Yes, I’m in favour of the Muskrat Falls rate mitigation proposal. No, this is not an endorsement of any candidate or political party. Yes, I believe this mitigation is necessary if we are ever to have a national energy grid and a decarbonized future. No, it’s not a bailout. And yes, it should not be necessary.

Newfoundland and Labrador is indeed a puzzle, shrouded in mystery, wrapped inside… let’s just say it’s got a lot of issues.

One of the most resource-rich provinces in the country, it is also one of the most economically unstable. Its unreliably-cyclic-highs and all-too-reliable lows are as endemic as its fog-strewn springs and wink-b’y-they’re-gone summers.

Consider its legitimately world-class fishery. It fed countless boats for thousands of years, from Indigenous harvesters and Norse explorers to more recent European and Canadian fleets. Though greedy overfishing caused it to bottom out in the 1990s, today’s N.L. fish and seafood sector is still worth more than a billion dollars a year.

And though much-maligned in a decarbonizing climate, the province’s offshore oil sector produced more than a quarter of Canada’s conventional light crude for the past 30 years—plus more than $22 billion in provincial royalty payments.
Mining, too, has been both a literal and figurative gold mine thanks to abundant reserves of iron ore, nickel, copper, cobalt—and yes, gold. With more than 7,000 people directly employed, mining is one of the province’s oldest and most lucrative industries.

And then there’s Churchill Falls.

This monolithic generating station, the third-largest in North America, has been capable of producing 5,428 megawatts of renewable power since it reached full capacity in 1974. The profits flowing from Churchill Falls are in the billions (cumulatively topping $30 billion two years ago, according to a 2019 CBC report).

I don’t have an exact number on the collective revenues from those collective industries, but it’s safe to say N.L.’s resource sector delivers big value by anyone’s accounting.

But here’s what doesn’t add up: At any one time, Newfoundland and Labrador has roughly 550,000 residents (sometimes more, currently less). If you were to divide those billions of resource dollars among the people who live there, N.L. would be a utopia. Every road would have pristine pavement, post-secondary would be free and physicians lined up for patients. Hunger would be unknown, homelessness non-existent and unemployment a personal choice.

Often criticized for its supposedly bloated public service, N.L. should be able to sustain an entire population of government employees. Or have a lush venture capital fund to invest in domestic entrepreneurial initiatives. That’s how much money its resource sector makes each year.

There are legitimate reasons for N.L. perpetually running in red: centuries of wealth exported overseas… a Mother Country that virtually abandoned the then-dominion after World War II… the barbarically inadequate level of pre-Confederation infrastructure that has never yet caught up to national standards… the trading of resource rights here for trade deals benefiting Canadians there… the inability to transmit Labrador power to market without Québec. Indeed, as British Columbia was to Alberta’s Trans Mountain Pipeline, so too was Québec to Labrador’s hydroelectricity (which is why only seven per cent of the profit to date from Churchill Falls has gone to N.L.).

The bottom line, according to a 2004 research project conducted by local newspaper The Independent, is that Newfoundland and Labrador has been anything but a “sinkhole” for federal funds. “While the province has benefited by $8.9 billion from the federation; Canada has reaped six times that, or $53.5 billion.”

The paper also noted that the province’s relationship with its federal partners has been “marked by resentment and frustrations—and must be improved.” It was true then and is even more true today.

Newfoundland and Labrador’s renewable hydroelectric reserves are an integral part of Canada’s journey to net-zero. We need to get over the past if we’re going to secure a future. That means finding a way to share the resource wealth—and the expense. Muskrat Falls rate mitigation is part of that equation.

Other provinces and other projects will be added in due time.