Overture: “William Tell”

Sadly, split into two bits:

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Overture from “The Barber of Seville”

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Political blarney stone gone

Danny Williams’ political backside used to be like a blarney stone on legs.

Any politician of any stripe loved to kiss Danny’s hind bits in hopes some of Williams’ magic would rub off.  

The latest sign Danny’s butt is out of visible power comes from Jack Layton.  The federal New Democrat leader now claims he can get a better indication of what is going on in the province by meeting with ordinary people.

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Iceland opportunity lost

Danny Williams’ obsession with signing something he could have called a Lower Churchill deal before he quit politics ignored a far better opportunity for Newfoundlanders and Labradorians.

According to documents released by Wikileaks, the Icelandic government sought American financial assistance in 2008 to deal with its crushing foreign debt situation. The government was looking for a loan of $1.0 billion with “medium term maturity”.

The Newfoundland and Labrador government had twice that much in cash at the time as the result of gigantic oil price windfalls.  It also had the capacity to borrow billions more if needed. The Icelandic loan would have guaranteed payoff from the interest rate charged.  An Icelandic bailout might also have given the provincial government influence in Iceland and the country’s energy and fishing industries.

Instead, the Williams administration pursued his obsessive desire to develop something on the Lower Churchill river that would enable him to retire from politics.

Under Williams’ retirement plan,  the taxpayers of Newfoundland and Labrador will have to borrow almost three times the size of the Icelandic bailout and face guaranteed doubling of current electricity rates to finance a dam on the Churchill River and expensive transmission lines.

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Connie Leadership 2011: Party delays appeal hearing

According to the Telegram, the provincial Conservative Party is postponing the appeal into it’s decision on Brad Cabana’s leadership bid.

The party is postponing the hearing date from January 21 to January 24 to accommodate one member of the hearing panel who has a scheduling conflict.

The party rejected Cabana’s leadership nomination claiming that he did not have enough signatures of people the party recognises as members.  Cabana and the party both contend that the party has an open membership process.  The party contends that open membership doesn’t mean it is actually open.

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HQ signs new power deal with Vermont

Starting next year, Hydro-Quebec will ship power to Vermont under a new 26 year power purchase agreement, according to the Montreal Gazette.

The starting price for the power is US$58.07 per megawatt hour.

By contrast, and if it goes ahead, the recently announce Muskrat Falls project in Labrador will produce power in 2017 for about $143 per megawatt hour according to Newfoundland and Labrador Premier Kathy Dunderdale.*

Under the new agreement, Vermont utilities will purchase up to 225 megawatts of energy, starting in November 2012 and ending in 2038.

The agreement includes a price-smoothing mechanism that will help shield Vermont customers from volatile market prices, the utilities said.

Under the proposed 824 megawatt Muskrat Falls project, the only confirmed customers are Newfoundland and Labrador  - where the power isn’t needed – and Nova Scotia where Emera will receive 35 terawatt years of power in exchange for building a $1.2 billion intertie between Newfoundland and Cape Breton.

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*Edited to clarify the reference to Muskrat Falls

Connie Leadership 2011: Spooky stuff

In the middle of the 1990s, some guy  - a “prominent young St. John’s lawyer” apparently thought the Tories should have a leadership contest because the caucus was behind Len Simms:

His reasoning: Simms will win anyway so endorsing a competitive political race would be a waste of PC party funds. It came down to money for him.

Now there’s an unfailing testimony to the sterile decline in respect for the value of democracy in the PC party of Newfoundland.

That prominent St. John’s lawyer? You guessed it — Danny Williams [via The Telegram letters page last week]

As Premier, Danny Williams gave Len Simms a plum patronage job heading the province’s housing corporation.

Hmmm.

Makes you wonder now about all the Danny sightings in and around the Confed Building the past couple of weeks and the rumours that he helped broker the back-room deal to keep Kathy Dunderdale in place.

Whatever is going on in those Conservative back-rooms and the front seat of an Escalade, it sure as heck ain’t about democracy.

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Dunderball - Traffic for Jan 10-14, 2010

Who would have thought a mere two months ago that the ruling Conservatives could be embroiled in a political clusterfrack entirely of their own making?

