No independent oversight, no support for Churchill Falls MOU, PC leader declares
Level of scrutiny over historic deal with Quebec continues to dominate special debate in the House of Assembly
PC Leader Tony Wakeham declared Tuesday his party will not support the Churchill Falls MOU unless it undergoes an independent review, while the Liberals again signalled a willingness to open the tentative agreement and any future formal deal to more scrutiny.
For the second consecutive day, debate during a special session of the House of Assembly was dominated by demands from Opposition politicians for a rigorous audit of the tentative agreement with Hydro-Quebec, by experts not linked to the government or N.L. Hydro.
MHAs are scheduled to vote Thursday evening on a motion to grant N.L. Hydro, the province's Crown-owned utility, permission to continue negotiations with the aim of reaching definitive agreements with Quebec by the spring of 2026.
The formal agreements, if reached, are forecasted to inject more than $225 billion in revenue into the provincial treasury over the next 50 to 60 years, and includes a ripping up of the lopsided 1969 agreement that sees Quebec receive roughly 15 per cent of its electricity capacity from Churchill Falls at a near-free price of 0.2 cents per kilowatt hour.
Under a proposed new deal, Quebec will pay about 30 times more for that power from the existing Churchill Falls station, and unlike the current agreement, prices are not fixed.
But the 14-member PC caucus will either abstain or vote against the motion, said Wakeham, unless the government agrees to its demand for an extra layer of scrutiny. The NDP and independent MHAs in the legislature have also called for more oversight.
"You're asking us to turn around in the House of Assembly after four days and to vote on something that will impact Newfoundlanders and Labradorians for 50-plus years. I think due diligence would require this to have an opportunity to be looked at by others who are capable of doing that review," said Wakeham.
Failures of Muskrat Falls loom large
The Liberals have repeatedly defended the process, saying they are following the recommendations of Justice Richard LeBlanc, who led the inquiry into the disastrous Muskrat Falls project, which was billions over budget and years behind schedule.
LeBlanc's first recommendation was that the province should never plan, approve or construct any large project with a budget greater than $50 million without engaging independent experts to review the project.
There's been heated debate over whether the Liberals are meeting the standards proposed by LeBlanc.
"What we are proposing now is absolutely within what Justice LeBlanc has said," Energy Minister Andrew Parsons told reporters.
Premier Andrew Furey has promised not to repeat the mistakes of previous deals on the Churchill River, and said they've taken extraordinary steps — from the creation of an expert advisory panel to the hiring of world class consultants and leading business law firms — to ensure the province enters into the best possible deal with Quebec.
Expert consultants from the firms JP Morgan and Power Advisory, who supported N.L. Hydro's team during negotiations with Quebec, will also answer questions from MHAs on Wednesday and Thursday.
The Liberals have also said any developments in Labrador that may affect power rates in the province will also be reviewed by the province's utility regulator, the PUB.
Furey has said the level of political and public consultation on the MOU is far superior to any other major project, including Muskrat Falls, and called the four-day debate on the MOU the best example of transparency.
Furey promising 'fulsome' updates
On Monday, Furey also announced government will create a separate panel of experts to provide advice to cabinet as talks continue toward final contracts.
On Tuesday, with pressure mounting from the Opposition, Furey signalled discussions were underway to determine how much information they can release publicly from this new panel, without harming the province's negotiating position.
Furey hinted they're considering a reporting model similar to one used by the Muskrat Falls oversight committee, which protected commercially sensitive information but provided "fulsome" updates to the public.
"That's exactly what we're trying to think about," he said.
Bickering over the border
Tuesday's debate, meanwhile, ranged from fiery criticism of the MOU by Opposition MHAs, who allege the deal is another giveaway to Quebec, to fawning praise for the agreement from government members, and a resurfacing of the long-simmering anger over the refusal in some Quebec circles to accept the border lines between Quebec and Labrador.
Wakeham said the border issue should have been settled before an MOU was signed, and said it's disrespectful that Hydro-Quebec continues to present official documents in which the border is described as "not final."
"When you're going to enter into an agreement with a partner for the next 50 years, let's make sure this partner recognizes that the border is set," said Wakeham.
Furey bristled at the suggestion that there's any question about the integrity of the border, which was upheld by a 1927 decision of the Privy Counsel, and again in Newfoundland and Labrador's Terms of Union with Canada in 1949.
"It's a ridiculous thing to be talking about," said Furey. "This is our land. It's our place. It's our border. Full stop."
Meanwhile, PC MHA Lloyd Parrott described the MOU and the flow of information as "very misleading" and said Quebec will have complete control over any expansion at Churchill Falls and development of the Gull Island project.
"There are no jobs unless Quebec says there are jobs," Parrott said of the promise of a decade of construction and thousands of jobs.
Another PC MHA, Helen Conway Ottenheimer, said the MOU "will end up giving Hydro-Quebec far too much control for far too long, and essentially Quebec ends up directing our destiny for the next 50 years and more."
She also decried the "rush" to debate the MOU, and suggested a theory.
"It's about calling that election, and they want to justify this by ramming this MOU and then going to the polls," she said.
WATCH | The Quebec-N.L. border isn't a suggestion, say the PCs and Liberals:
Under the terms of the MOU, Hydro-Quebec will lead construction of Gull Island and a second power station at Churchill Falls, and take most of the financial risk.
N.L. Hydro CEO Jennifer Williams acknowledged there is no clause in the MOU that requires Hydro-Quebec to move forward with the developments, but she's confident they will happen.
"I would absolutely categorize this as a good deal," she said.
Quebec has exclusive rights to develop Gull Island for the next two decades, but if it becomes apparent that Quebec is not moving fast enough, Williams said there will be language in the contract that allows N.L. Hydro to open talks with "other proponents."
"Hydro-Quebec is very interested and want this project done. They need more power. They need to double their system. This is the best project possible," she said.
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