Fruitloops on parade

So if there really had been a cultural genocide, as the Societe St-Jean Baptiste claims, there wouldn’t be anyone speaking French in Quebec , would there?

Some people just need to portray themselves as victims for some unfathomable reason.

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The Can Opener II

Just in time for Halloween, there’s a remake of an old horrorshow:  the local economist who makes dubious assessments that seem a wee bit tinged by things non-economical.

Used to be Wade Locke was the regime-supportive economist of record.

Now it’s Jim Feehan, a guy with a record of producing dubious bits of research on partisan political subjects.  He also co-wrote a paper on another local partisan favourite, the 1969 Churchill Falls contract.  The article  was titled “The Origins of a Coming Crisis” but at no point in the article is the crisis ever described. That should make you scratch your head just a wee bit in scepticism.  

Anyway…

Jim Feehan told local CBC radio listeners Friday morning that while this New Brunswick power deal looks like a good one in that rates will be stabilised after a series of increases, public debt will be hacked down and pulp and paper mills will benefit from lower rates, this deal isn’t really so good because once it is sold, NB Power can never come back again.

In other words, even though this deal is great from the standpoint of an economist, people should maybe think twice because of things the economist commenting knows nothing about.

Like say law.

You see, as the Fortis expropriation in this province demonstrates, even in the worst possible case in New Brunswick, there is nothing like this that can’t be undone. 

But why would you want to expropriate or buy back a debt pig like NB Power if the new arrangement delivers all the economic benefits the economist noted but downplayed?

Well, there’s a question for us to ponder as we wait for the great news in Labrador Feehan’s predecessor once predicted. In the meantime, don’t hold your breath expect an answer to that one from Feehan.

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Something to look forward to…

When Gushue’s book is finished, make sure you get a copy.

in the meantime, check John’s blog post and leave him some words of encouragement and support.

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No word on Fortis expropriation talks

While other power utilities in Atlantic Canada are up for grabs, there’s no word on the status of compensation talks between the Government of Newfoundland and Labrador and Fortis, Inc. resulting from the provincial government’s surprise seizure last winter of hydro-electricity assets in central Newfoundland.

Fortis-owned Newfoundland Properties  was one of three companies – including ENEL and Abitibi – generating capacity in the unexpected, and thus far unexplained, seizure.

Newfoundland and Labrador Premier Danny Williams announced the measures.  Williams introduced a bill in the provincial legislature in December 2008 that also quashed active court cases and stripped the companies of any legal recourse to the seizure.

The seizure of assets caused a loan default among other financial consequences.

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Emera silent on NS Power sale

With Hydro-Quebec reportedly casting covetous eyes on Nova Scotia Power, the company’s current owner – Emera – is keeping to a strict “no comment” policy, according to reports.

In related news, Nova Scotia Premier Darrell Dexter said his government has not been contacted with respect to any sale of NS Power.  He also said he doubted HQ was even interested in NS Power, despite some media reports.

Dexter also backed away from joining Newfoundland and Labrador Premier cum New Brunswick Opposition Leader Danny Williams in his crusade against the recent deal to sell NB Power to Hydro-Quebec:

"At this point, it’s certainly not my intention to pick a side in this," Mr. Dexter said.

"Those decisions with respect to what New Brunswick does are New Brunswick’s decisions. We are going to have to deal with the system operator, no matter who it is, and so we respect their right to make those decisions."

Danny Williams reportedly fears being isolated.

Too late to worry about that now.

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And by his actions, he is known

In war, said Napoleon, the moral is to the physical three to one.

In other words, psychological effects are three times greater than physical ones.

The recent by-election loss seems to have had a profound psychological impact on some of the most ardent supporters of the Blue Cause.

 Tony the Tory – he of Open Line fame – was left so profoundly distraught by the loss that he wrote the editor of the province’s largest daily to assure the world that all had not been lost and that his beloved party was not dead.

No one said it was.

But Tony evidently was afraid of such a thought.

