Deal frees N.L. from Quebec: Williams

The Canadian Press ~ OBJ
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‘This is our CPR,’ Nova Scotia premier says

Nova Scotia Premier Darrell Dexter

Premier Danny Williams seized at least part of what has become a political holy grail in the province with a $6.2-billion deal to develop the Lower Churchill hydroelectric project in Labrador with help from Nova Scotia.

A beaming Williams touted the joint venture Thursday as an economic breakthrough for Newfoundland and Labrador, Atlantic Canada and the country as a whole.

It’s also a chance to break Quebec’s grip on his province’s renewable energy resources, he said.

“On this day the people of this province are realizing a dream,” Williams said. “Giveaways are a thing of the past. ... Quebec will no longer determine the fate of Newfoundland and Labrador and one of the most attractive, clean energy projects in North America.”

Williams left no doubt that his drive to bypass Quebec and bring power through Nova Scotia using subsea cables was fuelled by the 1969 agreement to develop Chur-chill Falls power.

He said the woefully lopsided terms of that deal also drove him into politics.

Quebec has reaped more than $19 billion in profits while Newfoundland has pocketed only $1 billion, according to the Newfoundland and Labrador government. The deal doesn’t expire until 2041.

The Lower Churchill development won’t repeat those mistakes, Williams said.

“Several decades after that deal was signed, it remains as a defining moment in our history that has served as a warning to the generations who followed of what not to do.”

The proposal is a scaled-back version of the premier’s long-promised Lower Churchill development. It must also clear regulatory hurdles and could be scuppered unless Ottawa approves a compensation deal that must then be ratified by the Innu people of Labrador.

“One of the key outstanding issues now is the consent of our Innu people,” Joseph Riche, grand chief of the Innu Nation, said as the deal was announced in a St. John’s hotel ballroom.

But such details were for another day.

“This is our CPR (Canadian Pacific Railway),” Nova Scotia Premier Darrell Dexter said of a project that would mean thousands of jobs. “This strengthens us as a region, but ultimately in so many categories it builds the country.”

Under the agreement, Nova Scotia would receive 170 megawatts of energy annually — about eight to 10 per cent of the province’s total power needs — for 35 years.

Emera would also have an option on an additional 330 megawatts that could go to other provinces and New England.

In June, Nova Scotia and Newfoundland and Labrador made a joint request to Ottawa for $375 million to help build a subsea power cable connecting the two provinces. The federal government has not made any funding commitments, but Dexter said he believed it would have “little hesitation” in supporting the proposal.

Dexter said he gave the broad outlines of the deal

to Peter MacKay, the federal minister responsible for

Nova Scotia, and Keith Ashfield, the minister for the Atlantic Canada Opportunities Agency.

“I can say there was unreserved enthusiasm among them for this project,” Dexter said. “My firm desire is that they would respond in an expeditious fashion.”

Williams said the project would proceed with or without the requested federal assistance.

"This strengthens us as a region, but ultimately in so many categories it builds the country." Nova Scotia Premier Darrell Dexter

“The beauty is that the province does have the financial capacity in order to be able to undertake this — which is something that we could not have done years ago,” he said. “The project is a go.”

Still, if Ottawa provided loan guarantees, that would shave “hundreds of millions of dollars” off borrowing costs, Williams said.

“We’ve made application to the federal government because ... this is not only a great regional project, it’s a great national project,” Williams said. “I would suggest it’s a no-brainer, although we can’t take it for granted.”

Quebec is against federal funding for the subsea cable, and Quebec Premier Jean Charest said he reiterated that concern to Dexter on Thursday.

Riche said Innu leaders are to meet with the federal Indian Affairs minister next week in Ottawa. Williams urged the federal government to step up talks to settle compensation and land issues that could become major hurdles. Innu people who oppose the development say it will flood cherished traditional territory and hunting grounds, wiping out animal habitats.

The Lower Churchill agreement is subject to approval by regulators in Nova Scotia and Newfoundland and Labrador as well as the boards of directors for Emera and Nalcor Energy.

New Brunswick’s energy minister said his province stands to benefit from the deal by transmitting Lower Churchill’s energy to the lucrative, energy-hungry markets of the northeastern United States.

“With a significant portion of the power intended to be going to New England through this deal, we’re going to benefit from the transmission side of that,” Craig Leonard said.

“Secondly, clearly, it gives us a new source of clean, emission-free power that we’ll be able to utilize.”

