Feb 27Liked by Ed Hollett

Was there an agreement? It's a nothing, other than a desperate Premier trying to get good press. Quebec holds the upper hand of a bad 1969 deal. Until an offer is placed before us to consider we still have nothing.

8Billion cash up front to NL not Brinco and 35% of the next 18yrs profit before depreciation (approx 1.3 Billion annum/ 24Billion ) 32Billion

Expand full comment
Feb 28Liked by Ed Hollett

Wait, what? Was there an agreement? Only in the sense that two politicians who want to polish their biographies for the history books sat down and said that they want to sort something out sooner than later, so, no, no real agreement. Let's face it, the prospects of these guys arriving at a deal are dim.

The stakes are so high that it might be impossible for the two provinces to come to a mutually beneficial agreement, no matter who is at the table.

Quebec is still printing maps which show the entire Ungava Peninsula as part of La Belle Province. Thousands of Quebecois maintain that Quebec was robbed of Labrador in the 1927 Privy Council decision. There's a nice review of the history of the competing claims to Labrador on Wikipedia, at

[ https://en.wikipedia.org/wiki/Newfoundland_and_Labrador%E2%80%93Quebec_border ]

Last week, while discussing the LeGault visit to St. John's, CBC radio in Montreal referred back to the 1927 decision, and how it was still contentious among Quebecois, because many Quebecois see the hydro potential of the waters of Labrador as being theirs by right. Those people will not support any deal which favours Newfoundland.

The multiple forms of litigation since 1969 suggest that the two governments are unlikely to be able to work out a mutually acceptable deal to sell the Churchill Falls power, let alone make a plan for future dams at Gull Island and the lower Churchill.

Even if they were likely to be able to sort out a go-forward agreement, Newfoundland cannot live with the fact that the Quebec side took $28 Billion while we got $2 Billion, a decidedly lopsided deal which has left a lot of sour Newfoundlanders.

By unhappy coincidence, half of $28 Billion would almost pay off the Muskrat Falls white elephant, but that's a distraction at this point.

In St. John's last week, LeGault called the 1969 deal a bad deal, but he resisted saying that it was unjust. His position appears to be that Newfoundlanders made a bad contract, which cost them billions. So, it sucks to be us. And he's not interested in changing that.

There is no offer of reparations to compensate for the improvident division of profits from Churchill Falls for the past 54 years. He is also not suggesting profit sharing on a go-forward basis: instead, he wants to buy the electricity from us, and sell it on to New York state, with the profits going through Hydro Quebec to the Quebec government. In other words, more crumbs swept off the table for Newfoundland, while the bulk of the profits will continue to go towards keeping Quebec fiscally secure.

This is not the only energy-related matter between the newest and the oldest provinces of Canada. Quebec claims, through its archipelago in the Magdalene Islands, ownership of the Old Harry oil field in the Gulf of St. Lawrence. Newfoundland claims the field too. If the past is any indicator of the future, our long history of dealing with Ottawa on offshore oil fields, eventually leading to the C-NLOPB BOARD, will suggest what we might have to face if the Old Harry field is ever to be developed.

Let's face it, we have had a poor history of dealings with the Canadian wolf. Some of your readers will remember the song.

Meanwhile, the other white elephant, the trans-island electricity network, is a compleat disaster. Too bad, really, because it might offer a means of getting the electricity to the Maritime provinces, perhaps for resale to New England. Not that that would be a solution: the Maritimers need money and electricity too.

In a perfect world, Quebec would offer some reparations for the lopsided Churchill Falls deal, and then agree to split the profits of that and any new development selling electricity to markets in Canada and the USA.

But this is Newfoundland, not Disneyland, and there is no Prince Charming to come to our aid.

On the bright side, we have 18 years to sort it out. It's not as if there is any advantage to working it out earlier. Quebec said, many times, that a deal is a deal. So, let's wait and see what they offer us.

In the event that they offer nothing, by then we might be able to get the electricity across the strait.

Expand full comment
Feb 27Liked by Ed Hollett

Hire the best qualified Cost Engineer to do a macro cost/benefit analysis of the fully developed hydro potential of the southern boundary region. Cash Flow present value must be a few billion annually. How much is at stake in the negotiations?

Expand full comment

In any negotiation at this level all parties should be trying to profit maximize long term, not vote maximize short term. Quebec plays the long game and benefit from that strategy. The First Nations who have legitimate land claims to the Churchill River will probably make out better than the average NLer. We need to educate everyone from our students to the inhabitants of 8th Floor about the nuance and realities of these opportunities. This includes the consumers and industrial customers in Labrador who have benefited from less expensive power and the crowd at Nalcor/Hydro/?? about the profit/ lower cost power that we also reap from purchasing the power so inexpensively from CFLCo. (.2 cents/ KWh) and selling it or comsuming it or subsidizing industry with it. The NL bureaucratic culture that budgets are notional and nobody really cares if we do a bad deal needs to change. NLers are not mushrooms. Sunshine and education makes people uncomfortable but accountability and collective wisdom must be somehow injected into the DNA of this province.

Expand full comment

What do you think a fair and realistic deal looks like Ed?

Expand full comment