Premier Danny Williams
Canadian Club of Ottawa
June 9, 2010


Please Check Against Delivery

Head table guests and ladies and gentlemen. Good afternoon and thank you all for the opportunity to be here today and to share my thoughts with you.

And thank you for indulging me to play that short video on our tourism advertising campaign. It is a campaign that we are incredibly proud of as a province and of course, I would be remiss if I did not attempt to encourage you to come east and spend a few of your hard earned dollars.

In an address last week in St. John's, the President of Air Canada said that Newfoundland and Labrador was the only place that didn�t see Air Canada cut service due to the recession in 2009. Indeed, they actually expanded service.

So clearly, we are a preferred destination that you must experience for yourself.

As Canada's youngest province, I am proud to say that in the past half decade we have undergone a dramatic transformation that has been the result not only of our petroleum resources; but of a new approach to governance and a new attitude that has been embraced by our people.

And during these years of historic change, I have been incredibly privileged to lead Newfoundland and Labrador - one of the most innovative, creative and uncomplicated places in the world.

This transformation has been marked by a turn around in our financial fortunes, dramatically reduced provincial debt and unfunded pension liabilities, substantially lower tax regimes, progressive social policies that are being hailed and emulated across the country, and of course a whole new approach to the development of our natural resources.

And not to be forgotten is the most remarkable transformation of all; our change in status from a proverbial "have-not" to a "have" province. I am not here to take personal credit for that achievement but on behalf of all of my predecessors who share in our pride of this new found status.

Even during the extraordinary recession that hit the globe, Newfoundland and Labrador's economy stood the test and independent researchers confirmed that our consumer confidence was possibly the highest in the western world.

When the recession hit, unlike most we were ready for it. In fact, Global News said that Newfoundland and Labrador weathered the recession better than any Canadian province or territory. We did this by taking our already aggressive infrastructure strategy from four years earlier and expanding it. "Stimulus spending" was well underway in our province long before it became the trend of 2009.

A five billion dollar infrastructure plan in a province of our size is substantial to say the least, and has not only helped to create jobs and boost consumer confidence; it is also rebuilding communities so that we have the economic foundations necessary to succeed.

As I said earlier, we have also reduced net debt by more than 33 per cent over a four year period which gave us the flexibility to withstand an economic downturn.

For the first time in decades, we have seen a reversal of outmigration and experienced population growth.

Our housing market has been so robust that prices are at an all time high with housing prices over the past year up 16 per cent. Car sales are also up by more than 30 per cent this year.

Last year, retail sales and labour income increased; and private capital expenditures totaled more than 4.1 billion dollars. The most recent Statistics Canada report projects capital investment growth of 23.0

per cent in 2010�the strongest in the country.

Of course, offshore oil and gas activity has provided a particularly major boost during the last six years.

My vision for that industry has always been quite simple, if not sometimes controversial: and that was to see government at the table as players so that we could work hand in hand with our industry partners in helping to shape our province.

As Fred Shero, former coach of the Philadelphia Flyers said, if you don't want criticism, "say nothing, do nothing, be nothing."

Well, we went through some tough times and some hard nosed negotiations and criticism, but this process had a result that was well worth it for all concerned and this includes mutual respect, admiration, cooperation and partnership.

Not only did we as a government achieve an historic and ground breaking agreement worth billions of dollars and thousands of jobs for the people of the province in the Hebron offshore development; we also proved to our critics that Newfoundland and Labrador is indeed a great place to do business.

We have also signed off on agreements on the extension of existing offshore fields at White Rose and Hibernia and in all three of these agreements the province has taken an equity stake and increased royalties and benefits for our people.

Worthy of note is that upon completion our current oil and mineral projects will result in net revenues after expenses in excess of 225 billion dollars for Canada. That isn't peanuts folks.

There is a renaissance in Newfoundland and Labrador - a feeling of pride, energy, optimism, success and recognition that we are a significant contributor to Canada financially, culturally and personally. It is tangible; it is real; and it is based on the confidence that comes from self reliance.

As Robert Browning said, "Tis looking downward that makes us dizzy." In Newfoundland and Labrador we are holding our heads high.

And for all of the wonderful things I can say about our province, one of our greatest natural assets is our renewable energy.

