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January 7, 2025 HOUSE OF ASSEMBLY PROCEEDINGS Vol. L No. 98

The House met at 10 a.m.

SPEAKER

(Bennett): Order,

please!

Admit

visitors.

Extraordinary Debate pursuant

to Standing Order 8(7) – Memorandum of Understanding between Newfoundland and

Labrador Hydro and Hydro-Québec

SPEAKER: The hon. the Government

House Leader.

HOGAN:

Speaker, I call from the Order Paper, Motion 1.

SPEAKER:

The hon. the

Minister of Industry, Energy and Technology.

PARSONS: Thank

you, Speaker.

I’m

happy to be here again for day two of this extremely important and, I would

say, historic debate. Again, thank you to our colleagues, our friends for

joining us here on the floor of the House.

had an opportunity to speak a few times yesterday, and I wanted to lead off

today with something that’s extremely exciting to me and I think to the

province, and I know it’s exciting to my colleague for the District of Labrador

West. It’s something we’ve talked about, and in fact I think we’ve talked about

it since the day he came into the House, which is mining; especially mining in

Labrador and the need for power to increase that and to basically unleash the

potential for additional and better mining in Labrador specifically.

we all know that mining is a huge contributor to our economy, it’s vital for

Western Labrador and we know that the iron ore that is in Labrador is world

class. It’s high purity and, in fact, we were the first jurisdiction to declare

it a critical mineral and I would note that that step was followed by Quebec.

Then that step was followed federally by the federal government recognizing the

importance of high-purity iron ore to the global economy and to

decarbonization.

Now,

we know that there is estimated to be a massive increase in demand. We’re

talking 40 to 50 million tons annually that’s going to be required. Many

manufacturers are moving toward green steel and, again, what is there in

Labrador West positions Newfoundland and Labrador to benefit.

have a number of operations there, whether it’s IOC, Tacora. We have the Kami

project led by Champion that is moving forward and we’ll get into a little more

detail now. In fact, I would point out that they had a massive investment from

Nippon Steel just before Christmas; a group that we met with less than a year

ago in Japan. And again, I will point out it is very impressive when you walk

into a boardroom in Japan with one of the largest steel makers in the world and

they slide your critical minerals plan across the desk to you, meaning they

were looking at it.

also have, obviously, Julienne Lake, which I can say is a massive undeveloped

ore body with mineral rights that reside with us that we have put out there

with an expression of interest. Hopefully within the next month or so, we will

be able to write back to interested parties advising them to put forward a bid

or, I guess, a letter of interest. Right now, I can tell you we’ve had a number

of calls on that.

The

big driving issue with all of this though, and I know the Members asked me a

number of questions on this, is in order to do all this we need power. We need

power; we need transmission. So the first question I wanted to put to you,

because I know it’s not just us as a government or as the proponents. We speak

to them about what their power needs are. The Premier has met with them at PDAC

a number of times. The former minister, the Minister of Finance, knows these

quite well. I know they also speak to and a lot of times we refer them directly

to Newfoundland and Labrador Hydro to talk about the specifics when we get into

the engineering and the intricacies of the generation and transmission.

the question I have for our panel is, maybe can you tell us about your

conversations that you’ve had with mining companies or interested applicants

and maybe, again, I know this is sort of a broad question and I’ll give you

lots of room to roam around there. How does new generation, new transmission

jive with what the companies are telling you about what their needs are today?

SPEAKER:

The Chief Executive Officer of Newfoundland

and Labrador Hydro.

WILLIAMS: Thank

you, Mr. Speaker.

will start and if that’s okay, I would ask my colleague to join in and add much

better detail than I would necessarily have, but I will start, Minister, if

that’s okay.

First,

with regard to the content of the MOU, we have been – certainly Mr. Parsons and

I as well as others at Hydro, for several years, if not longer – meeting with

many interested proponents, interested in power in Lab West and in Labrador.

So,

obviously, by virtue of that access and those conversations, that very much was

part of how we approached this MOU in ensuring that part of the goals that we

would have achieved through this to gain access to a significant amount of

power to meet those requests, both as soon as possible as well as long into the

future.

So I

would just open it up with that as the context of what we were able to achieve

through the totality of this Memorandum of Understanding but I will ask Mr.

Parsons, if that’s okay, to get into a little more detail on how we have been

advancing the conversations in real actionable methods. So this is not just

ideas we’re pursuing. These companies are working with us and putting down

their money now to pursue various opportunities alongside of us.

if Mr. Parsons could –

SPEAKER:

The Vice-President of

Newfoundland and Labrador Hydro.

PARSONS: Thank

you very much.

Yes,

ever since, I think, CEO Williams took over as CEO at Hydro and she started

having these first quarterly and then more frequently CEO to CEO-level meetings

with all of the iron ore proponents in Western Labrador to better understand

what their power needs were going to be and, you know, clearly, as we talked

about yesterday, IOC is already our largest customer, and then of course Tacora

in Lab West is also a significant customer, and we know there are significant

opportunities with Kami and Julienne Lake, not to mention other non-mining load

growth in that region.

That’s

a part of the reason why we offered those high-level meetings, and that

eventually turned into this transmission study that we have commenced with all

the proponents in Lab West, to bring more power to them in addition to the two

transmission lines that are already there, essentially adding a third line to

bring more power. But without having access to additional generation, there’s

no business case to build that line.

we talked a bit about yesterday, the 525-megawatt block that we have access to

today is nearly fully used up. Load is increasing not only in Labrador West,

but across the Western world, and so this additional – not only access to

recall from the new projects – but the additional 605-megawatt block that

starts in the early years from Churchill Falls is critically important because

it is from the plant that is already built. So even if the other projects don’t

go ahead, this 605-megawatt block, which is more than a doubling of the power

that’s available becomes available just from Churchill itself at the CF(L)Co

cost, rather than depending on where the new developments might go.

We’re

quite aware of the importance of power to the industry; iron ore is obviously a

critical mineral, but it’s not a rare mineral, it’s not something like gold or

diamonds, you put in a suitcase and carry off and, you know, make billions on.

It only works when the infrastructure is in place, and Lab West is such an

important part of this province’s economy because the resource is there, but

the electric power – renewable electric power – is there, and the rail and port

infrastructure is connected there as well.

That

is what makes iron ore work; I did spend some time as executive director for

the iron ore industry when I worked for the province back in 2013-2014, and

it’s clear that people from around the world are interested in that area

because of what is there. We did have a visit even by the chief decarbonization

officer from Rio Tinto worldwide who did the crazy flight from Australia to

Churchill Falls to come and spend a couple of days with us and see the plant

and understand how it can fit into Rio Tinto’s global decarbonization efforts.

SPEAKER:

The hon. the

Minister of Industry, Energy and Technology.

PARSONS:

Actually, Speaker, I’ll defer, I think the CEO had a point.

SPEAKER:

The CEO of Newfoundland and

Labrador Hydro.

WILLIAMS:

Thank you.

just wanted to add a little bit additional. I think we talked about it

yesterday, it warrants opening of the MOU again.

Schedule E is where folks can

see the allocation of power over time.

you look at in 2031 on

Schedule E you’ll see where the 305 megawatts starts to

become available, and then right up to 2035 it’s the 605 megawatts that Mr.

Parsons mentioned. You contrast that to the 525 that we have now. So, as Mr.

Parsons mentioned, it would more than double between now and 10 years time.

just want to add on, we’ve been talking about the various projects for power

expansion associated with the MOU. But the things that Mr. Parsons just talked

about, he referenced the transmission line to Lab West. That is on top of those

other projects.

are going through, basically, engineering for a new line, in addition to the

projects that we’ve already talked about here today in the MOU. We’re talking

about doing engineering and, well, I’ll call it the system impact study, which

basically does delve into engineering between Churchill Falls and Lab West.

That transmission line, on top of the other ones we’ve been talking about, is

in and of itself another megaproject, because it is well more than $1 billion.

top of that then, when those companies have access to power, the investments

they will make – and I’m not going to speak for those companies directly – but

those are very, very large projects as well. So you’re into other megaprojects

– private megaprojects really – then at that time.

This

really does unlock even more than is already contemplated and not yet

financially described, because we’re still in the engineering stage and we’re

still at decision-making stage. And certainly we’re still in the MOU review,

and therefore eventually, hopefully definitive agreement stage to enable these

kinds of investments for development in Labrador.

SPEAKER:

The hon. the

Minister of Industry, Energy and Technology.

PARSONS: Thank

you.

just want to get a little more specific now. Again, sometimes I certainly

realize that when I’m talking to constituents where I’m immersed in this all

the time – and I can only imagine, I’m at one level, and then when you’re

dealing with this all the time you guys are right in the weeds of it.

Right

now, what is the power – again, we have IOC and we have Tacora, what are they

using right now in terms of the power that is there?

SPEAKER:

The Vice-President of

Newfoundland and Labrador Hydro.

PARSONS:

Thank you, Speaker.

IOC,

as I mentioned, is our largest customer. They’re using approximately 260

megawatts, which would be supplied from the existing Churchill Falls block and

Tacora would be in the range of 55 megawatts.

SPEAKER:

The hon. the

Minister of Industry, Energy and Technology.

PARSONS: Thank

you.

it correct – and I apologize, Speaker. I know I’m not supposed to look, but I’m

all over the place.

SPEAKER:

It’s okay.

PARSONS: Is

it correct, though, there are times right now where operators are forced to curtail

their operations because of load needs elsewhere?

SPEAKER:

The Chief Executive Officer of

Newfoundland and Labrador Hydro.

WILLIAMS:

Thank you, Mr. Speaker.

Where

we are right now with load requests – and, again, I could ask Mr. Parsons to

talk about specific curtailments, but we actually have for Labrador a load

restriction in place. Through the Public Utilities Board we have asked for,

basically, exemptions to the requirement to provide for power and power

expansion in Labrador, which I know is a great source of frustration to the

folks that are representing Labrador here today. Because we do not have access

to power. For example, I think it’s a 200-kilowatt limit. Basically, you can’t

put a school in place unless we go for specific exemption to the Public

Utilities Board for access to power.

The

amount of development that could actually occur in Labrador, because of our

lack of access to power, until the 2040s, under the existing contract would

remain in place while we look for – so not only the industry development, but

just a large school or some kind of other kind of development that is above 200

kilowatts. Basically, you can hook up a house, but even that at some point

could probably hit a wall of being able to actually have any kind of

development in Labrador because we just simply do not have access to the power.

Under the existing contract, we would not have access to it until the 2040s.

SPEAKER:

The hon. the

Minister of Industry, Energy and Technology.

PARSONS: Okay,

so we know what the current usage is. We know about the disruptions. We know

about the wall, as you say. We know what the current situation is in terms of

when the next lot comes based on the current scenario, aside from this MOU. I

just want to make sure I have a couple things correct here.

this were to proceed, when it’s all said and done, we get 1,990 extra megawatts

from this deal. Are my numbers right there?

SPEAKER:

The Chief Executive Officer for

Newfoundland and Labrador Hydro.

WILLIAMS:

Thank you, Mr. Speaker.

get an extra about 1,500, because we already have access to 525. When were

talking about 2,000, that includes the 525. We have a quadrupling of power

available to us now.

SPEAKER:

The hon. the

Minister of Industry, Energy and Technology.

PARSONS: And

can you tell me again – t ake

that number and break it down in terms of what becomes available when, so we

know. Because again, that depends, when I look at these operations, for

instance, a Kami project is more advanced, obviously, than a Julienne Lake.

There’s a staggering of when the power needs will come in. I know what Rio

Tinto/IOC want to do has different timelines, so what we’re getting, we also

have to keep in mind about the timelines and demand from the company.

Maybe

we’ll first start with that extra power that we’re talking about, we’re

contemplating here, timelines and what we’re getting.

SPEAKER:

The Chief

Executive Officer of Newfoundland and Labrador Hydro.

WILLIAMS:

Thank you, Mr. Speaker.

I’m

just going to open it up, but I am going to defer to Mr. Parsons.

draw your attention to, again,

Schedule E. Basically, I think – Mr. Parsons, if

you look at the very bottom, and I’ll ask Mr. Parsons to work backwards, but

you see that the column under NLH (Existing), that is existing and it is

honoured throughout, obviously. So you see the 525 throughout the duration of

that period.

