Jibber-Jabberwocky Politicians
We are already the 51st State of Confusion
Improved free trade with the United States would collapse long-standing trade barriers between provinces and as a result, boost the NL economy, lower the cost of living, and create well-paying jobs.
The renewed 1969 Churchill Falls deal works against Newfoundland and Labrador in that likely world of the future as it blocks export of one of the most lucrative of our exports - electricity - and makes us a less-attractive place for investment.
Canadians are already the 51st state.
The 51st State of Confusion.
Lost in a cross between Donald Trump’s social media blatherings and Dante’s rings of hell. The Italian only needed nine rings each for Hell, Purgatory, or Paradise but this is Canada, and more specifically Newfoundland and Labrador where a net present value of a mere nine becomes 51 by some mathematical magic and enough time.
So 51 rings of Canadian hell it is.
The guide on our journey will be Mark Carney, the top choice among a handful of Liberals in Ottawa to replace Justin Trudeau now that Justin has reluctantly decided to quit the cirque de merde he and his crowd created. Trudeau’s unrelenting arrogance and breath-taking political stupidity has assured the Liberal Party that once dominated Canadian national politics will be lucky to elect as many members to parliament after the next election as the Tories did after Brian Mulroney frigged off from the wreckage of his scandal-plagued government. This is not his father’s Liberal Party by a long shot and Justin made it so.
Carney is the choice of a handful, but it is the right handful in what is almost certainly a rigged contest to install Carney as king after the princeling Trudeau shat the political bed so badly. Carney’s only opponents will be women so, despite their obvious merit, they will serve only to let the federal Liberals remain the only national party in Canada who has not elected a woman to lead them. Justin Trudeau’s Liberals talked the woke talk but in the end they have an obvious problem letting women hold real power. Ironically, Carney will then repeat Kim Campbell’s part in the election to follow hot on the heels of Carney’s scripted victory.
No one seems to notice that Carney is an economist, not a pass-time known for being decisive let alone interesting in this media age. No one among his boosters seem to notice his policy statements so far have been a continuation of all the ones that remain problematic. No one seems to notice that Mark’s last name sounds like the name for a kind of circus or the people who work there, adding to the carnival-like atmosphere of the collapse of the federal Liberal Party. No one seems to think it important either for Carney to have some new ideas. His formal launch was a promise of more of the same, which assures the Liberals may only make it out of their current so far as the first ring of Purgatory.
No one seems to notice either that in this supposed moment of national unity against an American threat - currently doing business as Donald Trump 2.0 - Carney launched his campaign on American cable television, on the Daily Show with Jon Stewart. Officially, the launch was in Edmonton but the real launch was south of what is still, for now, the border between two separate countries. Do not miss that symbolism any more than you miss the bevy of Canadian Premiers trooping to Washington to attend Trump’s inaugural party. Heads of government of any sort from truly independent countries do not attend the American inaugural circuses and they certainly do not organize a trip and go in a bunch, along with coverage by Canadian national television and the inaugural itself. They might well have organized an inaugural ball thus reinforcing the real message is that the Canadians are already Americans in all but name only.
There is more to this trip than just the usual political hypocrisy or the habit of provincial premiers to be self-serving and politically inept when it comes to doing more than a local town councilor could manage. The junket to Washington and the national political obsession with Donald Trump confirm how much Canadian elites are already Americanized. Andrew Furey may slam Danielle Smith for not putting on the Team Canada Jersey - Furey wears his over his TEAM NALCOR jersey, which all at NALCOR now wear over their Equipe Hydro-Quebec sweaters - but the truth is Furey is exactly like Smith in her Americanization. She is just more honest in representing her province’s economic interests and more obviously aware of what they are.
So it is that at the installation of 47 the re-run of 45, the posturing petty provincial panjandrums representing every northern American fiefdom from Plum Point to Plaisance to Petawawa to Penticton will be hanging out at the dozens of parties and galas hoping to catch Kevin O’Leary’s ear or see, in Andrew Furey’s case, if Bobby Kennedy Junior might pose for a selfie for Insta and TikTok, their respective pecs bulging, as they talk vaccines and health care and promote their personal brands. It will all be very trendy, very Celebritocracy, very superficial, very lightweight, very unserious, and very… American.
Everyday Issues. Plain Language. Bond Papers.
There is little as disturbing as waking up of a Friday morning to Andrew Furey on VOCM using the word incredibly so incredibly often that whatever point Furey is trying to make is instantly incredible and irretrievably lost. That was last Friday.
