It’s a revealing choice of words. If New Brunswickers have spied a bully on the playground, it’s only because the provincial government has failed to allay their concerns with enough facts. This, more than anything else, fuels the controversy. Simply put, despite the roughly sketched details about both the original and revised deals released to the public, not enough is known about the implications of the final framework. This is what keeps the critics up late at night, spinning conspiracy theories and doomsday scenarios. After all, it’s only human nature to abhor a vacuum.
Certainly, almost no one outside his privileged circle knew what was on Graham’s mind when, in January 2009, he approached Quebec Premier Jean Charest with a proposal. “I told him that we were going to have some major challenges in New Brunswick,” Graham recounts. “I said there were going to be some dramatic spikes in our power rates, and that there were going to be some major upgrades to our existing generating [plants] that will increase the debt of NB Power dramatically. I also said we need to look at ways to maximize the value of each other’s assets.”
Even in those early days, the notion of selling New Brunswick’s utility was viable. “I said we were willing to consider every option,” Graham later told the Saint John Telegraph-Journal. “But I also said I wouldn’t sell off the assets of NB Power unless we could get a benefit for New Brunswickers in return – and that meant rate relief and debt reduction.”
Serious negotiations commenced in February as Graham’s team (Chief of Staff Bernard Theriault, Deputy Minister of Strategic Priorities and Deputy Minister of Finance John Mallory) met with Charest’s hand-picked group of bureaucrats. By June, the talks had proceeded well enough to announce that the two provinces were in “discussions”. But, crucially, there was little or no acknowledgement of a possible sale on the near horizon.
In fact, Danny Williams remembers that period well. “At the time,” he says, “the premier of New Brunswick indicated that he wanted to explore opportunities for collaboration with Quebec with regard to clean, renewable energy. Well, that sounded fine to me. What I didn’t realize and what I didn’t know was that while we were talking to New Brunswick, Nova Scotia and PEI in a collaborative, cordial manner about a possible Atlantic energy framework, New Brunswick was pursuing this much larger deal with Quebec. And when the announcement was made in the fall, we were completely blindsided. It seemed that the national reporters knew more about it than we did.”
Williams’ alarm only deepened when Quebec premier Charest trumpeted his delight to Canwest News Service. Referring to access to the U.S., through New Brunswick’s transmission lines, his province would obtain once a final deal was reached, he declared: “We see in front of us a unique opportunity with what is happening in the United States. The Americans need clean, renewable energy, and they need a lot of it. And guess what? We in Canada are the ones who can supply it.”
Williams immediately hit the warpath, providing startlingly candid commentary to a rapt media. “It’s a despicable power grab,” he told The National Post in October. “If, in fact, New Brunswick gets acquired and if, in fact, Nova Scotia and PEI get acquired, then Quebec will be in a position, as a province, to direct the economic direction of these three provinces, as well as to have a stranglehold on the future of industrial development in Ontario. That’s dangerous.”
Sometime later, the premier elaborated his concerns in an interview for this magazine. “Newfoundland and Labrador has experience dealing with Hydro-Quebec,” he said. “They are very strategic. They are long-term thinkers. What happens if [Quebec] separates? What happens if we have the nation of Quebec, all of a sudden, in the middle of Canada with this kind of stranglehold and economic leverage on all four Atlantic Provinces, plus Ontario. I am very, very concerned about where all this is going.”
So, too, were many New Brunswickers. Though the business community (noting the attractive rate reductions) largely supported the measures in the draft memorandum of understanding, labour leaders, citizens groups, environmental lobbies and the average Joe on the street did not. The question of the province’s sovereignty fired the imaginations of people from nearly all walks of life. And once lit, the blaze burned hot and fast. Demonstrations of placard waving protestors became an almost daily occurrence outside the provincial legislature. Nearly 25,000 individuals joined the Facebook group, “Say No Sale of NB Power.” A coordinated letter-writing campaign filled the Op-Ed pages of New Brunswick’s daily and weekly newspapers.
As an economist (and ex-pat New Brunswicker) who’s read several analyses that support the NB Power sale, I understand the reasoning behind them. However, I am still concerned over the long-term implications which NO ONE can come close to predicting.
I respect the views of sages like Donald Savoie who has been calling the alarm over New Brunswick’s escalating fiscal imbalance and the probable need to begin selling off crown asstes. But when it comes to selling NB Power to Quebec Hydro, along with guaranteed access to the purchase of its transmission capacity should that decision be made in the future,I begin to think that this may be the contemporary equivalent to Newfoundlanmd Premier Joey Smallwood’s disastrous decision some five decades ago.
Our grand kids may very well shake their heads and wonder what Premier Shawn Graham was thinking in 2010.
Jim Taggart
Ottawa
It is a bad deal for NB.
