A few weeks ago, the Provincial Government announced it will go ahead with the refurbishment of the Point Lepreau nuclear generating plant. This week, protestors in St. Andrews were lobbying against the construction of a LNG (liquefied natural gas) terminal in the Passamaquoddy Bay within site of St. Andrews.

The Henry Hub price for natural gas yesterday was $9.77 U.S. per MMBtu. That’s three times the price it was five years ago. The price of crude oil was $67.29 U.S. a barrel. That compares to 10 months ago when it was only $55 a barrel and that was 60% higher than it was in January 2004.

Electricity ranged from 7.29¢ to 9.91¢ U.S. a kilowatt hour. The price of coal and natural gas track the price of oil. NB Power generates more than 50% of its electricity by burning coal, natural gas and oil. Today’s oil prices strongly support the Government’s decision to refurbish Lepreau.

If the price of oil is dictated by diminishing supply and/or the Middle East crisis, we can be reasonably certain it will not be dropping any time soon. In fact, supply may become a bigger problem than price. This will be good news for wind advocates and those who believe that tidal power and biomass could be alternatives to oil-generated electricity but many people believe they will only come into play as supplemental sources rather than replacement sources of electricity. Capacity potential, developmental costs and reliability of delivery become issues when alternatives are considered. Even Lepreau has its limits. Refurbishment will only extend its life by twenty five years. We need to be looking further down the road than twenty five years.

There is no easy way to get NB Power off oil but there are conventional alternatives in Labrador. Churchill Falls has capacity of 5400 megawatts of electricity. That’s about 30% more than the entire production of NB Power. To get Churchill Falls power to markets in central Canada and the northeastern United States, it has to travel across Quebec.

When the original development deal for Churchill Falls was negotiated in the 1960s, the Quebec Government, through Hydro Quebec said no to the free movement of electricity across its lands. Instead, the terms of movement, as dictated by Hydro Quebec enabled the Quebec utility to purchase all the power produced by Churchill Falls.

The contract was for a 40 year period with an option to renew for another twenty five. The price was initially fixed and then goes down over the 65 years. By 2016, the price will drop to one fifth of a cent per kilowatt hour. Hydro Quebec resells that power to its residential customers for 6.3¢ a kilowatt hour and to its large power customers for 4.23¢ a kilowatt hour (NB Power charges its residential customers 8.37¢ a kilowatt hour).

If NB Power could negotiate the large power customer rate with Hydro Quebec, it could purchase electricity for less than its own cost of production. That’s assuming Hydro Quebec would have surplus capacity to fill the order, that transmission lines into New Brunswick could accept the load and further that New Brunswickers would want to be dependent on Hydro Quebec for their electricity.

Churchill Falls is located on the Churchill River near Goose Bay/Happy Valley. There is potential for developing a second phase (Churchill Falls II) 1000 megawatt generating facility upstream from Churchill Falls. Downstream, there are two additional sites with potential for power development; Gull Island and Muskrat Falls. Together these three sites have the potential to produce 4100 megawatts of power, about 75% of the production capacity of Churchill Falls but nearly 100% of NB Power’s total production.

The Newfoundland Government believes these sites can produce the lowest cost, undeveloped hydro power in North America. If some variation of the Churchill Falls model for transmission and resale goes into place, most of that power could go to the United States via Hydro Quebec.

What if Nova Scotia, PEI and New Brunswick got together as guaranteed, long-term customers to attract financing for the three projects?

What if New Brunswick was to go it alone? What if the developers ignored Hydro Quebec and routed transmission over Labrador and under water to St. Anthony on the northeast tip of Newfoundland then over land to Port aux Basque and underwater to the Maritimes. The closest land point is Sydney, Nova Scotia but you could route an underwater cable into Miramichi. A Port aux Basque to Miramichi route would be about double the under-water distance to Sydney but the cable could find land about half way between the two points in the Madeleine Islands.

If NB Power could become the primary customer for Churchill Falls II, Gull Island and Muskrat Falls power, it could reap the benefits of long-term rates for its customers and surplus power could be exported to Nova Scotia, PEI and the northeastern United States. New Brunswick’s dependence on oil and gas for electricity generation would be drastically reduced or eliminated and we would have the power to replace a decommissioned Lepreau twenty five years from now.

