A7

Hassan Arif
Commentary

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The “rumour” is no longer just a rumour. It’s an official proposal that, if approved, would see most of NB Power will be sold to an outside entity, Hydro-Québec.

There are some short-term benefits to the proposed sale. Hydro-Québec, by taking on NB Power’s debt, will eliminate 40 per cent of the province’s debt. Also, power rates will be frozen for residential customers for a period of five years and significantly lowered for industrial customers.

However, are these benefits worth the costs of giving up the province’s sovereignty over its energy policy? Are these benefits really as good as they seem?

On the issue of debts and deficits, selling NB Power is a very short-term – and draconian – way to deal with this issue. After this recession passes, provincial revenues are likely to recover to some degree at least. Also, there are other, less draconian, measures that the province could take to reduce deficits – in particular, by putting a halt to planned income tax reforms that deplete provincial revenues while primarily benefiting the rich.

So what about power rates? While residential rates will be frozen for the short-term, what will happen after the five years are up? Considering NB Power’s debt, would this cost be passed on to New Brunswick’s residential consumers? While the agreement says power rate increases will be based on the Consumer Price Index (the cost of living in New Brunswick), is there potential for loopholes to allow Hydro-Québec to increase power rates further?

Also, this agreement does little to dispel talk that it was primarily driven by big business, as power rate savings to industry will be substantially greater than they will be for residential consumers who will only have a temporary rate freeze. This seems inequitable, especially to the poor and middle class.

Are these benefits, which are not as substantial as they would seem on the surface, worth the costs of selling NB Power?

In my opinion, no.

For one, there will be job losses through restructuring following the sale. Already, the Dalhousie generating station will be closed because of this deal, leading to further job losses in a northern community reeling from previous industry closures. As well, while NB Power will retain control over Coleson Cove and Belldune, they will be selling their power back to Hydro-Québec. So what happens when Hydro-Québec wants to buy from a source inside Quebec instead?

If Hydro-Québec decides on further restructuring of NB Power’s assets, there could be more layoffs. This would be devastating in the current economic climate and would further add to the problems of layoffs and hiring freezes that have already hit the public sector.

Then there is sovereignty over our energy policy. By selling NB Power to a public utility in another province, we are giving up a significant part of New Brunswick’s independence as a province. Given that the provincial government’s goal is self-sufficiency, giving up such a significant part of our independence hardly seems a step forward.

Hydro-Québec will fundamentally act in the best interests of Quebec, and what’s in Quebec’s best interests may not be in the best interests of New Brunswick. If there’s a conflict between the two, it seems inevitable that the former will win out.

Hydro-Québec is not entering this purchase out of altruistic motives. They want exclusive access to American energy markets, which would almost certainly mean cutting out (or at least greatly limiting) competition from Nova Scotia and Newfoundland.

This has the potential to fracture economic relations in the Atlantic region, which would be detrimental to our region while creating a virtual energy monopoly for a Central Canadian entity.

Donald Savoie, in his book on economic development in the Maritimes, Visiting Grandchildren, has written on how there needs to be greater economic cooperation among Atlantic provinces and greater realization of our shared interests if we are to progress. Selling NB Power is a huge blow to that goal.

I do not want to be completely negative here. Our provincial government has carried out some good policies. It is commendable that Social Development Minister Kelly Lamrock has pledged to rewrite pension rules in light of the outcry over Moncton resident Mike Kennedy being denied provincial benefits because his federal benefits were over by $1.70 per month. It is also commendable that Premier Shawn Graham has placed a priority on aboriginal rights and that he pushed for the appointment of the province’s first aboriginal Lieutenant Governor.

However, these good policies are too often drowned out by ill-considered decisions – in areas such as post-secondary education, health care and ferry services – that have frequently forced the government into embarrassing retreats.

Premier Graham is an inherently decent person who wants to do what’s best for New Brunswick. However, the proposed deal to sell NB Power is a wrong one, and one that could prove even more damaging to the government – and to New Brunswick’s interests – than previous missteps.

Hassan Arif resides in Fredericton. He can be reached by e-mail at arif. telegraphjournal@gmail.com His column appears on Monday.