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Tuesday, October 26, 2004

Newfoundland's newest fight

[originally posted to Daimnation!]

Every ten years or so, the premier of Newfoundland gets into a very big, very public dispute with the federal government. Here's the latest:

Newfoundland and Labrador Premier Danny Williams is boycotting equalization talks in Ottawa, accusing Prime Minister Paul Martin of reneging on a deal he agreed to both privately and in public.

Williams walked away from the conference just half an hour before Martin was to meet with the premiers to discuss how much money the federal government should contribute to the country's equalization program.

Williams said he was leaving because he says Newfoundland had a deal with Ottawa that would have given the province 100 per cent of offshore oil and gas revenues.

He said Martin made the deal in June, during the federal election campaign, but has now backed off that plan and isn't returning his calls.

Williams said the federal government is trying to put conditions on the deal, such as a cap, that would only allow the province to get 14 per cent of the revenues.

Williams blamed the about-face on the recent increase in oil prices.

"We didn't come here for negotiation. We have already reached an agreement. The deal was done. And it was done at a time when Paul Martin needed the people of Newfoundland and Labrador during the election," Williams told a news conference in Ottawa.

"With all due respect to the particular member, it certainly helped his election... Now what Paul Martin has done, he's actually turned his back on the people of Newfoundland and Labrador when they need him most."

Martin fired back, saying he never received a phone call from Williams. He also said the deal he offered the premier is more generous than what they first agreed on.

"I made an offer to Premier Williams that in all instances is more generous than the one that we discussed, based on the principles that he has publicly set out," Martin told reporters.

"And I'm not quite sure I understand why he won't take yes for an answer," the PM said.

On one hand, I think Newfoundland has to wean itself off of transfer payments from Ottawa eventually, and I've always believed it a bit disingenuous for us to demand we be allowed to keep all our federal transfers and all our offshore oil revenues. On the other hand, if Williams is telling the truth about Martin reneging on a done deal - and frankly, I'm more inclined to believe Williams than Paul Martin - it's another smack in the face for a province which has already recieved way too many smacks in the face.

If you don't live here, you have no idea how Newfoundlanders feel about control of their resources. Ottawa mismanaged the fishery into near-extinction, Quebec gets nearly all the benefit of hydro power from Labrador, and offshore oil development was delayed for years because of vicious jurisdictional fights between the province and the federal government. A lot of us voted Liberal because Martin promised us 100% of our offshore oil revenues, and if he's breaking that promise, we won't forgive the Liberals for...5 or 6 years, maybe.

Posted by Damian Penny on October 26, 2004 in Canadian Politics | Permalink


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Tracked on 2005-05-18 7:19:24 AM


Alberta feels Newfoundland's pain when it comes to energy revenues. No Albertan can forget the NEP, which ruined our economy and cost hundreds of thousands their jobs, homes, businesses and futures.

If Ontario people weren't so greedy, this wouldn't be a problem!

If more money is needed for "equalization", then Ontario should have its tax load quadrupled. Make those rich bastards give up their cottages, gas-guzzling SUVs, and expensive luxuries. Make them live like the rest of us.

There is no poverty in Ontario...yet.

Posted by: Scott | 2004-10-26 6:50:16 PM

YA! What he said. Make those rich greedy bastards live like the poor folks in Alberta . . . oh, wait a minute.

Posted by: k | 2004-10-26 7:27:51 PM

Have you ever had the experience of having your wallet lifted, and then finding yourself getting yelled at because there wasn't enough money in it?

I'd say that sums up my reaction to any theatrics from Newfoundland these days. "Ottawa" mismanaged the fishery? Just who elected the Fisheries ministers for the last five decades? Saskatchewan? Manitoba?

Come off it, Atlantic Candians got exactly the kind of fisheries management they voted for. It was always run not as viable industry but as a make-work project to get the maximum number of people possible onto pogey.

Similarly the eastern oil industry exists entirely because federal subsidies created it.

Newfoundland might want to rethink the practice of shaking down mining companies like Voisey's Bay if they suffer the misfortune of finding a rich ore body. It doesn't exactly encourage others to explore in the province.

Posted by: Kevin Jaeger | 2004-10-26 8:38:44 PM

Kevin seems to believe that Newfoundland's 7 or MPs have had a remarkable impact on overall government policy.