Who would have thought that Danny Williams would be parking in the Confed Building parking lot with Kathy Dunderdale the day before a surprise cabinet shuffle?

Well, all of that has gone to making this another big week for Bond papers traffic.  Not surprisingly, all but one of this week’s top 10 posts are all about the bizarre psychodrama that is the province’s Conservatives.

The other one is an op-ed from Kelvin Parsons that the conventionals carried and the Liberals sent along here as well. Any of the other parties who want to do the same thing are welcome to send their submissions along as well for consideration.

1. Brad and Circuses
2. Is anyone surprised?
3. Logically Challenged Conservatives
4. Cabana candidacy causes Connie caucus consternation
5. Dunderball Run!
6. The persistence of patronage politics
7. The caucus’ worst nightmare
8. Kremlinology 29:  Easybake Tories
9. Cabinet Shuffle Bored
10. A sweet energy deal for someone

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Money for nothing

A change in lyrics, if ya notice…

No Muskrat Falls in BMO forecast

Curiously, BMO’s latest economic forecast for the province doesn’t include any reference to Muskrat Falls.

The bank’s economists forecast overall economic growth in the province of 3.,9% in 2011 driven by provincial government infrastructure spending totalling $5.0 billion “over the next several years.  BMO says that the province’s capital spending hit 3% of the province’s gross domestic product in 2010.

BMO forecasts continued strong capital spending over the next three years.  While the bank mentions Hebron, Hibernia South and Long Harbour, there’s no reference to Muskrat Falls. That stands out like the proverbial sore thumb since the forecast is up-to-date enough to note the change in Conservative leadership late last year. it’s also odd because the forecast of capital spending comes entirely from the provincial government’s figures.

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Related:  Labour force indicators raise questions about economic health and competitiveness

Building permits value drops almost 50% in November

The value of all building permits issued in Newfoundland and Labrador in November 2010 dropped 49.3% from the month before, according to figures from Statistics Canada released last week.

The value of non-residential permits dropped 74.5% in the same period while residential permit value increased 4.3%

Those were the largest drops of any Canadian province.

In St. John’s, the value of permits dropped 60% from $149.8 million in October to $59 million in November. Permits in September for St. John’s were valued at $54.5 million.

You can get a better perspective on these figures by comparing them with a post from last December.

Paternalism on display

Members of Danny Williams’ personality cult tend to infantilise themselves and those around them. It’s an expression of paternalism, one of the hallmarks of the past seven years in local politics.

Take for example, this comment on a post by Nalcor lobbyist Tim Powers over at the Globe and Mail:

Cullihall

2:12 PM on November 27, 2010

I know we have to believe there are strong leaders out there who will step forward and continue the work of Danny Williams. Quite frankly, with the news of his departure, I felt somewhat orphaned, a sense of being left alone surrounded by those who will, again, try and rob us of what we have achieved. You are correct: we cannot take a step back. Danny has set the bar high enough that no politician will dare settle for less and survive the people's wrath. Deceitful people, like the PM and other provincial people will continually try to impede us as they have always done. Thankfully, we now have the confidence and pride to stand up to them.

The basic construction here is that a group of people were childish and incapable of properly looking after themselves until a strongman political leader stepped into protect them.  This strongman then gifted the child-like people with self-esteem.

The same sort of ideas have cropped up in several online comments by different people.  They all have variations on the same idea:  he gave us pride.

Take a look at the words “I felt like an orphan”.  The idea behind it, though, seems to be paternalism, although your humble e-scribbler has rendered it a little differently.  Individuals are supposedly incapable of governing themselves and must be cared for by an authority figure. While it is usually referred to as paternalism, having someone who is apparently not part of a ruling elite advance the idea seems to be more a case of reducing oneself to a child-like state of incompetence, i.e. infantilizing.

You can see here the victim mythology that is prevalent in certain segments of political culture in Newfoundland and Labrador.  According to this view, outsiders take advantage of the place and its people, sometimes helped by locals.

surrounded by those who will, again, try and rob us of what we have achieved

And that’s a related and very intense part of Williams’ political message:  fear of outsiders with the corollary that only Father Dan  - or some comparable parental figure - could protect his children.