Now it’s hardly surprising that Tony’s emotional reaction is so extreme.  The fellow is a fervent believer in The cause.  Tony worships Hisself as fervently as any. 

So it is not surprising Tony is full of fear, disquiet and unease since, you see, his idol attacked the by-election with the same manic intensity out of all proportion to what was actually involved.

As such, the psychological impact of the defeat is equally out of proportion.

labradore, it turns out, has made much the same point.

Tony rattles off a bit of history to bolster his case, but only a bit and he conveniently forgets much.

In 1987, for example, his beloved Blue Cause was so afraid of a by-election  - so petrified of the newly chosen Liberal leader at the time - that they delayed calling it as long as they could.  

Months rolled by. 

In those days there was no law requiring a by-election to be called with a fixed period.  The Liberals introduced such a law setting the maximum delay after a vacancy at 90 days.

Then in 1988, the Tories called a by-election in the old configuration of Waterford- Kenmount but only when they thought they could win it.

They didn’t.

But all of that has no larger meaning just as Tony’s list of by-elections has no such larger meaning.

But Tony’s letter itself does.

It just doesn’t have the meaning he thought it would have.

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Williams fears wheeling partner will bail, too

New Brunswick Tory Opposition leader Danny Williams said today that New Brunswickers should rise up and oppose the plan to sell NB Power to Hydro-Quebec.

Williams, who is also Premier of Newfoundland and Labrador, said that "if [Quebec also] acquires P.E.I. and Nova Scotia [power], we will find ourselves in a situation where one province will have energy control of the entire Maritime provinces. It will be attempting to strand Newfoundland and Labrador. So good, cheap, competitively priced energy, can't be offered to that whole region.”

Williams is worried that HQ might also buy Nova Scotia Power?

Of course, that would be the  Nova Scotia Power that is owned by the same company  - Emera – that Williams is paying to sell electricity from Churchill Falls into New York state. 

Yes that’s right.  While Williams was frothing about the negative impact of the NB Power deal on Lower Churchill power sales to the United States, he is already selling power through Quebec and happily agreed to pay $19 million annually to do so. 

So much for blocking the Lower Churchill, right?

And now Williams is concerned that Emera will bail on him in favour of selling their Nova Scotia subsidiary to HQ.

Things must be getting really bad for Williams if he believes that even his business partners are abandoning him.  That’s on top of reports that have his party organizers blaming Trevor Taylor, the former member of the provincial legislature, for Williams’ loss in the Tuesday by-election.  Talk about clubbing the fans.

Next thing you know he’ll be accusing his campaign donors of screwing him over too.

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Lower Churchill “unviable for the foreseeable future”: analyst

Energy analyst Tom Adams had this to say about the Lower Churchill project in a recent commentary on the NB Power sale:

Premier Williams has attacked Quebec’s interest in NB Power as a threat to Newfoundland’s prospects for developing the Lower Churchill’s hydro‐electric potential. Charged with emotion arising from historic Churchill Falls grievances – a contract that Newfoundland’s then Premier Smallwood sought out and willingly signed and that has been twice confirmed by the Supreme Court – Premier Williams imagines inter‐provincial intrigues to be Quebec’s motivation. This emotionalism blinds some Newfoundlanders to the real commercial challenges to the Lower Churchill’s development. Just as natural gas from the Mackenzie delta is now recognized as uneconomic in light of foreseeable market conditions, the factors that have driven down power prices in Northeastern North America make the economics of Lower Churchill development unviable for the foreseeable future. Newfoundlanders are lucky that Nalcor, their Crown energy company, is not out in the market the trying to sell high cost power right now. [Emphasis added.]

Unfortunately, NALCOR and Danny Williams didn’t get Adams’ memo. Premier Danny Williams revealed yesterday that NALCOR is out there trying to flog high cost power from an economically unviable project.

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The NB Power/Hydro-Quebec Memorandum of Understanding

The Governments of Quebec and New Brunswick unveiled the deal today that will see Hydro-Quebec buy most of the assets of NB Power.