Then

you go to the next column, which says NLH New Recapture Right and then just

scroll to the very bottom first and then Mr. Parsons can take us through the

dates, and you’ll see 605 megawatts there. Then you go to the Expiring Block,

which is the next column, there is another 500 megawatts there that comes to

Newfoundland and Labrador Hydro.

Then

you go to the second part of the chart, with the green column titles, and

you’ll see under the blue column – I know if anybody is watching online, they

may not have their

Schedule E open but it is really helpful for us to reference

this. And you scroll – well, you don’t even have to scroll to the bottom but

let’s do that anyway, just for completeness – and you’ll see another 360

megawatts. So when you add all of those up, that is what really gets us to

where we’re getting.

will ask Mr. Parsons to get into a little more detail on when we get access to

that and why we believe that is reflective of the kinds of requests that we

have. But I will also add – and I mentioned this yesterday – there is a balance

to be struck in the judgment of the negotiating team, who have been meeting

with various proponents over the years, of balancing keeping, I’ll call it, all

the power available and getting no firm value today versus getting a balance of

keeping some power – not just some, quadrupling – available to us for what

might come.

You

could choose to keep everything and get no value now, or you choose a balance

on the basis of the kinds of conversations that you’ve been having with various

interested proponents over the years and say, okay, listen, we believe that

this is reasonable.

I’ll

just add this one thing, and I will defer to Mr. Parsons shortly. Just a few

years ago – and these numbers, I think, would be on the record with the Public

Utilities Board – we had requests for 8,000 megawatts – requests for 8,000

megawatts. However, when you have conversations with a lot of these proponents

and you tell them the price of power, they’re like, no thanks, and so they walk

back away.

However,

the folks that are currently still talking to us, they know exactly the kinds

of prices that they would have to pay, and they’re still talking to us. So the

amount of power that we have included in this MOU for the periods in the coming

decades, we believe is a balanced amount of power to hold in reserve for the

needs that we believe will be possible.

SPEAKER:

The Vice-President of

Newfoundland and Labrador Hydro.

PARSONS:

Yes, I can just add a little bit more on how the next couple of years might

roll out in terms of getting ready to supply the new load as it materializes in

Labrador West.

This

study that we’ve been talking about, which is being paid for by the mining

proponents in Lab West to look at the possibility of adding that third line to

supply their decarbonization needs, that study will be completed in the next

year, the front-end engineering done, to better understand exactly the design

of the line, where the line will go, the voltages, these types of things.

Once

that study is complete, then it will be to the industrial customers to make a

decision as to whether they want to go ahead. Obviously, all signs are

certainly pointing in that direction and they’ve contributed significantly to

the engineering, thus far. We would expect that should they take that decision

in the coming year, inside of 2025, then we would begin that process of

actually constructing the line.

That’s

why you’ll see there’s, essentially, five years before the line gets placed

into service, and then there would be a ramp-up of power that you can see here,

305 climbing to 605, and this is really informed by our discussions with the

mining proponents.

this negotiation, obviously recall power for Labrador was one of our key

planks. But we didn’t come to these numbers haphazardly. We developed this

mechanism based on the power needs, which we know quite specifically because of

this line study that’s being done for Lab West. Then there is some other

engineering work done to figure out what the loads are likely to be in the rest

of the Labrador interconnected system.

SPEAKER:

The

minister’s time has expired.

PARSONS: If

I could have leave for two minutes just to clue up this line of thought.

SPEAKER:

Does the

Member have leave?

HON. MEMBER: Leave.

SPEAKER:

Leave.

Put

the time on the clock.

The

hon. the Minister of Industry, Energy and Technology.

PARSONS: Thank

you.

It’s

not so much for questions but just to clue up what I think has been important

here when we talk about this. One thing I think is important for people that

are listening, the numbers, the money, the jobs that have all been talked

about, none of that includes what we are talking about when it comes to the

expansion of mining operations in Labrador, as well as the construction of this

particular transmission line. So these numbers we’ve been talking about are

massive, massive numbers. But none of them include what comes from expansions

in the current operations, new operations, new construction of a new

transmission line.

The

timing, I think, works well. When you look at Kami’s EA registration, they talk

about permitting and then production. Then we talk about what IOC wants to do

in terms of Julienne Lake. I think it times well with what we have, but I can

tell you – again, I encourage anyone to reach out to these proponents – if we

don’t find a way to generate the power, the investment goes elsewhere. I have

to say that: The investment will go elsewhere and, with that, goes jobs and,

with that, goes all the other royalties, spinoffs, direct, induced, you name

it, whatever else – we haven’t even talked about data centres yet, which is

another thing I’ve dealt extensively with and I know Hydro has.

So I

want to put that out. That’s another benefit that’s not even included in this

that I think needs to be contemplated as we have this debate.

that note, I’m sure we might come back to this line of thought and these

questions later. I appreciate your indulgence in letting me finish off.

Thank

you very much.

SPEAKER: The hon. the Member for

Terra Nova.

PARROTT: Thank

you, Mr. Speaker.

What

a brilliant display of comms. You would think that the Minister of Industry,

Energy and Technology would know the answer to every single one of those

questions, having been in that portfolio as long as he has.

reflected last night back on yesterday. I’ll apologize to the House; I used the

word “lie,” but I didn’t specifically say someone was lying, but I will say all

of this, to me, is very misleading. From the start with the technical briefing

and the misinformation that’s in that to the jobs and the amount of jobs that

we’re going to have – and I will add again, there are no jobs unless Quebec

says there are jobs – to control, we’re going to give up control of the

Churchill River for another 51 years to the same province that just had control

for the last 56 years. And so we’re clear, to everything that the CEO and the

minister just said, they are the reason that Labrador West has not moved ahead

– they are the reason. It’s not because there hasn’t been a demand for power in

Labrador West for a long time – and so people understand, I am from Labrador

West; I understand this very clearly.

Quebec

has handcuffed Labrador West, not Newfoundland Hydro, but I will say there’s a

plan with these upgrades, to upgrade 11 turbines. Why haven’t we done it sooner

if we’ve known how handcuffed Labrador West is? Why have we not done it sooner?

Why does it hinge on this deal? I don’t understand that.

Timelines:

Yesterday, we listened and somebody said the timeline for this deal is now. If

we don’t do it now, we don’t get it; we lost bargaining control. I don’t buy

that – misleading. Urgency: Same line of questioning.

Quebec:

Make no mistake about it, Quebec has control over this deal. It doesn’t matter,

yesterday, the minister took some time to try and correct me – and so the

general public is aware, I sat on the board of directors for Hebron. I sat on

the board that negotiated the contract. I was part of the benefits agreement.

So if anyone wants to question my knowledge on how that stuff works, I’m open

for questions any time whatsoever.

But

I will tell you this, it doesn’t matter what the benefits agreement says, if

Quebec says they’re not doing it. What that means is there are zero jobs, not

for any of the Innu or Inuit, not for any of the Labradorians, not for any of

the Newfoundlanders and certainly not for anyone else – zero. Quebec controls

it lock, stock and barrel.

The

LeBlanc inquiry: We listened to the minister yesterday talk about the LeBlanc

inquiry – and so we’re clear on this – the same minister who sat on that

inquiry, stood up and dismissed the first six recommendations and went to

recommendation 7, and that’s the only one they quoted. The government stands

over there and they say: We are following LeBlanc’s recommendations –

absolutely false.

Key

Recommendations 1: “The Government of Newfoundland and Labrador should never

undertake, on its own or through one of its Crown corporations or agencies, the

planning” – not construction – “approval or construction” – not and

construction – “of any large project (meaning a project with a budget of $50

million or more) without ….”

I’ll

carry on, but I’ll add something else, I’d be curious to know how much this

process has cost to date. I’m willing to bet we’re close to the $50-million

mark already.

Paragraph

“a. Engaging independent external experts to provide robust review, assessment

and analysis of the project.” Not done – not done, regardless of what the

Premier is saying, the committees that were appointed prior have nothing to do

with this.

“b.

Providing well-defined oversight after consideration of oversight processes

instituted in other jurisdictions.”

Government

has misled the public with this deal from day one and the only way for anyone

in this province to understand what is going on is for there to be an

independent review prior to any vote happening in this House of Assembly.

That’s it. That’s all. There’s no question. We messed up too bad before – twice

– twice.

you think about what has happened to this province, where we are as a result of

that and if people are willing to move forward based on hope and what-ifs and

it’s up to Quebec; I’m sorry, I’m not there and this MOU doesn’t put me

anywhere near there.

The

people of Labrador West: I can tell you, I talk to people up there all the time

and I listened to the MHA for Labrador West on the radio the other morning.

There is no power for Labrador West right away. It’s 10 years out. This

government would have people believe that Labrador West is going to get power

right away.

just listened: In 2025, when we start to construct power lines, maybe, if EA

assessments and engineering and everything is done, a five-year window to 2031,

2031 to 2035 a ramp-up. The contract expires in 2041, six years later. What’s

the big rush?

IOC and all of them, I’m sure they’re aware of the timelines and I have zero

doubt that Newfoundland Hydro has done their homework – I have zero doubt. As a

matter of fact, I put full faith in these people, 100 per cent, but I will tell

you this MOU does not explain to the people of Newfoundland and Labrador

clearly enough what it is we’re getting into.

What

it does explain to me is that we don’t control the jobs, Quebec does. We don’t

control the river, Quebec does. We don’t control our future of that project up

there not one little bit, with the exception of the Churchill Falls contract

that we have right now and making it a little tiny bit better.

It's

better, make no mistake about it, I have no problem saying that, but we lose

control of our resources for the next, not 51 years, 51 years for Churchill

Falls, if – big if – Gull Island goes ahead it could be, because that could be

as far out as 85 years. If you take the 20 and take 15 years for

constructability – and don’t take my word for it, the vice-president of

Newfoundland Hydro said yesterday: Construction on a major project cannot

happen on a 10-year window. Yet in our technical briefing and everywhere else,

we’re led to believe that by 2035, Gull Island will be commissioned –

absolutely impossible.

don’t care if it’s Quebec or the Germans or who comes over and builds it, at

the end of the day, unless there’s more work done than they’re telling us,

unless there’s substantive engineering done and we’re ready to move forward

right away and Quebec agrees to move forward right away, it can’t happen and we

all know that. There are too many what ifs – there are too many what ifs. This

government has proved it.

The

day of the announcement, all these commercials come on; the Official

Opposition, the Third Party, the independents had no idea this announcement was

even coming. Not only that, we were not invited. At 9 that morning, this

government did technical briefings for every single individual in Newfoundland

that wanted one, pretty much. People were calling me telling me about it. Do

you know who they didn’t do it for? They didn’t do it for the Opposition and

they’re going to stand there and tell us this isn’t about politics or

elections.

this was not about politics or elections, we would have been in a technical

briefing the day of or the day before. We would have been invited to the

announcement. We would have been there. There would have been an invitation, it

would have been clear and we would have debated this before this MOU was

signed. Instead, they signed the MOU, then they say we’re going to come in here

and negotiate. They say it’s non-binding but there are parts that are binding,

we know that. We’ve read it. They admitted to it yesterday, so here we are.

are in a place right now where we’re being asked to sign off on an MOU to give

people power to move forward and they have done nothing to assure us that this

is the best deal. It’s a better deal, but we don’t know that it’s the best

deal.

What

we do know is Quebec controls the jobs, we know that Quebec controls the river,

Quebec controls the power and, in turn, Quebec control the future. If they

decide to do none of this, we are left with this one

section in

Schedule E

where we have the ability to sell power to Labrador West and expand our mines;

something I would argue we should have the ability to do anyhow, because if the

upgraded 11 turbines is the answer to that, we should have done that a long

time ago because there has been a demand for a long time.

I’m

going to ask the CEO of Newfoundland Hydro a few questions. If anyone is

wondering why I get so heated about this, it’s because Labrador is my home and

Newfoundland is my home. I care about this. It’s because I have two small

children and their future matters to me and it should matter to everyone in

this House. I don’t think this MOU gives us a clear picture of where we’re

going.

anyone in here has something different to say about that, then they should just

allow an independent panel to review this because the independent panel will

probably put people’s minds at rest. Instead, we’re left with all these

misgivings and falsehoods and the government continues to put them out there.