In this incredibly transformational moment of incredibly momentous national crisis with an incredibly dangerous threat to our incredibly important borders, Furey said in words to that transformational effect, we must stand united as Canadians from sea to sea to sea and fight this American policy instrument. That is not an exact transcript but it is close enough for government work right down to his talk of a policy tool, which stood out, as all dunderdalisms do, in an incredibly obvious and awkward way. The only way jibber-jabbering Furey could have made his interview an even more faithful homage to one of his many otherwise forgettable predecessors from the past 15 years was if he’d worked in there somewhere Kat D’s favourite bit of jibberish, the due diligence piece.
What Furey could not explain last Friday morning was what Trump wanted. None of the northern American pashas, potentates, and patriarchs in high dudgeon over the little orange menace can tell you what we are all supposed to rally to the flag to defend. Trump’s threat was always that there’d be tariffs unless… and no one in Canada seems to wonder what would come immediately on the heels of the unless. Most are stuck still now two and a bit months later talking about how devastating the Trump threat would be to the Canadian economy were it to happen.
But “were” is conditional. If it happens, this is what will follow. But what would trigger the “if” to go from being possible to be actual remains a mystery. What does Trump want *instead* of tariffs? The impact of tariffs on the American economy is so obviously bad for Americans that we ought to be wondering what Trump really wants. Yet no one in Canada apparently does.
The impact of tariffs on the Canadian economy would also be obviously bad. Premiers lost no time last November telling us that but not what he wanted. In Ontario, it would take out a half million jobs, which in Newfoundland and Labrador would come out to 16,000 jobs or more. All of that is so obviously horrible that it is incredible not only that Andrew Furey is onside with making that worse through Team Canada’s threat of massive tariffs against American goods but that he cannot explain - listen to the VOCM interview - why he’s all-in to make a bad situation worse through retaliation.
After all, the best Canadian plan - besides the suck-up tour - is to apply tariffs to American imports to Canada that would cost between $37 billion and $100 billion to the *Canadian* economy depending on which version the federal government imposes. Since tariffs are stupid “policy instruments” that do more harm to the domestic economy imposing them than on the target, then applying Canadian tariffs to American goods would only make the impact on the Canadian economy worse. Like dipping your scalded hand into a deep fryer on blast kinda stupid.
What Trump and his advisors are most likely looking for is a European-style economic union in North America that lowers the restrictions on people, goods, and services moving among the three countries that would make up the union. Kevin O’Leary floated this idea a few days ago. It is most likely what Trump and his team are after simply because of the speed with which the most nakedly biased Canadian media outlets - the Toronto Star and the Toronto Broadcasting Corporation - have been hammering it.
A North American economic union would frighten Canadian Premiers because most of them ignore the constitution daily with internal trade barriers that cost ordinary Canadians billions. An EU-type economic deal involving Canada, the United States, and Mexico would lower the prices of milk, eggs, chicken, and other food basics not to mention alcohol or oil and gas and other forms of energy.
Getting rid of those international barriers would be genuinely transformative in a way Andrew Furey could only dream of. Getting rid of the barriers between provinces would be another order of magnitude of transformation beyond that. If you want to understand the boost to ordinary Canadians from such a deal between Canada, the United States, and Mexico, understand that existing barriers the Premiers keep up between provinces add the equivalent of the Harmonized Sales Tax - upwards of 15% - to the price of goods and services we buy.
A 2019 paper by the International Monetary Fund estimated that free trade between provinces would boost the value of all goods and services produced by the economy by about four percent per person. Lower trade barriers would bring the most benefit to provinces like Newfoundland and Labrador that rely mainly on exports. The same paper estimated that internal Canadian free trade alone would boost the economy in Newfoundland and Labrador by 13 percent. International free trade would boost the economy by another 12 percent. Interprovincial free trade alone would boost employment by 13.3 percent and international free trade by another eight percent.
Newfoundland and Labrador would gain hugely from increased free trade between provinces and countries. Now that you understand what’s likely going on in the trumped up confrontation with the new American president, you can also take a closer look at the Churchill Falls deal and see how it misses out on a huge strategic opportunity.
The Furey deal with Francois Legault surrenders control of development along the Churchill River to Quebec. Under the deal as announced, Quebec controls both Churchill Falls and Gull Island to nearly the end of the century. Without development of Gull Island - solely Hydro-Quebec’s decision - Newfoundland and Labrador cannot develop Gull Island without Quebec for almost as long.
The deal also blocks Newfoundland and Labrador from exporting electricity from Churchill Falls to anywhere in the northeastern United States and eastern Canada, including Ontario. Government officials told politicians before the Big Debate farce that NALCOR and the provincial government agreed to a non-compete clause - it won’t be worded that way to skirt American free trade in energy rules - that makes Quebec the only place Newfoundland and Labrador could export surplus Churchill Falls electricity into if it doesn’t use the electricity locally.
That’s important because exporting electricity to the United States was already a valuable post-2041 option for Churchill Falls electricity. Two years ago, some here suggested canvassing the market through a call for expressions of interest to see what deals might be possible since electricity prices were higher in the US, far higher than the ones in the Furey deal as it turned out.
