On Monday, April 1st, the Premier announced in his own words “an agreement that ensures Newfoundlanders and Labradorians are the principal beneficiaries of their offshore resources, strengthens how those resources are developed through joint management, and will also achieve electricity rate mitigation.”
How “rate mitigation” for the Muskrat Falls project found its way into a deal about the Atlantic Accord, as former Premier Brian Peckford noted in his commentary, is baffling
Worrisome, too, is that Ball equates the “revenue stream” associated with Canada’s ownership stake in Hibernia as fulfilling the “principal beneficiary” principle, which he touts as a great victory.
He offered that context in the press briefing, and again on Wednesday evening in his “Here and Now” interview. He seems unaware that the Accord Acts include management, royalties, local benefits and other rights. The full context is ‘as if the resources are on land’. “Principal beneficiary” has a wide meaning and long-term implications; none were a priority for Ball. The subject is pushed off to be negotiated over the next two years — not by March 31st of this year.
Only the exigencies of electoral politics are front and centre in this deal. Ball has proven that Ottawa can play the boonies like a fiddle. He has been bought for a song.
Not surprisingly, Peckford described the revenue payments as “meagre”. $2.5 billion over 37 years — to 2056 — equates to $67 million a year, fixed. Truly, that is chump change given the amount of revenue Ottawa receives from multiple sources engaged in the NL offshore oil business. Consider, too, that NL is ineligible for Equalization Payments. Brian Tobin, for god’s sake, did a better deal selling “Term 29” back to Ottawa. It was forgotten the next day!
There are plenty of ironies here, especially for those of us with long memories. The Liberals are now doing in Government what they did in the 1980s in Opposition — which was to undermine the very idea of an Accord that puts jurisdictional rights and roles for NL above tinkering by Ottawa.
A more recent irony is that the Tories used a “back-end loaded” scheme to make power rates cheaper (relatively) in the early years to make the project “saleable”. Ball’s Accord has the revenue stream “front-end loaded” to sell the deal, too. If the Treasury doesn’t break earlier, after 2030 ratepayers will surely wonder if we are all charlatans for having bought it in the first place.
Of course, Ball’s and Ottawa’s money deal is not a serious program of national wealth redistribution. It is only a “scheme" to delude today's public. If it gets the Government(s) through an election, dishonesty will have won again!
Admittedly, the Ball Government may have been warned about the growing debt level and the risk of credit downgrade. The Bond Rating Agencies will be pleased with any reduction in the Net Debt, which – through creative accounting – will reflect Ball’s paltry deal. On that account, it will be more than interesting to see what the Federal Finance Minister says about rate mitigation this Friday.
That said, the response of a wise Premier to Ottawa’s fiscal games should have been an order to his Finance Minister to bring down a Budget based on fiscal prudence. Instead Ball caved to Ottawa – again. The local spending problem is as intractable as it ever was, too.
While former Premier Peckford’s analysis was spot-on, an even greater deficiency than the meagre monetary sum or any attempt to strengthen the Accord’s original design is the complete absence of transparent effort by Ball to deal with the Federal Government’s new environmental assessment approval process for large natural resource projects. The process captures offshore oil exploration. In a very serious way, it threatens the entire future of the province’s offshore industry.
Former NOIA president Bob Cadigan has spoken publicly on this issue and conducted a very insightful interview on the CBC Morning Show on Wednesday morning. (The CBC should make sure that Cadigan’s remarks are easily found.)
Cadigan warns that the proposed new environmental legislation could delay exploration and development licences and, in the case of exploration, this is already happening. Cadigan is not only right he may be understating the enormity of the problem.
Already, exclusion zones have been designated for oil and gas exploration, including in the Laurentian Basin. That, I suggest, is merely the thin edge of the wedge. Once this legislation is enacted into law, every interest group in the country will be enfranchised to oppose an exploration or development permit. If you think Alberta is the solo target, the NL public had better get ready for their own battle royal.
Think it alarmist, if you will. But the self-appointed environmentalists are coming to shut down the NL offshore. It will happen sooner than you think, and it will seem just as absurd as Paul Watson, or that other Paul’s protest of the seal fishery. And you probably remember how successful WE were then.
To one of Cadigan’s points, some of those people, myopic and uncompromising, are already helping shape federal environmental policy. They constitute some of the bureaucrats influencing the legislation.
We have seen what little progress the Federal Government has made for Alberta pipelines. Between the Courts and the hundreds of interest groups, there will be no rescue for a weak provincial government — perhaps any government — when new national legislation gives them grip.
The Premier is oblivious to all those realities.
Ball’s Accord is the deal of a charlatan. The public should tell him exactly that.