As an energy warehouse, Newfoundland and Labrador is clearly a jurisdiction that can help our neighbours address real problems related to energy supply and demand, and climate change targets that require realistic and practical solutions.

We currently export the output from more than 5,000 megawatts of stable, clean, renewable hydroelectricity and in total, we have more than 18,000 mega watts of developed and ready to be developed renewable power.

And of course included in this is 3,000 megawatts of undeveloped hydroelectricity in the Lower Churchill project. It is without question, the best undeveloped large-scale green hydroelectric asset in North America.

These 3,000 megawatts could reduce green house gas emissions by up to 16 million tonnes, the equivalent to taking 3.2 million cars off the road.

This is enough power to light up one and a half million homes and greatly assist Canada in reaching its climate change targets for 2020.

It is an outstanding green project and low hanging fruit in the world of clean energy. And I can assure the people of Ontario this project would greatly benefit consumers in this province. Our government�s crown corporation, Nalcor Energy is working diligently to move this project forward.

And we are looking at a couple of transmission options: the Quebec route - straight through Qu�bec into markets in Canada and the US; and the sub-sea Maritime route which would bring our power into Nova Scotia, New Brunswick, PEI and US markets.

It all sounds quite simple and straightforward, particularly in light of open access regulations which are a critical and fundamental tool for a competitive marketplace.

Newfoundland and Labrador on the face of it would be ideally positioned to be an energy powerhouse and a welcome competitor in the marketplace. Well, not so simply due to Hydro Qu�bec.

Now I know that some in mainland Canada are absolutely sick to death of hearing Newfoundland and Labrador complain about how the province of Qu�bec took advantage of us on the Upper Churchill. It is a more than one and a half billion dollar loss that we feel every year; we would have been a have province decades ago.

And that is why it is such a bitter pill to swallow that they are now attempting to once again keep our province down. And folks, it is time that the rest of this country listens up and understands why this is not just about Newfoundland and Labrador.

The Canadian Club of Ottawa's mission statement says this is a dynamic forum to explore issues that matter most to Canada; and a place where people see context, perspective and a deeper level of understanding. So hopefully, I will bring that to the table today.

Our province's long standing issue with Qu�bec is about one province's actions purposefully working to deny economic progression of the whole of Eastern Canada, and that most definitely includes Ontario.

To wheel our power through the Qu�bec route, Nalcor Energy rightly took the appropriate steps under open access rules and applied for transmission service through Hydro Qu�bec Trans�nergie or the R�gie � the independent regulatory body appointed by the Qu�bec government.

By way of explanation, the rules of open access mean that we request access, pay a fair rental to the transmission owner for use of the transmission infrastructure and we also pay for any upgrades which are not covered in the basic usage fees.  And in theory, the R�gie should treat all parties equally.

Nalcor and our province have endured a more than four-year application process in Qu�bec - a process that should have taken about nine months. Also worthy of note is that while our applications were grinding through the Qu�bec bureaucracy, Hydro Qu�bec's own projects were flying through. But we were patient because we believed in following due process.

Well, after four long years, we were hopeful that the R�gie would rule on our complaints against Hydro Qu�bec and make a decision that was fair and equitable and in accordance with established rules.

This would finally allow Newfoundland and Labrador to transmit our Lower Churchill energy through Qu�bec.

Instead, the ruling of the R�gie once again demonstrated that province's bias, arrogance and discriminatory business practices towards our province.

The blatant disregard of the R�gie on the basic principles of open access and non-discrimination was staggering. The arguments put forward by Nalcor were sound, legitimate arguments that should have been accepted.

Instead, this Qu�bec regulatory body handed down the most biased decision I have seen in my nearly 40 years as a lawyer. It ignored express factual evidence; it ignored established principles of open access; it breached principles of fairness and natural justice.

Furthermore, it supported suppression of critical evidence; it contradicted its own prior decisions; and it engaged in obvious misinterpretation with no basis in civil, administrative or common law.

In order to find a way to deny fair access to Newfoundland and Labrador to its transmission lines, it rendered a decision that was so absurd it was frankly embarrassing to Qu�bec.

