Three years ago, New Brunswick’s Liberal Premier Shawn Graham was elected on a platform of “self-sufficiency”. Unfortunately, the global economic meltdown got in the way. Now, the Province is mired in debt and the wholesale retrenchment of some of its traditional industrial powerhouses. But fear not. The indefatigably optimistic Graham has a plan – and it’s. . .well, transformational.
It is, after all, the least modest of proposals. So when I suggest New Brunswick might find fiscal solace, the curative to all its present woes, in a plan to auction off the world famous Flower Pot Rocks, Premier Shawn Graham roars with laughter. “I must admit,” he splutters. “I hadn’t heard that one before.”
Naturally, I concede with my tongue planted lightly in my cheek, but how much stranger a proposition is it than the one he now brings to the people who elected him three years ago? Did anyone, in their wildest flights of fancy, imagine that this youthful, almost pathologically genial, leader of Canada’s second-smallest province would strike a $4.8-billion deal to sell the major assets of NB Power to Hydro-Quebec? What happened to the rallying cry of 2006: Self-sufficiency or bust? In which universe does this agreement, which must be ratified in March, advance the Liberal government’s signature economic development agenda?
These are, at least, some of the questions which critics of the deal (and their ranks are swelling) currently pose. The opposition Tories claim that Graham is handing over the keys to New Brunswick’s energy future. Environmental groups worry that the arrangement will curtail alternative energy opportunities for homegrown producers. Others with no particular horse in this race fulminate about sovereignty, eminent domain and regulatory protections.
Still, a suddenly sombre Graham is adamant. “I understand there’s passion out there,” he says of reaction to the agreement reached last October. “People are wondering how we can source our energy from Quebec. But the fact is today we have a limited number of fossil fuel plants in New Brunswick. When a cap and trade system is implemented – and it will be implemented – it will increase the cost of electricity produced by those plants. At the moment, we source our oil from the Middle East. We source our coal from South America.”
Hydro-Quebec, on the other hand, is, as its name implies, a supplier of clean, renewable, endlessly abundant hydroelectricity. This fact alone, Graham insists, guarantees both competitive and stable power rates for all classes of consumers in New Brunswick. (In fact, the deal freezes residential rates at their current level for five years and fixes increases after 2015 to the province’s annual consumer price index, which hovers around 1.8 per cent).
Moreover, he says, the initial $4.8-billion pay-out eliminates 40 per cent of the Province’s $13-billion debt and carves millions off the annual deficit, now running at about $749-million: “Last September, our province was hit with the effects of the global economic crisis. It meant that we had to move boldly to cushion ourselves against the downturn. I’m pleased to see that our plan for a stronger economy is, indeed, working.”
This is, in fact, the underlying logic of the Hydro-Quebec deal: As odd as it appears to some, as controversial as it becomes to others, it is a piece – albeit a rather large one – of the provincial government’s long-term strategy for economic growth. It is less about striking a mutually advantageous arrangement with a neighbouring province than it is about securing New Brunswick’s competitive advantage as the seat of new industries, businesses and entrepreneurial start-ups. After all, the more money one has at one’s disposal, the more transformational the change one can make.
To be sure, the word “transformational” has resonated in this corner of eastern Canada ever since Graham’s Grits rose to power with a razor-thin majority on September 18, 2006. Their key challenge has been to translate campaign rhetoric into realistic policy for a province of 747,000 people where many traditional resource-based industries (such as the fishery, forestry and mineral extraction) have endured perennial setbacks. And while these economic engines continue to play an important role, especially in the north, focus has shifted to more knowledge-intensive sectors.