The cost of building the transmission system would be in the billions of dollars but with a life of 50 to 100 years, it might be justified. The Newfoundland and Labrador economy would benefit from construction and permanent operating jobs. The Madeleine Islands would find some benefit and NB Power would be off oil. We have the underwater transmission technology. It’s already in place between New Brunswick and PEI.

There is no reason to suspect that it could not be adapted to long-distance transmission. Would it bring stability and affordability to NB Power’s pricing regime?

Prices rarely go backwards but it would certainly bring price stability.

On Wednesday, August 10th, the North American Free Trade Agreement (NAFTA) dispute resolution panel ruled in favour of Canada on the matter of Canadian exports of softwood lumber to the United States. The American reaction was ‘so what’ NAFTA cannot over-ride American law.

In the same week, Prime Minister Paul Martin advised the Queen to appoint Michaelle Jean, a Haitian born, French Canadian from Montreal to the position of Queen’s representative and Governor General of Canada.

Earlier this week, the media was feeding on the notion that the Queen’s new representative and her husband Jean-Daniel Lafond may have socialized with known separatists in Quebec and that if they did so, they may not be committed to the future of Canada.

The frenzy forced Ms. Jean to release a written statement confirming her commitment to Canada. How sad is that, in a country which prides itself in a justice system espousing innocence until proven guilty. Most Quebecers have socialized with a separatist at least once in their lifetime. Nearly half of them live with a separatist. That does not make them a separatist.

Also in the past weeks, the federal Minister of Indian & Northern Affairs floated the possibility that $200 million could flow to New Brunswick to support a regional immigration program. A national poll suggests that the economic success of immigrants in Canada is often determined by their country or continent of origin.

Should a New Brunswick immigration strategy be racially profiled?

No, but one might interpret the poll to suggest that immigration is a bit of a crap-shoot and the $200 million might better be invested in projects that create high-paying jobs. Good long-term jobs would attract and keep quality people. Look at what’s happening in Alberta.

The notion of immigration as a development strategy is further muddied by the Saint John journalist who suggested last week that people from Ontario are not qualified to be the Government of Canada’s Consul General to Boston because they are not Maritimers. Wow, that’s a great way to launch an immigration strategy.

To top it off, one of our local newspapers got its knickers in a knot when the Globe & Mail made the mistake of naming Moncton as the Capital of New Brunswick. The newspaper headline attributed the mistake to the arrogance of "Upper Canadians". That’s a bit of an over-reaction. I would have thought that Moncton as the Capital would be a good thing.

So which of these breathtaking events will have a lasting impact on the future of Atlantic Canada? The Queen’s appointment of a French Canadian as Governor General may prove significant if reaction to it flames separatist feelings in Quebec but otherwise it will die a natural media death. My vote goes to the NAFTA ruling.

The intent of NAFTA was to facilitate free trade between Canada, the United States and Mexico. To a large extent it has worked. NAFTA has enabled both Canada and Mexico to increase their exports to the United States: Canadian manufacturers now send more than half their production to the U.S. while Canada is the most important destination for the export of U.S. merchandise from 39 of the 50 U.S. states.

Section A, Article 301 of the NAFT Agreement suggests that each party to the Agreement should accord national treatment to the goods of another party in accordance with Article III of the international General Agreement on Tariffs and Trade (GATT). That means that a state or province must treat the goods and services of its NAFTA partners in a manner that is no less favorable than the most favorable treatment accorded to competitive goods of its own. That seems fair but it doses not describe U.S. treatment of Canadian softwood lumber.

The export of softwood lumber is important to the Canadian economy and particularly important to the Province of New Brunswick. Its wood is currently exempt from U.S. import duties. The Bush Administration says the NAFTA ruling is inconsequential and that it has no intention of scrapping the softwood lumber duties or returning those that have been illegally collected since 2002 (an estimated $5 billion).

The new U.S. Ambassador to Canada, David Wilkins defends the Administration’s reaction. That’s not surprising, considering that he’s a former Bush fund-raiser and was South Carolina Campaign Chairman for George W. Bush in the 2000 and 2004 elections.

When Canada’s International Trade Minister Jim Peterson demanded that Washington concede defeat and return the $5 billion in anti-dumping duties, the U.S. refused, saying the NAFTA ruling is not the end of the matter because it does not deal with a 2004 decision from the U.S.-based International Trade Commission. That decision supported the American case, although some believe it has been trumped by the NAFTA decision.

