Robbing Newfoundland and Labrador 101 Part 6

Part 1 The Federal Government's 8.5% share of Hibernia

Part 2 The time is right to pursue the Feds 8.5% - Premier seems disinterested

Part 3 Energy and Industry - what the Federal Government and Ontario want

Part 4 The hidden royalty the Federal Government gets on our offshore

Part 5 The Lower Churchill Power used in Labrador - how we finance it

Part 6

It is time we show some vision for our province. We really need to think of our children and grand-children as we develop natural resources.
Many years ago the people of this province stood together and stopped the giveaway of Newfoundland and Labrador Hydro - as a result we have saved thousands of dollars each - as consumers - and hundreds of millions as owners.
Today we have the return of a group of people who wish to take this crown jewel from us. The players are back and we should not forget who they are - Dean MacDonald - Danny Williams - Doug House - the backroom we might never see but we are more clever than that.

As I mentioned in Part 5 the Federal Government owes us quite a bit for the destruction of our fishery - the interference with hydro-development - the gouging of our offshore oil resources - loss of federal jobs and services - and the unique penalty Newfoundland and Labrador suffers under equalization because of our geography.

With respect to the Upper Churchill revenues (the little that we do get) it is time we all understood how the "contract" with Quebec screwed us 2 ways. The first is obvious - they get a billion - we get a tens of millions. The second is perhaps worse as it demonstrates - once again- the theft we have suffered because of CONfederation.

On March 7 - 2000 I called openline with Bill Rowe as host and asked Stephane Dion (studio guest) how Upper Churchill revenues were dealt with under the equalization formula. There had always been talk that Quebec was not paying equalization on their windfall profits from the deal.
At the time Tobin and Bouchard were working on a deal to develop the Lower Churchill.
Dion did not have the answers at the time and promised to write me back with the answer. He - in fact - kept that promise.
Please take the time to carefully read what Dion said.

May 4 - 2000
Stephane Dion
President of the Queen's Privy Council and Minister of Intergovernmental Affairs

"On the question of the treatment of Churchill Falls under the Equalization program, it should be noted that an adjustment has been made in the calculation of Equalization payments since 1982 which takes into account how Churchill Falls hydro is priced. Equalization payments are based on the relative ability of each province to raise taxes; and the Churchill Falls adjustment shifts some capacity to tax hydro sites from Newfoundland to Quebec. The net effect is to reduce Quebec's annual Equalization payments while raising Newfoundland's. Furthermore, to the extent that profits from Churchill Falls translate into profits to Hydro Quebec that are remitted to the Quebec government, these too have the effect of lowering Quebec's Equalization."

Let me remind the reader that prior to 1982 we were penalized under the equalization formula by virtue of the Upper Churchill being located in Labrador. Even though we were making less to nothing on the deal - we were treated as if we made a fair deal and therefore were collecting taxes (royalties) - which we were not.
Even though there was an adjustment in 1982 - the adjustment only addressed a portion of this reality and therefore we continue to be penalized for part of the power produced - yet we do not actually receive the benefit.
This needs to be addressed by the Federal Government in order for us to receive fair and just treatment as a Province of Canada.
I suggest they address the inequity by investing - via grant - a significant portion of the financing required to develop the Lower Churchill. In this way - Danny and the province can aggressively pursue industry for Labrador versus shipping our future to Ontario - Quebec and other jurisdictions. Failure to do this will repeat the mistakes of our past and continue to devestate our population and economic growth.
We are in the same position we were - in the 1970's where oil prices jumped significantly making our hydro power very valuable - the only exception is we know the difference this time. Since that time oil prices have risen from 5 - 10 dollars a barrel to - at times over $70 and consistantly around $60 a barrel.
The 1970's seen Ontario and Quebec develop tremendous industrial potentials using relatively cheap - renewable hydro power. They would like to see that happen again by 2012 using more of our power.
Part 7 this week will deal with how Quebec beat the equalization program and added an additional 10-20% on the value of Churchill Falls power - and despite our knowledge of it - we did not do the same. Stay tuned - and see how weak politicians and bureaucrats with tunnel vision cost this province hundreds of millions of dollars. Information will include more quotes from Dion and new information from Paul Martin when he was Minister of Finance.

DO NOT LET DANNY EXPORT OUR FUTURE - KEEP THE POWER IN LABRADOR