François Legault is preparing to leave for Saint John of Newfoundland to undertake “negotiations” for a win-win energy partnership between Quebec and Newfoundland and Labrador (NL). -I.). Will it succeed where its predecessors failed?
The Quebec Premier risks receiving a hostile reception in the Avalon Peninsula. In fact, more than one Newfoundlander cannot bring himself to accept the idea that Hydro-Québec buys almost all of the energy produced by the Churchill Falls generating station, with a nominal capacity of more than 5,400 megawatts, at a derisory cost — 0.2¢ per kilowatt hour (kWh) — under a contract entered into on May 12, 1969.
In The Telegram, Gabe Gregory denounced no later than Friday that Quebec eats the wool on the back of T.-N.-L. in “harvest[ant] tens of billions of dollars from the Churchill Falls contract” and “prevents[ant] development” of Labrador for more than 50 years. The arrival of François Legault would be neither more nor less than an “insult to Newfoundlanders”, argues the resident of St. Philip’s.
“A “deal” in the 1960s”
The Premier of Newfoundland and Labrador, Andrew Furey, makes a point of recalling from time to time the affront suffered by the Newfoundlanders, who never managed to renegotiate the contract between Churchill Falls (Labrador ) Corporation Limited (CFLCo) and Hydro-Québec in 1969. “You could say that we are a little humiliated [nous] also, to have lost Labrador, Quebecers. I say that every time Andrew Furey brings it back to me, ”said Mr. Legault on the sidelines of a meeting of elected CAQ members three weeks ago.
The fact remains that Quebec has used an “extremely dominant position” to “extort – we can say – outrageously favorable conditions in this contract”, maintains the holder of the Chair of management of the sector of the energy of HEC Montreal, Pierre-Olivier Pineau. “It’s not glorious”, he adds, while specifying not to be “the arbiter of history”.
Visiting professor at the University of Ottawa Jean-Thomas Bernard disagrees. According to him, CFLCo was “not at all, not at all” deceived by Hydro-Quebec, which assumed the risks associated with the Churchill River development project and the vagaries of electricity prices on the market. At the time, many swore on cheap oil and nuclear power, not anticipating future price shocks, says the expert, having started his teaching career a few months before the oil shock of 1973.
In any case, François Legault does not have the 1969 contract on his conscience. “When it was built in the 1950s, they were very happy to have Hydro-Québec as an expert and as a client. What we got for the price is at cost, I agree, but it was a good deal in the 1960s. When you look at it today with the price of electricity, to pay a quarter of a cent per kilowatt hour [sic] when, well, the wind projects, the dams cost 5, 6, 7, 8 cents, they look at that and they say to themselves… They challenged the contract twice and they lost twice, well”, has he recalled.
That said, Quebec will not be able to avoid a discussion on an increase in the cost of the kilowatt hour post-2041, before discussing a possible increase in the production of electricity from the Churchill Falls complex or even the construction of a dam at Gull Island to the east, agrees Mr. Legault, who aims to impose Quebec as “the first state in North America” to drive out greenhouse gases (GHGs) and to “develop the ‘green economy’: ‘green batteries’, ‘green’ aluminium, and ‘green’ steel…
Become good neighbours?
Professors Pineau and Bernard both argue that a “good deal” on energy, for both Quebec and NL, is possible. “If there is a political will,” says Mr. Pineau of HEC Montréal. “It is certain that we will have to pay a price which is closer to the true value of this energy. We are not going to redeem the advantages and the humiliation, but we will pay a higher price,” he adds, pleading for Quebec’s participation in energy corridor projects such as the “Atlantic Loop”. “We have much more to gain from developing a good collaborative relationship with our neighbours. »
That said, neither he nor Professor Jean-Thomas Bernard thinks that Quebec and Newfoundland and Labrador are “condemned to get along”. In the absence of a new contract, T.-N.-L. could attract a hydrogen producer or a “state-of-the-art aluminum smelter” to its territory, or even dream of a transatlantic electrical link as the most seriously academics in the world propose. “Labrador still has a few cards it could play,” Pineau points out.
For its part, Quebec could also manage on its own with “a lot of energy efficiency”, wind farms, solar parks and “perhaps dams”, but would be frustrated in its ambitions to export green electricity. , he suggests. “What we export from Quebec is what we import from Labrador, roughly speaking. Quebec is not an electricity exporter. Quebec is a trader of electricity, we buy at 0.2¢ on Labrador and we sell at 4¢US in the United States. »
In short, 18 years from the end of the controversial contract, Quebec has the time it needs to turn its back on Newfoundland and Labrador and launch wind, solar and hydraulic projects on its territory. “We are able to build dams before 2041,” warned Mr. Legault on January 27, while busy finding a time to meet Prime Minister Andrew Furey.
“He is ready to start negotiations. I am ready to start negotiations, said Mr. Legault. We are complementary, we are made for each other. »