Again,

I’ll defer to what the minister said yesterday. After I questioned the 13

million person-hours, he came in and he talked about the benefits agreement and

he landed back on: there are jobs. The answer was yes, but in reality, the

answer is no. Quebec decides if there are jobs. We can write 15 benefits

agreements; we can write as many benefits agreements as we want, if Quebec says

they’re not going ahead, they’re not going ahead. It’s really that simple.

That’s what it boils down to and that’s what we are giving away – end of story.

Hydro-Québec undertakes engineering and analysis on Gull Island and then they

decide not to build, will all of their information then become the property of

Newfoundland Hydro?

SPEAKER: The Chief Executive Officer

of Newfoundland and Labrador Hydro.

WILLIAMS:

Thank you, Mr. Speaker.

The

engineering work product that Quebec would undertake to examine the viability

and, I guess, the final details for Gull Island would remain with Hydro-Québec.

However, as we discussed yesterday, if they choose not to proceed, exclusivity

ends and then we can pursue that project with somebody else and monetize it

with somebody else.

So I

need to be really clear that that is the case. I would like to add, as well,

about the jobs. Again if they don’t proceed with those projects, you look at

Schedule E and you read it in context of the whole MOU, we still get access to

power for Lab West. What that would then mean, as we discussed earlier with

Minister Parsons, is that there are jobs for the transmission line to Lab West

and there are jobs with the increased access to power that the mining companies

would then have.

don’t agree that there wouldn’t be any jobs associated with if Quebec chooses

to proceed or not proceed with those projects, for the reasons that I’ve just

outlined. Again, we can do it with somebody else and that we gain access to

power anyway and that would then be a new transmission line to Lab West which,

as Mr. Parsons also outlined, we are still working on. We are in active system

impact studies and, when Mr. Parsons mentioned earlier, they have contributed

to the engineering. Not only are they contributing to it by giving us their

information so that we can do a detailed engineering assessment of what that

would look like, they’re also financially paying for these studies, and that is

not insubstantial.

This

reality of getting access to power and then proceeding to Lab West with that

power will indeed result in important development that we would not be able to

undertake otherwise between now and after 2041.

SPEAKER:

The hon. the

Member for Terra Nova.

PARROTT: How

many tens of thousands of jobs will come as a result of building a transmission

line a couple of hundred kilometres from Churchill Falls to Labrador West? How

many tens of thousands of jobs?

SPEAKER:

The Chief Executive Officer of

Newfoundland and Labrador Hydro.

WILLIAMS:

Thank you, Mr. Speaker.

The

tens of thousands of jobs, as we discussed yesterday, was quoted to include the

fulsomeness of the MOU, as well as the indirect and induced benefits associated

with some of the ones as we’ve just discussed just then. So that, in the

context of the whole MOU, is what we are working to help all of the public

understand, and that was what would be quoted publicly.

is not just in the scenario that you just mentioned where it’s just if they

don’t proceed with those projects. But again, if those projects don’t proceed

with regard to Hydro-Québec’s interest and they choose not to do it, then the

exclusivity ends and then we can pursue those projects with other proponents.

SPEAKER:

The hon. the

Member for Terra Nova.

PARROTT: Quebec

has exclusivity over the Gull Island project for 20 years – yes or no?

SPEAKER:

The Chief Executive Officer.

WILLIAMS:

Thank you, Mr. Speaker.

They

only have exclusivity for that period as long as they are actively pursuing and

getting that project completed. If Quebec chooses not to proceed with those

projects, exclusivity ceases.

SPEAKER:

The hon. the

Member for Terra Nova.

PARROTT: Who

polices that?

SPEAKER:

The Chief Executive Officer.

WILLIAMS: Thank

you for the question.

believe we might have discussed this a little bit yesterday, but it does

warrant discussing again. The definitive agreements will lay out exactly how

the joint development agreements will work and the various milestones, the

various efforts that we both have to undertake, but us as well as Quebec and

Hydro-Québec. So then it would be a normal commercial dispute if we thought

that they were not pursuing this and then we would say this is not working, but

that is the case with any proponent.

For

example, if we were to do a project with IOC, if we were to do a project with

Vale, it is normal to have their legal contracts that say where you are not

obliging by the obligations that you’ve agreed to, then you would have a normal

dispute resolution mechanisms included. Anybody with any background in that

would understand, any kind of lawyers, that it is normal for us to have that

scenario.

we will have it all laid out in definitive agreements, what our obligations

are, and we’ll be able to check each other throughout the period that we’re

trying to get these projects done.

SPEAKER:

The hon. the

Member for Terra Nova.

PARROTT: What

is your faith that the province that has kept us held up for 56 years can’t

keep us held up for the next 20 on a project that they can say that they’re

exploring?

SPEAKER:

The Chief

Executive Officer.

WILLIAMS: Thank

you, Mr. Speaker, and for the question.

Hydro-Québec

are getting access to new power in this MOU. They are giving up free power for

17 years to gain access to more power. So I don’t believe, at all – and I don’t

know if that’s a strong enough word. I am confident that Hydro-Québec want this

project really badly. If you would refer to Premier Legault’s statements –

like, right from the beginning, this is something that he wanted to have as

part of his outcomes. He needs access to power.

The

idea that Hydro-Québec are just going to try to not pursue this project in a

way to, I don’t know, get one over on us, I don’t understand that that would be

a valid position that they would take. They need power really badly, as we’ve

discussed yesterday. They need to, essentially, double their system. It would

not make sense for Hydro-Québec to not want to pursue this project with

everything possible in their jurisdiction.

SPEAKER:

The hon. the

Member for Terra Nova.

PARROTT: Your

own words yesterday, you said that this power represents one-fifth of Quebec’s

needs. They need to double their energy consumption. So they’re going to be

looking, certainly, at four other major sources to gain what they need and

there’s a possibility that they may find more than they need. So I guess there’s a simple

question. It’s clear that Quebec controls all of this. They’re not actually

giving us power for free. I’ll remind you that it’s our river. We are 70 per

cent owners in CF(L)Co, as of right now – 65. So they may be looking to change

the contract, but it’s still our power.

signed a bad agreement. What we’re trying to do here is not to sign another bad

agreement. So we have one-fifth of the power we’re going to supply them.

They’re going to be looking elsewhere to get the remainder of the power. I

guess the biggest question is – and it’s a simple yes or no – are you willing

to put all your apples in one basket and say you trust Quebec?

SPEAKER:

The Chief Executive Officer.

WILLIAMS:

There was a fair bit in the

preamble there that I would like to take on, but

I’m not recalling all of it there now.

With

regard to how we are working with Hydro-Québec going forward, they are a

one-third owner of CF(L)Co now, and that will continue past 2041. So that is a

fact, an undisputable fact; it is not going to change. We have an existing

partner, and that is not going to change. We have to find a way to see can we

make this relationship work long term, and that is what we have done with this

memorandum of understanding.

The

clauses and the language that we have included in the MOU set the framework for

a much stronger and much fairer relationship for the decades to come. We will

take the framework and turn it into stronger language than we’ve ever had

before, for the relationship going forward.

don’t consider that as putting all your apples or eggs in one basket; that is

using the lessons learned of the past – and I said yesterday this is a

lessons-learned MOU – both from the Muskrat Falls Project as well as from the

existing contract, we have engineered out many of the previous issues of the

previous contract, into this new contract, both for the PPA as well as for the

new developments, and we will be then taking the framework, if we get authority

to do so, and turning it into definitive agreements that will be on a much

better legal footing than it currently exists, as well as what would otherwise

exist.

SPEAKER:

The hon. the

Member for Terra Nova.

PARROTT: The

number being floated around is $17 billion, so the reality of it is our future

is being sold for 65 per cent of $17 billion.

simple question here – yes or no – if we sign this agreement, go through the

definitive agreement process, everything works out, Quebec decides not to move

forward with CF2, Quebec decides not to move forward with Gull Island, all the

expectations of jobs and everything associated with it are gone, is this still

a good deal? Yes or no.

SPEAKER: The Chief Executive

Officer.

WILLIAMS: Thank

you, Mr. Speaker.

The

$227-billion projected benefit direct to Treasury, that is not something that

then needs to take one-third off and go to Quebec. So I have to be ultra-clear

about that because that is some misconception and confusion that’s being

circulated publicly.

The

$227 billion is direct to Treasury for the whole MOU and it does not include

the other benefits that we’ve talked about here earlier, the knock-on domino

benefits. However, of the $227 billion, $180 billion is associated with the CF

PPA and the remainder, doing the math for me, I believe is $47 billion, is

associated with the new developments. I think that works out to 20 per cent,

along those lines, so I would absolutely categorize this as a good deal.

Then,

again, if Quebec chooses not to proceed with those two projects, as you just

mentioned, the exclusivity ends and we can monetize that and work with other

proponents to do it. I will say as well, the water management agreement that we

have included in here in

Schedule K, I want to say it is, that talks about –

that’s the difference as well, going forward, is “Production from any

non-emitting plant that is on the NL system (existing and future) and a party

to an arrangement with CF(L)Co for capacity and energy … may be used to meet

CF(L)Co’s contractual obligations to HQ.”

So,

from a water-management perspective, this framework here allows us to work with

other parties if Quebec does indeed choose to not proceed with those projects.

It’s a really important aspect of this project. I go back to, of the $227

billion, 80 per cent of the value for the next 50 years is allocated to the CF

PPA and 20 per cent is allocated to new developments.

What

I will also say is, if those projects do get done, what we will have at the end

of that period – and it is normal to have these assets paid off over a very

long time. They’re incredibly expensive and that is normal utility practice, to

pay them off over a long time, to have a revenue stream over a long time. They

cannot be financially paid for. Financial people will not lend you the money

for a 20-year, $25-billion project.

After

we get these projects paid for, so in the 2080s, absolutely, you will have

CF(L)Co, an incredibly valuable project, and you will have the new projects,

also incredibly valuable. They will then be valued at the time. They will be

built. We will have monetized these assets, which are currently sitting

unmonetized in Labrador.

SPEAKER: The Member’s time has

expired.

The

hon. the Minister of Immigration, Population Growth and Skills.

STOODLEY: Thank

you, Speaker.

First,

I want to say thank you so much to the negotiating team and the panel for being

here today, your expertise and insight – and I hope she doesn’t mind; even my

mom was texting me this morning saying how fantastic and amazing you’ve been,

and insightful to anyone watching. So thank you so much – and hi, Mom and hi,

Central; I know you’re watching, and all the constituents in the economic

powerhouse District of Mount Scio.

I’d

like to give a few comments, and then I have some questions. Firstly, I just

want to recognize how big of a privilege it is to be here as an elected Member

at this time debating this memorandum of understanding. My first election, I

spoke to a group of my supporters and I remember at that point saying to them,

we only have five elections before 2041. I didn’t really know anything about

Churchill Falls and 2041 at that time. Never, in a million years, did I think

that I’d have the opportunity of being here.

take that responsibility very seriously. Supporting this memorandum of

understanding, as far as me as a Member, I consider this to be the single, most

important decision that we, as a government, are making so far during my time

elected. I just want to say to my constituents and the public that I do take

that responsibility extremely seriously.

I’m

not a lawyer; I’m not an engineer. But I guess, for a relatively layperson,

I’ve done as much personal research as is physically, absolutely possible. I’ve

spent nights in the library curled up in the basement, reading. I’ve read

everything that is available to read on this, and I am a hundred per cent

confident and honoured to support this memorandum of understanding. I believe

that this is a fantastic opportunity for the next generation of Newfoundlanders

and Labradorians.

SOME

HON. MEMBERS: Hear,

hear!

STOODLEY: Speaker,

I guess first, when I learned about the detail of this memorandum of

understanding, I went home and it’s like a big relief – a sense of relief that

you feel. I didn’t even know that I was worked up or upset about something.

Then it’s like, we’re going to be okay. Newfoundland and Labrador is going to

be okay.