Is it any wonder how many of Danny’s loyal followers have used Brad Cabana’s birthplace as a reason to suspect him and his motives?

Minnie on Night Line proposing all sorts of conspiracies including that Cabana is a Harperite plant sent to cause strife among the Danny faithful?

Or Ross Wiseman in a scrum with reporters noting, almost as a throw-away line, that Cabana hasn’t been in the province very long.

Talk about dog-whistling Ross.

But it all fits the pattern.

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Empty gestures and tells

The fact that Kathy Dunderdale volunteered a certain comment in a scrum on Thursday tells you it was a prepared line, likely to try and counteract the fairly plain idea that her leadership is a done-der-deal cooked up in a back-room somewhere before Christmas.

Dunderdale volunteered that she “would have” welcomed a contested leadership for the Conservative Party.  She changed the verb tense because the one that first spilled from her lips actually confirmed the “done deal” impression everyone has but the damage was done.

It’s a bit like the Conservative Party website. Before Christmas it proudly displayed a heavily photoshopped shot of the new Premier, identified as the party’s “interim” leader.

Now the whole thing is gone.  It looks like the Conservatives don’t have a leader at all.

You can tell the Conservatives have a mess.

The tell you they have a mess by all their gestures to deny there is a mess.

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Cabinet Shuffle Bored

The back room plan to slide Kathy Dunderdale into the Premier’s job isn’t going so well.

The Gang that Couldn’t Shoot Straight is back shooting itself in the foot.

Kathy Dunderdale meets with Danny Williams one day and then the next day there is a surprise cabinet shuffle that Dunderdale explains with some lame comment about getting fresh blood and shifting ministers around to give them experience.

That is most definitely NOT what this is about.

Oh and to be really sure, you can guarantee that it is not about Dunderdale “picking her key lieutenants” as CBC has been presenting it. None of the portfolios involved are biggies.  This is purely a shuffling around at the bottom end of the cabinet list.

So what is it about?

Well, for Derrick Dalley it is a huge promotion that can only mean he is in serious political trouble in his district.  Danny’s coat-tails were barely enough to get him elected last time and without the Old Man, that seat is likely to flip.  This way Dalley gets a nice boost in pay and a higher profile.

Dalley has no background in business so sticking him in that portfolio makes no sense at all.

Charlene Johnson got a sweet little promotion after years of slogging it out in a  department that is usually a starter department for ministers.  She’s a loyal Dan-ite so giving her a higher profile helps bolster the back-room deal crowd:  she takes direction very well.  Johnson’s never shown signs of understanding the portfolio she had and she’s unlikely to inject anything other than further listlessness in a new department that is still struggling.

Here’s hoping there are no more giant controversies in a department known to generate nasty headlines. Charlene had a tough time even with Danny on the ground to shore her up.  With the Old Man out of the picture, she could be a major disaster waiting to happen. 

Ross Wiseman slides downward to environment and conservation.  He isn’t likely to run again so this just keeps around one of the Dan-ite stalwarts until Dunderdale gets through the current crisis and the spring budget.

Darin King gets a huge demotion.  The leadership hopeful and likely internal dissident got the big ole bitch slap for something.  Like he’s paying a double price that includes a bill for the shitstorm he caused by trying to do his old job at Eastern School District.  Darin’s school reorganization is a cock-up of monumental proportions since it has served only to agitate voters needlessly in seats the Conservatives normally would call safe. 

Joan Burke is being called back to the limelight likely to clean up Darin’s mess.  It’s a novel concept and logically, Burke’s arrival should mean the plan goes in the bin.  Burke’s usual approach would be like adding gasoline to a political fire and even Dunderdale couldn’t blunder that badly. 

Putting her back in charge of education also gives Burke the chance to raise her profile again in anticipation of the leadership race that will inevitably follow the next election. 

Everyone knows Dunderdale is just a placeholder.  Well, everyone except people who think she is promoting her key lieutenants for the next election.

Sheesh, what a head-slapper of an idea.

