The Ghosts of Shag-Ups Past
Plus bonus audio track
You have those feelings like you’ve lived something before.
Deja-vu. French. Means “already seen.”
We old farts get it a lot.
We old historian farts get it a lot more than usual because we have not only our own experiences rattling around in our heads but those of others going back to the year the first slime crawled out of the ocean and took a breath.
You get used to it, though. That sense you have lived this moment before.
Monday was one of those moments non-stop. Ground Hog Day but not fun like the movie.
Another Gigantic Energy Project up for talking in the House of Assembly. Not a debate because debates involve people with information discussing whether something is good or bad, right or wrong. This was a bunch of people who want more information and the people pushing this Latest Biggest Last Chance in the History of Civilization who have some information but won’t share and what they are sharing doesn’t line up with the claims of splendiferousness of their offspring.
Then there’s Jennifer Williams. Runs Newfoundland and Labrador Hydro, still basically NALCOR, but with another name. Took the same crowd pushing this deal two years to go from telling us they would change the name of the outfit she runs to actually doing the legal work to make it happen. A trivial thing, really. Took two years.
This is our time. Our deal. Our water. Says Premier Andrew Furey.
We gotta do this deal now. No dilly-dallying or words to that effect from Furey and from Williams.
“If [Quebec] can’t get an answer from us on what they want to do, they will start doing something else. Us waiting for a long time might not be the right thing to do.”
No one is talking about waiting for a long time. They just want to make sure everyone gets it right precisely because rushing headlong is exactly what went wrong countless times before, including with one of her predecessors who got paid more than she does and for no good reason. They just want straight answers to simple questions, something Williams had trouble doing Monday and Tuesday even with deputy justice minister Dennis Mahoney sitting next to her whispering the answers to her now and again.
She could not explain f’rinstance how the Churchill Falls pricing works and where this number 5.9 cents comes from when there is no version of the information in public - one chart maxes out at less than three cents and the other ranges between one and 37 - in which 5.9 cents is an average or even a number that appears most often. It is a phantom number, like Harvey, the magical tone that would appear in Mamas and Papas recording sessions around the time of Churchill Falls 1 because the quartet sang such tight harmonies themselves. That Harvey was real but no one was actually singing it so they named it after the imaginary rabbit from a movie. Jennifer and Andrew’s five point nine cents is the rabbit, not the tone. Harvey. Imaginary. Not really there.
That sense of rush, urgency, and panic is never healthy. But it is very common in local politics and it leads, without fail, to expensive mistakes. Don’t think of Muskrat Falls here. Think Abitibi expropriation. Rushed through the House by Danny Williams and his crowd solely because they wanted to swipe some generating plants for NALCOR from FORTIS, Abitibi, and a company called ENEL. No other reason.
Williams cooked up some scam in which he would scoop up the cream of Abitibi’s assets and leave the turds of environmental waste to Abitibi. In the negotiations for compensation, Williams would simply call it a wash when the guv’mint took the turds off their hands. As it turned out, they expropriated giant logs of crap including the plant itself and left to Abitibi a raft of high quality lands around places like Botwood, which actually got the land as a free gift from Abitibi. For a bonus, even though Abitibi survived the bankruptcy process, they also were freed of the responsibility for pensions for their employees since the provincial government bailed out the pension plans as well. Have someone in your life who hates you as much as Danny hated Abitibi.
Andrew Furey delivered one of his patented fluffy speeches on Monday. Lots of puffy, meaningless words. And at one point he said the opportunity before us was this deal or nothing at all. “The people of the province deserve to understand the opportunity that lies before us. Mr. Speaker. The easy thing to do and perhaps the politically most advantageous thing to do, would be to do nothing. But, Sir, that may not be the right thing to do.”
This is Muskrat Falls, redone. No alternatives considered even though there were many. Just this deal or nothing at all. The only alternative to Muskrat Falls for local needs the crowd of MFers told us would be doing nothing else. But there were plenty of alternatives, including electricity from Churchill Falls, all of which the MFers just ignored.
Now we have the CFers rushing headlong into something without a pause to hear any of the warnings or contrary voices. “For every Newfoundlander and Labradorian, we must all come together now, here in this House,” Furey said. How Danny like, who always wanted cheering or silence. No dissent. This is not an attitude that welcomes anything but groupthink. Or Brendan “Time to put on the NALCOR jersey” Paddock. You know. Andy's pal.
“We must be bold and have the courage to ask questions of this MOU to get the answers from experts.” A variation on Kathy Dunderdale’s theme that all the experts worked for guv’mint and all those who asked questions or raised concerns other than her crowd were not experts. But Furey and the CFers have learned the lessons of the MFers, supposedly. A variation too on the MF legion of business people who told us to be bold and have the courage to put on the NALCOR jersey. No simple explanation of the benefits of the deal. Just an appeal to emotion now, as then.