Then

when I think about when my little guy – he’s four – gets to college or

university, if he chooses to do something like that, the revenues that we’re

talking about coming out of this memorandum of understanding, that is what is

going to support him going into trades or going to college or university. The

revenues from this are going to be a significant portion of our Treasury,

Speaker. This is what is going to support some of the Members here in the

old-age homes.

this is an incredible, long-term opportunity that I think – and the

constituents that I’ve spoken with – this gives us all a bit of breathing room

and to say things are going to be okay. I guess I just wanted to start with

that.

know we’ve talked a lot about independent oversight. First, we had the expert

panel and they were independent. We’ve had J.P. Morgan provide expert advice.

We’ve had Power Advisory, and we’re going to hear from both those stakeholders

tomorrow and on Thursday. The government has had Stewart McKelvey provide

expert, I guess, challenge to the government in terms of a separate process. I

know the Premier spoke about that yesterday.

just want to remind everyone that this is a memorandum of understanding. This

is the initial stage. This is the most appropriate and earliest opportunity to

bring this incredible opportunity to the House of Assembly and to this province

to talk about this in depth.

SOME

HON. MEMBERS: Hear,

hear!

STOODLEY:

This is the memorandum of understanding stage. We are bringing this forward to

the public to debate, to hear what people think, to understand the nuances, to

make sure that the public understands what we are signing. After this, as we’ve

heard, between now and April 2026, these experts and their teams will be – as

the Premier mentioned, if this passes and if the public wants us to proceed

with this memorandum of understanding, then they work towards definitive

agreements. That’s when Hydro and the government would be signing all the – I

think it’s at least 10 contracts that we would need with Hydro-Québec and

Newfoundland and Labrador Hydro to proceed to the next stages.

are just talking about a memorandum of understanding and, over the next year or

year and a half, that’s when all the legal contracts would be further

negotiated. I know our Premier has already also committed that those definitive

agreements will also come back to this House of Assembly. So we are going to be

back in this House of Assembly on numerous occasions between now and any of

these definitive agreements being signed, debating this on numerous occasions.

just wanted to say, for anyone listening and watching, this is the first stage

of this amazing, incredible opportunity. This is also, I think, providing an

amazing opportunity for people to learn from the experts.

Minister of Immigration, Population Growth and Skills, I think we, as a

government, and my department, along with the Department of Education, have an

incredible amount of work to do in terms of the apprentices and the trades and

the skills and getting the province and the next generation of workers ready

for these incredible opportunities.

From

a trades perspective, the apprentices, but also, I think there are so many more

areas that people wouldn’t think about, like project managers, accountants. I

did a business degree; we are going to need so many more accountants. All these

companies are going to need so many more accountants.

From

a technology perspective, you think about artificial intelligence; people are

using ChatGPT and all these other companies. I can’t even fathom what

artificial intelligence in construction looks like in 10 years’ time. I think

there are so many incredible opportunities for a range of sectors and a range

of skill sets in this province, that this memorandum of understanding unlocks

now for those who are 10, 15, 17 years old right now – and I’m so excited for

them in terms of what their future is going to look like. I just want to say,

yes, it’s significantly about trades, significantly about that type of labour

force, but it’s also all the spinoffs, all the other supporting industries.

heard the Federation of Labour on the radio this morning really anxious and

wanting us to move fast. As a government, we are going to be working with all

those stakeholders to make sure that we do whatever we can and more to be

ready, have our next generation of the workforce ready for these incredible

opportunities. Thank you for that.

I do

have some questions for our expert team, so I’ll just dive in. Some of these I

think we’ve heard touched on a little bit and some of these I’ve heard from

constituents, but I just want to hear it from the experts themselves.

guess the first one I’ll start with: I know part of this agreement is

Hydro-Québec would lead the Gull Island development and then the financing and

all that for Gull Island. I’ve been asked why wouldn’t Newfoundland and

Labrador Hydro do that? Why wouldn’t we do that ourselves? Why wouldn’t Hydro

do that?

I’m

wondering if you could touch on why that – I’m convinced it’s a good idea, our

plan, but I’m just wondering if you could, as an expert, elaborate for anyone

watching in the public in terms of why is it a good idea for Hydro-Québec to

lead that initiative?

SPEAKER:

The Chief

Executive Officer for Newfoundland and Labrador Hydro.

WILLIAMS: Thank

you, Mr. Speaker.

It’s

a great question. At its most fundamental, while we have these incredible

hydroelectric resources here in this province, the quantity of resources that

we have and of our recent history, the reality is that Quebec have done a lot

more of this with great success for many decades.

referenced for another purpose yesterday the size of their system versus the

size of our system. Now, domestically we’re only say a little more than two

gigawatts, their system is 40 gigawatts. But if you add on Churchill Falls and

– we’re closer to say seven gigawatts. If you think about their system is

primarily hydroelectric; of that 40 gigawatts, that is primarily hydroelectric

power. That is primarily projects that they have built, constructed over the

years. They are a very large organization, I think, it’s 25,000 plus, I believe

the actual number is. Now they obviously have distribution folks and that as

well, but their ability and history, I think, for the benefit of both of us,

both Hydro-Québec as well as Newfoundland and Labrador Hydro and Newfoundland

and Labrador, we would benefit from their history and their success in taking

on the lead of this really, really very big project.

They’ve

just recently executed and concluded other projects to success and we think

that we both would benefit by them playing the lead in this one.

SPEAKER:

The hon. the

Minister of Immigration, Population Growth and Skills.

STOODLEY: Thank

you very much.

know it’s come up already this morning, but I’m wondering if you can clarify,

so the turbines currently at Churchill Falls, why hasn’t Newfoundland Hydro, I

guess, done upgrades to the turbines and now are planned in a contract?

Wondering if you could touch on that please.

SPEAKER:

The Chief Executive Officer.

WILLIAMS: Thank

you, Mr. Speaker.

Mr.

Parsons touched on it a little bit, I think, yesterday. I can’t remember if I’m

getting yesterday and today mixed up. But of the 11 turbines, you invest in

your assets when it’s financially prudent to do so and not before. We’ve just

recently, I guess, a couple of reasons we’ve just over the last number of years

been working with the proponents – I keep looking at MHA Brown but I’m just

thinking about Lab West in particular – but we worked with those proponents to

really understand what are the power requirements.

That

would be, I’ll call it, question one and when you understand their power

requirements, the process is iterative. So you’ll have a proponent come and

say, hey, we’d like this access to power and you have very early conversations

about, okay, well we might be able to get some power for you, what are you

willing to pay? I’m going to call it at a very high level. Someone will say

well we’d like that for half a cent a kilowatt hour, one cent a kilowatt hour.

You’d then weed out some of those folks.

The

folks that stick back around, you start pursuing with them, okay what do you

really want access to? Then you have to talk with them about the access to

power is several hundred kilometers away, we need to build a transmission line.

Are you willing to pay for that transmission line? So those conversations have

to go.

You

end up narrowing down what are the real requests. Then you say, okay, how are

we going to get access to that power? For us to have invested and replaced

turbines before we knew we had an actual customer, that is not financially

prudent to do so.

But

I will pick up on something that Mr. Parsons talked about – again, I think it

was yesterday – for the 11 turbines, every asset in a hydroelectric plant has a

defined or an expected life. Industry is certainly evolving better, too.

Instead of time-based replacement, condition-based replacement, because that is

a better financial decision. For the assets that we would need to change out at

Churchill Falls to get more power out of, they have actually a fairly long

life. I think Mr. Parsons mentioned yesterday the assets are generally probably

about 60 years old before you would start replacing them.

It’s

important to know that we wouldn’t just replace them without them, for one

reason, not being in the condition to replace, or if a customer wanted access

to that power, they would also have to of understood what their financial

commitment is. We would have to understand that, and we’ve been working on that

for years. It’s all of those combination of reasons of why we have not yet done

it.

will say another, third item, is for any project that is above, I think it’s $1

million, we have to go to the CF(L)Co board for approval. So depending on the

justification for the projects that we have with CF(L)Co under the old

shareholders agreement or the current shareholders agreement, which is

committed to be modernized, Hydro-Québec, if they chose during this period

while they have the existing shareholders agreement, they could actually

essentially veto some of those decisions if we brought those forward. So

there’s a whole host of reasons of why we would not have done that to date, as

I’ve just described.

SPEAKER:

The Minister

of Immigration, Population Growth and Skills.

STOODLEY:

Thank you very much. That’s extremely helpful.

One

of the things that I’ve heard from people, I guess people worried about what

happens in the future, how do we maintain power in our – not electricity power,

but relationship power – with Hydro-Québec as the four or five or 10 contracts

progress in length over the long term. I’m wondering if you can talk about any

off-ramps and how – as much as you can, considering all the definitive

agreements are still being negotiated – how do we ensure that Newfoundland and

Labrador is able to react or pivot in the future or have off-ramps or maintain

relationship power with Hydro-Québec?

Thank

you.

SPEAKER:

The Chief

Executive Officer.

WILLIAMS:

Yes, thank you for the question, and thank you, Speaker.

will start and certainly if there’s something important that I forget, I would

ask Mr. Parsons to let me know that he would like to jump in.

guess there are several ways that I would like to expand on that. I picked up,

in particular, on the word “off-ramps,” and I want to jump to that because we

haven’t really talked about that very much here. Again, I could go back to

Schedule E in the MOU. If you look at years 2051 and years 2061 – because one

of the questions that we talked about at length yesterday, but I do think it

warrants repeating as much as possible, is what is the risk of getting the

value of the electricity for the CF PPA.

have put into this MOU the opportunity to connect to several markets. I’ll call

them markets. One is the wholesale rate in Quebec; the northeast markets; as

well as the replacement cost in Quebec. So that, for the duration of the PPA,

allows us to capture that value as that grows and for what we can’t understand

now.

What

is also in

Schedule E is a 250-megawatt block that in the early years, in the

first 10 years beyond what Quebec currently has access to, 250 megawatts will

expire. So Quebec no longer has access to that 250 megawatts. That will revert

to Newfoundland and Labrador Hydro and, at that time, we will determine what is

the value of that electricity at that time.

can choose to use it for our own benefits in Labrador or we can choose, if

those opportunities for customers in Labrador doesn’t materialize, we’re not

stuck with it, then we can choose to sell it back to Quebec. So that is one of

the ways that we can ensure that we are not held to, again, the current

allocation of power to Quebec. That is an off-ramp.

The

same thing happens 10 years after that. Another 250 megawatts will come back to

Newfoundland and Labrador Hydro, and we will, at that time, determine do we

want to use that for access to power, or do we want to resell that back to

Quebec for the value of the electricity that we can’t envision today.

those are some of the off-ramps that it’s different in this contract. That is

not at all the case – we didn’t have expiring blocks in the old contract. We

had no way – so that’s going to happen, say, 2051. We will know we’ve got that

250 megawatts coming totally to us. We can sign a contract with a customer.

Let’s say there’s a customer somewhere else in Labrador who wants to build and

we say, that’s great, I see that 250 megawatts coming and I would like to sign

up for that 250 megawatts; we can start talking about what would that look like

to them because we know that is coming and expiring, even though the rest of

the contract continues. The rest of the PPA will continue; we know we’ve got

access to that.

That’s

a really important aspect that we haven’t really talked about very much yet, is

those expiring blocks really do allow us to capture the value, at that time,

that we cannot envision today.

SPEAKER:

The hon. the

Minister of Immigration, Population Growth and Skills.

STOODLEY:

Thank you, Speaker.

guess this is probably my last question in this section, but one of the things

I think we haven’t really talked much about, which I think is incredibly

important, is the water management piece. I think, in the general public, there

is very little, probably less so than the Churchill Falls deal – I’m just

wondering if you could maybe give us a crash course in water management and how

this MOU changes that, please.

Thank

you.

SPEAKER:

The Chief

Executive Officer.

WILLIAMS: If

I may ask my colleague to take that one on?

SPEAKER:

The Vice-President.

PARSONS:

Thank you, Speaker.

I’ll

try my best to keep it simple.

Everywhere

in the world where there are multiple hydro plants on a single river, there are

complexities in terms of how a reservoir up river might have a negative impact

on a plant further down the river. So it’s very common in the industry to have

what is called a water management agreement, which basically sets up an energy

trade between the plants on the river. So that instead of focusing on

generating just for their own customer, they can focus on working together to

optimize the river as an entire unified generating source.