I find it amazing that yet another generation of Maritimes / Atlantic-Canadian readers of the mainstream periodical business press are to be brought up once again on utter pap of the kind on offer in Alec Bruce’s article. Absent anywhere in the piece is even a breath of a hint of a clue, a hemidemisemiquaver, of the reality of the private corporate control/diktat that has been driving the entire NB Power/Hydro-Quebec deal “from the get.”
Cupidity, thy name is IRVING.
In the 1970s it began to be pointed out occasionally [in forgotten publications like The Mysterious East and the even more thoroughly forgotten federal Royal Commission on Corporate Concentration] that the so-called “interests of New Brunswick” happened — by just an amazing coincidence — to reflect exactly 100% — not 9% and not 101% but 100% — the interests of the Irving business empire, full stop. A generation of us eventually learned to read between the lines and look for the Irving-imperial interest[s] served by the Robichaud, Hatfield and McKenna administrations. In no field was this more blatant than that of oil-and-gas / energy.
Unloading NB Power onto Hydro-Quebec resolves quite a number of challenges to the Irvings’ future interests both in the short/medium-term and the longer term. The Irvings cannot possibly have a really profitable energy hub in Saint john, especially with a huge foreign investor partner such as Repsol SA, unless NB Power’s provincial monopoly is utterly tamed and retired as a potentially independent operatort not entirely under the Irvings’ control. The Irvings frequently use/attract Quebec-based capital to absorb assets that they find troublesome (remember Cabano? ever heard of Acadian Lines? SMT?).
What’s obviously no longer a source of maximum profit in minimum time are those penny-ante 30-year Bunker C contracts to supply NB Power thermal generating plants. Does anyone seriously expect Hydro-Quebec to maintain those aging and increasingly outmoded facilities?
In the wake of Hydro-Quebec’s digesting NB Power and thereby entirely monopolizing the export of electric power from east of Quebec into U.S. markets, I would look forward to Emera finding ways to dump any further long-term involvement in costly and decreasingly profitable monopolies like its current domination of the provision of electrical power throughout Nova Scotia. Central Maine Power which it already owns is a far better prospect, and in the U.S. there would be no hassles bringing unlimited quantities of Colombian blood coal to power the company’s generating plants. Well, then at least we won’t have to wait for a bad storm to knock or brown out our power services.
As for The Rock, those benighted folk have already been compelled to kiss a 400-year old fishery goodbye to make way for the offshore oil play that became Hibernia and the Hydro-Quebec coup will be curtains for any Lower Churchill dreams anyone was still harbouring. “Williamsville,” about to shrink to the size of a patch of Continental Shelf 300+ km or so southeast of St John’s, will just slide into a new desuetude as the easternmost oil tank of U.S. eastern seaboard oil refineries. Danny Millions’ personal republic will stay afloat on the basis of safety standards of the kind that sank the Ocean Ranger and took more than 80 workers’ lives nearly 30 years ago, and that contributed to the loss of almost everyone on Cougar Flight 491 when it ditched a year ago today (March 11). As for those pathetic 700,000-plus other folk still trying to carve out a livelihood on the island of Newfoundland, all I can say is: remember the Beothuk.
Having received the Atlantic Business magazine two days ago I was delighted yesterday to learn that New Brunswick has now decided to dump the power deal with Quebec – or perhaps as the Government of New Brunswick would prefer me to say….hmmm, Hydro Quebec pulled the plug on the deal.
I think not!
Last night I watched the New Brunswick premier try to keep up with Steve Murphy’s interview in which among other things he wondered how the Premier plans to get re-elected….that’s where the -it was Hydro Quebec’s dumping of the deal surfaced.
Having spent nearly 30 years in the media and a very large part of it working in Newfoundland and Labrador to try to get a “fair deal” from Hydro Quebec on the Labrador Hydro deal I feel qualified to offer the following.
The Alec Bruce article is a brilliantly written presentation of the power project. A case which openly wonders about what the deal would ever have meant to increasing value in Hydro Quebec – without something else, more devastating to the region to follow on the heels of this agreement. New Brunswick residents seemed at the outset of the “Plan” to twig to the potential black hole, in the fine print or in the what was not said.
Premier Graham almost made Jean Charest’s day, or perhaps more likely “Legacy of office: and don’t forget the business interests in New Brunswick to boot – they seemed destined for a comfortable future too.
The rest of Atlantic Canada should be happy with the outcome of the poor plan because as has been the mantra on the rock for over 4 decades now…isn’t it a tad strange that the “Government of Canada” could give permission to oil companies to build a pipeline from Alberta to Nova Scotia…but Newfoundland couldn’t run a power line across Quebec. I think to fully understand that you have to put Quebec and Hydro Quebec in that picture and you also have to put emphasis on the word POWER.
New Brunswick, you have just dodged a huge bullet – and don’t get too pent up in the very sad story about to enfold about how you missed the opportunity of a lifetime – I don’t think so!
To Atlantic Business Magazine – a perfect setup of the story of the year in this Region!