Bonus Audio Track - Contrarians, a shagged-up MOU, and a Come-to-Jesus Moment
Now doing nothing is the only alternative to *this* deal, produced by experts all independent of something as they work in lock-step to produce the same thing, no contrary voices allowed, at least in Furey’s mind. Andrew Furey talks of this deal as if he had found a unicorn. Andrew Furey has caught a lot of unicorns in his short political life. His biggest one before now was hydrogen. Bold step. Historic. Transformative. Or the MOU with Ottawa on offshore wind in which Ottawa gave Newfoundland and Labrador the right to issue land permits for wind development on offshore land Newfoundland and Labrador already owned and Newfoundland and Labrador gave up control of even more offshore lands to Ottawa for nothing.
Gotta rush to get this hydrogen deal done before it is too late and gone, came the cry from the guv’mint crowd, and so they all rushed and turned the world on its head only to have Furey’s fishing buddy bail on hydrogen. Now two and a bit years later there is no wind or hydrogen project anywhere near ready to do anything. The transformative Andrew Furey thinks he has a new unicorn, though, even though as grown-ups know, and history shows there's no such thing as unicorns.
Last Great Hope. Again. All the money coming from this new deal. Our latest LGH. This is like Danny Williams in the Great Fight with Ottawa for More Handouts. Our last great hope, it was supposedly. The oil would be everything and we would only get all the oil money if Ottawa gave us handouts on top of the oil revenue. Nonsense then. Nonsense still and more nonsensical for Furey to talk about imaginary amounts of money that will come long after he and the rest of us are dead and gone. No alternatives considered.
No surprise Furey looked at no alternatives except doing nothing because the committees he asked to review options never had a chance to report *before* Legault showed up with his deal. No surprise they looked at no options because Jennifer Williams is desperate to sign this deal as if Hydro-Quebec had no options. It doesn’t. We do.
Well, we would, if Williams and Furey and everyone else had thought of them. But they are desperate for this deal because they need it for some reason, more than Quebec does. We know Quebec is driving the bus now as in 1969 because when someone asked why Quebec got a 50 year deal for more Churchill when 20 years is the normal thing, Jennifer Williams said it was because that’s what Quebec wanted.
Furey is parading the negotiators and their tech support through the House claiming they are independent experts, when they are not. They are all engaged in the same venture, which is cutting the deal that Furey and the government have told them to cut. Richard LeBlanc warned about this. Others could have warned the Premier of the need to have people look at these ideas and the deal with sceptical hearts. Use the 10th Person, someone deliberately told to pick holes in everything, starting with the assumptions behind whatever project you are up to. Other Premiers here used the notion to produce great deals as big or bigger than this one. Independence as Richard LeBlanc meant is not about who is paying the bills or professional integrity, which Hydro’s consultants would have naturally. It is about what job they are asked to do and none have been asked to be the anti-Christ in this latest of an endless string of salvations produced by Newfoundland politicians. It is about telling truth to power. If you want everyone to get in the same boat, you do not want to hear any independent thoughts and you will only hear the truth by accident.
“We wait 17 years, and we see nothing in 17 years,” Furey told the House of Assembly on Monday. Those are his only choices. Do nothing or back my deal. “Quebec would have moved on and found a different energy supply because it needs this power now.” But Quebec doesn’t have a better choice, as Andrew Furey should know. It’s cheapest alternative to Gull Island or Churchill Falls is 16 cents a kilowatt hour and it would be very hard to replace the 15% of its basic electricity supply that now comes from Churchill Falls. Nearly impossible to find so much electricity in a mere 16 years, which is all the time left until 2041. The longer Quebec waits, the more pressure builds on Hydro-Quebec. For us, we have the electricity and markets in Ontario or the States. Churchill Falls is going nowhere.
“[Acting now] only strengthened our bargaining position. We act now and we see hundreds of billions. This is our moment, and our moment means exploring all opportunities on the table.” Furey’s words are bizarrely disconnected from reality since he is not exploring any alternatives. Furey’s moment means literally *not* exploring anything but whatever Francois whispered to him over dinner. Full stop. None. And rushing to close a deal with Quebec that so heavily favours Quebec when time is not on their side is folly. It is a young man’s enthusiasm, bordering on desperation. Legault had him at “hello.”
The sight of the people with no right to sit on the floor of the House sitting at desks taking and answering questions takes us back to John Shaheen, the guy behind what became the largest bankruptcy in Canadian history. Dragged by Joe Smallwood in front of the House of Assembly to tell the world his Latest Last Great Hope, the phantasmagorical oil refinery at Come by Chance was not a bust. Not just Shaheen, but a platoon of executives, all paraded with their spendiferous credentials.
“All we hear are the great dreams of thousands of jobs.”
“Thousands of jobs!”
That was Clyde Wells, heckled by Smallwood. Wells and John Crosbie left Smallwood’s cabinet over the financial guarantees from the government to back Shaheen’s scheme. Deja vu. All over again.
All we hear these days are the dreams of thousands of jobs and these days billions of imaginary dollars to go with the imaginary jobs. Shaheen’s mess still poisons the ground at Come by Chance and like the mill at Grand Falls, the cost of clearing it up will come from taxpayers of Newfoundland and Labrador. Clyde talked about the mere $5 million Smallwood wanted to give Shaheen and how it would raise the cost of a ten cent chocolate bar so that the little boy at the corner store with his 10 cents to buy the bar would not get it because the bar would now be 11 cents.