Leonard said there was some capacity in his province to carry Lower Churchill’s power. But he added that the New Brunswick government would want a partnership to build new transmission lines if they are needed.

Emera has been in negotiations to develop Lower Churchill power since a memorandum of understanding was signed in January 2008. The company said it hopes to have power flowing in 2017.

Last month, Williams announced he was pursuing the Lower Churchill project in two phases. He said his plan was to build a generating station at Muskrat Falls, followed by a larger facility upriver at Gull Island.

The multibillion-dollar project has been on the drawing board in one form or another for decades. In 1980, it passed an environmental assessment but was set aside due to concerns over market access and financing.

Concerns over the loss of habitat that would result from the development of the project have also stalled its progress in the past. But Nalcor has promised to develop a compensation plan to make up for that.

The desire to build more power plants on the Churchill River in central Labrador can be traced back to 1972, when the Churchill Falls hydroelectric dam was finished with Quebec’s help.

Organizations: Canadian Pacific Railway, Atlantic Canada Opportunities Agency

Geographic location: Quebec, Newfoundland and Labrador, Nova Scotia Ottawa Atlantic Canada North America Chur United States New England New Brunswick Churchill River

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Recent comments

  • Barry
    November 19, 2010 - 22:39

    I look forward to seeing the pudding!!!!!

  • W McLean
    November 19, 2010 - 20:31

    I dunno, Richard. The CPR was delayed by years of dithering about the route, required massive freebies to entice the partners to deal, went way over budget, and with so much money involved was rife with scandal. The CPR comparison might end up being very apt after all, if not for the reasons Dexter uses it as an example.

  • Durr the 1337
    November 19, 2010 - 14:58

    What about the people of Labrador who reside in communities where Diesel generators are still being used to power the towns? How about a handout to those people? Oh wait, some of those people have yet to get running water in some towns (Black Tickle) so I guess Mr. Williams doesnt care about them, or how about the families who lost their 3 boys? That area is still a grave for 2 of the three. Thanks again for screwing the hard working people of Labrador Mr. Williams, I guess the next time you come to Labrador passing out hundred dollar bills to buy your votes wont be in the near future....

  • Willi Makit
    November 19, 2010 - 14:33

    20% free to N.S. for 35 years? How's that different than the original deal with Quebec? Oh yeah, Quebec actually pays us for the power as well - even if it is at pitifully low rates. ''No more giveaways''??? This 'deal' is a whopper.

  • richard
    November 19, 2010 - 14:04

    This our CPR? Not really. We had a railway, once. The Tories gave that away, too.

  • Frank Blackwood
    November 19, 2010 - 11:23

    I have to congratulate Premier Williams on this deal, and it is encouraging to see we will no longer be a hostage of Quebec. There is no doubt the cost of living will rocket, but governments will have to readjust the cost of living for those who are on fixed incomes as they will be the welfare recipents of the future as their pensions will only be enought to buy peanuts. The province of Ontario has already showed a deaf ear to its senior citizens who are living below the poverty line. The future will see more people living on crackers and peanut butter and going to food banks to feed themselves and their children if something isn't really done soon. A future of begging and humilation, for those who were brought up in a different generation and built this great country. Frank Blackwood

  • lindy
    November 19, 2010 - 10:02

    another increase in electric rates for seniors with no increase in pensions or supplements

  • David Wilson
    November 19, 2010 - 09:47

    Danny, how about letting the residents of NL in on the deal. Finanace 10% of the project through project bond offerings that only NL residents could purchase and benefit from.

    • Darren ryan
      November 19, 2010 - 11:06

      I agree with DAVID WILSON. Only problem is there are probably not enough Newfoundlanders willing to partake. Thus, other people will be involved... How about we give Newfs the first crack and then others?... except Quebec obv!

  • Dave
    November 19, 2010 - 09:16

    I would like to see this new deal put along side the deal that was proposed with Quebec. I want to see a comparison to see if deal is any better and what bang we're getting for our buck.

  • A sober viewpoint
    November 19, 2010 - 08:00

    The Quebec view is that Quebec was forced by Ottawa to give up Labrador in exchange for the upper churchill, to the island dominion of Newfoundland for them to join confederation. How time becomes a spin doctor.

  • james
    November 19, 2010 - 07:02

    good deal but still 10 to 15 years away was this about nl or quebec

    • Dick
      November 19, 2010 - 11:08

      I don't know about Nalcor but Emera had been raping Nova Scotians for years all for profits for thier shareholders, which I presume Darrel Dexter is one one them, so to my friends back on the rock, be careful what you wish for.