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Scrum Update:  Take a watch of the post-swearing in scrum. The most over-used line – after Charlene talking about “the children” and how important they are -  is the effort to portray this as some sort of renewal and refreshment.

The cliché is so over-worn that all you’d have to say is “deck chairs” but everyone will know instantly how true it is as a description of Thursday’s cabinet shuffle.

As for Darin King, notice that he spoke last of all and started by thanking Dunderdale for the privilege of serving.  If anyone has any doubt that this guy is being punished then let them watch the scrum and seen the proof.

Connie Leadership 2011: Logically challenged Conservatives

So if the whole thing was a slam dunk  because all the Tories – by their own definition – were backing Kathy Dunderdale and Brad was wasting his time, why have so many Tories been so agitated for the past week or more about the prospect he might file nomination papers?

I mean if he had no chance then an experienced political operator like Chick shouldn’t have been so agitated that he took it upon himself – according to Ross Wiseman -  to head out and have a chat with Brad to explain to him why he didn’t stand a chance.

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Connie Leadership 2011: Dunderball Run!

How many surprising things could we find out on Wednesday in the ongoing  soap opera that is the back-room deal to a leadership contest of any kind within the province’s Conservative Party?

Well, certainly no one would have expected that the Conservatives would send out business minister Ross Wiseman to confirm that the whole thing was, in fact, a lash up.

He didn’t mean to do that, supposedly, but he did.

Wiseman spoke to reporters after wannabe Conservative candidate Brad Cabana accused Wiseman’s executive assistant of threatening him and otherwise trying to persuade Cabana to stay out of the race.

We’ll get to that scrum in a minute.

Let us first of all consider the contents of an e-mail that the executive assistant – Chick Cholock – sent to Cabana, apparently some time in December.  You have to say apparently because in the version posted by CBC the thing is devoid of any identifying marks of any kind. The e-mail could have been typed up on Wednesday or heavily edited to remove any incriminating or dubious statements.

For the sake of keeping this moving, let’s just imagine for a moment that the parties to this farce are not complete imbeciles incapable of organizing even a garden variety Christmas pantomime.  And let’s note that Cholock is either not very well informed, incidentally, or is pulling his nose in the opening sentence, but that is another story.

Let’s just look at this bit, first:

In an ideal world there would be no leadership challenge.  They always end badly.  This paragraph displays Cholock’s ignorance of political history in the province.  It also shows a fundamental anti-democratic strain that is, sad to say, not very surprising.

On the other hand, it confirms, as regular readers know, that there are indeed cleavages inside the Conservative Party that are so deep that the back-room types are petrified at the prospect.

Let us now turn to Wiseman’s scrum.  There’s a version on the CBC website and another on the Telegram’s website.

In his first long answer to the first question, Ross states that “it was well known and well understood” that the entire caucus backed Dunderdale at that point as were most of the district associations. Wiseman says that given that it was highly unlikely any challenger could succeed.

That hardly sounds like an open process.

When asked about an open process, Wiseman tries to insist that the process is open but then quickly returns to the point that everyone – caucus and district executives – were all backing Dunderdale and therefore Cabana had a tough row to hoe if he ran.  That was the “backdrop”, according to Wiseman, for Cholock’s comments.

Wiseman insists that Cholock was acting as a private individual when he visited Cabana’s house in the middle of the work week to discuss Cabana’s candidacy.  Wiseman does rattle off Cholock’s extensive experience in the party and his history of party involvement but then claims that any conversation was done on Cholock’s own time and was unofficial. Wiseman did not explain why he was speaking for his executive assistant on a personal matter, as opposed to having Cholock do the talking for himself.

Wiseman also acknowledges that Cabana contacted the Tory caucus seeking support before he submitted his nomination papers.

But here’s the thing:  Wiseman essentially confirms that Cholock went to cabana’s house to explain that Cabana was wasting his time, given that everyone had already declared for Dunderdale.  David Cochrane from CBC asks the question using those words – “wasting his time” – and Wiseman concurs.

But the fix was not in.

Sure.

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The persistence of patronage politics

Former auditor general Elizabeth Marshall made the news this past week in her new capacity as a Conservative senator from Newfoundland and Labrador.