He certainly doesn't seem to understand how Newfoundland interests (the seal hunt, stopping foreign overfishing) were sold out lest the Europeans, offended by the protection of Newfoundland's industries, slap a duty on products from Ontario.

Or how the government for many years charged the exact same fee for icebreaking, whether you were going to ice-free Halifax, or up to Montreal...

I'm not saying the local governments have no share of the blame. But pretending that the Federal government, in enacting policies designed to benefit Central Canada first and foremost, have no share in the blame, is simply illogical.

Posted by: Craig | 2004-10-27 9:02:29 AM

I would agree with your statement on general policy issues, but I disagree when it comes to issues that simply have no relevance to the rest of us.

We don't care, and never have cared, about the east coast manages its fishery. We don't care about the overall quota allocation or what percentage is given to inshore versus offshore. All those things were handled by MPs elected completely within Atlantic Canada.

We do notice, however, how in every election the eastern populace demands a ritual shower of pork from their MPs, and severely punishes any party that shows restraint in the unloading of make-work projects.

Posted by: Kevin Jaeger | 2004-10-27 10:16:03 AM

As part of the considerable Newfoundland diaspora, I take issue with the notion that the offshore oil money-sharing imbroglio is just micromanagement gone wrong. There are fundamentals of Confederation lying exposed to view here, like raw nerves.

Paul Martin is the latest Quebec-based political sophist to swan through Newfoundland offering beads and baubles during the only perilous time for Liberals, an election.

What should be a simple matter is made ponderously intricate. Oil on the Grand Banks should be Newfoundland property, plainly and simply and in pursuance and realization of the most basic political morality. That it is the subject of a federal-provincial management scheme is proof that Newfoundland receives its own property rights only grudgingly. This is the statist product of a federal government tuned neurotically to the greedy sensibilities of the central Rust Belt.

The extortive Churchill Falls contract and the extermination of the Grand banks cod stocks are not just local colour here folks. These are real, living grievances over deliberate shunting of the province's interests into the dustbin.

Posted by: Barry Stagg | 2004-10-27 12:17:02 PM

Churchill Falls:

I'll admit to not being in on the details, but I seem to recall from I've read and heard that a proper commercial contract was drawn up specifying what each side would get, and for how long, and signed with no coercion, after long inspection and introspection.

So what exactly is Newfoundland's issue?
That they were taken to the cleaners by slick lawyers?
That they are too naive or cheap to hire competent legal and technical assistance when signing an important multi-decade contract?

I don't get Newfoundland's beef. If someone would care to explain, I'd be delighted, because at first blush it looks silly.

You signed a contract and it screwed you when conditions changed, boo hoo. Suck it up, at least it isn't costing you cash, you just aren't getting as much as you feel you ought.

Posted by: Fred | 2004-10-27 1:13:47 PM

Why don't you Atlanteans just separate? The Clarity Act has kicked the door wide open.

No more greedy Ontarians and Quebeckers exploiting you. No more excuses.

Posted by: Justzumgai | 2004-10-27 4:44:15 PM

The Churchill Falls comments above are indicative of just how the information on this debacle is now conveniently shrouded by the fog of time.

The power contract, circa 1965, was a coercive instrument predicated upon the immutable fact that Quebec was holding the electricity hostage at the Newfoundland border.

Posted by: Barry Stagg | 2004-10-27 8:24:13 PM

Further, other possible hydro developments in Labrador have been blocked by Quebec (at one point, Ontario Hydro offered to basically build the station(s) outright in exchange for access to the power; the Quebec government said it would not allow ANY hydro development involving anyone but Quebec to transmit power across Quebec).

And Kevin: do you mean to tell me that you think the allocation of fish quotas to foreign fleets with histories of overfishing; the lack of enforcement of fishing regulations against those countries; and the refusal to extend our sea boundaries to cover the 'nose' and 'tail' of the Grand Banks, are East Coast policies? Really?

Or, as your comment suggests, are you just so bitter that Atlantic Canadians don't vote the way you like that you're willing to distort the facts.

Posted by: Craig | 2004-10-29 6:59:42 AM

OK then, from the fisheries debacle you have learned that you absolutely cannot trust the federal government to manage your affairs.

However, the endless whining about "Quebec won't do this for us" sounds like a plea for the federal government to, you know, step in and manage your affairs.

Face facts: you have brain-dead, corrupt socialists running the governments of Canada, Ontario, Quebec, and all of the Atlantic Provinces. And the Western Provinces too. None of these clowns gives a rat's @ss about the actual wellbeing of their citizens or anyone else's citizens. What matters to them is money and power. Their money and their power.

