The name has changed but the essential elements of the MOU remain.
And the question is, to use the phraseology of the Independent Review Committee, whether the Definitive Cooperation and Implementation Agreement is in the “public interest”. The obvious first step in determining that would have been to ask the Committee that question but alas that hasn’t happened.
Given the political situation in Quebec and the opinion polls at the time of the announcement I had thought the new MOU would have a short shelf life given that the PQ had opposed the original MOU. I may have been wrong.
The CAQ, the governing party, have recovered in the polls and the election has become competitive.
In addition the muted and neutral response of the PQ to the deal was unexpected until I read the Hydro Quebec press briefing which made the point that the new deal is much better for Quebec than the original MOU. Hydro Quebec says the new DCI provides power at one third of the replacement cost as opposed to to one half of the replacement cost achieved by the original MOU and at “a cost lower than that of the 2024 agreement”.
That should tell you all you need to know about the negotiation prowess of Hydro Quebec and the extent to which we have been bested by them, yet again.
The new government is to be congratulated for living up to their commitment to have an independent inquiry into the MOU. It was a rushed process carried out in total secrecy but it succeeded in successfully discrediting the MOU so much so that not even the previous government has criticized the report.
The problem is that while the new government has said it is using the report as the template for the negotiations leading up to the Definitive Cooperation and Implementation Agreement, it turns out it hasn’t.
Their first recommendation is that “ GNL should determine, based on a comprehensive analysis of long-run economic development options, the extent to which power generation from the Churchill River should provide financial versus economic value to the province over time.”
The response of the government was to immediately enter into negotiations without doing that “comprehensive analysis.” It didn’t do its homework.
The fourth recommendation is that “GNL should rigorously evaluate alternative ownership, operating, and right-of-use models for new hydroelectric generation at Gull Island that are consistent with the province being the primary beneficiary of the financial and economic value created.”
That rigorous evaluation obviously never took place and the new deal has the same ownership structure for Gull Island, 60/40, as the original deal.
The fifth is “GNL and NLH should prepare for future negotiations with HQ by preparing a fully articulated strategy and best-practice governance process.”
I doubt that the time available before negotiations started allowed that to happen.
I now realize that this negotiation has been driven by the Government of Canada as part of a strategy to prevent the PQ from taking power in Quebec and raising the spectre of secession once again. It’s an admirable objective but shouldn’t be at our expense.
Our problem is that we only have one customer under the present circumstances and until that changes we will always have very little bargaining power. The people of Canada don’t know that we being prevented from selling our power to anyone other that Quebec. Alberta companies don’t have to sell to British Columbia at cut rate prices so they are the principal beneficiaries of Alberta oil. Alberta companies can sell to the world. The government of Canada can change that and to their credit they are encouraging steps leading to a national grid, as are eight of the provinces. (Quebec and Newfoundland and Labrador are the outliers.)
We need to educate Canadians about this inequity, as we successfully did during the negotiations leading up to the Atlantic Accord. And we need to take advantage of the economic necessity to reduce internal trade barriers because of the actions of the Trump administration.
My submission to the IRC was focused on that issue, which is the key to getting the market price for our electricity. While that was ignored there was a reference to that issue in the body of the report.
It turns out that one of Hydro’s experts “ recommended investigating export sales in order to be full informed and up to date. The IRC did not receive evidence that NLH has sought agreements with specific potential major customers in the United States or other markets for power delivery after 2041…”.
So the government did not follow the advice of the IRC to take the time to prepare for the negotiations, did not do a comprehensive assessment of the opportunities for domestic use, didn’t examine alternatives to Hydro Quebec owning 40% of Gull Island, and didn’t seek out other potential markets.
The Premier committed to having a referendum on the new agreement and has reneged on that firm commitment based apparently on a request of the government of Canada.
This kind of promise is different than the normal campaign promises like building new ferries here despite not having the capacity to do so. It is a promise to make an important public policy issue the subject of the approval of the electorate, not their elected representatives.
There is lots of time between now and the expiry date of the new DEIC at the end of March to have a referendum and to have a rigorous independent evaluation of the merits of the deal though a public enquiry or reference to the PUB prior to a vote.
The House of Assembly debate is a poor substitute for an independent enquiry, where witnesses are examined under oath and critics also give evidence and can challenge the proponents.