You just can’t trust Quebec. That’s a common sentiment behind at least one side of the discussion over hydroelectrical development in Labrador.
Of course, “Quebec” — in the broadest sense — should accept some responsibility for its reputation. The lopsided Churchill Falls deal of 1969 has left a permanent scar on the provincial psyche. And all attempts to renegotiate or litigate have fallen through.
A contract is a contract, or so the Supreme Court of Canada ruled in 1984 when it crushed Newfoundland’s attempt to affirm its constitutional control over Churchill River waters.
Interesting decision, that.
Basically, the court said that while the province indeed has rights to its own natural resources — including water — it cannot use that right to undo an interprovincial contract.
It didn’t condemn the premise of the act, merely its intent. That’s important, and here’s why.
Two weeks ago, St. John’s lawyer Bern Coffey raised concerns about a clause in the Churchill Falls agreement that suggests Hydro-Québec can dictate how this province controls the flow of water on the river. Coffey is a member of the anti-Muskrat Falls group Energy2041.
The contract spells out the specific amount of power that the provider, CF(L)Co, must make available to Quebec — referred to as the “firm capacity.”
Coffey points to this clause: “The firm capacity shall be available at all times when Hydro-Québec has requested it. In addition, whenever additional capacity can, in the opinion of CF(L)Co, be made available, such capacity shall also be available to Hydro-Québec on request.”
To accommodate its planned Muskrat Falls project, the province’s energy corporation, Nalcor, plans to periodically store water in the Smallwood reservoir at Churchill Falls in order to manage power production downriver.
Coffey says Hydro-Québec may have a say in how that stored power is used.
But do they? Two things:
The phrase “whenever additional power can, in the opinion of CF(L)Co, be made available” is hazy at best. CF(L)Co is majority owned by Nalcor, in partnership with Hydro-Québec. If power is being stored for purposes associated with Muskrat Falls, under what reasoning would it be considered “available” to Québec?
Second, the Supreme Court acknowledged that Newfoundland retains management rights over its own waterways. It merely quashed the 1984 act because its apparent intent was to undermine the Churchill Falls contract. Thus, any water usage that does not hinder that contract is perfectly within the province’s rights.
As Nalcor stated in a response to Coffey’s letter, “How Churchill Falls meets its contractual obligations to Hydro-Québec is at the discretion of Churchill Falls.”
The province’s Public Utilities Board has already imposed a water management agreement to that effect. It spells out exactly how Churchill Falls and Nalcor can store and share electrical capacity, while protecting the contracted supply to Quebec.
Coffey still thinks more clarity is needed. Curiously, that suggests he, too, is worried about Quebec’s trustworthiness.
At the least, it’s one of the more unique twists we’ve seen in the debate.