Exaggeration for effect. Hyperbole. Wells made the point. Smallwood called Wells a liar for saying it. The Speaker did not take Smallwood to task for the unparliamentary word. The House is more genteel these days. But no one has noticed the obvious, that this project will not lower electricity rates on the island. Furey and Williams did not do even that. There is not enough money actually coming from their deal to pay for Muskrat Falls, the deal we pay for while others profit from with free or super cheap electricity, also a key feature of this new Churchill Falls deal. The numbers are way bigger now compared to the days when your humble e-scribbler was the eight year old with a dime for a chocolate bar but SOL. But things are still the same even if bars are a couple of bucks and I can afford a few.
The dreams of thousands of jobs and billions of dollars all backed by a memorandum of understanding that is not definitive - meaning not legally binding - while the Premier and his ministers and his battery of witnesses insist we talk about as if it were real and definitive. Yet when cornered, they admit it is not all that clear and that the detailed documents they are working on in secret as we speak will be definitive. You’ll see, they say in so many words. Trust us, the folks who think Muskrat is beautiful. Just ignore the money it cost and the fact it doesn't work.
The details are supposed to come from the MOU, which is supposed to be clear. The offshore wind thing. Muskrat Falls. All had clear outlines of agreement that shaped the final deals. This one should be no different but it is very different. It should talk about what is in the detailed versions to come. But it does not. The MOU deals with power allocations but not actual electricity purchases, which is what will set the money that will change hands. The stuff that matters is not in this MOU.
“The Member opposite seems to think that the MOU is definitive,” Andrew Furey told the House of Assembly on Monday. “We are taking a completely different approach than what was exercised in the past.” An MOU that is unclear - indefinite, not definitive in the plain English of it - *is* a new approach. A different approach. A dangerous approach.
In 2010, we had an MOU for Muskrat Falls that was clear enough so that those who read it could figure out what the guv’mint were doing and what that meant. Same thing for other projects as well, like Hibernia, Terra Nova, White Rose, even if not made public. Ditto Voisey’s Bay and even the Atlantic Accord in 1985. Words matter. Meaning matters. Confusion matters too.
The MOU says the total value of the electricity Hydro Quebec will buy from Churchill Falls shall add up to no more than $33.8 billion, valued in 2024 dollars. There is a mention in the MOU in Appendix F that says vaguely that the pricing schemes worked out in detail will reflect the different ways of valuing electricity. But this is not the same as setting the actual valuation, which is done by saying the total value is $33.8 billion. Jennifer Williams thinks something magical will happen as blocks of power change hands in the future - as defined in the MOU - but not realising that HQ will buy blocks of electricity - not listed in the MOU - and that the maximum value of all of it will be $33.8 billion in 2024. That is the plain English of the MOU.
Williams imagines future years when Newfoundland and Labrador Hydro will have electricity it cannot use and then will sell it to someone else, most likely Hydro-Quebec and at that time, NL Hydro would get more for it. Maybe NL Hydro will. Maybe they won’t. That is not nailed down. But the price in the future is the value set in the MOU and that will always add up in total over 50 years to $33.8 billion 2024 dollars. No more. Hydro-Quebec may give in to whatever something else Williams and her team imagine but that would be a surprise. More likely their battalions of lawyers far bigger and meaner than the corporal’s guard at Stewart-McKelvey or even Stikeman-Elliot will fight over that $33.8 billion because it is the *only* concrete thing in the MOU on pricing, along with the schedule of payments that is not there by some accident.
What is most striking about Andrew Furey and Jennifer Williams and all the CFers pushing this deal is how hard they are pushing. They dismiss any criticisms, reject any alternatives either because they claim people don’t understand what they are doing or because the details are still being worked out. Endorse us, they say. Get on board. Be bold. Count all the imaginary money, line up for all the imaginary jobs that come from parts of the deal not guaranteed.
What is almost as striking is how much they sound like so many politicians and bureaucrats before them, how much this deal looks and sounds like failed deals from the past, how big the gap is between the words coming from countless mouths and the evidence.
This should be a deal that sells itself. Here are the five things we know were wrong with the original deal. That should be the starting line. Here is how we fixed them in this deal. Here is what else we get and here is how we protect ourselves against misfortune.
But no. We get fluff and confusion.
The pricing should actually be the simplest thing to explain because it is the one thing about Churchill Falls 1969 that everyone knows. There are different ways to do it. Pick one. Set a floor price for example and tie the price paid to another market price such as the New England Hub. The fact all the Premier’s horses and all his good men and women cannot explain this in simple words, that the MOU is vague and lacks enough detail to assess when it ought to be clear, are in themselves massive warning signs that something is seriously wrong with the deal itself and how the provincial government and NL Hydro are tackling it.
Look at the three guys at the top of their column. Like their predecessors, they thought they’d found the way to El Dorado. Like they found The Ring. None of them wanted to shag up, let alone shag the province up. But they did before and these guys now seem to be headed that way not because they are stupid - they are anything but - nor because they are anything bad but simply because they are ignoring the warning of the Ghosts of Shag-Ups Past.
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