There doesn't seem to be much interest in this topic, but I'll post this anyways. From John Crosbie in todays Toronto Sun.
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Sun, January 9, 2005
Our beef with Canada
By John Crosbie -- For the Toronto Sun
Today, I will try to explain what causes the intensity of the feeling in Newfoundland and Labrador over its offshore oil and gas resource dispute with the government of Canada.
Last June 5, Prime Minister Paul Martin, in a phone conversation with Premier Danny Williams that was confirmed later on Signal Hill before the press, committed to make sure that the province was "the primary beneficiary of its resources." Martin stated: "I have made it very clear that the proposal that (Williams) has put forth is a proposal that we accept."
The failure of Martin since June 5 to carry out his electoral commitment to Newfoundland and Labrador comprises the third major betrayal of the province's vital interests by Canada, with respect to the major assets Newfoundland brought to Confederation when it joined on April 1, 1949.
In addition to our strategic geographical position essential to the defence of Canada, we Newfoundlanders brought with us a claim to most of the Atlantic Continental Shelf, comprising millions of square miles later recognized by the UN as part of the Canadian 200-mile economic zone.
If Newfoundland had not joined Canada, Newfoundland would have controlled the fish resources and the oil and gas and mineral resources in that huge area, as well as the iron ore and hydro power resources of Labrador.
The 56 years since 1949 have seen the vital interests of Newfoundland and Labrador ignored by Canada, with the resources either poorly administered and depleted -- as in the case of the cod and other fish species -- or with the province's economic and revenue needs ignored, as in the development of the offshore and hydro power resources.
Shamefully ignored
The promise that it should be the primary beneficiary of the offshore resources -- in accordance with the Atlantic Accord on offshore oil and gas resource management and revenue sharing -- has been ignored shamefully by Canada while Newfoundland continues as a "have not" province, its fiscal capacity per capita still only 68.5% of the national average.
This is why most people in the province back Williams' position in the Atlantic Accord negotiations with Martin -- and why they are so upset that they also support his decision to remove the flag of Canada from provincial buildings.
This all results from Canada's three major betrayals, the details of which should be known to all Canadians:
Hydro: The hydro-electric development of the Upper Churchill River in Labrador was initiated in 1953 when Brinco entered an agreement with the government of Newfoundland. Because of geography, Quebec either had to be the customer for the huge quantity of power developed or had to permit the energy developed to be transmitted across Quebec to other purchasers. The result was torturous negotiations with Quebec that continued for 14 years.
Canada refused to use its constitutional power to declare this a work "for the general advantage of Canada or two or more of the provinces" which would have prevented Quebec's objections. Instead, Canada believed it to be in the national interest not to aggravate the threat of Quebec separatism. This federal decision was largely responsible for the onerous 65-year contract forced upon Newfoundland and Brinco by Quebec that severely limited prices.
During the years since 1974, Quebec has received economic rent from the Upper Churchill Project of $800 million per year while Newfoundland, as the owner of the resource, receives $20 million per year. The development of the Lower Churchill did not proceed and despite seven major negotiations between the two provinces in the 30 years since, two major sites remain undeveloped, with the water running to the sea and Newfoundland and Labrador losing hundreds of millions of dollars of economic rent. How would the people of Ontario or other provinces feel if Quebec was aided by Canada to impose such a deal on them?
Fish: The northern cod were fished off Newfoundland by Europeans from 1481 onwards. In the 100 years from 1850 to 1950, an average catch of 250,000 tonnes of northern cod was taken each year with no diminution in the fish stocks or any threat to the survival of the species. However, in 1992, Canada, within whose jurisdiction the fishery is constitutionally placed, had to announce the cessation of the cod fishery off the east coast of Canada and the fishing for other species cut because the stocks had been so vastly reduced, thanks to modern fishing technology and overfishing. The northern cod stock is still in danger, with other stocks overfished and in a parlous state as well, although Canada instituted generous programs of assistance to the 30,000 fishermen and fish plant workers affected.
Fierce battles
Oil and Gas: The discovery well at Hibernia was drilled in 1979, but it was 20 years before oil was produced and revenues began to flow in 1999. The first deep well had been drilled off Newfoundland in 1966. Fierce battles raged over these resources and how the revenues should be divided until 1985, when the Atlantic Accord was entered into by the administration of then-PM Brian Mulroney (in which I was a cabinet minister).
In 1974, the Supreme Court of Canada decided that Canada owned the oil and gas resources offshore, just as it had owned the oil and gas resources in what were known as the Dominion lands that came into Canada in 1867, and which became the provinces of Alberta, Saskatchewan and Manitoba as well as Northern Ontario and Quebec. The sub-soil resources were owned by Canada clearly, but in 1912 the sub-soil rights to minerals in Northern Quebec and Northern Ontario were granted to those provinces by Canada. In 1930, the sub-soil rights to oil and gas and other minerals were confirmed to Alberta, Saskatchewan and Manitoba by Canada -- without any compensation to the then maritime provinces.
In fairness, Canada should grant to Newfoundland, Nova Scotia and the other maritime provinces full right, title and property in offshore oil or natural gas. But Canada has refused to treat offshore resources as they treated onshore resources.
The long disputes over the offshore resources were settled by the Mulroney administration with the Atlantic Accord, which states "the right of Newfoundland to be the principal beneficiary of the oil and gas resources off its shores."
But because of the way Canada's equalization program works, there is a clawback so that Newfoundland loses up to 70% of its equalization grants, deducted from provincial oil and gas revenues received through the Atlantic Accord. The result is Newfoundland receives only 14% of the total government revenues from the offshore resources, while Ottawa receives 86%.
Last chance
It is Paul Martin who, since 1999, has led Canada's opposition to Newfoundland and Nova Scotia being the principal beneficiaries of offshore revenues. This is their last chance to become "have" provinces.
Last June 5, when Martin made his commitments to Williams, naturally Williams thought the issue settled, with Newfoundland and Labrador to receive 100% net of provincial revenues from offshore oil, without clawback of any kind.
You can well imagine how the weaseling of Martin and his ministerial minions, Ralph Goodale and John Efford, have aroused the distrust and revulsion of the people of the province, who see the commitments made to them after years of bitter disappointment snatched away once again by a totally untrustworthy and dishonourable government of Canada.
Newfoundlanders need their fellow Canadians to understand what has happened, how they have been betrayed.
Hundreds of millions lost on the Churchill River hydro developments, up to $1 billion that could be lost over 16 years on provincial revenues from offshore oil, and many hundreds of millions since 1992 lost by our fishermen and plant workers and rural Newfoundlanders: Surely enough is enough.
http://www.canoe.ca/NewsStand/Column...08/850381.html