churchill Falls is three times the capacity of Gull Island. Remember, too, that Gull Island is using the huge system of dykes and canals that belong to Churchill Falls. In other words, if construction of Gull Island was assessed as a stand-alone project, it would cost billions of dollars more. Other metrics that employ the current market value of electricity per kWh can be used to give further proof of this valuation. In each case the capital value of around $100 billion is confirmed.
Having given Quebec access to Churchill Falls power for the next 51 years at a price per kWh that is substantially below market value, allowing for no re-opener clause for a second time, too, Quebec – not Newfoundland and Labrador – can claim the value of Churchill Falls. The proposed capital projects, including Gull Island, only enlarges the giveaway. Think of it as your own property: having under-rented the asset at the start because you are a poor negotiator or didn’t do your homework, you also contractually agreed to ignore the market forces (demand for accommodations) that could have driven the value of your asset far higher. Now, you must wait 51 years…when things could be very different!!!
Strangely, your esteemed business leaders didn’t think to discuss issues of this kind with you before giving their nod to the Government’s foolhardiness.
In order to better understand the incredulity of the Hogan Government’s position, it might be advantageous to think about what it has agreed to in your name. I feel certain that if the public better understood exactly what they have given away, Newfoundlanders and Labradorians would not treat the MOU with the shrug many seem to give it. Let’s begin here:
The headwaters of the Churchill River are not Quebec’s, they are ours.
The natural feature – the 1025 ft vertical drop, referred to as hydraulic head, that makes Churchill Falls a world-class site for production of hydro power – is not Quebec’s. It is ours.
The reservoir area that contains the dykes and canals that constitute the Smallwood Reservoir measures 5700 sq. km. The reservoir is not Quebec’s. It is ours.
The drainage area which feeds those rivers, dykes, and canals measures 72,000 km2. It is so massive that it amounts to the size of the entire province of New Brunswick. This vast area is not Quebec’s. It ours.
Worse, you have given Churchill Falls away to a province that has no respect for you, your rights under law, or as Canadian citizens.
The fact that Quebec continues to show the United States Government and its agencies maps that fail to depict the 1927 Decision of the British Privy Council fixing the boundary does not change what we own; it only magnifies the gall of this intransigent and greedy neighbour, and confirms that it is time for us to change the next chapter of our history. Hydro Quebec filed the map below with the Securities and Exchange Commission on 11 April 2025.
Hydro-Quebec has been filing such ‘disputed border’ maps with the SEC since 2008 (for the 2007 fiscal year); as illustrated below, prior to 2008 the maps HQ filed as part of its 18-Ks avoided depicting the Labrador – Quebec border. (e.g. HQ’s 18-K filing in 2007 for its 2006 fiscal year used a strategically placed legend box to avoid showing the Labrador – Quebec border)
Gill Dalton’s analysis of the Churchill Falls MOU properly states that a failure to fix the fundamental problems it contains would be “like virtually taking the Churchill River and moving it across the border into Quebec.”
When Newfoundlanders and Labradorians should have the backbone to tell Quebec to change its attitude towards this province, to demand that we are treated as equals, not as supplicants, as owners of Labrador not as squatters, we find ourselves with an incompetent Government capable neither of remembering our history nor the ability to stand on the fundamental principles of fairness or even self-respect. Not just that, though Quebec needs Churchill Falls power because no other source is as reliable, plentiful, green, easily obtained, as inexpensive, our negotiating committee couldn’t even negotiate a deal that remotely passed the smell test of acceptability.
When Government’s allow such a situation to occur, this is when they should be thrown out of office.
In this context, worse than failing to recognize the value of Churchill Falls power, the MOU serves to confirm the right of Quebec to deny us our rights ONE MORE TIME. This insult has been allowed to go on for 55 years. It is truly maddening when our political leadership lacks the spine to tell Quebec where to get off!
When are we going to put a stop to this insult?
For how long should we remain second class citizens in Canada?
Why are Newfoundlanders and Labradorians content to go down on bended knee to the Quebec Government?
Why are we so easily content to be supplicants in our own land?
Only negotiators ignorant of the law and NL history, and NL politicians opportunistically inclined to use this multi-billion dollar moment to seek re-election, would permit the travesty of this MOU to occur. It is not as if this province can afford to be generous. The lavish promises that continue to be rolled out in the current general election, unaffordable whether the current MOU proceeds or not, only confirms the extent to which it is unhinged from realty.
No society, certainly not one carrying the level of debt with which Newfoundland and Labrador is burdened, can survive this level of recklessness.
The Newfoundland and Labrador public swore that the 1969 Churchill Falls Contract would never be repeated, that we would never go on bended knee to Quebec again. We made that promise. This MOU breaks that promise.
Stopping it, however, means that you have to tell opportunistic politicians and businesspeople that you want to have a real future for your family, not one based on political rhetoric and empty promises.
I’m not surprised that the business types support the MOU; they will be happy with crumbs from Hydro-Quebec’s table. The MOU is about them, not you.
But the rest of us, those of us less opportunistic, need to ask: Are we so desperate that we have lost not just out spine, but our dignity, too?