04 December 2012

The Prisoners of Their Own Delusions #nlpoli


Another part of the Premier’s Office assault on reality Monday was a puff piece by Paul McLeod in the Chronicle Herald on Kathy Dunderdale.  In some respects, the timing is a coincidence but the thing has been in the works since last month, at least.

“She won’t make Joey’s mistake” was the title, with a subhead that Kathy Dunderdale “is leading the charge” of a Newfoundland and Labrador that is now in a power position in the country.

The focus, as you can gather from the title is a presentation of recent history in Newfoundland and Labrador centred on the 1969 Churchill Falls power contract.

History holds powerful political totems in Newfoundland and Labrador and none is more potent than the contract between Churchill Falls (Labrador) Corporation and Hydro-Quebec signed in 1969.

The Chronicle Herald piece is a fascinating bit of insight into the mindset behind Muskrat Falls. it shows the extent to which the Churchill Falls totem is based more on fiction than fact.

Take, for example, the title.

She won’t make Joey’s mistake. it comes from this comment by Dunderdale:

“I don’t want to be the second premier in our history to be saddled with a project that is a disaster.”

A common enough view to be sure, but Smallwood never signed the 1969 agreement.  In fact, CFLCo started life as a private sector company, headquartered in Quebec, with another private company – BRINCO – as its majority shareholder.

Smallwood left the development of the Churchill River to BRINCO exactly as Dunderdale and her colleagues put development of the Lower Churchill in the hands of Nalcor.  If you accept the Chronicle Herald’s account, last week’s loan guarantee term sheet finished on terms approved by Nalcor boss Ed Martin, not Kathy Dunderdale. 

If she wants to avoid the same mistake Joe Smallwood made, Dunderdale is off to a very bad start.

BRINCO got into trouble by starting construction without firm commitments for the power from the project.  They wound up heavily in debt and unable to borrow more.  Hydro-Quebec used its advantage to secure renewal of the contract on extremely favourable terms.

Again, people can see ready parallels with the loan guarantee and Emera.  Imagine if Nalcor found itself in 2014 needing to borrow huge sums, already $2.0 billion spent and without a loan guarantee.

And while BRINCO developed Churchill Falls entirely with private money, the Conservative plan Dunderdale is fronting involves nothing but public money.  Public money that came as a windfall from oil and borrowing that will easily top $5.0 billion on top of the cash Dunderdale and her colleagues will spend without any independent regulatory review of their plan. 

Hydro-Quebec and the 1969 contract are a recurring theme for Muskrat Falls supporters.  It turns up so often when supporters talk about the deal that you can easily believe their plan has nothing to do with making electricity for people in Flower’s Cove or on Flower Hill.  Churchill Falls has haunted the Conservatives since they took power and started on their plan to build something on the Lower Churchill, no matter what.

But Conservatives like Dunderdale have a strange relationship with the past.  For example, McLeod includes this quote:

“Truly, in this province, people will be prepared to see that water run to the sea rather than try to find some way to deal with Quebec if we have to go right to 2041 without any redress [for 1969']…”

How strange, then, that by her own admission, Dunderdale and her patron spent five years secretly trying to lure Hydro-Quebec into a  deal to develop the Lower Churchill without redress.

There are a few other curiosities in the piece.  McLeod quotes David Cochrane as saying that Dunderdale’s win in 2011 was bigger in some respects than the Tory win in 2003.  McLeod gives no explanation.  Cochrane meant in seat count only, as he explained to SRBP via Twitter, 34 in 2003 versus Dunderdale’s 37.  But the wider context – low turn-out, huge drop in Tory vote and the loss of the Tory bedrock seats in St. John’s – turn up in another part of McLeod’s piece. Dunderdale wouldn’t likely have been any help to McLeod on that.  She has some nutty ideas of her own about her place in history

McLeod also quotes Tim Powers reciting a Conservative talking point about using the Lower Churchill to get past dependence on oil.  McLeod doesn’t note that until recently Powers was Nalcor’s lobbyist in Ottawa.  Nor does the piece note that so far the only people actually paying for Muskrat Falls electricity are the ones who will carry around the debt.

And after that, McLeod returns to Dunderdale’s curious view of history and the Conservative obsession with what they imagine happened in the 1960s with Churchill Falls.

McLeod’s piece will survive as an especially fine description of Kathy Dunderdale’s state of mind as she pushed forward with Muskrat Falls.  It’s a marvellously fluffy piece of writing, the kind of thing you’d expect to see organized for a Premier who, like Dunderdale, is at an incredibly low point in the polls.  Cochrane’s comments about a post-Danny correction for the Tories are one thing, but where Dunderdale and the Tories are at the moment is something radically different.

But in a sense that theme – incongruity, disconnection  - is what McLeod’s piece is about.  It appears, disconnectedly enough, in a newspaper that few Newfoundlanders and Labradorians will read and fewer still would accept because the article is so evidently at odds with what actually happened.

Kathy Dunderdale and the Conservatives cannot hope to leave history behind, as the piece might suggest, since they see their every move through the mirror of the past.   They are doomed to repeat history because they cannot remember what happened.  They are prisoners of their own delusions.


*Last two paragraphs edited to clarify some sentences