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LETTER: Newfoundland was sold down the Churchill River

Joseph R. Smallwood at the Churchill River, circa the 1960s. — Telegram file photo
Newfoundlanders and Labradorians were sold down the Churchill River, but not by Joseph R. Smallwood, a letter-writer says. — Telegram file photo

Twenty years after joning Canada, Newfoundland was screwed by the federal government, not Quebec. The federal “family” seems purely dysfunctional when one considers what really happened at Churchill Falls, which was more political than financial.

If there is one thing Newfoundlanders resent — even more than deficits and unemployment — is the thought that the rest of Canada may view Newfoundland as a basket case in need of handouts. 

Even if Newfoundland, as a sovereign state, had not managed its fisheries any better than the federal government, we would have emerged a “have” province many years ago.  That is, if we had been given a fair deal on Churchill Falls. 

Yes, a contract is a contract, but most Canadians don’t have a full appreciation of what was done to Newfoundland in the Churchill Falls debacle, not by Quebec, but by Ottawa.

Newfoundland was, indeed, sold down the Churchill River in 1969. The details of this ill-conceived agreement have been well documented over the past 50 years, but few have an interest in the facts. 

When Premier Joey Smallwood was working out the details, the province needed access to the large and lucrative United States market for the sale of Churchill Falls power. In order for Newfoundland and Labrador to transmit the power to the United States, it needed to transmit power across the provincial boundary of Quebec.

The federal government could have decreed that Newfoundland had the right to wheel a source of energy across provincial boundries, much the same as Alberta has the right to transport another source of energy across provincial boundaries. If such were granted, the New York Rockerfellers or the Rothschild financiers in London might have taken on more risk, which would have been a much better deal for Newfoundland and Labrador.

However, the federal Liberal government of the day would not do so because it had every single federal seat in Quebec, and fearing the loss of even one, it said a flat no to transmission rights through Quebec. History does not always inform, as the Energy East pipeline encountered the same fate.

As a new, small province with little political clout — only four federal seats at the time — Newfoundland had no choice but to enter into this lopsided deal with Quebec to finance the large project. 

Otherwise, Quebec insisted there would be no deal and was backed by the federal government. The result is $28 billion in profits going into Qubec coffers, all from Newfoundland and Labrador natural resources and a paltry $2 billion to Newfoundlanders.

Of course, Canadians will tell Newfoundland that it got better roads, better health care, better education and the like. But so did every other Canadian province.

Had the federal government stepped in, a fairer deal would have been struck in the federal “family.”

Even if Newfoundland had gotten only half the revenues from its Labrador resources it would be a much different province today. It might even be in the category of Alberta with its own heritage fund, and many more Newfoundlanders living at home in a more prosperous province.

Most Canadians don’t appreciate the fact that when Newfoundland joined Canada it had a surplus of cash in the bank, an abundant fishery and control of all its natural resources, including that of the mighty Churchill River. Since then Newfoundland has experienced nothing but budget deficits, high unemployment, massive outmigration, a mismanaged and collapsed fishery, due largely to federal mismanagement, and loss of revenue from Churchill Falls.

A big part of the answer for this sad outcome lies in the way in which Newfoundland turned over its right to manage its own affairs and the steep price of being a member of a larger Canadian family. Of course, Canadians will tell Newfoundland that it got better roads, better health care, better education and the like. But so did every other Canadian province.

That would have been the fate of Newfoundland, in any case, since it would have developed as any other province over the ensuing years as we progressed through the industrial and technological revolution and beyond.

Newfoundlanders living at home and the tens of thousands who have uprooted families to find work across Canada and in other countries, put Churchill Falls out of their minds for the most part to help feel more like proud Canadians.

Joseph G. LeRoux

St. Alban’s

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