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Wednesday, 11 September 2013


The Blog Post "WHY DUNDERDALE CAN'T CONNECT" attempts to explain the underlying reasons the Premier is floundering in the Polls.  The Premier, and her Administration are languishing, in third place, having literally dropped off the political precipice.

That July 1st Uncle Gnarley missive concluded that “….the Premier must give herself a defined period, say six months, during which to make the positive connection with the electorate….failing this test, the Premier should call it a day”.  

The Premier is into the third month of this interval, and has been 'gone to ground' for much of the summer.  Her popularity is showing no signs of rebound.    
On Saturday the Telegram ran a front page commentary by its chief editorial writer, Russell Wangersky, announcing: "Premier, it is time to go".

The Telegram’s man delivered the message with the respect and dignity that ought to be afforded a First Minister, but there was no equivocation. Said Wangersky, to the Premier, “Your race is run.  You may not know it yet – you may not even want to believe it – but it’s over”.

Again, on Tuesday, Sept. 10 Wangersky wrote a column headlined "Lights on, nobody's home".  

Today's item is also about the Premier's 'loose ends'. It explains how the outstanding issues could severely harm this Province. They speak to the urgency of why the Premier must provide us clarity, right away.

It would be fine, if the ‘fine mess’ in which the Premier finds herself, were her misfortune alone or just that of her party.  Regrettably, the ‘mess’ is ours; the Premier’s political career is mere detritus. Of greatest importance is what she has unleashed by having prematurely and ill-advisedly sanctioned the Muskrat Falls Project.

Every day the sun rises, another million dollars is spent without the certainty that it is going anywhere, except into a black hole, under a Labrador sunset. Millions more are being committed.

The public are only ‘sceptical’ of that Project, right now, having trusted the Government that it had a firm grip on all the questions of economics, engineering and the law.  If the Premier is not careful, her Administration’s silence, on some critical issues, will soon inspire ‘doubt’; if it continues, ‘fear and anger’ will surely follow.  Newfoundland history is replete with lessons. The Premier would do well to read history; the Sir Richard Squires saga may be a good reference point. 

As the Premier contemplates her destiny, a number of critical issues are playing out.  They have enormous consequences, but they did not appear out of nowhere. The Premier received fair warning, in every case.  In a nutshell, here are the main ones:

1.       The Utility and Rate Board of Nova Scotia (UARB) has refused to sanction the Maritime Link as that Province’s lowest cost option.  All it did was issue an ultimatum, to Nalcor, to deliver up an additional 40% of the power (60% total) from Muskrat Falls (at a price of 5-9 cents per KWh) to allow Nova Scotia to achieve a blended cost of around 10 cents per KWh, flat for 35 years. (Cabot Martin's recent Telegram Article is an excellent expose of this issue).

2.       The Federal Loan Guarantee has not been issued, and in the absence of approval from the UARB for the Maritime Link, the FLG stands little chance of being approved.

3.       Hydro Quebec’s legal challenge, in the Courts of that Province, over water management rights is a ‘show stopper’ for the Project, if HQ’s position is upheld. If you think this view unwarranted, this comment can be found on page 19 of a White Paper entitled, "Incremental Power Imports", prepared by the New England States Committee on Electricity, and just released to the public.  It states, succinctly: “…Hydro-Quebec filed a lawsuit against Churchill Falls that puts the Muskrat Falls project in jeopardy.”  Local critics are not the only ones focussed on the Quebec action. Lawyers, familiar with the court case, believe that the initial court decision and subsequent appeals may run into 2016, or later. 

4.       Court challenges by other groups may also derail the Project.

5.       The millions of dollars, now being spent and committed, by Nalcor, are monies paid directly out of the Provincial public purse; billions will have to be borrowed by the Government, and added to the public debt, in order to keep the machinery moving.  

6.       In the absence of the Federal Loan Guarantee (FLG), and clarity of the legal challenges referred to, there is no certainty that the Provincial Government will be capable of raising the billions of dollars necessary to complete the Project.  Indeed, even if the money is found, in the absence of a favourable Quebec court decision, on water management, the amount of firm power from Muskrat Falls will only be enough to replace the Holyrood Generating Station.

By what measure would any rational person suggest this Province should be advancing billions of dollars to this megaproject?

What must be done?

In the coming few days, the Premier will need to ignore her own political problems and display only a concern for the public interest.  She must do so, personally, squarely in front of the cameras. 

A province-wide address is essential now, to deal with each of these issues and to provide clarity to the problems her unwise Administration and a naïve and foolhardy Nalcor have created.

We need to know how her Administration’s plans to avoid financial turmoil in the face of these challenges.  Perhaps, the Premier plans to capitulate to the blackmail tactics of the NS UARB, in the hope that the Federal Government will ignore all the legal issues, and get her off the hook, at least for now.

Perhaps, she thinks Newfoundlanders won’t be angry if they pay for Muskrat Falls, for all of the cost overruns plus 80% of the overruns on the Maritime Link.  (Sir Richard Squires’ narrow escape, from the Colonial Building, really does make interesting reading!)

A Provincial election now dominates Nova Scotia politics.  A change of Government may ratchet up the price of, or delay, that Province’s participation.  The current NS Official Opposition Party has vigorously opposed the deal.

It will not suffice that, as Wangersky said of the Premier’s communications strategy with the electorate: “If you need to know something for your own good…we decide when and how to tell you”.  While sanction of Muskrat Falls was reckless, the Premier would, again, be unwise to let public ‘scepticism’ grow into ‘doubt’, or worse. She needs to explain how the Government plans to deal with the very real problems facing this Project.

At the very heart of all the issues, is this fundamental question: Premier, will you continue to spend every cent the Government can borrow and will you keep on spending until the money runs out?

The people of the Province need clarity, Premier.  If you can’t face us with some clear answers, please muster the courage to send out a Press Release informing us you have shut the Project down.