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VIEW: ‘Free trade’ and electricity exports, by Murray Dobbin

Murray Dobbin writes in his blog that, “The recently announced sale of New Brunswick Power to Hydro Quebec is another alarm bell for the Canadian economy.”

“We are regressing back into a natural resource economy – the logical conclusion of the ‘free trade’ deals we signed with the US which resulted in the loss of early 300,000 manufacturing jobs.”

“The transformation of publicly owned power companies (intended to serve their respective publics) into export companies is taking place at both ends of the country – and in the middle.”

And “one of the results of these power export strategies is that power in Canada will become more expensive.”

“The sale (of New Brunswick Power) is aimed at enhancing the transformation of Hydro Quebec into an export industry – selling power into the US market.”

“The $15 billion deal (including NBP debt) provides Hydro Quebec with a power transmission corridor to the US.”

“HQ is also rumoured to be negotiating with Nova Scotia Power for a similar deal.”

“In BC, which had some of the cheapest power in all of North America, the split up of BC Hydro (a public utility) into several pieces to enhance exports to the US will result in the eventual doubling of electricity prices to BC residents and businesses.”

“NAFTA’s ‘proportionality’ provisions already commit Canada to selling an increasing amount of its oil and gas into the US (it can never reduce the percentage of production going south). That same clause will apply to electricity – as does the provision that states Canada cannot have a different export price. So when BC Hydro and Hydro Quebec price their power to meet the demand in the US, it has to charge its domestic customers the same, higher, price.”

Murray’s blog is at http://murraydobbin.ca/2009/11/03/hewers-of-wood-drawers-of-water-peddlers-of-power/.

Additionally, in StraightGoods.com, David Frank writes that, “As a crown corporation, NB Power has had a long history of serving the social and economic needs of the province. …In more recent years, NB Power was allowed to drift away from its original mandate. Following an ethic of bigger is always better, it started having visions of becoming a major energy exporter, undertaking costly experiments such as nuclear power at Point Lepreau.  Still, many New Brunswickers think of NB Power as a success story with an accumulated value far beyond easy reckoning, and until a few weeks ago that too was the message of the provincial government. Now the company is described as a financial albatross, to be sold at a price little more than the existing debt load.”

He adds, “So far, the unions representing the more than 2,000 employees at NB Power are relatively satisfied that their collective agreements will be respected, even if there are some job losses due to shutdowns. Other unions are a lot more critical and argue that the deal is a form of privatization by another name — a massive shift of public power out of the province and beyond the control of the citizens.”

“Political scientists may also want to debate whether the deal represents an abdication of constitutional responsibility. In Canadian history it is hard to think of any examples of a province selling one of its principal assets to a neighbouring jurisdiction.”

“The idea of regional cooperation in energy also seems to be off the table. Why a private sale to Quebec, secretly negotiated over the past few months, rather than a regional energy partnership between all five of the eastern provinces?”

That’s at http://www.straightgoods.ca/2009/ViewFeature.cfm?Ref=540.

Council of Canadians blogs on the sale of NB Power can be read at http://canadians.org/campaignblog/?p=2144.