Senator Marshall racked up $51,000 in airfares in a three month period, making her the senator from the province with the highest spending on travel.  According to Marshall’s staff the whole thing was for business class travel between St. John’s and Ottawa.  It’s really expensive to commute to work these days, especially when you live the better part of half a continent from the office.

Some people might credit Senator Marshall with uncovering what became known as the House of Assembly spending scandal.  She was trying to audit one member of the legislature almost a decade ago when the committee overseeing the legislature barred her from finishing the job.

When the scandal finally erupted into public view in 2006, the scandal shook the province’s political system.  Four politicians went to jail, along with the legislature’s former chief financial officer.  Millions of dollars of public money remain unaccounted for, despite an extensive police investigation, supposedly detailed reviews by Marshall’s former deputy and an investigation by the province’s top judge.

In one of those great cosmic coincidences, a local businessman involved in the scandal found out this week he’d be going to jail for upwards of three years. John Hand pleaded guilty to defrauding the public of almost half a million dollars.

Marshall didn’t actually uncover the spending scandal. She was focused on a particular member of the legislature whom she felt was using public money to purchase win and artwork for himself. A subsequent review by Marshall’s successor didn’t add significantly to what others had already found.

The more significant story, though, lay somewhere else.

Between 1996 and 2006, members of the legislature gave themselves the power to take money set aside to help them do their jobs as members of the legislature and to spend it on just about anything each of them deemed appropriate.  While some enriched themselves, and a few spent public money on women’s clothes, season hockey tickets or perfume, virtually all members of the legislature in that decade gave money to their own constituents.

In his lengthy report on the scandal, Chief Justice Derek Green described the practice  - and the problem - as eloquently as anyone might:

“First and foremost, the practice of making financial contributions and spending in this way supports the unacceptable notion that the politician’s success is tied to buying support with favours. Such things, especially the buying of drinks, tickets and other items at events, has overtones of the old practice of treating - providing food, drink or entertainment for the purpose of influencing a decision to vote or not to vote. As I wrote in Chapter 9, it demeans the role of the elected representative and reinforces the view that the standards of the politician are not grounded in principle. In fact, I would go further. The old practice of treating was usually undertaken using the politician’s own funds or his or her campaign funds. To the extent that the current practice involves the use of public funds, it is doubly objectionable.

Related to the notion of using public funds to ingratiate oneself with voters is the unfair advantage that the ability to do that gives to the incumbent politician over other contenders in the next election.”

For his part, former Speaker Harvey Hodder made plain his own attachment to the system this way:

"Some members, myself included, paid some of my constituency expenses out of my own pocket so I would have more money to give to the school breakfast program ... I don't apologize for that."

And former auditor general Elizabeth Marshall saw nothing wrong with the practice of handing out cash, often without receipt, with no established rules and for purposes which duplicated existing government programs.

What Chief Justice Green called “treating” is actually the old practice of patronage.  That isn’t just about giving party workers government jobs.  It’s basically one element of a system in which citizens trade their status as citizens for that of being the client of a particular patron.  The patron gets political power and the ability to dispense benefits of some kind.  In exchange, the client gives the patron support.  Explicitly or implicitly, as the Chief Justice stated, there's a connection between the favour and support.

In a model government bureaucracy, the rules that govern how a particular program works are well known.  Everyone in the society who meets the requirements would typically get the benefit of the program. 

But in a patronage system, the rules are hidden or there are difference between the formal rules and the ones that are actually used to hand out the benefit. The patrons and their associates control access to the benefits and so can reward people who comply with their wishes or punish those who do not.

There are as many variations on the patronage idea as there are societies.  The notion is well known in Newfoundland and Labrador politics. As political scientist George Perlin put it in 1971:

“Historically, the dominant factor in the Newfoundland context has been the use of public resources to make personal allocations or allocations which can be made in personal terms, in return for the delivery of votes.”