The full text of the memorandum of understanding is available online.

Key points of the deal (quoted from the official news release):

• Under the terms of the MOU, Hydro-Québec would acquire most of the assets of NB Power for an amount equivalent to NB Power's debt, $4.75 billion. The utility's debt would thereby be completely eliminated.
• As a pre-condition to the negotiations, New Brunswick has established a revised rate structure to benefit New Brunswickers. It is estimated by New Brunswick to have a value to ratepayers of about $5 billion. The proposed transaction would have no impact on Hydro-Québec's electricity rates in Quebec.
• NB Power would continue as a separate, New Brunswick entity, headquartered in Fredericton, and would use the existing name and corporate identity. Hydro-Québec would offer employment to all employees of NB Power at the time of closing, and respect the collective agreements in place.
• The nuclear generating facility at Point Lepreau (after completion of the plant's refurbishment), the hydro facilities, the peaking power plants and the transmission and distribution assets of NB Power are part of the proposed transaction. Hydro-Québec would not assume any liabilities with respect to the Point Lepreau refurbishment project.
• Thermal generation facilities at Coleson Cove and Belledune would continue to be owned and operated by the Province of New Brunswick, and would supply electricity to Hydro-Québec under the terms of tolling agreements.

The upside for the New Brunswick provincial government appears to be that it offloads a debt pig while guaranteeing stable rates for residential consumers and lower- and hence more attractive  - rates for industrial consumers.

The one curious part of the MOU is that Hydro-Quebec continues to operate the company as if it were a Crown corporation in that it will pay no taxes of any kind to the provincial government. 

Interestingly, Premier Shawn Graham acknowledged the role played  by his predecessors Frank McKenna and Bernard Lord in laying the ground work for the disposal of NB Power. 

Lord’s successor as Tory party leader has been opposed to the deal since before he knew what it was about. 

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The Fan Club

There has always been this bizarro cult of personality thing to Danny Williams’ supporters.

They worship him as if he was a celebrity.

Some out here in the rest of the world – your humble e-scribbler included – have taken to calling the truly hard core cultists The Fan Club.  They make comments all over the Internet faithfully  pushing whatever line is currently on the go from the Club directors or simply attacking anything that they think undermines the gloriousness of their idol.

They’ve got a language of their own, too, but that’s another story.

Six years in, though, the Fan Club doesn’t have quite the same impact as it once did.

Take the past 24 hours with two examples.

Not so very long ago, the sort of attack on supposed foreign demonios being launched by Hisself and the Fan Club  against Hydro-Quebec (again) would be spreading like wildfire.  For examples of the Fan Club talking points, just check the comments sections at the Telegram, CBC or even here at Bond Papers.

Not so this time.

This is all old hat around these parts and ordinary taxpayers seem to be having a really hard time connecting a theoretical issue in far off New Brunswick to real-world issues in this province and in their lives. 

People have built up an immunity to the same old, same old.

Now that’s really interesting because the immunity is really at the heart of the results in the Straits by-election.  Hisself framed the whole thing around the same old, same old:  look at all the riches I brought you.  $137 million.  Show me how much you appreciate that by voting for me.

Well, they didn’t. 

A couple of thousand people didn’t and likely lots more didn’t who just never bothered to show up at the polls.  A monumental effort worthy of the most grandiose display of the faltering Smallwood empire failed to motivate enough to win the seat as it has every time since 2001 in the Straits and on the overwhelming majority of other similar cases across the province ever since 2001.

That’s not good.

Nor is it good that the Hydro-Quebec attack – another same old, same old – ain’t working either. 

That is intended for two purposes:

First, it lets Hisself vent his frustration that the Lower Churchill just isn’t happening. 

Second – and perhaps most importantly -  it is supposed to help change the channel and get people’s mind off the disaster in the Straits.

But it isn’t doing that second thing.  The ordinary taxpayers seem to have caught on.

Meanwhile, there is another problem for the Fan Club beyond the fact their usual stuff just doesn’t work any more.