The U.S. response to the NAFTA ruling has caused Canada to suspend softwood negotiations with the United States. Peterson has questioned the U.S. commitment to NAFTA and is seeking permission from the World Trade Organization to implement punitive measures against the Americans'. If these reactions and counter-actions continue, they could lead to the total closure of the U.S. border to Canadian softwood lumber including lumber harvested in New Brunswick. That would hurt.

It’s time to chill out.

Let’s give the Americans the benefit of the doubt and assume they want to negotiate their way out of the softwood lumber situation. By raising the Trade Commission decision in their response to NAFTA, they hold out the prospect of a negotiated settlement.

Canada’s Ambassador to the United States should jump at it. He’s an excellent communicator. He’s blunt. He’s tough and he’s a proven deal-maker.

That may be what we need to resolve this crisis.

In the fall of 1971, Barbara Frum began her tenure as co-host of CBC Radio’s "As it Happens", a nationally broadcast radio newsmagazine.

She was a wonderful interviewer.

In January 1982, she moved to television to launch ‘The Journal’. It quickly became the most watched and respected newsmagazine in Canada with some 60% of the show dominated by her interviews with newsmakers from around the world. She was one of Canada’s most respected and influential journalists until her untimely passing 10 years after the Journal’s launch.

How then do we explain her scurrilous son David?

David Frum is a former speechwriter for George W. Bush. He’s the guy who first coined the phrase "Axis of Evil’’ in the run-up to Bush’s invasion of Iraq. He’s an unabashed worshipper of the current President and a leading spokesman for right wing, neo-Conservatives in the United States. He’s also an author. I’m told that in his latest book, due for release in December, he advocates preemptive strikes on Iran and North Korea as necessary to winning the war on terror.

This is the guy who earlier this week, in the National Post, ridiculed the 1995 appointment of Romeo LeBlanc as Governor General. Frum’s mean spirited comments were uncalled for and ill-informed. He suggested that Mr. LeBlanc was unqualified for the post and needed the job.

Nothing could be further from the truth. Mr. LeBlanc did not seek the Office of Governor General. He had to resign his tenured position as Senator and Speaker of the Senate to accept the position. If Frum knew his Canadian history, he would understand the significance of Mr. LeBlanc’s appointment as the first Acadian to become Governor General of Canada.

Romeo LeBlanc spent years as a teacher before becoming an international journalist for Radio Canada. He served as Press Secretary to two Canadian Prime Ministers (Pearson and Trudeau) before being elected to the House of Commons in 1972 to represent the residents of Westmorland Kent. In 1974, he joined the federal cabinet and served as Minister of Fisheries for the next ten years. He was the fishermen’s Minister and helped establish Canada’s 200 mile offshore fishing boundary. He also helped shape the International Law of the Sea.

In 1984, Mr. LeBlanc was appointed to the Senate and in 1993 he became Speaker of the Senate. This is a man who earned the honour of being appointed Canada’s 25th Governor General. He’s a kind and good man, unpretentious and a real gentleman.

When he was Governor General, he focused much of his attention on the plight of our Aboriginal peoples and advocated that they become full partners in a greater Canada. He was also a great booster of volunteerism and founded the Caring Canadian Award to recognize the courage and dedication of ordinary Canadians who have made extraordinary contributions to their communities or to their country.

As in many countries, Canada’s Head of State is separate from the Head of Government. The Governor General represents the Queen as Canada’s Head of State and is appointed by the Queen on the advice of the Prime Minister. Mr. Frum would have us believe that the appointment is political and handed out as a patronage plum. He should stick to his Washington fellowship.

Romeo LeBlanc worked hard to promote unity and to celebrate excellence in Canada.

He traveled thousands of miles to fulfill his duties. He served as Commander in Chief of our Armed Forces and was a great supporter of our military and its peacekeeping roles around the world. He represented Canada abroad with state visits to the Czech Republic, India, Pakistan and several African countries (first ever by a Canadian Governor General). In Canada, he received some 19 heads of state and thousands of visitors at Rideau Hall. He attended nearly 2,000 events and made close to 800 speeches in the four years he served his country as Governor General. That’s an impressive work load.

David Frum has done little in life but pontificate his scary views of the world. He admires the George W. Bush who is described by old time conservatives as a caricature of what a right-wing president is supposed to be, a man who discredits conservatism with his invasion of a country that posed no threat to the U.S., a man who doles out war profits to politically favored corporations, a man who finances a war in Iraq with ballooning deficits, a man who is ceaseless in his efforts to cut taxes for the wealthy.

