With a loss of about $50 billion in hydro returns, Newfoundland and Labrador’s sacrifice for "preserving Canadian unity" has been an economic anchor around the province’s neck, and our own union with Canada has cost us billions more as a result of a federally mismanaged fishery that holds us down like a bag of rocks.
Between the anchor and the rocks, this place is doomed.
Before bankruptcy finally does us in we need to reset our economic relationship with Canada, or, in event of a failure to negotiate a new deal, to seriously consider leaving the federation. I am not a separatist, but separation, as with all options, must be considered as a means to finally float our ship of state.
Former premier Clyde Wells told the CBC recently that one of the reasons this province is once again knocking on Ottawa’s door for financial help is that we don’t collect any revenue from one of our major natural resources — Labrador hydro.
When Newfoundland wanted to build a power line across Quebec to transmit Upper Churchill hydro to markets in Ontario or New York, Quebec said not a chance, and the federal government refused to intervene. We ended up selling Labrador power to Quebec at a fixed, 1960s rate that’s “barely distinguishable from being free” until 2041.
When Saskatchewan and Manitoba tried a similar move — to buy Alberta oil to sell to Ontario — Ottawa stepped in, and declared a pipeline through Saskatchewan and Manitoba to be in the national interest.
That’s two-tier Confederation, certainly not what Newfoundland signed on for in 1949.
As Wells pointed out, the price of Canadian unity should be paid by the nation — not the country’s poorest province — which, he estimated, has lost about $1 billion a year from the Upper Churchill contract. Considering first power was delivered in ’71, that adds up to a loss of roughly $50 billion (and counting) — the difference between have and have-not status for generations.
The province’s total debt (including Muskrat Falls) is about half that amount. As for the province detouring Muskrat Falls power around Quebec, that decision also resulted from the same economic anchor around our neck.
The late John Crosbie described the absence of a fair Canadian energy policy as the“greatest failure” of the Confederation between Newfoundland and Canada, although I would still go with Ottawa’s (mis)management of the fisheries for top spot. Northern cod still awaits a rebuilding plan 28 years after the rebuilding was to begin.
What will it realistically take to reset our relationship with Canada, and give Newfoundland and Labrador the ability to stand on her own?
“Who hears the fishes when they cry?” Crosbie once asked.
The same ears that ignored the elephant trumpeting in the Upper Churchill powerhouse.
Cabot Martin, a former Brian Peckford adviser, once wrote some survival notes for Newfoundlander, including an estimate that a well-managed northern cod stock could generate $400 million a year for the provincial economy. That’s another fortune we’ve lost out on over almost 30 years of little fishing — and northern cod is just one mismanaged stock. There are many more. We’re also slowly losing access to adjacent fish stocks to other provinces and countries.
Wells was right to advise the next premier to be up front and honest with the electorate, and to have a logical plan that treats everyone fairly. But to do that our next leader(s) must also publicly face the underlying problems that hold us back in Confederation.
Are Newfoundlanders and Labradorians warm to the idea of separation? For the vast majority I would say absolutely not. What would our economy do without Canada’s social safety net, and programs like EI?
At the same time, what will it realistically take to reset our relationship with Canada, and give Newfoundland and Labrador the ability to stand on her own?
To start, a federal acknowledgement of the devastating price we’ve paid for Canadian unity, and the opportunity to right the wrong with a redress of Muskrat Falls. The province must also take control of her fisheries.
Anything less would amount to a Band-Aid on a broken hull.
Ryan Cleary
St. John’s