As he left, Trevor Taylor provided his membership in the Fan Club by praising Hisself to the highest heights on every level.  Hisself returned the favour in his comments about Trevor.

Until the loss in the Straits.

Now party insiders are spinning the story to local media – see David Cochrane’s report on Wednesday’s Here and Now, for example –  that the whole loss was Trevor’s fault.

That sort of stuff just isn’t going to sit well with a whole bunch of people who haven’t joined the Fan Club but who like the stuff Hisself puts out.  They’ve been buying his CDs for a few years now just like they’ve bought The Other Blue Note CDs before. 

But maybe not so much any more.

Not, that is, if people like Trevor are getting blamed for stuff they really didn’t do.

Fan Club takes on a whole new meaning when it’s the fans getting clubbed.

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Eating his own

Newfoundland and Labrador Premier Danny Williams is tearing strips, not off New Brunswick Premier Shawn Graham or Hydro-Quebec but his own deal with Hydro-Quebec from last April.

Williams attacked the deal in a letter to Graham:

Despite our expectation of regulatory fairness [ in wheeling electricity across Quebec], Nalcor Energy has encountered obstacles in Quebec. Nalcor has been forced to lodge four complaints with the regulatory authority in Quebec about the tactics being used by Hydro Quebec Transenergie that serve to delay and inhibit our progress.

Under an agreement announced in April 2009, the provincial government’s energy corporation sells power to unidentified customers in New York state.  The power is wheeled along transmissions lines in Quebec under what is known as the open access transmission tariff.   NALCO pays Hydro-Quebec $19 million a year to wheel the power.  The figure was not released by NALCO or the Government of Newfoundland and Labrador.

While Williams is now slamming the deal – making it sound as if there was no wheeling agreement at all -  back in April, he was positively giddy with excitement at what he termed an “historic” agreement:

“This is truly a historic and momentous occasion for the people of our province, as never before have we been granted access through the province of Quebec with our own power…”.

There is no obvious explanation for Williams sudden attack on his own project nor is there any explanation for his claims that Hydro-Quebec is blocking or trying to block NALCOR’s access to markets.  The April deal proves there is no real obstacle.

What makes the latest tirade all the more bizarre is that in a scrum with reporters two days ago, Williams acknowledged  that there was no obstacle to getting power to markets in the United States.  In the same scrum, he said Hydro-Quebec might be trying to do just that. 

His disdain for the sale of NB Power to Hydro-Quebec is apparently based on losing the race for new markets for hydroelectricity.

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A cross between Karnac and Kreskin

In 2006, the Globe’s Konrad Yakabuski warned Danny Williams that he might be beaten to market by the people at Hydro-Quebec.

Turns out Konrad was right, after all:

Newfoundland Premier Danny Williams decided earlier this year to go it alone on a proposed $6-billion to $9-billion (according to already stale estimates) hydroelectric development on the lower Churchill River in Labrador, rejecting an offer from Hydro-Quebec and the Ontario government to jointly build the 2,800-megawatt project. It was great politics. Newfoundlanders still feel they're being stiffed by Quebec on the massive 5,400-MW Churchill Falls hydro deal that their late premier Joey Smallwood negotiated in the sixties. They'd dearly love to see their current leader stiff Quebec on the lower Churchill.

The problem is that it's impossible. Hydro-Quebec is the biggest and most savvy hydroelectric company on the continent. When Mr. Williams turned his nose up at its offer, it took about two seconds for Hydro-Quebec chief executive officer Thierry Vandal to move to Plan B. The latter entails fast-tracking 4,500-MW worth of hydro developments within Quebec. If Hydro-Quebec's stated goal is not to prevent Newfoundland from proceeding without it on the lower Churchill, its decision to green-light competing projects in la belle province certainly casts enough of a pall over Newfoundland's project in order to make it a tough sell for Mr. Williams.

Anyone have the full article?

It is amazing the number times people have forecast things like this since 2003 and they have come true.