They

ensure that the units are at the right set points, they’re at their maximum

efficiency, so that the river itself is maximized and then the individual

plants divvy up all that extra benefit that they’ve created by acting more

efficiently. That’s very common in the industry. There are some rivers in the

world with, you know, dozens of small hydro plants on them.

have a water management agreement in place between CF(L)Co and Muskrat Falls

today; however, because of the limitations in the 1969 contract, Hydro-Québec

has control over the dispatch of the plant, which places limitations on how

much CF(L)Co can participate in this optimization of the overall river. We do

some of that optimization, but it’s severely limited by what’s contained in the

old contract.

What

we have here, in this MOU, is an unequivocal commitment by Hydro-Québec to move

to this new, modern approach where there are no restraints on any of the plants

to participate in that optimization. In a world where renewable energy is so

valuable, we have to work together to create as much renewable energy from a

resource that we can.

Because

we will be renewing this partnership at pricing that ensures when Hydro-Québec

benefits in the markets, we benefit in the markets, for example, they have

agreed that full water management unrestrained must be part of how the Churchill River is

maintained, is run – Churchill Falls to Gull Island to Muskrat Falls.

SPEAKER:

The

minister’s time has expired.

The

hon. the Member for Harbour Main.

CONWAY OTTENHEIMER: Thank

you, Speaker.

would like to direct this question to the CEO of Newfoundland and Labrador

Hydro and I only have one question to ask.

Ms.

Williams, in the MOU, is there any clause which requires Hydro-Québec to build

Gull Island? So I just want you to direct me to a clause that states that they

have to build Gull Island, and you certainly can confer with your two

colleagues for that answer.

Thank

you.

SPEAKER:

The Chief

Executive Officer of Newfoundland and Labrador Hydro.

WILLIAMS: Thank

you, Mr. Speaker.

The

MOU contains commitment for both parties to work toward the completion of those

projects.

SPEAKER:

The hon. the

Member for Harbour Main.

CONWAY OTTENHEIMER: My

question – if you can specifically answer the pointed question; it’s a simple

question – is there any clause which requires Hydro-Québec to build Gull

Island? Because I have looked through the MOU and I cannot find a clause. So I

would like you to tell me if there is a clause, if I’ve missed that.

SPEAKER:

The Chief

Executive Officer.

WILLIAMS: The

MOU, again, is best efforts for both parties to get these projects done. There

is no clause that directs Hydro-Québec to build this project, but I really want

to continue to state that Quebec wants this project done and, as I’ve said

earlier today, Premier Legault, himself, has indicated that this is what’s

really important to them. This is why they are here talking to us about the

reopening and the tearing up and, in fact, the replacement, I think, is the

word that we actually use – the termination and the replacement of this

contract. That was in the press release.

it’s really, really important that we continue to state that Hydro-Québec is

very interested and wants this project done. They need more power. They need to

double their system. This is the best project possible. They are saying that

themselves publicly.

SPEAKER:

The hon. the

Member for Harbour Main.

CONWAY OTTENHEIMER: The

question has been answered. There is no clause that requires Hydro-Québec to build Gull

Island.

Despite

the witnesses and Ms. Williams’ hopes and views that this is happening there is

no clause. I would like to continue on and indicate, I have thought about this

overnight and what I’ve heard yesterday from the witnesses, their testimony,

and this morning as well. And this is where I believe we’ve landed.

As a

lawyer for many, many years and having reviewed this MOU, this is what I’ve

concluded. If the 10 definitive agreements are signed, then for the next 51

years the following is true: the MOU gives Newfoundland and Labrador Hydro no

rights to transmit any electricity through Quebec, the MOU as it stands now.

Secondly, the only customer CF(L)Co will have, the only customer CF(L)Co will

have, besides Newfoundland and Labrador Hydro, is Hydro-Québec.

Thirdly,

Newfoundland and Labrador Hydro can not use electricity from Gull Island or the

Churchill Falls to compete with Hydro-Québec. Fourthly, Hydro-Québec will alone

decide whether the Churchill Falls Expansion or Gull Island goes ahead. And the

MOU does not – and we’ve heard this today from the witness, although there was

hesitation to answer the question – require Hydro-Québec to go ahead with Gull

Island.

What

does this all mean for the people of Newfoundland and Labrador, Speaker? It

means that the MOU – and let’s not be fooled again – is intended to put

Hydro-Québec in control of much more than half of the electricity generated in

our province. Hydro-Québec will control whether or not the thousands of jobs

being talked about ever materialize. This all leads me to believe – and this is

my

interpretation – that the MOU will end up giving Hydro-Québec far too much

control for far too much, for far too long. Essentially, Quebec ends up

directing our destiny for the next 50 years and more.

Speaker,

this is a lot at stake here today, and this week. I’ve heard from the

government and from the Premier yesterday the rush to get this done. There’s a

rush to get it done now, and they suggest that if we don’t do it now, we’ve got

to go to 2041. But we do not have to do it now, Speaker. That is not accurate.

The idea that we have to do it now, as fast as possible, or we’re going to have

to wait until 2041, that has to be corrected. That is incorrect, it is

misleading, and it’s a false dichotomy that is really concerning to hear from

this administration, this government.

Our

position here in the Opposition, and we are demanding this, Speaker, demanding

it, that we have at least a month or two to have an independent review. When we

hear the Premier even as early as this morning discussing it and saying: Well,

we have that. That is not true and that is confusing the issue. We do not have

an independent review; we do not have impartial and objective analysis of this.

That’s all that we are asking.

That

is confusing the issue; the Premier is confusing the issue by saying this has

been done. It has not been done. We only have to look at Justice LeBlanc and

his number one recommendation and this has not been done. This is what we are

concerned about, we are demanding that opportunity, for the sake of the people

of Newfoundland and Labrador, and our future.

SOME

HON. MEMBERS: Hear,

hear!

CONWAY OTTENHEIMER: Speaker,

this is very concerning, and we know that we need to have that independent,

objective analysis. We need to have the opportunity to review this. What really

concerns me about this, is the fact that they are presenting and arguing that

this has to be done now, like this week. What is the motive, Speaker? What is

the motive of this administration? And I hope to God it’s not because they’re

planning on calling a snap election to secure another four years of power

before the real secrets of this deal are uncovered and they’ve got that power.

I hope that’s not what’s happening here and that’s their plan, to call a snap

election like Friday or next week because that is not acting in the best

interest of the people of Newfoundland and Labrador. They’re not thinking about

what’s in the best interest of Newfoundlanders and Labradorians, if that is

their intent.

clearly in my view, that’s what this is all about. It’s about calling that

election and they want to justify this by ramming this MOU through and then

going to the polls.

Speaker,

these are our concerns as the Official Opposition here and these are legitimate

concerns. We’re concerned we’ve only had a very limited time to review this,

very limited time; don’t be fooled, we’ve heard from them saying that this is

not signed, it’s not binding. There are provisions that are clearly binding in

this agreement and we will be stuck with. This is the basis of the contract so

do not be fooled.

that point, Speaker, I’m asking that this is what we respectfully request: A

month or two to have independent analysis, which has not been done, by no means

has it been done yet, and we will have that security and that comfort because

there is nothing in the MOU that gives me, as a lawyer, and I’m not an expert

in Power Purchase Agreements or anything, but we’ve heard externally, from

outside this House of Assembly, from people who are raising these concerns and

we need to listen to them.

that note, I’ll conclude and, hopefully, what will be done here will ultimately

be what’s in the best interest of the future of our generations, our future

children and grandchildren. We do not want to repeat the mistakes of the past.

Thank

you.

SOME

HON. MEMBERS:

Hear, hear!

SPEAKER: Any other speakers?

The

hon. the Government House Leader.

HOGAN: Thank

you, Speaker.

was going to respond to the time that was still up, but that’s fine.

SPEAKER: There was no question.

HOGAN: T hat was my point, Speaker,

there actually was a question at the start of her speech, so I just wanted to

clarify what the question actually was because she asked several questions,

leading off with when we get to the definitive agreements.

The

point I wanted to make was, was the question about the MOU or was the question

what will go into the definitive agreements? Because I think it’s an important

point. We do have an MOU and that’s what we’re here to debate is what the MOU

means. So when we talk about how it will be constructed, how it will move

forward into the definitive agreements, it is a process and, of course, this is

a 30 page-ish MOU and we talk about, I think, the number is 10 definitive

agreements. Of course, there’s more work to do. Of course, there are

negotiations that will be ongoing between NL Hydro and Hydro-Québec.

With

regard to independent oversight, it’s very clear on this side of the House that

the commitment has been made. It’s been very clear with the media, they’ve

reported on it as well, but for some reason it’s not being heard over there,

that the Premier has committed to further independent oversight. They disagree

with the fact that independent experts have given advice on this already to get

to the MOU.

will be interesting to see how they disagree with that tomorrow and Thursday

when those independent experts will be here answering questions about the

advice they gave.

SOME

HON. MEMBERS: Oh,

oh!

SPEAKER:

Order,

please!

HOGAN: Touched

a nerve there, Speaker, I guess. They don’t like facts; here we are.

But

we will hear from those independent experts tomorrow and the best part about it

is that they’re here to answer questions about their independence and about

their expertise and about the MOU.

That’s

a great opportunity for us on this side of the House and the other side of the

House to ask those questions, to be clear about what the independence was, to

be clear about their expertise and to be clear about how that expertise

provided advice and how it became part and formed the MOU.

The

part that people on the other side of the House aren’t hearing is that the

Premier has committed to – outside of the advice that has been given to date –

an additional oversight model, as the MOU goes toward definitive agreements.

That has been committed. I think actually when he spoke at the debate Monday

morning, the first speech that was given on this resolution by the Premier of

the province, said that he is committed to providing that additional

independent oversight of the MOU and as the MOU goes forward to definitive

agreements.

That’s

something that has been asked for, that’s something that the Premier has

committed to and I can’t be more clear, that what is being asked is being

provided by the Premier, Speaker.

Thank

you.

SOME

HON. MEMBERS: Hear,

hear!

SPEAKER:

The hon. the

Member for Harbour Main.

CONWAY OTTENHEIMER: I’ll

ask the question of the minister. The question that I actually asked the CEO of

Newfoundland and Labrador Hydro is: Was there any clause that requires

Hydro-Québec to build Gull Island? Which was stated that there wasn’t, so let

me be very clear, Minister; just to clarify that with the minister.

The

other point I’d like to rebut on what the minister just said is that the

Premier is committed to a further additional independent oversight model and

with reference to the experts that are coming in tomorrow, we questioned the

level of independence, Speaker.

Maybe

I can ask the minister this question: These experts that are coming in

tomorrow, who are they hired by, Minister?

SPEAKER:

The hon. the

Government House Leader.

HOGAN: The

experts were retained by Newfoundland and Labrador Hydro.

SPEAKER:

The hon. the

Member for Harbour Main.

CONWAY OTTENHEIMER: That

clearly goes to the level of objectivity and independence, if they are hired by

Newfoundland and Labrador Hydro. We’re talking about who they are answerable to

and that impacts their level of independence.

That’s

what we’re getting at here, Speaker. We want people independent, that are not

hired. If you’re hired by someone, that definitely questions your level of

objectivity and independence.

SOME

HON. MEMBERS: Oh,

oh!

SPEAKER:

Order,

please!

the Member finished?

CONWAY OTTENHEIMER: Is

there any response to that, Speaker?

SPEAKER:

Oh, sorry.

Go ahead.

CONWAY OTTENHEIMER: That’s

my position. Maybe the minister or someone could respond to that.

SPEAKER:

The hon. the

Member for Lake Melville.

TRIMPER: Mr.

Speaker, I’m just confirming that I can take a speaking time. I’m right in the

middle of the Member for Harbour Main’s time. Can I go ahead? I was going to

make a presentation and now seems like an appropriate time. Am I able to do

that?

SPEAKER:

Are you

finished with your speaking time?

CONWAY OTTENHEIMER: Yes.

SPEAKER:

He’ll use

his own time then. So stop the clock and we’ll reset.

TRIMPER: Put

it on myself.

Thank

you.

SPEAKER:

The hon.

Member for Lake Melville.

TRIMPER: Thank

you, Speaker, and thank you to my colleagues.

don’t have a good order and I wasn’t going to deliver this until later this

afternoon, but now does seem like an important time because there is

disagreement. I think we need to have some clarification around exactly what we

are talking about when we refer to an independent consultant.