More recently, political scientist Alex Marland had this to say about the House of Assembly:

A final, but perhaps most critical, theme is the politics of deference towards charismatic power-hungry men and an outdated paternalistic ethos. Backbenchers, bureaucrats and journalists are scared to be on the wrong side of the executive for fear of harsh repercussions that can harm their careers. A massive spending scandal  occurred because, unlike Peter Cashin had done years before, nobody in the legislature had the courage or whistleblower protections to speak up about questionable expenses.  Political participation is sufficiently limited that interest groups prefer to meet behind closed doors and family networks continue to hold considerable sway within party politics. There is a historical pattern of democratic fragility and of  Newfoundlanders and Labradorians trusting elites to represent their interests.

Marland is understandably scathing in his criticism of politics in the province in the early years of the 21st century.  His assessment of the contributing factors  - way more than the paternalism mentioned above - is thorough and accurate even if his conclusion is a bit pollyannaish.

What’s more interesting is the way that seemingly unconnected events can relate to each other.  Those relationships explain much about the state of politics in the province.  Next, we'll add another element to the picture and discuss the Conservative leadership fiasco.*

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*  In the original version this sentence read "Tomorrow" instead of "Next".  The second installment of this mini-series on patronage and local politics is going to take a bit longer to complete since so many rich examples can be found in current events.

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Connie Leadership 2011: Is anyone surprised?

Brad Cabana’s candidacy is ruled invalid.

The Telly reported based on Cabana’s Twitter feed. CBC reported based on comments by convention co-chair Shawn Skinner and Cabana.

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Connie Leadership 2011: Acorns and trees

nottawa succinctly describes the way that Danny Williams’ supporters are applying the lessons he taught them to defeat a challenger to their back room plans and yet who claims he wants to carry on with the Williams legacy and style:

Brad Cabana, in a mere few hours, has somehow managed to present the regime with a bit of a conundrum. He's all three enemies rolled into one.

If he wants to be one of them, and if he wants to lead them, then what kind of a traitor/enemy/non-person is he? And what is the appropriate response?

The party brass are meeting to discuss.

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A sweet energy deal for someone

The following op-ed piece is from opposition leader Kelvin Parsons.  It appeared in several conventional news media last weekend.

 

A sweet deal, but not for the citizens of Newfoundland and Labrador

by Kelvin Parsons

The proposed Term Sheet to develop hydroelectric power at Muskrat Falls, Labrador with Emera Energy of Nova Scotia is badly flawed. If it proceeds, it will cause an exorbitant rise in electricity rates and increase our provincial debt by as much as 50 per cent, a worrisome development given that we already have the highest per capita debt in Canada.

The Government of Premier Kathy Dunderdale would have us believe this deal is necessary to provide stable, long term energy prices and that if it doesn’t proceed our energy prices will be even higher. However, neither the premier, nor Nalcor, has provided any information to substantiate that claim. Neither has Ms. Dunderdale or Nalcor offered any proof that energy demand is increasing on the island and that we actually need the additional power Muskrat could provide. It would be instructive to see Nalcor’s energy demand projections given this province has lost two pulp and paper mills under the current government’s watch and our population is projected to decrease over the long term.

As for her contention that replacing the thermal plant at Holyrood with Muskrat power would make this province 98 per cent green, Ms. Dunderdale is not telling the full story. She is failing to disclose that Holyrood generates only 20 per cent of the island’s electricity and that the other 80 per cent is already “green energy” that comes from hydroelectric stations such as the ones at Bay d’Espoir and Cat Arm and from wind farms such as the one at St. Lawrence. Using the premier’s own formula for calculating our “greenness,” which includes the 5,400 megawatts of energy already being produced on the upper Churchill, this province is already 91 per cent “green.”

The premier is proposing that we spend $6.2 billion to build a new power plant in Labrador and run lines thousands of kilometers over land and under water to replace just 20 per cent of our energy production. Adding such a huge financial burden on top of our existing debt - for such limited gain - makes no financial sense.

Refurbishing Holyrood to reduce its emissions is a far cheaper option. Eliminating Holyrood also eliminates the prospect of eventually using this province’s large stores of natural gas for electrical generation here at home. There is much more gas in the oil fields now under production in the Jeanne ‘d’Arc basin than in the Sable reserves off Nova Scotia. And that’s not counting the potential reserves in Western Newfoundland or the large gas reserves off Labrador.