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Williams miffed that HQ beat him to market again

In his written reply to Shawn Graham released today, Newfoundland and Labrador Premier Danny Williams reveals that his government energy corporation was in discussions to sell power to New Brunswick from the still largely conceptual Lower Churchill project.

But Hydro Quebec – with as much power as the Lower Churchill may one day offer already under construction -  evidently beat Williams to the punch.

The real  source of Williams’ frustration at news of a deal to sell NB Power to Hydro Quebec is buried after six lengthy paragraphs of irrelevant frothing:

One of the potential impacts of Hydro Quebec’s dominance may be the premature cessation of current, good faith discussions between Nalcor Energy and NB Power to sell competitively priced Lower Churchill power to New Brunswick and jointly advance the long term, mutual interests of both of our provinces in conjunction with Nova Scotia and P.E.I. These discussions have not yet reached an advanced stage, so it is not possible to quantify the benefits that might be lost to our two provinces and all of Atlantic Canada if discussions are terminated. If New Brunswick narrows down its range of alternatives to a single-window with Hydro Quebec, full information may not be available to evaluate the opportunities that other alternatives may bring. I would reiterate that our province feels compelled to look into the potential of anti-competitive behaviour on the part of Hydro Quebec given the potential monopoly that could exist as the result of an agreement between them and NB Power. [Emphasis added]

The revelation that Williams had been beaten to the market by Hydro Quebec is almost as astonishing as word last month from Williams energy minister that he had been working for five years, making secret offers for Hydro-Quebec to take an ownership stake in the Lower Churchill project. 

Williams criticises the Churchill Falls deal in the Graham letter but, according natural resources minister Kathy Dunderdale, Williams was willing to set the issue to one side in exchange for Hydro-Quebec buying a piece of the Lower Churchill.

In 2006, Williams rejected a proposal from Ontario Hydro and Hydro-Quebec to jointly develop the Lower Churchill.  Williams said the province would go-it-alone.  He made no reference at the time to efforts to lure Hydro-Quebec into another deal, as Dunderdale revealed.

Hydro-Quebec already had significant hydro projects in the works and added about 4,000 megawatts of wind energy to its mix of new project.

The Lower Churchill proposal currently undergoing environmental review consists of transmission through Quebec and a line to bring power from the project to eastern Newfoundland.  There is no proposal in public to run the power to New Brunswick.

The Lower Churchill project  - estimated to cost between $6.0 and $9.0 billion – has no confirmed markets.  An opening to Rhode Island apparently fell apart because power could not be delivered at a marketable price.  That isn’t what the energy minister told the public.

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The best by-election commentary

1.  There is nothing that trumps the analysis by a political veteran like nottawa.  The Temelinis, Dunns and Marlands of the world are so far removed from what actually goes on they really can’t offer anything beyond theory and abstraction masquerading as fact. 

To take it a step further, nottawa has really hit on the essence of the Danny message since Day One.  Back in 2001 and again in 2003, it was “Elect me and I will personally take away all your pain, bring you jobs and gobs of cash.”  In 2007 and since then, it was all about Hisself and how much Hisself had brought in fulfillment of the earlier promise.

2.   Right behind nottawa is Winston Smith.  His round-up includes a reference to Yvonne Jones pithy observation that:

"People want a voice, and there isn't a voice inside the Williams government," she said. "Most of the backbenchers are silent. Many of the cabinet ministers are allowing critical cuts to happen in their districts without ever speaking out against it."

Winston has a couple of other things in there including the complicity of the local media in supporting the cult of personality but that’s almost old hat.

3.  Undoubtedly there’ll be more but that should hold you for now.

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Separated at birth: Magicians

Harry Blackstone Junior

Marshall Dean

Kremlinology 11: Words that start with “p” and “o” together

Just notice in the by-election follow up media how much the Premier and others – including Memorial University profs like Alex Marland and Michael Temelini  - base their assessment of the importance of Marshall Dean’s win in the Straits pretty much exclusively on how popular Danny Williams is showing in the polls.

