Inhabited for more than two and a half centuries by a feeling of injustice, even oppression, Quebecers find it hard to imagine that they can be perceived as exploiters.
In the west of the country, we have the reputation of being a bunch of parasites living on the hooks of the federation, who have the nerve to spit on the “dirty energy” which feeds equalization.
In the Maritime provinces, the contract that Hydro-Québec signed with Newfoundland in 1969, valid until 2041, has rather earned us the reputation of looters without faith or law, with whom it is better to avoid making a pact under pain of to pay the price.
Former New Brunswick Premier Shawn Graham learned this the hard way in 2010, after he had the misfortune to reach an agreement in principle which provided for the sale to Hydro-Québec of most of the company’s assets. NB Power, founded in 1920, for $4.75 billion.
New Brunswick business circles were largely in favor of it, but public opinion saw things differently. For months, the fiery Premier of Newfoundland Danny Williams, supported by his Nova Scotia counterpart Darrell Dexter, had crisscrossed the country to denounce the monopoly he accused Quebec of wanting to impose to the detriment of his province, from all of the Maritimes and even from Ontario.
Graham’s Liberals, who appeared to be heading for easy re-election, saw their voting intentions drop sharply in favor of the Conservatives, who were actively campaigning against the sale of NB Power. In the September 27, 2010 election, the Liberal Party lost more than half of its seats, and its leader immediately resigned.
Some see the considerable benefits that Quebec derived from the electricity produced at Churchill Falls as a kind of compensation for the loss of Labrador, which the London Privy Council had ordered ceded to Newfoundland in 1927.
Since the explosion of energy costs following the oil crisis of the 1970s, Newfoundlanders have been crying robbery. While the sale of electricity produced at home generated profits of 28 billion for Hydro-Quebec, they themselves drew only 2 billion. No less than a third of Hydro-Québec’s profitability is based on this contract.
In 1969, however, Quebec had taken considerable risks, which made it hesitate for a long time, by embarking on this project that Newfoundland had neither the expertise nor the financial means to carry out, not to mention a position geography which prevented it from exporting this electricity. Hydro-Québec’s participation was a condition sine qua non, and Newfoundlanders were convinced they were getting a great deal.
The failure of their repeated attempts to reopen the contract only increased their frustration. In 2018, the Supreme Court put an end to their hopes by rejecting the argument of the “theory of unforeseeability”, which allows in some countries to force the renegotiation of a contract when unforeseen events make it too expensive for one of the parties.
Quebec’s Minister of Natural Resources at the time, Jonatan Julien, said he saw the decision as the end of the dispute and an open door to new collaboration with Newfoundland, but he categorically ruled out reopening the contract before the deadline. of 2041 in order to facilitate the discussion.
The Legault government is now open to this possibility. A new partnership, particularly for the realization of the Muskrat Falls project, would considerably facilitate the transition to a green economy.
The current Premier of Newfoundland, Andrew Furey, is well aware of the great mistrust of his fellow citizens towards any collaboration with Quebec and he will have to convince them that, this time, they have the upper end of the stick, even whether the sums already committed to Muskrat Falls have brought his province to the brink. You will have to be patient and have the delicacy not to contradict him.
After a first one-on-one with Mr. Legault, in August 2021, Mr. Furey said: “I can already imagine people dusting off their keyboards to write panic messages”. He should have said out of anger.
Above all, do not expect that the new meeting between the two men will lead to any agreement in principle. Even if they themselves were convinced that everyone would benefit from it, the wounds are still too raw to rush things. Negotiation will be as much a matter of psychology as of economics.
It will be imperative to involve the Innu in the discussions. In 1998, they literally blocked the way to an exploratory meeting between the two prime ministers at the time, Lucien Bouchard and Brian Tobin.
In 2021, they filed a lawsuit against the governments of Canada and Newfoundland and Labrador, which had reached an agreement on the financing of the Muskrat Falls project, accusing them of having taken “direct, deliberate and decisive” to deprive them of the benefits that had been promised to them. They will also have to be included in a possible partnership.