And in doing so, it revealed the lengths to which Qu�bec will go to implement its agenda to deny competitive power to its fellow provinces and the rest of North America. Its strategy is to delay the regulatory process, cut off access to markets, make costs prohibitive, fully book existing capacity, while signing prospective customers to long term contracts and neglecting to provide an impartial appeal process through a truly independent regulatory body.

Does anyone really think that it is a coincidence that the very day after we filed our transmission applications into New York and New England, Hydro Qu�bec filed 1,200 MW applications into New York and New England over top of ours?


And then while our applications got routed into this 4 year process, their transmission applications were approved by the R�gie, and service agreements were executed by March of 2009.

Two days ago, an article appeared in La Presse confirming our belief by stating that since 1997 the R�gie has not often made rulings contrary to the interests of Hydro Qu�bec and the CFIB added that "a well informed person would have reasonable doubts about bias with regard to the Energy Board."

 

The irony that should be lost on no one is that Qu�bec promotes itself on the international stage as a leader in clean, green energy solutions yet they are doing absolutely everything in their power to ensure that the best green project in North America is shelved to protect their own market dominance.

Further, Qu�bec promotes itself as the voice of advocacy on free trade, in particular with the European Union and internal free trade domestically. The R�gie decision and the political actions of that province demonstrate that Qu�bec believes in free trade only when it benefits Qu�bec.

Canada has set 2020 reduction target for emissions which will be difficult to fulfill and the Qu�bec Government has the gall to embarrass and criticise Canada in Copenhagen for not dealing with climate change while at home its policies deliberately block major green solutions.

Qu�bec's self interest is harming the provinces, the nation and our country's international reputation.

Not only have I witnessed first hand Qu�bec's obstruction of the Lower Churchill, I have personally seen that province thwart the noble and sound economic goal of a national energy grid. This concept would not only utilize the clean, renewable hydro power of Newfoundland and Labrador but also of the North, Ontario and Manitoba.

It would also reduce greenhouse gas emissions and firm up solar and wind alternatives, and provide healthy competition.

Hydro Qu�bec has also locked up existing inter-tie capacity into Ontario, preventing others from competing with them in the Ontario marketplace.

This allows Hydro Quebec to purchase Ontario�s surplus power at a pittance in the middle of the night when demand is down, then turn around and sell it back to the people of Ontario for 4 times that price in the day when demand increases and is at its peak.

Simply put they buy your power cheap, store their own power in their reservoirs then resell it back to you for a premium.

Aside from the direct market and environmental value that the Lower Churchill could bring to Ontario, it also has the potential to create thousands of green jobs for this province. The physical construction of the Lower Churchill Project will create substantial amounts of business and employment opportunities which complements Ontario's strategy of building a manufacturing base that is linked to a green economy.  

This project is expected to generate 80,000 person years of employment.  We will be making billions of dollars of investment in heavy civil work and Ontario could benefit significantly by supplying such things as steel, portland cement, fuel as well as industrial and electrical equipment.

And so, denying the development of the Lower Churchill and a national energy grid means the loss of industrial benefits of several billions of dollars to Ontario. All sacrificed to protect Qu�bec market dominance and anti-competitive practices. This country needs to stand up and take notice.

The further irony of course, is that while reaping billions from our Upper Churchill, Qu�bec also receives approximately 17 billion dollars annually in major federal transfers. In 2010-11, Qu�bec alone will receive almost 60 per cent of the total equalization pot for all provinces.

And just what is Qu�bec doing with all this revenue? They are giving tax breaks, reducing electricity rates, funding the best child care programs in the country and the lowest tuitions for post-secondary students for only Qu�bec residents.

And Canadians are paying for Qu�bec satellite offices � or mini embassies - in approximately 26 countries including the cities of Barcelona, Taipei, Munich, Mumbai, Vienna, Santiago and Damascus to name just a few.

A recent study by the Montreal Economic Institute indicates that Hydro Quebec provides a seven billion dollar subsidy to Qu�bec electricity consumers, resulting in a rate that is 40 per cent less than Moncton, Halifax, Toronto and Calgary. This is a policy which provides less income to the Government of Quebec resulting in a greater need for contributions from the rest of Canada.