Just notice it.

Pretty well exclusively.

It doesn’t really matter, they say, because we are/he is hugely popular.

Just keep that in mind.

Polls.

Popularity.

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Libs win Straits

Marshall Dean took the by-election in the Straits and White Bay North this evening against Premier Danny Williams, just about all the provincial cabinet and millions in public cash.

Dean defeated provincial Conservative candidate Rick Pelley – former executive assistant to Trevor Taylor – and New Democrat Dale Colbourne.

The results (40 out of 40 polls) were:

Dean – 1925

Pelley – 1799

Colbourne – 320

The Straits was one of two by-elections won by the provincial Conservatives in 2001 and heralded by many as a sign of the ascendency of the Tories under Danny Williams. 

Trevor Taylor won the seat for the Tories.  The by-election Tuesday was necessitated by his unexpected resignation in September.

Danny Williams, the former cable television mogul,  was the only declared candidate to lead the provincial Conservatives at the time of the 2001 by-election in January 2001 and was acclaimed as leader a few weeks later. 

In many respects this Liberal victory is truly remarkable.  Williams’ Conservatives have been virtually unassailable for years and their bank account is full.  that’s exemplified by the 2008 financial reports which show the Tories raised the better part of $600,000 while the Liberals barely pocketed $40,000.

While Williams, his cabinet and long-time party organizers rushed to the district to back the Tory candidate, the Grits could rely on little more than moral encouragement from other parts of the province, a very small cadre of provincial organizers and whatever Dean could pull together himself. 

The next test will be a by-election in Terra Nova necessitated by the surprise resignation of Paul Oram only days after Taylor bailed out.

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Lash-up

With municipal affairs minister Diane Whelan hospitalized with an undisclosed but reportedly very serious illness, the Premier shuffles a few more portfolios off to ministers on a temporary basis with no sign of a permanent set up.

Whelan was already carrying the temporary assignments resulting from Trevor Taylor’s surprise resignation.

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Shawn to Danny: sod off, mate

New Brunswick Premier Shawn Graham sent Newfoundland and Labrador premier Danny Williams a polite letter on Wednesday telling him to keep his nose out of the NB Power talks and stick to running his own province.

Graham also repeats the point that others have made, namely that any suggestion that the grid through new Brunswick might be somehow closed or restricted as a result of any deal with Hydro-Quebec is without merit or foundation. Click that image, by the way, and you’ll get the whole letter, courtesy of cbc.ca/nb.

Stunning.  Not.

Incidentally, there’s also no small irony in Williams’ comments warning about New Brunswick selling off its natural resources to Hydro-Quebec.

In September natural resources minister Kathy Dunderdale revealed some details about Danny Williams’ previously secret offers to Hydro-Quebec to take an ownership stake in the Lower Churchill.

labradore offers chunks of the transcript of Dunderdale’s interview. So much for “despicable.” 

Those Dunderdale comments were all the more stunning in light of Williams’ previous position about demanding redress for the Churchill Falls contract before there would be any deal on the Lower Churchill.  According Dunderdale, Williams was willing to set the whole issue of the odious 1969 contract to one side in the interest of giving Quebec a fair return on its investment in the new project.

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NL and the NB Power story: the facts

For the benefit of those who keep using the Premier’s comments on the NB Power story, here is what is really going on, in the words of natural resources minister Kathy Dunderdale:

We know that if you come in here as an equity player that you have to have a good return on your investment. And we want you to have a good return on your investment. But it also has to be a good deal for the people of Newfoundland and Labrador. Now we have been with that message back and forth [i.e. to Hydro-Quebec] for five years. No, sir. No, sir. There is no takeup on that proposal.

Yes.

That’s right.

Danny Williams wants Hydro-Quebec to have a good return on its investments.

In this case, it was a good return in exchange for owning a piece of the Lower Churchill.

So what is the pseudo-racket all about?

It might all be irrelevant by tomorrow evening.

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