As well, the citizens of this province should be told there are several other potential hydroelectric and wind projects that can be developed on the island of Newfoundland to meet any incremental growth in electrical demand for many years to come. These projects can be developed at far less cost than Muskrat Falls and with much less impact on us as taxpayers and electricity consumers.

Make no mistake, Muskrat will be a financial burden. By the premier’s own admission, the generating and transmission costs of Muskrat Falls power will be at least $143 per megawatt hour. That’s a 120 per cent increase over the base rate Nalcor now charges Newfoundland Power, the main provider of energy to consumers on the island. If there are cost overruns on the project, the base cost will be even higher.

If this project is approved, we will go from having the cheapest power rates in Atlantic Canada to the most expensive. Muskrat’s exorbitant energy costs will also hurt businesses, impair job creation and drive up the cost of living for everyone in this province as the higher electricity charges are added to consumer goods.

But there will be some beneficiaries – just not in Newfoundland and Labrador. Take the case of Emera Energy of Nova Scotia. Ms. Dunderdale claims Emera is paying $1.2 billion for 20 per cent of Muskrat’s energy. That is untrue. That $1.2 billion is being invested in a transmission line that Emera will wholly own for 35 years. The power that will run across that line to Emera will be provided for free. Emera will then sell its free power to consumers in Nova Scotia, recovering its $1.2 billion investment with a guaranteed rate of return. All this has been confirmed by Emera’s president, Bruce Huskilson, in a conference call with investment analysts.

This arrangement is akin to me letting my neighbour take water from my well for 35 years for free, as long as he pays for the hose. Whatever money he gets from selling that water, he keeps it all, not a cent of it comes back to me.

Premier Dunderdale claims the benefit of such a lopsided deal is that Nalcor will be allowed to run excess energy from Muskrat over Emera’s line for sale in the Maritimes and New England. That is true. But Nalcor will have to pay all the associated tariffs and very likely use Emera as the broker. That means more fees paid to our Nova Scotia “partner” and less revenue for the people of this province.

As well, any Muskrat power going to the Maritimes or New England will be sold at a fraction of its production cost. Comparing the current market price in New England of about $50 per megawatt hour with Muskrat’s production cost of $143 per megawatt hour, the people of this province would end up subsidizing two thirds of the cost of electricity going to New England. While Americans and people in the Maritimes would enjoy paying the lower market rate, consumers of electricity here on the island of Newfoundland would have to pay Muskrat’s full production cost plus allowances for profit.

There are other problems with the deal that Premier Dunderdale doesn’t want to talk about. For instance, while Nalcor has agreed to pay half of all cost overruns on the construction of Emera’s Maritime Link, there is no reciprocal agreement on Emera’s part to pay any cost overruns on the transmission line running from Labrador to Newfoundland. That’s despite the fact Emera is getting a 29 per cent ownership stake in our line and will enjoy 29 per cent of all the profits derived from transmitting power from Muskrat Falls to consumers here on the island.

Not surprisingly, financial analysts have hailed the project as a great deal for Emera. They have not made the same assessment for the residents of Newfoundland and Labrador.

The bottom line is this: Premier Dunderdale and her government is asking the residents of this province to pay more than double for their electricity and take on an additional $4.5 billion in debt to finance a project that will provide free energy to Nova Scotia and subsidized energy to consumers in the Maritimes and New England.

As for her contention that keeping Holyrood on stream will lead to energy costs that are even higher than Muskrat’s, to date neither her government nor Nalcor has provided any evidence to back that claim despite our repeated requests to see any such documents.

The Term Sheet to develop Muskrat Falls looks like it was slapped together in a hurry. Incredibly, it’s even worse than the historically unfair Upper Churchill contract. At least in the case of the Upper Churchill, Hydro Quebec pays something for our energy, albeit a pittance of its market value. If Ms. Dunderdale gets her way, Emera Energy will receive Muskrat’s energy for free as well as a 29 per cut of profits on all transmission of energy to our island. Meanwhile, the people of Newfoundland and Labrador will be financing this atrocious deal with even higher debt payments and exorbitant electricity bills.

It’s a sweet deal, alright, but not for the citizens of Newfoundland and Labrador.

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