I’ve seen a lot of TV clips of late, showing Bloc Québécois leader Yves-François Blanchet basically trash talking the West, and Alberta in particular. He would support western separation if they wanted a “green state,” for example, but not an “oil state.”
Because oil is bad. He thinks we should stop producing it.
He doesn’t think Quebec gets Alberta money. It comes from the feds, he says, conveniently forgetting that money for equalization is almost entirely coming from Alberta, and mostly going to Quebec.
Blanchet is not a provincial premier, nor is he in power federally. He’s the leader of a minor party during a minority government, albeit one that has enough seats to hold the balance of power. And he’s driving Alberta Premier Jason Kenney crazy.
Indeed, it’s not a stretch to say Blanchet is driving the entire oilpatch crazy.
It sure must be nice to have a $4 billion surplus this year in Quebec. So much so that they’re opening up the wallet for more social program spending and cheaper child care, beyond what is already ridiculously cheap. In the meantime, Alberta public servants are wondering how many of them will have a job in the future, and when, if ever, they will see a decent raise again.
The federal equalization formula, which excludes renewable resource revenue but includes non-renewable resource revenue, is very rapidly driving a stake into the beating heart of this confederation.
Let’s look at Quebec for a minute, so blessed with renewable hydroelectricity it thinks it walks on water instead of just damming it. Ever hear of the Churchill Falls project?
Back in 1969 Newfoundland got into financial trouble building a massive hydro dam project in Labrador at Churchill Falls. Hydro Quebec stepped in and bailed it out, but in doing so, essentially forced the Newfies to sign one of the most lopsided, predatory contracts in Canadian history.
It ensures that Quebec gets an enormous amount of hydro electricity at a fixed rate, $2 per megawatt-hour (0.2 cents per kilowatt-hour). My power bill charges me 14.2 cents per kilowatt hour. Newfoundland is getting 0.2 cents per kilowatt-hour for its Churchill Falls power.
I strongly encourage you to look up an article published by Policy Options on Sept. 1, 2010, by James P. Feehan and Melvin Baker, entitled The Churchill Falls Contract and why Newfoundlanders can’t get over it.
It reads, “Even in the late 1960s, a price of $2 was extraordinarily low and not achievable from any new energy source then available to Hydro-Québec. To put this future price in perspective, in 2004 the average wholesale price of electricity in Ontario was about $52 per MWh, and in 2003 Hydro-Québec received an average of approximately $85 per MWh for its electricity exports. A price of $2 in 2016 with that price fixed until 2041 is barely distinguishable from being free.”
How much power does that plant generate? More than all of SaskPower, combined. Churchill Falls produces about 30 million gigawatt-hours of power per year. SaskPower supplies 25.7 gigawatt hours per year, as of 2018-19. That means Churchill Falls produces more power than every single coal, gas, wind, solar, cogen and hydro plant in all of Saskatchewan. And Quebec is getting a very large chunk of it, and profiting immensely from it, for basically free.
And despite numerous legal challenges brought forward by Newfoundland, the Supreme Court has allowed this to continue, to 2041.
Tell me again why renewable resources aren’t considered in the equalization equation? Especially given that Newfoundland, in dire shape right now over its follow up to Churchill Falls, the Muskrat Falls project, is paying into equalization and Quebec is withdrawing?
And then there’s shale gas. Quebec, apparently, has lots of it. You know, good, clean natural gas with a low carbon footprint. But they haven’t developed any of it.
A few years ago, I interviewed the CEO of a company that drilled 15 wells in Quebec. They had a discovery in 2008 which could have been game-changing, if only they could frac.
But Quebec brought in a de facto moratorium on fracking.
That company had acquired a substantial amount of permits for land, but couldn’t do anything with it. If they could frac, the CEO figured they could supply a substantial amount of Quebec’s domestic natural gas needs.
But you see, it’s easier to rely on gas from the northeast U.S., these days, and the money taxed from the gas industry in Alberta which goes to support equalization. Why develop your own resources when you get the money without effort, or risk?
Yes, Alberta, Saskatchewan, British Columbia, Newfoundland and, to a much lesser extent, Manitoba, are blessed with oil and gas. But other jurisdictions, like Quebec, Manitoba and British Columbia, are blessed with hydropower. In a world where green energy is considered the ultimate goal, shouldn’t they now be considered the have provinces?
Quebec took advantage of Newfoundland in a way that is unconscionable. And with $4 billion surpluses, their “have not” status is a total farce.
Let’s see Quebec have to pay their way in the world, and maybe we’ll see some drilling in the St. Lawrence Valley. Then we’ll see whose resources are socially unacceptable.
Brian Zinchuk is editor of Pipeline News. He can be reached at email@example.com.