Plan now for future of Churchill Falls

In the early 1980s, the government of Newfoundland and Labrador drafted legislation called the Water Rights Reversion Act.

On a reference to the Supreme Court of Canada, the legislation was deemed to be colourable and aimed at the Churchill Falls power contract with Hydro-quebec.

Further, the SCOC ruled, “The pith and substance of the Act was to interfere with the right of Hydro-quebec under the power contract to receive an agreed amount of power for an agreed price.”

Let us suppose today is the last day of August 2041. The contract with Hydro-quebec for power from Churchill Falls is minutes away from its expiration. This province has survived.

The hated contract and the ill-gotten automatic renewal clause can no longer be waved under our noses (a contract is a contract is a contract) by Hydro-quebec. Yet, Hydro-quebec still owns 34.2 per cent of Churchill Falls Labrador Corporation with Newfoundland and Labrador Hydro possessing the remaining 65.8 per cent.

CFLCO has a 99-year lease on the Churchill River watershed. The lease was signed in 1961 by the resource owner, the government of Newfoundland and Labrador, and is renewable for a further 99 years.

Remember now, in this hypothesis, the contract is mere minutes, and now seconds, away from expiration. This province cannot be accused of tampering with or trying to tamper with the contract. It is defunct, as dead as former premiers Maurice Duplessis, Jean Lesage, Joe Smallwood and Rene Levesque.

Immediately at the expiry, the government of this province enacts legislation, the Water Rights Reversion

Act (2041), to revoke the lease of 1961. Constitutionally, property rights and natural resources are the purview of the Canadian provinces. The government will hold the water rights to its sole enjoyment, to do with as the province wishes.

Water through the runners of the turbines as usual to generate electricity or every single drop diverted through the spillway, over the precipice into the Boudoin Canyon to follow the ancient riverbed to the sea? No contract, no worry, no court.

Or … Newfoundland and Labrador learns at long last from Hydro-quebec’s hardball tactics.

Instead of earning money from the electricity produced and sold as is now the case, the provincial government, through its Crown Corporation NL Hydro, decides it will charge a fee for every cubic metre of water used to produce that electricity and pockets the fee.

In this scenario, the cost of Churchill River catchment area waters to CFLCO, owner and operator of the Churchill Falls generating station, just so happens to equal the amount of money earned by CFLCO every year in electricity sales, minus the costs of maintenance, wages and salaries.

Huge profits for NL Hydro and the provincial government and no profit at the end of the year to be shared with Hydro-quebec, notwithstanding its continuing 34.2 per cent ownership of CFLCO.

The government of Quebec and the directors of Hydro-quebec can put this recommendation down to the revenge of the survivor or, en francais, le vengeance du survivant.

Tom Careen Placentia