Mr. Speaker, the poet Robert Frost penned the very eloquent words: "Something there is; that doesn't love a wall; that wants it down".
This is a sentiment with which Quebec's new premier is starting to agree. He wants to mend and remove broken fences, to heal old wounds, to show that Quebec is a good neighbour and that it would be a good trading partner, as a sovereign country of course. However, one fence which Quebec and Labrador have between them which needs major repair is the Churchill Falls contract.
Twenty-seven years ago a 65-year contract was signed between the Churchill Falls Corporation of Labrador and Hydro Quebec. The contract requires that Newfoundland sell cheap power to Quebec from the gigantic hydroelectric project on the Churchill River until the year 2041 at pre-1973 oil prices.
It is an extremely unfair contract. Newfoundland earns $20 million each year from Churchill Falls' electricity sales. Hydro Quebec, on the other hand, makes a staggering profit of $800 million from the resale of Newfoundland power to New England. That is a difference of $780 million.
The people of Newfoundland and Labrador are extremely upset and even embittered over the contract. This is a matter which dates back long before the days when the Reform Party was in politics. It was a matter of great concern and sadness before I ever thought about politics.
It is an unjust contract. It is an unfair contract. It is an oppressive contract. Newfoundlanders know they erred in signing it. They realize that Quebec has wilfully and knowingly taken advantage of them. Quebec knows that too.
When Newfoundlanders suffer, Canada suffers. The $780 million that Newfoundland and Labrador lose to Quebec every year is nearly equal to the amount that Newfoundland gets in equalization payments from Ottawa. The Churchill Falls contract is extremely unfair to the Canadian taxpayer as well.
If Quebec wants to be a good neighbour, if it wants to build good fences rather than poor ones, if it wants to show the world that it can be trusted, it will come back to the table and renegotiate the
contract with Newfoundland and Labrador. We challenge the premier of Quebec to make this commitment.
Newfoundland is a have not province. It suffers from the highest unemployment rate in the country. Over 20 per cent of the population is unemployed. The cod fishing industry is practically non-existent and its economy is in a complete shambles.
If a fair contract had been signed, or if the federal Liberal government had intervened to ensure that Newfoundland received an equitable share of the profits from this megaproject, the economic situation in Newfoundland would be quite different today. There would be jobs. There would be growth. There would be prosperity in Newfoundland today.
Newfoundland has been unable to finance a power line to siphon off some of Churchill's power to the island. It has also been unable to finance the construction of a second Labrador power plant on the lower Churchill River, estimated to cost $11 billion. This project would create 24,000 construction jobs. Newfoundland also cannot afford to develop a smelter in the Voisey Bay, a project that would create hundreds, if not thousands of jobs.
The federal government promised to create jobs, jobs, jobs. There is no place in Canada that needs jobs more than Newfoundland. However, for the last 27 years the federal government has failed to act on behalf of Newfoundlanders concerning this matter. It has failed to intervene and to guarantee one of the poorest provinces in the country its fair share of profits from the direct sale of power to the New England states.
If Quebec does not want to be a good neighbour, if it does not want to build good fences and voluntarily agree to renegotiate the Churchill Falls contract, then we challenge the federal government to stand up for the people of Newfoundland. We challenge the federal government to lower internal trade barriers in Canada and to push Quebec to the negotiating table.
Quebec has refused to allow Newfoundland to build its own power lines on Quebec soil. Consequently, Labrador cannot develop the lower Churchill Falls hydroelectric plant. Quebec also has refused to allow Newfoundland to use its transmission lines to transmit electricity to markets in other parts of Canada or the United States, to join in the North American power grid.
Clearly Quebec has backed Newfoundland and Labrador into a very tight catch-22 position. It cannot develop the untapped resources of the lower Churchill Falls unless it gets an energy contract. It cannot get a contract without a way to transmit the electricity to the buyer.
