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Bitter legacy hangs over today’s energy discussions between Quebec and N.L. premiers

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2 years ago

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Newfoundland and Labrador Premier Andrew Furey and Quebec Premier François Legault pose in the office of the premier at the Confederation Building, in St. John’s, on Friday, Feb. 24, 2023. THE CANADIAN PRESS/Paul Daly

By Sarah Smellie in St. John’s

As Quebec Premier François Legault seeks a new energy deal with Newfoundland and Labrador, he faces a public in the Atlantic province scarred by the legacy of a pair of hydroelectric projects mired in missteps.

Legault travelled to St. John’s this week for discussions with Newfoundland and Labrador Premier Andrew Furey about the 1969 Churchill Falls hydroelectric energy deal — and what will come after it ends in 2041. The lopsided deal heavily favours Quebec, and has left a lasting bitterness in Newfoundland and Labrador.

The two leaders are scheduled to speak with reporters later on Friday after the meeting.

Jeff Webb, a historian at Memorial University, says some residents of Newfoundland and Labrador think the province wouldn’t have endured the “humiliation” of needing equalization payments from the federal government if the Churchill Falls agreement had more evenly served both provinces.

“It does speak to people’s sense that this is something that’s always been rightly ours, and it’s been stolen,” Webb said in a recent interview.

Decades later, that hostility drove people in Newfoundland and Labrador to embrace the Muskrat Falls hydroelectric project, which is long delayed and draining the provincial purse, Webb said.

The 1969 Churchill Falls deal allows Quebec’s provincially owned hydroelectric utility, Hydro-Québec, to purchase 85 per cent of the electricity generated by the dam in Labrador, and therefore reap most of the profits. As of 2019, the deal had yielded close to $28 billion in profits to Quebec, and about $2 billion for Newfoundland and Labrador.

Under the agreement, Hydro-Québec pays a fixed price of 0.2 cents per kilowatt hour for Churchill Falls power. By comparison, the utility said in a news release this week it made an average of 8.2 cents per kilowatt hour on power it sold outside the province in 2022. Hydro-Québec made a record-breaking income of $4.6 billion last year, the release said.

The Innu of Uashat mak Mani-utenam in Quebec filed a $2.2-billion lawsuit against Hydro-Québec earlier this year, claiming the Churchill Falls hydroelectric station has destroyed a significant part of their traditional territory. In 2020, the Innu Nation in Labrador launched a $4-billion lawsuit against Hydro-Québec and Churchill Falls (Labrador) Corp., a subsidiary of Newfoundland and Labrador Hydro, for the ecological and cultural damage caused by the damming of the upper Churchill River in the early 1970s.

Pam Frampton, who retired in 2021 as the managing editor of The Telegram newspaper in St. John’s, said she grew up under the shadow of Churchill Falls.

“There was always these associated feelings of shame and bitterness, and the feeling that we had been duped,” Frampton said in an interview.

Frampton said she believes the province would be in a completely different economic position now if the Churchill Falls arrangement had not been so skewed.

“Wanting to give Quebec the middle finger, if you will, was a part of the impetus behind Muskrat Falls,” Frampton said. “I think if we had a fair day’s deal with (Churchill Falls), we wouldn’t have been so hell-bent on getting (Muskrat Falls) developed at any cost.”

Like the Churchill Falls project, the Muskrat Falls development harnesses the power of the Churchill River, in Labrador, and it also sits on traditional Innu territory. It was green-lit in December of 2012 after much trumpeting and fanfare by the Progressive Conservative government at the time, particularly by premier Danny Williams, who quit politics in late 2010.

Muskrat Falls has been disastrous for the province’s finances and morale. Its price tag now sits at more than $13 billion, a figure Andrew Furey described in 2021 as “an anchor around the collective souls of Newfoundland and Labradorians.”

Legault has said he wants a “win-win” deal for Quebec and Newfoundland and Labrador — and has even suggested paying the province more for electricity before the current deal ends in 2041.

Frampton said the Quebec premier needs to know that the people of Newfoundland and Labrador are hardened and still smarting from both projects.

“I think he needs to know that, going in, we are gun shy, and for good reason,” she said. “He should expect us to ask the hard questions. And I certainly hope to God our government does, on our behalf.”

This report by The Canadian Press was first published Feb. 24, 2023.

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Business

Worst kept secret—red tape strangling Canada’s economy

Published on February 22, 2025

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From the Fraser Institute

By Matthew Lau

In the past nine years, business investment in Canada has fallen while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receive barely half as much new capital per worker than in the U.S.

According to a new Statistics Canada report, government regulation has grown over the years and it’s hurting Canada’s economy. The report, which uses a regulatory burden measure devised by KPMG and Transport Canada, shows government regulatory requirements increased 2.1 per cent annually from 2006 to 2021, with the effect of reducing the business sector’s GDP, employment, labour productivity and investment.

Specifically, the growth in regulation over these years cut business-sector investment by an estimated nine per cent and “reduced business start-ups and business dynamism,” cut GDP in the business sector by 1.7 percentage points, cut employment growth by 1.3 percentage points, and labour productivity by 0.4 percentage points.

While the report only covered regulatory growth through 2021, in the past four years an avalanche of new regulations has made the already existing problem of overregulation worse.

