24 December 2012

Not with a bang, but a whimper #nlpoli

mcleodsgreatquestionThe longest filibuster in Newfoundland and Labrador legislative history ended quietly Saturday morning.

This was the second filibuster this year and the  Telegram’s legislative reported posed a simple question via Twitter before the House closed.

What does it say about current Newfoundland and Labrador political culture that we’ve had two such filibusters in a single year?

Normally a filibuster is an opposition tactic to hold up a government proposal the opposition doesn’t like.  That was the case with the Bill 29 filibuster in the spring.

As it turns out, the Muskrat Falls filibuster was different things for different parties.

The Conservatives used the filibuster to talk about the merits of their project.  Normally, a government would just let the opposition wear itself out.  In this case, though, Conservative members  - especially natural resources minister Jerome Kennedy - took every chance to speak on the bills and to talk up Muskrat Falls. 

The New Democrats, the filibuster was about opposing the changes to electricity regulation and consumer pricing in the province.  NDP leader Lorraine Michael issued a news release describing the two government bills as “two of the most dangerous bills ever presented in the provincial legislature.”  Michael said that it was important for the people of the province know “what was being done to them” by the provincial government.

And the New Democrats had no problem saying what that was:

“They [the Conservatives] may think there’s nothing wrong with chaining ratepayers to first paying for a project that may yet balloon to a cost of $10 Billion or more, and then having to pay for enough electricity to allow Nalcor to make a profit; but I think it’s shameful,” Michael said.

As for the Liberals, however,  the filibuster was merely a way to give the governing Conservatives what they wanted all along: a chance to have a long sales pitch in the House  without expert witnesses.

Here’s what Liberal leader Dwight Ball said in the end-of-filibuster Liberal news release:

"As the Official Opposition we owe[d] it to all Newfoundlanders and Labradorians to ensure that merits of the legislation were debated in a full open and public forum as the House of Assembly."

That was the third sentence of the release.  The first two merely stated facts:  the debate was over and the two bills will have “far-reaching effects” on the province.  The fourth sentence was another insight into the obvious, namely that the bills gave Nalcor on electricity supply to the island.

And then Ball said this:

"As Government denied the Opposition the right to hold a special debate on the Muskrat Falls project ahead of sanctioning by Nalcor and Emera Energy on December 17, 2012 the option to filibuster these two pieces of enabling legislation did provide the people of the province with the opportunity to understand the ramifications that will develop as a result of the project," said Ball.

Weak statements to be sure, but the full meaning behind them only becomes apparent when you read what Ball said via Twitter after the House session ended:

@DwightBallMHA MF has dominated my life since election 2011. Could always support the principles of MF. Its been a fantastic week #nlpoli

Could always support the principles of Muskrat Falls.

Remember that, just like you should recall what Ball said about the debate on CBC’s On Point with David Cochrane.  For Ball, the debate over the two bills was about avoiding another accident like the expropriation of the mill in December 2008. Ball was not opposed to the principles behind the expropriation, apparently, either and that is crucial for anyone trying to understand the current state of politics in the province.

Both the Liberals and Conservatives support this project and its principles

The first principle behind this project is that consumers in the province should not enjoy the lowest cost electricity in the province.  In effect, Ball and the Liberals have joined with the Conservatives to demolish the electricity policy set by a former Liberal administration in 1994.  As described by then-Premier Clyde Wells put it in 1994, the policy was that the province had a mandate “to make sure that we run an efficient operation, people are treated equitably, and we produce the lowest possible cost consistent with reliable service.”

Not any more.

Muskrat Falls is premised on the second principle, namely that consumers should be forced to bear the full cost and all the risks associated with it.  Muskrat Falls is not the lowest cost option. it is simply the option Nalcor preferred.

Rather than having electricity prices set by a disinterested third party specifically mandated to protect the public interest,  the third principle of Muskrat Falls is that Nalcor will set electricity prices for consumers in the province.  They will do that through the cabinet, which gets the power under Bill 61 to dictate to the public utilities board.

The fourth principle of Muskrat Falls is that consumers must subsidize electrical rates for industry in Labrador and thereby increase profit for private sector companies.

This is significant for a couple of reasons.  First, the Electrical Power Control Act, 1994 did not allow for any electricity user to subsidise another. The new policy doesn’t restore the situation before 1994 when, according to Wells industry subsidized consumers.  Rather, the new electricity policy for the province forces consumers should give industry cheap power. 

Second, the policy transfers benefits to companies at the expense of the people who own the non-renewal mineral resources of Labrador.  Rather than making Newfoundlanders and Labradorians the principle beneficiaries of their own resources, the new policy takes those benefits and freely hands to them to others.

Ball wants to take what little  the companies might pay and use that to lower consumer rates.  But what the companies might wind up paying is so small in comparison to what consumers will pay that that Ball’s idea looks like little more than a cruel joke. 

This transfer of benefits, of course is the fifth principle of Muskrat Falls.  Muskrat Falls transfer the benefit of resources within this province to others.  Nova Scotian company Emera will get free electricity paid for by ordinary Newfoundlanders and Labradorians. Mining companies will benefit from cheap electricity prices.

That brings us to the sixth principle of Muskrat Falls, namely that Nalcor’s corporate interest supersedes the public interest.   Ball and other politicians confuse the two but there’s no mistaking it.  Nalcor will benefit by owning the assets while consumers bear all the costs, liabilities, and risks. 

This was a principle established in the December 2008 expropriation, which Ball already supported. Muskrat Falls continues the same principle. Consumers, after all, will borrow all the money to pay for the project. Then they will pay back the loans and a profit to Nalcor and the other companies involved.  Muskrat Falls cements the principle in place.

In the process, Muskrat Falls converts what was supposed to be an investment earning money for Newfoundlanders and Labradorians into another expense, another tax. 

The seventh principle of Muskrat Falls is that the province is opposed to free markets.  Bill 61 closes the island portion of the province to competition in electricity.  By extension, it will close off export opportunities for Labrador hydro resources in the future.

What’s more important though,  Bill 61 reinforces the message of the December 2008 expropriation that Newfoundland and Labrador is not a good place to do business.  The new government policy, endorsed by the Liberal and Conservative parties sets the province apart in a very bad way compared not only to other jurisdictions in North America but globally.

The Newfoundland and Labrador economy is built on trade.  We need markets for our products.  At the very least, current government policy encourages other places to restrict market access for Newfoundland and Labrador products. More problematic, though, will be the threat posed to the province by being branded as hostile to investment.  The Newfoundland and Labrador economy lacks the capital to exploit its own resources.  Current government policy may well make it that much harder to attract investment.

Dwight Ball thinks no one will cheer if Muskrat Falls fails. 

He’s wrong. 

The people of Newfoundland and Labrador would be infinitely better off if the miserable project and the hideous public policy it embodies were to collapse under their own weight.  As it is, Ball and his political allies have locked Newfoundlanders and Labradorians into a horrendous public policy the ramifications of which people have only scarcely begun to realise. Failure may no longer be an option.

Muskrat Falls may have passed through the House of Assembly with a whimper.  At least when the bang comes for the people of the province – as it will if the project works as intended – at least they will know who supported Muskrat Falls in principle and in fact.