Quebec has established a barrier to the free movement of electricity from Newfoundland to places outside Quebec. If Quebec does not want to be a good neighbour, if it does not want to mend walls with Newfoundland and Labrador and voluntarily agree to break down this trade barrier, then the federal government must move to have the trade impediment removed. This would lead to prosperity, not only for Newfoundland and Labrador, but increased prosperity for Quebec as well.
In western Canada natural gas, electricity and oil freely cross provincial boundaries. This neighbourly approach to trade creates a harmonious relationship among western provinces and produces greater wealth for all the provinces involved as these provinces have free access to each other's markets.
If Quebec would be this kind of good neighbour, Labrador and Quebec would both prosper, shoulder to shoulder into the 21st century.
By this August there is supposed to be a second draft of the internal trade agreement to be signed. Unfortunately it is not in Quebec's economic interest to sign the internal trade agreement. Quebec would have to give up some of the benefits it receives from Churchill Falls contracts. It is unwilling to do this so it will not come to the table.
It is important for Ottawa to finally take a stand for the people of Newfoundland and Labrador. It needs to take a strong stand and say that enough is enough. Quebec must come back to the negotiating table. It must help build good fences between good neighbours. It must work to allow Newfoundlanders to benefit from their own resources.
The federal government can urge Quebec to be more neighbourly by first of all following a recommendation by a federal government mandated group that tabled a report in 1988 called: "Energy and Canadians: Into the 21st Century". That report recommends:
The federal government should articulate the conditions under which one province has a right to access, on a business basis, another province's electricity corridor or electrical grid for the purposes of transmitting electricity to a market not adjacent to the first province.
This is the first step for the federal government: state the right of the provinces to interprovincial trade, then articulate the conditions under which that trade might exist. Taking this stand would not require legislation. It is a direct statement of policy.
The government must assert its authority under section 121 of the Constitution to bring down internal trade barriers. Section 121 reads: "All articles of the growth, produce or manufacture of any one of the provinces shall from and after the union be admitted free into each of the other provinces". If the federal government is willing to use this section of the Constitution, it might be enough to encourage Quebec to come back to the negotiating table on this subject.
If Quebec still refuses to be a good neighbour, the federal government could act further. It could give the National Energy Board the power to open up Quebec's transmission lines to allow export of electricity from another province. This would allow Newfoundland to channel electricity through Quebec lines to markets in the United States.
Quebec would still have the original Churchill Falls contract. Its earning power would remain in place but Quebec would also be helping out a neighbour. It would be helping all the people of Newfoundland and Labrador to get back on their feet financially so they could get off government assistance and back to work. This would help build a prosperous future for their families right into the 21st century. It would be a neighbourly act indeed.
If Quebec refuses to be a good neighbour and remains unwilling to mend fences between itself and Labrador, the federal government might consider a second position suggested by the National Energy Board. That option is to use section 58(4) of the National Energy Board Act to designate a corridor through Quebec on which hydro lines could be built by Newfoundland for the transmission of its own power. This could be done through an order in council.
What I have just discussed are only options. They are options available to the parties and to the federal government. They are options that would encourage Quebec to become more neighbourly in its attitude and more giving in its actions.
The fences between Quebec and Labrador are in need of much repair. Newfoundland and Labrador have suffered financially for years due to the Churchill Falls contract and Quebec's trade barriers. They are extremely embittered. The people of Newfoundland and Labrador want a change and they have wanted it for years.
The new premier of Quebec wants to mend broken fences, to heal old wounds, to show that Quebec is a good neighbour and that it would be a good trading partner as a sovereign country. This is a prime opportunity for Quebec to come back to the table voluntarily to renegotiate this contract with Labrador to break down internal trade barriers. If Quebec does this, then and only then will Quebec together with Newfoundland and Labrador be able to say that well mended fences make good neighbours. However, if this is not possible, the Government of Canada representing the interests of all provinces must intervene.