The Trudeau government in particular has intensified its regulatory assault on the extraction sector with a greenhouse gas emissions cap, new fuel regulations and new methane emissions regulations. In the last few years, federal diktats and expansions of bureaucratic control have swept the auto industry, child care, supermarkets and many other sectors.

Again, the negative results are evident. Over the past nine years, Canada’s cumulative real growth in per-person GDP (an indicator of incomes and living standards) has been a paltry 1.7 per cent and trending downward, compared to 18.6 per cent and trending upward in the United States. Put differently, if the Canadian economy had tracked with the U.S. economy over the past nine years, average incomes in Canada would be much higher today.

Also in the past nine years, business investment in Canada has fallen while increasing more than 30 per cent in the U.S. on a real per-person basis. Workers in Canada now receive barely half as much new capital per worker than in the U.S., and only about two-thirds as much new capital (on average) as workers in other developed countries.

Consequently, Canada is mired in an economic growth crisis—a fact that even the Trudeau government does not deny. “We have more work to do,” said Anita Anand, then-president of the Treasury Board, last August, “to examine the causes of low productivity levels.” The Statistics Canada report, if nothing else, confirms what economists and the business community already knew—the regulatory burden is much of the problem.

Of course, regulation is not the only factor hurting Canada’s economy. Higher federal carbon taxes, higher payroll taxes and higher top marginal income tax rates are also weakening Canada’s productivity, GDP, business investment and entrepreneurship.

Finally, while the Statistics Canada report shows significant economic costs of regulation, the authors note that their estimate of the effect of regulatory accumulation on GDP is “much smaller” than the effect estimated in an American study published several years ago in the Review of Economic Dynamics. In other words, the negative effects of regulation in Canada may be even higher than StatsCan suggests.

Whether Statistics Canada has underestimated the economic costs of regulation or not, one thing is clear: reducing regulation and reversing the policy course of recent years would help get Canada out of its current economic rut. The country is effectively in a recession even if, as a result of rapid population growth fuelled by record levels of immigration, the GDP statistics do not meet the technical definition of a recession.

With dismal GDP and business investment numbers, a turnaround—both in policy and outcomes—can’t come quickly enough for Canadians.

Matthew Lau

Adjunct Scholar, Fraser Institute
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Business

‘Out and out fraud’: DOGE questions $2 billion Biden grant to left-wing ‘green energy’ nonprofit`

Published on February 22, 2025

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From LifeSiteNews

By Calvin Freiburger

The EPA under the Biden administration awarded $2 billion to a ‘green energy’ group that appears to have been little more than a means to enrich left-wing activists.

The U.S. Environmental Protection Agency (EPA) under the Biden administration awarded $2 billion to a “green energy” nonprofit that appears to have been little more than a means to enrich left-wing activists such as former Democratic candidate Stacey Abrams.

Founded in 2023 as a coalition of nonprofits, corporations, unions, municipalities, and other groups, Power Forward Communities (PFC) bills itself as “the first national program to finance home energy efficiency upgrades at scale, saving Americans thousands of dollars on their utility bills every year.” It says it “will help homeowners, developers, and renters swap outdated, inefficient appliances with more efficient and modernized options, saving money for years ahead and ensuring our kids can grow up with cleaner, pollutant-free air.”

The organization’s website boasts more than 300 member organizations across 46 states but does not detail actual activities. It does have job postings for three open positions and a form for people to sign up for more information.

The Washington Free Beacon reported that the Trump administration’s Department of Government Efficiency (DOGE) project, along with new EPA administrator Lee Zeldin, are raising questions about the $2 billion grant PFC received from the Biden EPA’s National Clean Investment Fund (NCIF), ostensibly for the “affordable decarbonization of homes and apartments throughout the country, with a particular focus on low-income and disadvantaged communities.”

PFC’s announcement of the grant is the organization’s only press release to date and is alarming given that the organization had somehow reported only $100 in revenue at the end of 2023.

“I made a commitment to members of Congress and to the American people to be a good steward of tax dollars and I’ve wasted no time in keeping my word,” Zeldin said. “When we learned about the Biden administration’s scheme to quickly park $20 billion outside the agency, we suspected that some organizations were created out of thin air just to take advantage of this.” Zeldin previously announced the Biden EPA had deposited the $20 billion in a Citibank account, apparently to make it harder for the next administration to retrieve and review it.

“As we continue to learn more about where some of this money went, it is even more apparent how far-reaching and widely accepted this waste and abuse has been,” he added. “It’s extremely concerning that an organization that reported just $100 in revenue in 2023 was chosen to receive $2 billion. That’s 20 million times the organization’s reported revenue.”

Daniel Turner, executive director of energy advocacy group Power the Future, told the Beacon that in his opinion “for an organization that has no experience in this, that was literally just established, and had $100 in the bank to receive a $2 billion grant — it doesn’t just fly in the face of common sense, it’s out and out fraud.”

Prominent among PFC’s insiders is Abrams, the former Georgia House minority leader best known for persistent false claims about having the state’s gubernatorial election stolen from her in 2018. Abrams founded two of PFC’s partner organizations (Southern Economic Advancement Project and Fair Count) and serves as lead counsel for a third group (Rewiring America) in the coalition. A longtime advocate of left-wing environmental policies, Abrams is also a member of the national advisory board for advocacy group Climate Power.

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