Well,

yours truly worked as an independent consultant from 1987 to 2014. I’m just

going to cite a little definition; I was just writing it down: “An independent

consultant is a non-employee who provides services to the general public, as

opposed to a single employer. Typically, they work on a contract basis” – as

we’ll find out from these folks later this week – “meaning they work for a

client for a set duration of time, as an employee of their own company or under

self-employment.”

What

that talks about – and if you are going to be in the consulting game as a

career, I can tell you it’s all about your reputation.

BYRNE: Does

a lawyer fall under that same category? Is that the same thing as a lawyer?

TRIMPER: I’m

going to speak about an independent consultant.

The

point I want to make is that the people that had been retained by NL Hydro, by

the provincial government, frankly by the Opposition, to prepare for this

debate this week, their reputations are on the line. Their performance on each

of these individual contracts that they perform, that is the basis for which

they will pursue other work. You have to be thinking about this constantly.

in the consulting world, I worked as a terrestrial environmental scientist

leading on frankly every environmental assessment in Labrador over three

decades and around the world, the World Bank, foreign affairs and so on. Your

reputation has to stand up or you just don’t have any credibility when you go

before it, because often you’re working – I worked in the world of proponents

and resource development and the regulators will just not tolerate you. You

will not have an opportunity to get to the table.

this idea that somehow these amazing companies that have been retained to

provide advice for Newfoundland and Labrador Hydro and our province in pursuing

this MOU, their reputations are stellar. They have to be stellar. If they’re

going to be a gun for hire and give their particular contractor, their client

at that time, whatever it is they want to hear, they’re not going to last long.

I can tell you in my own personal experience, and I get the concern.

I’m

going to take the lead from the Minister of IET because he’s often reaching

across to the Opposition and talking about their perspective and what they’re

feeling. I get it, the point when you say: Oh, they’re working for so and so.

Again, I say your reputation is stellar, but I can also tell you the pressure

does exist and certain proponents, depending on who they are, they will say:

Are you sure that’s not a significant effect? Are you sure that this should be

done this way? Are you sure we don’t need to invest in whatever, a capacity

mitigation measure and so on? That pressure is there. You have to stand up for

your values.

can tell you over the period of my career, that 30 years, there was five times

when my company walked away from clients and opportunities because we could not

find a way to demonstrate the professional approach versus – let’s just say –

the objectives of the client, five times I saw us do that, and sometimes those

contracts were huge, but our integrity was important.

can tell you, while you’re putting out the idea of perception, that just

because one of these world-class experts that we’re going to be hearing from

was working for a particular entity, such as the fine folks here in this room,

NL Hydro, that does not mean that they in any way compromise their values,

their objectives and so on.

heard some commentary earlier from the consultants supporting the Opposition.

There he is, he’s in a position where he’s providing advice. He is employed by

himself. He doesn’t work for the Opposition. He’s on a contract basis and he’s

calling into question, essentially, peers in the same service that they’re not

independent but he is. I just wanted to put this on the floor and let people

really think about it.

The

folks that we’re going to hear from later this week, it’s their reputations

that are on the line as well. For all the concern and all the seriousness that

we’re taking to this debate, we have to understand we all have a stake at this,

getting it right, including those experts.

Thank

you, Speaker.

SOME

HON. MEMBERS: Hear,

hear!

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: Thank

you, Speaker.

I’m

going to start off this morning with a little bit of different line of

questioning, but it raises significant concerns for me and it bothers me, and I

think it will bother every single Member of the House of Assembly and the

people of Newfoundland and Labrador. I’ll ask the question to the CEO about

this and then I’ll reference it.

want to know if the CEO of Newfoundland and Labrador Hydro is aware that

Hydro-Québec exports electricity into the United States and, as a result of

that, they file what’s called an 18-K with the U.S. Securities and Exchange

Commission.

SPEAKER:

The Chief

Executive Officer of Newfoundland and Labrador Hydro.

WILLIAMS: Thank

you very much, Mr. Speaker.

Yes,

I am very aware that they export into the United States and, as we’ve discussed

in

Schedule F of the MOU, it’s where we will tie a portion of the price for the

CF PPA to those export markets. With regard to anything with securities, Mr.

Parsons actually has accountability for energy marketing at Newfoundland and

Labrador Hydro and I think he could certainly provide for any further

perspective with regard to any obligations that Hydro-Québec may have.

SPEAKER:

The Vice-President

of Newfoundland and Labrador Hydro.

PARSONS: Yes,

we’re aware of the 18-Ks.

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: Speaker,

just so the people out there, the public listening in, understand, an 18-K is

an annual report of Hydro-Québec that they file into the United States because

they do business there, but included in that annual report is a map which

outlines their major facilities of where they do business. On that map – which

I have here, which I will table, which they have been doing year after year,

and this is 2023

– that they filed with the U.S. Securities and Exchange Commission is they

document that map that identifies the border between Labrador and Quebec as –

quote – not final.

The

Province of Quebec and Hydro-Québec, after all these years, have still decided

that they do not recognize the legitimate boundaries of Newfoundland and

Labrador. That’s there, right here in this filing in the United States in their

official documents, and that should bother everyone. If this document that they

filed had the border with Ontario recognized as not final or the border with

Maine recognized as not final, then there would be uproar – there would be

uproar. And we’re about to turn control of the Churchill River developments

over to Hydro-Québec and the Province of Quebec.

So I

ask: Does that bother people from Newfoundland and Labrador Hydro and does it

bother the people here?

SPEAKER:

The hon. the

Premier.

FUREY: Thank

you, Mr. Speaker.

Certainly,

that map is a misrepresentation. We should all be cognizant of that map, of

course, but what we need to be more aware of is the Privy Council decision

which declared that boundary to be final. And make no mistake, under this

government or any other government, that boundary is final. Whether they want

to believe in it or not is up to them. They can believe in bogymen and

everything else, but that boundary is real, final and definitive.

SOME

HON. MEMBERS: Hear,

hear!

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM:

Speaker, that’s great to say that.

ask the Premier: Have you asked Hydro-Québec or the Province of Quebec to

recognize the boundary and change that map in their filings of their annual

returns?

SPEAKER:

The hon. the

Premier.

FUREY: Thank

you, Mr. Speaker.

don’t speak to the CEO of Hydro-Québec. What I have said to the Premier of

Quebec, that boundary is final, non-negotiable and will be forever – period.

SOME

HON. MEMBERS: Hear,

hear!

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: How

difficult is it then that they’ve refuse to change this boundary in official

documents that they file? Their annual report that Hydro-Québec files in the

Province of Quebec has the same map. The annual report they file in the United

States has the same map. We can’t say in this House of Assembly to stop it,

take it out? We’re about to hand over the resources of the Churchill River to

Hydro-Québec. It’s time they stopped this nonsense, that we put an end to that.

So,

again, will that be part of what we’re talking about here in these definitive

agreements? That we get a definitive decision that this is not good enough,

that this needs to stop?

SOME

HON. MEMBERS: Hear,

hear!

SPEAKER:

The hon. the

Premier.

FUREY: The

definitive and concrete decision that is good enough, is the Privy Council

decision that declares that border accurate and firm. We can publish maps all

we want that have other people associated with us; that doesn’t make it real or

true. What does make it real and true is the Privy Council decision and no

Newfoundlander and Labradorian would tolerate anything but.

SOME

HON. MEMBERS: Hear,

hear!

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: Speaker,

we all agree that the Privy Council is the one that should be respected. But

unfortunately, the Province of Quebec and Hydro-Québec do not respect the

decision of the Privy Council.

SOME

HON. MEMBERS: Hear,

hear!

WAKEHAM: I

find that bothersome, and I find that we’re about to enter into an MOU with a

province that doesn’t recognize our borders, and it’s about time they did, and

I would ask that it be included in this MOU.

SOME

HON. MEMBERS: Hear,

hear!

SPEAKER:

The hon. the

Premier.

FUREY: Mr.

Speaker, not only is it included in the Privy Council decision, it is included

in the boundaries of the province; it’s included in the definition of Canada.

It’s definitive, it is real and it is non-negotiable now or ever in the future,

Mr. Speaker. It is final. It is our boundary. It’s our boundary to protect and

we will always do so.

SOME

HON. MEMBERS: Hear,

hear!

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: Speaker,

this is about respect. We can say all we want about all those things, but

Hydro-Québec in their annual reports says it’s not final. The Province of

Quebec and Hydro-Québec – Hydro-Québec is wholly owned by the Province of

Quebec and they don’t respect that boundary. That’s the point we’re making

here.

It’s

time that, as Newfoundland and Labrador, we had that respect. Ontario wouldn’t

stand for it, Maine wouldn’t stand for it, and neither should we. It’s time

that we turned around and said no.

SOME

HON. MEMBERS: Hear,

hear!

WAKEHAM: Take

it out. Fix it. We want to do business. Let’s do business, but let’s recognize

the legitimate border, as the Premier has said, that the Privy Council

established years and years ago. Let’s recognize that – 1927, the Premier

wanted to know. There you go. But let’s establish that and let’s get it done.

Thank

you very much. Let’s move on.

SPEAKER:

Any more

speakers?

WAKEHAM: I

have more questions.

SPEAKER:

Okay.

The

hon. the Leader of the Official Opposition.

WAKEHAM:

Speaker, this morning, the CEO of Newfoundland Hydro referred to – and the

Premier referred to it yesterday – $225 billion in total revenue coming to the

Treasury of the province. We’re here today and yesterday, and for the next two

days, talking about an MOU and nowhere in the MOU can I find a reference to

that number.

So I

would ask the CEO: Is there a schedule? Will you table the

schedule that shows

exactly where that $225 billion to the Treasury is coming from?

SPEAKER:

The Chief

Executive Officer of Newfoundland and Labrador Hydro.

WILLIAMS:

Thank you, Mr. Speaker.

Yes,

I believe after our briefing with the technical advisors, or the advisors on

Saturday, that we committed to providing, I think it was a breakdown of the

$180 billion, to make very clear what that was made up of. I believe that was

sent. I would have to get somebody to check for me what mechanism that follows,

but I believe that would have gone through the Clerk, through to the folks, so

I believe that’s the case.

However,

we are also going to publish – hopefully today – exactly that request, which

would better break down the $227 billion. Also, to make very clear, that those

numbers are after Hydro Québec also gets its dividends. Because there has been

a fair bit of confusion, publicly, that that number there is before

Hydro-Québec gets its dividends, and that is not accurate.

we’re going to publish and, therefore, I guess, table in the appropriate

mechanisms – I will need help with that – that information so that it makes it

very clear exactly what that is.

But

I would like to just mention really quickly that the MOU, on the very first

page, is a Memorandum Of Understanding For A New Long-Term Energy Purchase

And Development Initiative Between Newfoundland And Labrador Hydro And

Hydro-Québec . So the MOU itself wasn’t a calculation of the benefits to the

provincial Treasury. That would have been calculations that would have been

done informed by the MOU, but the MOU is not between the provincial government

and Hydro-Québec. It is between Newfoundland and Labrador Hydro and

Hydro-Québec; therefore, that’s why you would see the things referenced as

payments to CF(L)Co, those sorts of things, as opposed to payments to the

provincial government.

SPEAKER: The Leader of the Official

Opposition.

WAKEHAM:

Again, the information you provided yesterday added up to $180 billion. This is

$225 billion. There is a difference there that I would like to understand.

Then,

in the

Schedule G, which you outlined – because this about a new deal with

Hydro-Québec and new revenue to be received from Hydro-Québec. What I’m getting

at is, I know there are dividends there and hydro and the water rights and

everything else, the rentals that we already collect revenue from, what is the

total amount of new revenue, firstly, that will flow to CF(L)Co from

Hydro-Québec – is that

Schedule G for the old agreement?

Secondly,

what is the total revenue that will flow to the Treasury from payments by

Hydro-Québec, and how much does that total to?

SPEAKER:

The Chief Executive Officer of

Newfoundland and Labrador Hydro.

WILLIAMS: Thank

you, Mr. Speaker.