If you want to see things improve, vote out all of the S.O.B.s and vote in someone who will let you, your family, and other private individuals take their own private responsibility for their own private lives. If you succeed in taking back your own personal freedom and responsibility from the government, I guarantee you will stop worrying about whether you're getting a big enough royalty cheque from some hydro dam you didn't help build, in some part of the world you never intend to visit.

P.S. if you are a very well connected Liberal or Conservative, you can ignore this advice. Just pray that "your guy" can get in and stay in long enough to get you a cushy job in a government department or crown corporation.

Posted by: Justzumgai | 2004-10-29 8:37:52 PM

Craig, I don't expect to persuade you otherwise. I've listened to more versions of this pseudo-Marxist tirade from Newfoundlanders and other Atlantic Canadians than I care for. The common theme is that everything is always someone else's fault - the poor hapless population is just a collection of helpless souls exploited by Quebec, central Canadians, big business. You might find that most Canadians listen and nod politely as the sins are listed off, but you really shouldn't interpret that as being taken seriously.

We know which way the equalization payments go. We see the porkmeisters at work.

Posted by: Kevin Jaeger | 2004-10-30 6:53:46 AM

"Pseudo-Marxist" is a term more appropriate to describe the purveyors of blank, factually barren dismissiveness who delight in posting on this topic. To those I say: Newfoundland is not a product of socialist welfare-line economics but it is a present recipient of this abominable creation.

Ignorance of history and unfamiliarity with those messy items usually called "facts" make it easy to reject Newfoundland's claims. If a western Canadian has difficulty understanding the geographic extortion of Churchill Falls electricity by Quebec, I suggest contemplating Alberta's oil and gas industry if interprovincial and international pipelines were as forbidden as are interprovincial electrical grids. The federal power of expropriation obtained these pipelines for the petro-industries. This same federal power lies flaccid as far as Newfoundland electricity going across Quebec territory.

Posted by: Barry Stagg | 2004-10-31 7:53:08 AM

As I said, I don't expect to persuade anyone from Newfoundland. The record of Newfoundland's government-led industrial enterprises are not noticeably worse than those of the rest of world - that being pretty much universally catastrophic. Compared to Ontario Hydro's nuclear plans that were undertaken at about the same time as Churchill Falls, Newfoundland's effort looks pretty good - it's lost a lot less money.

But the common thread from cucumbers to the refineries at Come-by-Chance is that the government created boondoggles. See here for a summary of the horror show of Smallwood's schemes (http://www.nextcity.com/contents/spring99/15smallwood.html).

One option would be to stop doing these things. The other is to blame others for the constant exploitation. No doubt Inco's new smelter they have no economic requirement for but the government insists they build will be another humiliating ripoff.

Posted by: Kevin Jaeger | 2004-10-31 10:30:41 AM

Good link Kevin. Educational, but unpleasant - rather like watching a colonoscopy on the Learning Channel.

Is that true Barry? You got shafted by Saint Joey and not by the French Satan?

[[[... Lévesque was prepared to consider Churchill Falls as a joint Quebec-Newfoundland project. Smallwood refused, arguing that it would be unfair to kick out BRINCO, which had brought the project to the verge of completion. Had Smallwood, himself, not been a large shareholder in BRINCO, he may have been more open to Lévesque's proposal.]]]

But really - what's the use of arguing? Have you ever heard a single Newfoundlander advocate separation as a cure for the raw deal they believe they are getting from Canada?

[[[Pottle claims Newfoundlanders have lost their self-respect and become completely dependent on the government to provide industry, jobs, fish, and if all that fails, cash. It's a trend that appears to be so ingrained that Newfoundlanders still have their hands extended today. As Murphy says: "We have people who have been on welfare and associated government assistance for over 40 years. It has become a way of life that is passed from one generation to another, all the tricks needed to get money from the government are known and abused."]]]

But like Kevin said, it is hardly any worse in Nfld that in the rest of Canada. The average Ontarian also believes the Marxist garbage about the wisdom and benevolence of Big Government. But they are only now starting to feel the heat as their private industries die and move away, and it becomes more difficult to ignore the uselessness and corruption of government owned and government controlled industries.

Posted by: Justzumgai | 2004-10-31 6:38:25 PM

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