In 2008, Qu�bec made 2.3 billion dollars from the Upper Churchill project while our province made approximately 50 million dollars. Power which is bought from us by Hydro Qu�bec is flipped by them and sold on average for 36 times more than what they paid for it.

The contract was for 44 years with a 25 year renewal at a lower rate from 2016 to 2041. It is the equivalent of selling 48 million barrels of oil at only 1.60 a barrel.

It sounds unbelievable, yet that is the reality our province has been facing for the past forty years. And despite numerous entreaties to renegotiate a fairer deal, Hydro Qu�bec will have no part of it.

The gross inequity of this agreement cannot be denied. It is without a doubt considered the biggest loss of resources by our province; in fact, I would venture to say there are no other similar agreements of such a disproportionate magnitude in our country.

On a per capita basis, this loss to Ontario would be the equivalent of approximately 38 billion dollars annually.

The shock for me as provincial leader is the sense of greed, arrogance and entitlement displayed by Qu�bec, after "milking Newfoundland dry" in the words of a national newspaper. This attitude evolves from their assumed ownership of Labrador evidenced by their continued use of inaccurate maps on their official government web site.

These maps unabashedly include Labrador in Qu�bec's territory, contrary to the 1927 decision of the Judicial Committee of the Privy Council and Newfoundland and Labrador's Terms of Union with Canada.

Can anyone deny our outrage and desire to see an end to this imperialistic attitude and I-can-get-away with anything approach?

As Sir Winston Churchill once said, "If we are together, nothing is impossible. If we are divided, all will fail."

I firmly believe in the adage that a rising tide lifts all boats. And I wish for nothing more than to see all provinces succeed.

But I do have a very serious problem with one province consistently being the beneficiaries of substantial federal government assistance, while at the same time reaping an inordinate and extraordinary benefit from my province and then to add insult to injury, doing everything in its power to inhibit our moving forward.

The political reality is obvious but no one wants to say it. About a year ago, Jeffrey Simpson addressed it and I contacted him to acknowledge that he got it loud and clear.

Qu�bec gets its own way because it has achieved the political trifecta. Their provincial special interests are protected by their influential Ministers in the Federal Government, the Provincial Government of Qu�bec and the Bloc - a party that has a significant role in the balance of power which prioritizes issues only of concern to Qu�bec.

The strength of their strategic triangle is premised on the perceived necessity of their support for national governance.

This triangulation results in the strangulation of the individual interests of other provinces that don't fit the agenda of Qu�bec. This is not good for us individually, provincially or nationally and it creates a serious inequity in our great country. The reality is the tail wagging the dog. And it must stop.

I recently had an Ottawa-based columnist, Don Martin, come to town for a chat and he made the comment that I seemed to have mellowed out a little. And shockingly, yes folks, there is a kinder and gentler side to me!

I told Don, I enjoy the part of my job where I just get to run the province, developing policies and plans that move us forward as a people. I don't spend my time looking for a fight!

But as I also told him, as much as I enjoy that side of it I just as much enjoy the opportunity to stand up and be heard. To stand up and be counted on issues that are important not just to Newfoundland and Labrador but to the country as a whole.

Newfoundland and Labrador's place in this country is very clear. We contribute financially with substantial revenue streams flowing to the Federal Government from our natural resources.

We contribute culturally with our extraordinary talent, starting the day with Seamus O'Regan, ending it with Rex Murphy and being entertained in between by The Republic of Doyle, Rick Mercer and 22 Minutes.

Our brightest and best are contributing to some of the most successful companies and news organizations in the country, like our own Heidi Bonnell and Max Keeping.

We are unique. We are innovative. We are resilient. And we have firmly established our place in this country as Canada's youngest and coolest province.

As for the province we aspire to be, that too is equally as simple. We aspire to be a province that continues to contribute; that continues to be self reliant. We are a province that aspires to share not only our energy resources for our own benefit; but to benefit our brothers and sisters in this great federation.

We want to create jobs; we want to help reduce green house gasses; we want to ensure Canadians have competitive power rates; we want to spur economic growth in other provinces.

Newfoundland and Labrador aspires to get the respect it deserves and to be a province that Canada is proud of. Let's work together to make that happen.

Thank you.


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