Yes,

we are committed to, today, filing a breakdown of the $227 billion. As you’ve

mentioned, we’ve already tabled an explanation of the $180 billion as it

relates to benefit to the Treasury. So we will add to that to ensure that it is

the fulsome of the $227 billion. So that will be done today.

The

other item that helps – because, I think, the start of your question was about

what is the total revenue going to CF(L)Co. What you will see in the other

document – which I know that this won’t be reflected in Hansard but it’s

this chart, a long chart that shows – it’s titled Volumes to HQ and NLH, and

associated payments from HQ and NLH to CFLCo (existing generation only). Again,

I’m not sure what the mechanism is for that to get through to the various

parties, but that was also provided, I believe, Sunday night.

What

that totals there is the total payments that will come from both Hydro-Québec

as well as Newfoundland and Labrador Hydro to CF(L)Co. You can see that

detailed on that chart that was tabled – again, I’m saying tabled. I’m sorry if

I’m not using the correct terminology, but that was provided on Sunday night.

We’ll make that available as well on the public website.

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: Again,

Speaker, the table that I received on Sunday night shows common dividends from

65.8 per cent ownership of CF(L)Co of $131.8 billion. Is that Newfoundland’s

share of the additional amounts Quebec will pay? What I’m trying to establish

is, what is the revenue that CF(L)Co will get from Hydro-Québec over this,

compared to

Schedule G – it says

Schedule G, that these are the payments from

Hydro-Québec.

these are payments to CF(L)Co from Hydro-Québec, and they total how much?

SPEAKER:

The Chief Executive Officer of

Newfoundland and Labrador Hydro.

WILLIAMS:

Thank you.

if the question is what are the payments from Hydro-Québec to CF(L)Co,

Schedule

G details the forecasted payments. They total $195 billion. I think the

question also is surrounding what goes to Treasury.

This

is where I’ll go back and say the MOU is between the utilities; it is not

between government. So the MOU details what goes from Hydro-Québec to CF(L)Co.

The table that was mentioned about Sunday night, that was an explanation of the

$180 billion associated with the existing generation. That goes directly to

provincial Treasury. That rises from all of the revenue streams to CF(L)Co from

both Hydro-Québec as well as Newfoundland and Labrador Hydro and as part of the

operating costs, which include the water rentals and royalties that go directly

to Treasury.

they’re companion documents; they are not the same information represented in

two different ways. One is payments to CF(L)Co and the $180 billion is a

separate explanation that is provided and calculated outside of the MOU,

because the MOU is not between Hydro-Québec and the provincial government.

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: Speaker,

I would go back and try this again. First of all, these are all forecasted

payments, correct?

SPEAKER:

The Chief

Executive Officer.

WILLIAMS:

Absolutely.

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: Forecasted

payments. I’m looking at

Schedule G. These are payments by Hydro-Québec to

CF(L)Co from 2025-2075. They add up to X – again, what was that amount, sorry?

SPEAKER:

The Chief Executive Officer.

WILLIAMS: It

is $195 billion.

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: So

that’s the gross that goes into CF(L)Co from Hydro-Québec: $195 billion. Of

that, 35 per cent of that, technically – after expenses, though, you haven’t

factored out expenses or anything in this forecast. These are gross revenues,

correct?

SPEAKER:

The Chief Executive Officer.

WILLIAMS:

Yes, that is correct.

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: So

$195 billon gross revenue over the period of this contract is what Hydro-Québec

will pay for the revised Upper Churchill contract. That’s the estimate, that’s

the forecast amount.

Coming

from that, that goes into CF(L)Co. CF(L)Co will then pay all of their expense,

their debt, whatever, and then what’s left, a portion of it, will be

distributed 65 per cent to – for the sake of rounding – Newfoundland Hydro and

35 per cent to Hydro-Québec.

Have

you got a forecast of what that net amount might look like?

SPEAKER:

The Chief Executive Officer of

Newfoundland and Labrador Hydro.

WILLIAMS: My

apologies for asking, but when you say the net amount might look like, I’m not

sure what you mean because that is the –

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: Sorry,

yes, what I’m getting at is, this is gross revenue. So this gross revenue goes

into CF(L)Co. It’s $195 billion. Somewhere along the line there are expenses.

Have you estimated what those expenses are? When you talk about how much

revenue is going to flow to the province, are we simply talking gross revenues,

or are we talking net?

Because

if we’re talking net, then there must be somewhere, somehow that someone has

said $195 billion flowing in through

Schedule G to CF(L)Co, there’s a series of

expenses, debt, whatever that has to come off of that. There’s a net amount

left that will be distributed between Newfoundland Hydro and Hydro-Québec and

that is, technically, what’s left to go to the Treasury.

I’m

just trying to get a handle on what that amount is. I don’t want to factor in

any of the preferred dividends or the water rentals or the things that we get

now. I’m trying to establish the new revenue, that stream that we’re going to

get, as a result of this deal. We know there’s more revenue coming in. I’m just

trying to get to understand exactly what that looks like.

SPEAKER:

The Chief Executive Officer of

Newfoundland and Labrador Hydro.

WILLIAMS:

Thank you.

Again,

I’m not sure how this information makes its way, but I reference this chart

that we would have sent along as well. So with regard to the revenues to

CF(L)Co, you’ll see at the bottom of that table a

summary and a total, so

instead of going by year, you’ll see HQ will pay, that is – what is the total

revenues to CF(L)Co, which is not revenue to provincial government – $194.7

billion. Right next to that is the revenue that Newfoundland and Labrador Hydro

are going to pay CF(L)Co as well.

that is a significant revenue stream, of which Hydro will also then receive the

benefits from CF(L)Co. So that is another $83 billion in payments that this

jurisdiction will pay for the power it will receive and the increased power

amounts as we’ve been talking about.

the two of those together is the total revenue stream that will go into CF(L)Co

into the future and it’s after that then, to your point, is where the dividends

will then come out.

SPEAKER:

The hon. the

Leader of the Official Opposition would wish to continue with leave.

leave granted?

HON. MEMBER: Leave.

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: Thank

you.

I’ll

just finish up with a couple of more questions on this subject. In the fact

sheet that has been distributed about Churchill’s new chapter, it says: “ More

than $225 Billion in total revenue to the Newfoundland and Labrador

treasury from the new power contracts and the new developments.”

Can

we get a breakdown of that number? Can you table that today?

SPEAKER:

The Chief

Executive Officer.

WILLIAMS:

Yes, (inaudible).

SPEAKER:

Could you

repeat that, I don’t think Hansard got that.

The

Chief Executive Officer.

WILLIAMS: Sorry,

Mr. Speaker.

Yes,

I’ve committed that we will do that.

SPEAKER:

The hon. the

Leader of the Official Opposition.

WAKEHAM: That

will conclude my comments for this morning.

SPEAKER:

Thank you.

The

hon. the Government House Leader.

HOGAN: Just

to make a quick comment. I know the CEO from NL Hydro has committed to tabling

documents. I don’t think that she’s permitted, that’s fine, but anything that

she has committed will be tabled through me, as Government House Leader.

SPEAKER:

The hon. the

Member for Humber - Bay of Islands.

JOYCE: Thank

you, Speaker.

I’m

going to stand and take a few minutes just to speak on the few things that were

brought up earlier. One of the things that was brought up was Gull Island. I’m

going to give people in this House a little history lesson because I was here

in 2001 and 2002 when Voisey’s Bay was done, which has proved to be a great

deal for the Province of Newfoundland and Labrador.

There

was also another deal, that was Gull Island, it was scuttled. It was actually

scuttled. That was 22 years ago. I was in this House debating it. I was part of

coming up with the agreement for Gull Island. So 22 years later, almost 23

years, we’re back here again about Gull Island and nothing done.

I’m

going on memory, I always remember this, Quebec was going to do the deal and it

came down to they couldn’t do it. There were loans from government. The number

six was that this deal would fail if the Government of Newfoundland and

Labrador became bankrupt. So with the Opposition at the time and the public

outcry and a few people resigning, the deal was scuttled. Here we are again

today, 23 years later, talking about the power at Gull Island and the jobs.

feel strongly that we should try to do something with Gull Island, I really do,

because we put it off now for 20-something years. I remember we had it, the

deal was out, the jobs, we started some of the work on it, but it didn’t happen

and here we are again today.

Now

we got almost the same deal. Quebec is going to take it. Quebec is going to go

with it. Quebec is going to pay for it. Cost overruns, Quebec is going to take

care of it. Almost the same thing that we had back in 2001, and I was here. No

other Member in this House was here that went through that and it was just

thrown out.

we’ve got to put safeguards in, absolutely no doubt. But somewhere along the

line, we have energy there that we should find some way to develop. I heard the

Opposition talk about the day is up in Quebec. It is. On that agreement, it is.

But isn’t it better to try to take a chance to do it than wait another 23, 24

years to get it done?

was here. I went through it. I went through every part of the detail. I will

give the premier of the day, Roger Grimes, credit. He would come in with an

agreement and say: Here’s the agreement. Take it home, ask whoever you want for

details, questions, and come back. We did that day after day, week after week,

until we had something that we thought we could sell the best for Newfoundland

and Labrador, and it never happened.

this idea that Quebec is in control. Yes, they are. They were in control back

then also. But we have to try something. I could ask the CEO later: If Quebec

don’t go, we still have the ability later to go ahead and start the project at

Gull Island? I’ll ask the CEO.

SPEAKER:

The CEO of

Newfoundland and Labrador Hydro.

WILLIAMS: So

the answer to the question is, if Quebec chooses not to proceed with Gull

Island, their exclusivity ends and we absolutely have the ability to pursue

that project with another proponent.

SPEAKER:

The hon. the

Member for Humber - Bay of Islands.

JOYCE: So

that’s the question on it. So we still have the right to do it.

was 2001 when this came up; we had this in place. So I want to put that in

context of this debate, that we’re still waiting for the benefits, the jobs,

the money that we could make from Gull Island, 23 years later when I was in

this House trying to get it done. So just keep that in context. I heard the

history is bad, it brought about the boundaries and I agree we should probably

get the boundaries. Should we scuttle this deal because of that? How that came

up in this House of Assembly?

was at a conference in the New England states and who was there was a former

Member of Waterford Valley, I think. He was there and that came up on a chart;

just a chart down there talking about the boundaries of Quebec. Next thing you

know, that Monday, there was questions in the House of Assembly: How come that

boundary is there?

This

has been on the go, I’d say 2000, I remember it being brought up and there was

a question asked in the House of Assembly here in 2000, 2001 about the same

boundary that we’re saying now the deal that we need respected. The same thing.

Quebec is not going to change that; they’re not going to do it. That was

brought up in the House in 2000 and then the government changed at the time.

The government went ahead and no one brought it up again. The only time this

comes up, again, is when we’re in discussions with Quebec. When was the last

time anybody heard that brought up in this House of Assembly? The last time was

2001, 2002 after we came back from the New England conference. That’s when it

was brought up.

HON. MEMBER: (Inaudible.)

JOYCE: Pardon

me?

That’s

the last time it was brought up. Should we get it confirmed? Yes. Definitely we

should but let’s not wait and try to hold hostage on something like this

because this has been on the go for a number of years and history does help,

experience does help. I’m going to put that in perspective also.

The

other thing, I just want to give the Chief Executive Officer some credit. The

Member for Mount Pearl - Southlands went down last night and we had a

conversation about some of the numbers and how they were confusing. The CEO

said to us, yes, it is kind of confusing. There was a commitment made last

night and I’ve no doubt it’s going to follow through on it that we’re going to

put the numbers to make it easier for people to understand and smooth out.

That’s

what the Member for Mount Pearl - Southlands and I was with him last night and

I think the Premier joined us for a while also. They’ll put the numbers out so

the general public can look at the numbers and say, okay, here’s how much we’re

getting after the dividends, the 34 per cent CF(L)Co. When it’s all lumped in

and we’re all saying, well, when they take the 34 per cent and the person that

was helping us out with this whole review, that was one of his concerns, is

that when this money goes into this pot, 34 per cent is gone. The CEO said

they’re going to change it and said no, no, what we’re going to put in now is

after the dividends – after.

LANE: Money

to the Treasury.

JOYCE: Money

to the Treasury was what the Member for Mount Pearl - Southlands said: What is

the money to the Treasury? This is what this debate does and I thank the expert

people in front of us for understanding that.

