For many Newfoundlanders, it is a source of rage and a symbol of outsiders profiting from their province’s natural resources. In 1969, then-Premier Joey Smallwood approved a 65-year accord to sell most of the power generated by Labrador's massive Churchill Falls hydroelectric development to Hydro Quebec at bargain-basement prices. The Quebec utility was the only realistic purchaser of the power and it negotiated an extremely favorable arrangement: it pays Newfoundland just $95 million a year for the electricity while selling a similar amount to the United States for an estimated $600 million. Now, Newfoundland officials are negotiating a new agreement to sell electricity from two new generating stations on the Churchill River to their neighbor—but at a much higher price.
Declared Cyril Abery, chairman of the province’s Churchill Falls (Labrador) Corp. Ltd. and its chief negotiator: “Any new deal with Quebec will be much different from the earlier arrangement.” Newfoundland Premier Clyde Wells's government needs new sales to further harness the economic potential of the powerful Churchill River. The proposed $11.4-billion project is almost as large as Quebec’s recently postponed James Bay n project. It calls for the damming and development of two new sites downriver from the existing 5,428-megawatt plant on the Churchill, and it is an integral part of Wells’s long-term development strategy for the chronically depressed province. But the government, once again, needs a long-term buyer in order to make the ambitious project economically viable. Newfoundland itself would consume less than a third of the estimated 3,088 megawatts that the new stations would be able to generate. Until last year, however, Newfoundland’s talks with Hydro Quebec were stalled over the
province’s demand that renegotiation of the 1969 agreement become part of any new contract. But in January, 1990, Wells’s government dropped that condition. Since then, says Development Minister Charles Furey, “the tone of the negotiations has improved dramatically.” But even if Quebec and Newfoundland officials strike a deal, other troublesome barriers loom—including a native land claim that covers the area where the new dams would be built. In July, Ottawa, Newfoundland and the Innu Nation, an organization that represents Labrador’s 1,500 native residents, began formal negotiations to resolve the claim. But those talks likely will continue for years. Says Innu Nation president Peter Penashue: “This project should not go ahead while the land-claims question remains unsettled.” As a result, it seems unlikely that the mighty Churchill's potential will be fully developed for many years. J. D. in St.John’s
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