The Premier still does not get it, and his government seems to be forging ahead on a Bad Deal for Churchill Falls.
- I am convinced he knows it is a Bad Deal (he is not stupid) and that’s the main reason why he did not proceed with a referendum as he promised.
- He and his team came out on the losing end of the negotiations with Quebec but then began to believe his own hype and convinced himself and his MHAs that it was a good deal.
- He is rushing through this deal at a speed that prevents full analysis and certainly before the full details can be properly explained to the public. That’s what you do when you have a weak hand and you are trying to bluff other players at the table … in this case, the opposition and the general public.
- He engaged in an expensive promotion to sell the Deal, while at the same time engaging in a flimsy debate in the House of Assembly to, as he called it, explain and debate the deal. This was not a debate at all … it was all part of the selling job.
- Have you watched the advertising with the Premier (all paid for by the taxpayer) trying to sell this bad deal. He talks about more money, more power, more transmission, more jobs. Yes, there is more up-front money but offset by less back end money … they offset each other … it is essentially a loan that we have to pay back. Yes, there is more power but much of the more power for NLH comes from projects that may never be built … the cheaper power from the existing plant goes primarily to Quebec. The more transmission he talks about is being paid for by the Feds and while some is in Labrador, the bulk of it (some 65% of it) is in Quebec. There will be more jobs on the transmission side, but again most of these will be in Quebec. The Gull Island development, if ever developed, will provide more jobs, but these jobs will be there whoever develops it and whenever the development takes place … right now we have turned all these decisions over to Quebec and then we give them the right to own 40% of the deal if it gets developed. Where is the good deal in that?
What the premier does not talk about in his ad is:
- We leave the GNL / CFLco Water Rights agreement in place at the ridiculous low rents and royalties still in place. This should have been cancelled and a new modern one put in place as a condition of doing a new deal in the first place.
- The new deal will continue a CFLco shareholders agreement, that gives HQ veto control on essentially all major decisions on the Churchill River. We will be in a straitjacket operationally for another 50 years. This is in addition to giving Quebec full control over whether the Gull Island project is ever developed at all. The structure of the deal has built in disincentives to development anyway from Quebec’s perspectives … if they develop it, they have to give up cheap power from existing CF plant and take on more expensive power from Gull Island. What are the chances of that happening?
- The new deal even puts increased limitations on the constitutional powers of the province’s House of Assembly, regarding taxation and other matters. These types of limitations were not even in the old 1969 deal … congratulations Mr Premier … you even beat Mr Smallwood in giving away Newfoundland’s resources and powers.
The more I look at this DCIA the more I realize to use the words of Mr Gabe Gregory when he said “The DCIA is a subterfuge, or in other words – a scam – deception.”
My view now is that the inclusion of the possible development of Gull Island was included in this deal merely as a teaser to GNL in order to get a cheap new 50 year deal on the main prize … the existing Churchill Falls Power. They knew that this would be of great interest to GNL (jobs, jobs, jobs). But they had to ensure they had control the process so as not to get trapped into development unless on their terms … thus the complete transfer of control over Gull Island embedded in this deal. Congratulations Quebec, your idea worked. Now here we are, with the ownership of probably the best water / electricity resources in North America, if not the world, and we seem willing to give it all up, because we lost the poker game with Quebec.
I say to the people of the province … DON’T LET THIS HAPPEN.
There are better and more suitable ways to do this.
Gil Dalton, BA(Econ), BCom, CPA, CA