There

was another commitment made this morning, also.

LANE: Questions

and answers.

JOYCE: Questions

and answers: what was agreed to today. I think it’s great, some of the question

that were asked in this House today: here’s the question; here’s the answer.

We’re doing it in this House so if we can go online, some of the questions that

were asked here and some of the answers, so the general public will know.

That’s the whole idea of this here, the general public will know.

still think the oversight, we need some kind of oversight, I really do, to look

at the MOU and then to follow it on through. I feel that. I’m hoping that will

come up.

But

I just want to stand again – and I’m not saying anybody is right or wrong on

any of this, I just want to give the history of it, because if that project had

gone ahead back in 2001, 2002, we would be having benefits from it now, but it

didn’t go ahead.

I’m

not saying that this should go ahead until Hydro-Québec does their due

diligence and Newfoundland Hydro does their due diligence, but that history is

that 23 or 24 years ago, this was all in place to go and I was a part of it.

The Premier at the time had it pretty ironclad, but then the Opposition in the

province, it was scuttled.

can see it’s 12 o’clock, I’ll take my seat. I’ll save the other minute for

later, Mr. Speaker.

Thank

you very much.

SPEAKER: The hon. the Deputy

Government House Leader.

DEMPSTER:

Thank you, Speaker.

move that this House do now go to recess until 1 p.m.

SPEAKER: A seconder?

DEMPSTER:

Seconded by the Minister of Municipal and Provincial Affairs.

SPEAKER: This House do stand in

recess until 1 p.m. this afternoon.

Recess

The

House resumed at 1 p.m.

SPEAKER

(Bennett): Order,

please!

Admit

visitors.

Before

we begin this afternoon, I would just like to welcome people into our public

galleries again this afternoon.

Welcome.

The

hon. the Government House Leader.

HOGAN: Thank

you, Speaker.

just have one document at this time that I’d like to table. It is entitled:

Volumes to HQ and NLH, and associated payments from HQ and NLH to CFLCo

(existing generation only).

I’ll

table that, Speaker.

SPEAKER:

The hon. the

Deputy Government House Leader.

DEMPSTER:

Thank you, Speaker.

Often

when I speak in this House, like many of colleagues, I will stand and say it’s

a tremendous privilege for me to speak and, in my case, as an MHA to represent

the people of the beautiful District of Cartwright - L’Anse au Clair. I have

been reflecting on what I would say in my opening at this historic time. When I

woke up this morning, there was a song that was in my head. I’ll save you – I

won’t sing it here today, Speaker –

SOME

HON. MEMBERS: Oh,

oh!

DEMPSTER: –

but some of colleagues will know it, I’m sure, but I’ll give you a verse of it:

There

is a land of boundless beauty, where the untamed rivers run, and majestic

snow-capped mountains, rise to meet the morning sun. There are silent sunlit

valleys, undiscovered, unexplored; it’s a home for free of spirit. It’s a land

called Labrador.

SOME

HON. MEMBERS: Hear,

hear!

DEMPSTER:

And I have to start with that as a fiercely proud Labradorian. I know that I

have colleagues in the House from Labrador, some like me, still privileged to

live in Labrador and call that place home.

I’ll talk about that sort of as I move throughout, but what I wanted to say –

and I said it in Goose Bay when I flew up with the Premier on the 14th of

December and we addressed folks in that really full auditorium that day, the

Lawrence O’Brien Arts Centre, and it was interesting, Lawerence’s role in some

of the history and to do that in a place that was named after him.

I’m

always mindful that we do stand on the shoulders of those who came before us,

but I talked about how many of my colleagues say what a tremendous privilege at

this point in time, but I also feel the weight of responsibility. As the

minister responsible for Labrador at this point in time, I came into this House

of Assembly at a very tumultuous time in our history.

2013, we had had a megaproject that was sanctioned for $6.6 billion. I think we

ended up over $13 billion by the time it was all said and done. I was going

back through material and I was reading some of my comments in a PMR that I

spoke to in March of 2014, when the government of the day, we already had $5

billion committed of a project that was to be $6.6 billion when the government

of the day brought in a PMR that they were going to bring in oversight.

felt it was a little bit late to the game. Up until that time, we had asked

many, many questions in the House. We were concerned of what this was going to

mean to the taxpayers in the province. I will say – I meant to say this at the

opening – it was interesting, and I’d be remiss if I didn’t say this today in Hansard ,

the day that we started debate on the MOU in the House for this next project,

four megaprojects really what we’re debating here, is the day that our prime

minister stepped down.

I do

thank him for a number of things that he did working with our Premier for the

Province of Newfoundland and Labrador. But, in particular, for the $5.2 billion

of the loan guarantee that helped us mitigate rates in this province so that

seniors would not experience rate shock. Because those of the kinds of lessons

that we have learned from megaprojects in the past where we did not have

independent experts, where we did not have panels, where we did not have

oversight committees.

it was heartening to hear the Premier stand yesterday morning, as we started

debate on this MOU, to say that those mechanisms will now be in place, to say

that we have learned from the mistakes of the others. Also, Speaker, not lost

on those of us who lived through the history of the past megaproject, the

overruns, the money that was on the backs of the residents of Newfoundland and

Labrador, but to have come to a place where Hydro-Québec is willing to accept

the cost of the construction, the cost and risk of overruns, $3.5 billion that

the people of this province will not be on the hook for.

Speaker,

many people say, what’s the rush? Why now? In very simple terms – and a lot of

this is very, very technical. It’s very complex and I won’t go down that road,

but in simple terms we’ve heard it said and it’s been talked about for quite

some time now that Quebec needs the power. They need the power and if we don’t

work a deal with Quebec, they will find their power another way. Why the rush?

Why don’t we wait until 2041?

Speaker,

we would be giving up $17 billion. From 1969, the old contract, until today, we

received $2 billion in total – $2 billion. Now we have a chance for $17

billion. Every day we come in this House and we have needs around this

province. We have 10,000 kilometres of roads, we have ferries and we have

schools. Every day in this House, folks are debating and looking for things for

their districts and for the province. So I want to share at the opening that

that money will go a long way to helping the people of the province.

also want to say, Speaker, two things that were missing from the ’69 deal, is

that this price will escalate over time and it will be tied to market prices.

It’s really incredible when you think about where we’ve gotten today. I know

folks say we have three or four days here in the House. I was thinking about

that as someone who’s been sitting here in the front row for a long time

involved with House management and working with the Government House Leaders.

If you think about the hours of debate that we have in a normal sitting, what

we’re doing here in four days is really three weeks is what it equates to in

debate. So it’s important to know that. Plus, it’s something that’s been talked

about for quite some time.

This

MOU is one part of the process. The Premier was very clear from the outset that

he would take the MOU to the House to be debated by all sides. We are doing

webinars around this province. Webinars in the morning, in the afternoon, in

the evening for people to have an opportunity to ask questions of the experts

and the various guests. The Premier has also committed that in 2026 the

agreement will come back. Quite a contrast to the megaproject that, in my early

days, a little bit more than a decade ago now that I was here in the House and

what we experienced and what our whole experience was.

think one more comment I wanted to make on the project is that there’s

snippet and that’s all they understand. One of the things that I wanted to put

on record here is that when you look at the combined ownership of all of the

new development, 65 per cent of that goes to NL Hydro and 35 per cent is

Hydro-Québec. It’s important that we note that, because we’ve seen a lot of

different figures thrown around, misinformation.

Speaker,

I’ve read this. It’s been a long time ago, but the last couple of days sitting

in the House I’ve been thumbing through the Muskrat Falls: A Misguided

Project . It took me back through such a tumultuous time in Labrador in

particular. We were travelling to Labrador for months, being met with protests.

You’d go into an office for a meeting and when you came out, you were literally

walking over bodies. It was a really difficult, challenging time. People were

protesting at the gate at Muskrat Falls and actually went in at one point.

People that I represent went to jail. They went to jail because of the

injustice that happened around that whole project.

Then

we see in the report, Speaker, the Joint Review Panel. Again and again and

again – I want to talk about Indigenous peoples: “Many Indigenous Peoples had

serious concerns about how the land and wildlife would be changed by the

development, concerns that were shared by other citizens of Labrador.”

Throughout this whole report, Speaker, Justice LeBlanc references the Innu

Nation, and I’m glad that we continued on the New Dawn Agreement and the

continued deal was signed with the Innu Nation. They’re certainly deserving and

those are their rights there.

Also

referenced through this report is the Nunatsiavut Government and the

NunatuKavut government and the lack of consultation. We know in the report that

the Nunatsiavut Government was primarily concerned with the impacts downstream.

can tell you, Speaker, now as I’ve been over as the Minister of Environment and

Climate Change since July – I was close to some of these files back then, but

it wasn’t everyday briefings – we have probably the best water-monitoring

system right now in the world – in the world. That is as it should be, because

people’s public health and safety need to be paramount.

now have data, Speaker. I think it’s just under 4,000 samples of data that we

have. I learned a lot myself around methylmercury. Some of that is in the water

every day in the things we eat, but we don’t want it to get to a level that

it’s unsafe. Also, in recent data, we know that the numbers we’ve seen are

trending down. I just want to share that.

had a lot of emails, I guess, since this was announced. Some of the emails that

I received over the weekend were talking about the drought and the Churchill

Falls reservoir. That is also a false narrative and perception, Speaker. It’s

really to the contrary, where thousands of cubic metres of surplus water are

released, and the folks here at the left of me would certainly be aware of

that.

Speaker,

as the Minister of Labrador Affairs, I do have a couple of questions for the

panel. We have a history where Labrador have not felt always included. This

world-class asset that we’re talking about developing sits in the heart of our

territory. So I’ll finish up with some comments later, but one of the things I

want to ask is the megaproject, Muskrat Falls, that happened in the 2012 to

2013 time frame, there was many calls for transmission lines to the coast.

Folks felt, why do we have to continue to be on diesel? At that time, we were

told, repeatedly, that it was cost prohibitive. Now we have a deal on the table

that is going to be $1 billion a year, that is going to equate to, in its

totality, a quarter of a trillion dollars. It’s even hard to get a figure that

big from your mouth, Speaker.

That’s

the number one question that I’ve been asked because I, as the MHA, represent

an area where the diesel plant, in my hometown, burnt down in October of ’19

and we’re moving toward a regional diesel. It’s a pretty high cost – $110

million now that it has ballooned to.

So I

want to ask the CEO: Has it been costed, the cost of a transmission line? I’ll

ask them both so you can answer them together in the interest of time.

Depending on what that is, I also want to know if you have looked at what the

cost of subsidy would be to households that are currently on diesel. I know

that ratepayers on the Island, I think it’s 13, 14 cents that they pay. In

Central Labrador, we were delighted to hear the Premier say that he would hold

the rate at three cents. That’s remarkable. I know that, in due course, Lab

West will get the industrial power that they need that’s really stunting their

growth. I’m just wondering what you’ve looked at for the coastal communities.

SPEAKER:

The Chief

Executive Officer of Newfoundland and Labrador Hydro.

WILLIAMS: Thank

you, Speaker.

Thank

you for those questions.

If I

could just take a quick moment to talk about the community that you mentioned

that did have a plant fire back in 2019. I do feel very strongly that Hydro has

put forward the appropriate solution that honours our requirements according to

our regulatory requirements for decision-making there. It is very clear to us

and we’ve heard quite clearly that the residents, not just in Charlottetown,

but in the surrounding communities, have a significant interest and a passion

and a value set that wants to do everything possible to ideally get fully off

of diesel power or certainly, at an absolute minimum, is to immediately start

using less diesel in that area.

are pleased to have an agreement with NunatuKavut Community Council to invest

in improved energy opportunities for more energy security in communities in

which they have members. So we’re really pleased with that. We believe that

through conclusion of decision-making around the project for Southern Labrador,

we think that we will do some great things together and, hopefully, we will see

NCC become owners of, for example, renewable sources that will offset diesel in

the area.

The

last point I’d like to make on that – and it does tie in, Minister, to the

questions then around a transmission line to the area – is if you look around

our province, whether that’s in Labrador or on the Island, generally at the end

of long transmission lines, you often have a backup source of power that would

occur for an intermittent issue that might happen or a longer term issue that

wou