Quebec sure is one to talk, when it comes to energy.
I鈥檝e seen numerous TV clips of late, showing Bloc Qu茅b茅cois leader Yves-Fran莽ois Blanchet basically trash talking the West, and Alberta in particular. He would support western separation if they wanted a 鈥済reen state,鈥� for example, but not an 鈥渙il state.鈥�
Because oil is bad. He thinks we should stop producing it.
He doesn鈥檛 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鈥檚 the leader of a minor party during a minority government, albeit one that has enough seats to hold the balance of power. And he鈥檚 driving Alberta Premier Jason Kenney crazy.
Indeed, it鈥檚 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鈥檙e 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鈥檚 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 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 鈥淭he Churchill Falls Contract and why Newfoundlanders can鈥檛 get over it.鈥� You can find it here: https://policyoptions.irpp.org/magazines/making-parliament-work/the-churchill-falls-contract-and-why-newfoundlanders-cant-get-over-it/
It reads, 鈥淓ven in the late 1960s, a price of $2 was extraordinarily low and not achievable from any new energy source then available to Hydro-Qu茅bec. 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-Qu茅bec 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.鈥�
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, combined. 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鈥檛 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鈥檚 shale gas. Quebec, apparently, has lots of it. You know, good, clean natural gas with a low carbon footprint? But they haven鈥檛 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鈥檛 do anything with it. If they could frac, the CEO figured they could supply a substantial amount of Quebec鈥檚 domestic natural gas needs.
But you see, it鈥檚 easier to rely on gas from the northeast United States, these days, and the money taxed from the gas industry in Alberta that 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鈥檛 they now be considered the have provinces?
Quebec took advantage of Newfoundland in a way that is unconscionable. And with $4 billion surpluses, they鈥檙e 鈥渉ave not鈥� status is a total farce.
Let鈥檚 see Quebec have to pay their way in the world, and maybe we鈥檒l see some drilling in the St. Lawrence Valley. Then we鈥檒l see whose resources are socially unacceptable.
Brian Zinchuk is editor of Pipeline News. He can be reached at [email protected].
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