The PC Government is using taxpayer-funded radio advertising to make misleading claims about its Churchill Falls agreement, incorrectly suggesting that Newfoundland and Labrador has finally secured the same access to export markets as Quebec.
The government’s radio advertisement states: “And now, we can finally sell our power abroad at the same price as Quebec.”
That is not what the agreement says. As was confirmed during the recent information session in the House of Assembly, Newfoundland and Labrador has not gained direct access to external electricity markets or external buyers.
J.P. Morgan, the government’s own financial advisor, confirmed that “NLH will not directly contract with buyers of power in external markets.” The agreement is clear: “NL Hydro may elect to sell to Hydro-Québec,” and not directly into external markets or to other buyers.
Pursuant to the agreement:
- Newfoundland and Labrador cannot directly negotiate with external buyers or sell power directly into external markets.
- A small portion of the power may be sold to Quebec at prices linked to Quebec’s existing contracts with third parties, contracts Newfoundland and Labrador has no ability to negotiate and that are largely already fixed-price.
- Quebec must provide three years’ notice before changing these arrangements.
- Transmission costs are deducted from the price Newfoundland and Labrador receives.
- The power comes from Newfoundland and Labrador’s own allocation, which the government has also claimed will be needed to support development in Labrador.
This distinction matters.
If Newfoundland and Labrador cannot contract directly with external buyers, it cannot compete for those customers, negotiate its own prices, or take advantage of higher electricity prices when market conditions are favourable.
The PC Government’s advertising suggests Newfoundland and Labrador now has the same access to external markets as Quebec. The agreement does not provide that.
Furthermore, the advertisements, paid for by the Government of Newfoundland and Labrador and the Crown corporation NL Hydro, prominently feature a political slogan used by the Progressive Conservatives during their election campaign. This is an inappropriate use of taxpayer and ratepayer funds to promote partisan PC messaging.
The Premier should not be spending taxpayers’ money on political advertisements that give Newfoundlanders and Labradorians a misleading impression of what his deal actually delivers, while also featuring partisan slogans.
If the PC Government continues to stand by this deal, without market-based pricing and with a declining sale price for Gull Island power, it should be able to make its case to the public using the facts, not taxpayer-funded advertising.
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