I rise today to give honourable members an update on the status of negotiations with Quebec to develop the Gull Island Hydro Project in Labrador.

On August first, following several months of discussions with officials from the Government of Quebec, Premier Landry and I announced in Halifax that we had agreed on the fundamental principles that would underlie any deal that would be reached to develop the $4 billion dollar, 2,000 megawatt hydro project at Gull Island.

First, we agreed that Newfoundland and Labrador would own 100 per cent of the project, a marked difference from the existing Upper Churchill Project, which is owned 2/3 by the province, 1/3 by Quebec.

Second, we agreed that there would be a provision outlining that the price we get for selling our power would be reflective of the value of electricity as it changes over time - in other words an escalation clause as it is often referred to, which did not exist in the Upper Churchill contract, must be part of any new agreement.

Third, we also agreed that Newfoundland and Labrador would have the right to recall power for use in the province, should it be needed for domestic, commercial, or industrial purposes.

Fourth, Premier Landry and I agreed that we would maximize economic and employment benefits for both Newfoundland and Labrador and Quebec.

Fifth, we recognized the importance of partnering with the Innu, and of developing the project in an environmentally-sensitive manner.

Since we announced those principles in Halifax, officials have been negotiating the detailed terms that would put them into effect. We have made significant progress.

We know this is a large $4 billion investment for our province, and we are taking what time is needed to negotiate terms which provide the right balance between minimizing financial risk for our province and maximizing economic returns for our people.

Today I reaffirm our commitment to the principles announced in August. If we reach an agreement, we will report the full details to the people of the province. In our continued spirit of openness and accountability, we will ensure our residents have ALL the facts.

We also commit to a full debate, in this legislature with an opportunity for a free vote on such an important issue.

The government that I lead will not shy away from progress on the economic front, we will not live in the past. We recognize the value such progress has on maintaining good social programs in our province. This year alone we have seen the sanctioning of the White Rose offshore oil project; the start of the Voisey�s Bay Project; and the resolution of the offshore boundary dispute with Nova Scotia - to mention a few. And there will be more.

I am confident that we will conclude negotiations in the near future, one way or another, on Gull Island, maybe even this week. I look forward to the opportunity to update honourable members at that time.

2002 11 18                                        2:10 p.m.