And unless someone stops the Furey give away, export sales and this province's control if it's own energy future are rapidly fading as a viable option. The deal isxs foolish give-away. The chance to change it s fading. You see, the memorandum of understanding announced in December is not the deal, as officials kept admitting. The real talks are underway right now, with the provincial government here already locking into its weak position by announcing the deal and endorsing every aspect of it despite any criticism of obvious major flaws. The more the provincial government defends the deal as it is now, the less room it has to negotiate. The Quebec python doesn’t even have to squeeze its prey tighter and tighter since every over-the-top provincial statement just snuggles the province deeper and deeper into Quebec’s coils. The wiley Kaa Legault really did have the giddy Andrew Mowgli at hello in 2021.
Not like we didn’t see this coming. As explained here in April 2023, since “NALCOR-Hydro cannot force local ratepayers to cover the second piguva project [this time, like it did with Muskrat Falls], Andrew Furey doesn’t have many options. The best he could hope for is a deal in which Hydro-Quebec winds up controlling the whole show at Gull Island. That also strengthens Hydro-Quebec’s hand when negotiating Churchill Falls contracts post-2041 in the scheme that Francois Legault scammed young Premier Andrew Furey into.”
“Working the two projects together in some fashion helps get more electricity out of both plants but it also leaves Newfoundland and Labrador with no leverage to get anything more than HQ is willing to give. This is the price for the provincial government’s complete lack of preparation for these talks despite literally years of advance warning. The problem for Furey personally is that, unlike Mowgli, there’s no Bagheera or Baloo to save him from the wily Legault-Kaa.”
That bit of Kreskin-like prediction didn’t go far enough, though. Reality always goes one better. Unless it is radically altered, the Furey give-away will also limit future potential by surrendering control of the Churchill river to Quebec and closing off exporting electricity from it as an option. Newfoundland and Labrador could have a much brighter energy future thanks to even more free trade between provinces and the United States triggered, as in 1998, by *American* free trade policies. But unless something changes radically in this Furey deal, we are screwed.
Churchill Falls and Gull Island are attractive projects for investment. American investment. There are other energy opportunities for wind and American money will be looking for a friendly province to invest in after a new international free trade deal opens the Canadian market. One of those places could be Newfoundland and Labrador but that’s not likely if the province is already locked into a strangle-hold with Quebec while Quebec busily protects its own relationship with Americans, further blocking Newfoundland and Labrador. The Yanks will go to Quebec faster than Newfoundland and Labrador. After all, we are just the little eastern province that just keeps screwing up. In 1969, geography worked against BRINCO and forced a deal with only Quebec. Now, Newfoundland and Labrador with more options and not tied to Quebec alone, has decided to stick its own economic and policy body into a Quebec-controlled straight jacket, all with the enthusiastic support of its young Premier.
Some policy.
Some tool.
O these mixed emotions, and what they reveal to me about myself.
I was innocent once: in the late 80s, when I began my career, I was a Quakerlike Mr. Sunshine in my belief that fair dealing was the only way to trade and exchange. Now, with my more realism-tainted thinking and what I call coincidentally a cultured wisdom of the snake, I feel regret for what NL is going through and at the same time contempt for its slapheaded 'leading lights'. Doubly so because I'm Québécois who stands to gain from what's happening AND I'm an electrical engineer.
All this reinforces my sense of things: the present hydro 'deal' being discussed is not something to be expected of two parties of any sense or merit; but there comes a time when one side gives so much away without being under dire threat and against all reason ... that side deserves all its losses and the contempt of onlookers.
As for interprovincial trade barriers: they've been an issue since forever, and Canadians would GREATLY benefit for a new Mulroney to bring the provinces together to at least identify and publish what those barriers are! Right now, different business-industrial segments are aware of what affects THEM; but no one at large has a sense of what it all adds up to.
Which is a damn shame.
Great Article Ed!
Lowered trade barriers for Nfld would be a HUGE benefit for the province, for both fishery and oil business. We would get a chance to trade more easily with the largest economy in the world and in history.
If we get locked in on this deal now, we are giving up another part of independent trade ability to another jurisdiction of Canada. What a huge mistake! Maybe thats why Quebec is going for this deal now - because they see the way the wind is blowing for trade south of the border. They want to lock us in so they control the resource.
Furey is trying to paint Trump and company as Bogeymen. Trump's core policy is actually to minimize government intervention in the economy (hence DOGE).
The more government intervenes in the economy, the worse the economy becomes. Just look at the mess Nfld has made with their interventions with the crab industry every spring. Arguably, the best performing economy in the US right is Utah. And they have the least government intervention.
We better wake up. We are getting screwed again.