Frum is a guy who questions the patriotism of conservative Americans who oppose the war in Iraq and charges them with anti-Semitism when they dare to fight back. He has leeched off the spoils of Washington for years. He dishonours the memory of his mother.

In an article titled "The Bum Frum" published a few years ago by ‘The American Conservative’ a magazine launched by the infamous Pat Buchanan, David Frum is described as "a climber who fouls everyone and everything that takes him in, a bum who cannot see a belt without hitting below it. This buffoon was fired by the Bushies, then went around threatening to sue if someone hinted that he didn’t quit on his own. He is a cheap Canadian careerist who jumped on the neocon bandwagon.

He will use anyone—including his wife, which he did in spreading the claim that he invented the phrase "axis of evil"—in order to advance his career. Like his icon Sammy Glick, Frum tries to make it by stepping on bodies, but he will end up like Glick, a marginal fellow who tells tall tales about himself".

So much for his criticism of Romeo LeBlanc as Canada’s 25th Governor General!

If you are over twenty, you probably remember the television sitcom "Gilligan’s Island".

If you go to the beach or read this newspaper regularly, you’re probably aware of the long running sitcom "Gilligan’s Restaurant & Bar". Some years ago, the Beaubasin Planning Commission, empowered by the Community Planning Act which is overseen by the Provincial Government’s Department of the Environment and Local Government approved the siting and construction of Gilligan’s Bar & Restaurant at Parlée Beach.

It was built by its private sector owners and operated by them until last fall when the Provincial Government effectively shut it down because a group of Point du Chene residents successfully appealed the Beaubasin decision on the grounds that Gilligan’s posed a threat to the environment.

A few weeks ago, the Provincial Government decided to buy the building and operate the restaurant, free of the environmental regulations that shut down the private sector operators. The Government paid $790,000 for the property but local gossip suggests that members of Cabinet have boasted that the facility was really worth $1.2 million.

Apparently, their indiscretions have provoked the original owners of Gilligan’s to announce they will sue the Government for the $400,000 difference. In my view, the suit should be for a lot more than $400,000. The building and equipment may only have been worth $1.2 million but a going concern business would be worth more than the value of its fixed assets.

Tens of thousands of people a year visit Parlée Beach. For discussion purposes, assume the number is 500,000 people a year. Assume further that 10% of them (a very conservative number) would use Gilligan’s at least once and spend an average of $15 per person on food and beverages. If we then assume food and beverage margins of 100% and subtract the cost of staffing, maintenance and building/business financing, it’s conceivable the owners could net $300,000 a year before taxes.

An earnings multiple of twenty five (life of the building, the business and a twenty five year mortgage) would give the business a value of $7.5 million. Add the $7.5 million to the value of the buildings and the equipment and the purchase price could or should be more like $8.7 million.

Now some people will jump up and say hey, that’s stupid! The business had no value because it was shut down and couldn’t get a permit to operate. A smart lawyer might say hold on, the buyer was the Provincial Government, the Provincial Government made the law that closed Gilligan’s and destroyed its business value. The Provincial Government purchased the building and the equipment at fire-sale prices and moved into position to reap the operating benefits that rightly should have gone to the private sector operators.

You don’t have to be a lawyer to see the potential of a legal action or the conflict of interest that seems inherent in this situation.

The only winners in the Government takeover, other than the Provincial Government are the staff of Gilligan’s who now have jobs for the summer and the tourists who populate Parlée Beach and need sustenance in the form of food and beverages. The dunes are fine, the environment hasn’t been destroyed and the restaurant is booming as the Government operates outside its own regulations and spits in the face of its Planning Appeals Board.

In my view, the takeover and operation of Gilligan’s has effectively conveyed the message that there is no environmental issue with Gilligan’s, the residents of Parlée Beach have no (environmental) grounds for opposition to its operations and the Appeals Board had no reason for denying an operating permit to the original owners of Gilligan’s.

Don’t be surprised if the Provincial Government writes in a new character or creates a new script for this sitcom. Maybe it will be a new owner or a new operator who will lease the facility and operate the business for the benefit of Government.

Maybe the residents of Point du Chene will sue the Government and force it to shut down Gilligan’s. Maybe the Planning Appeals Board will resign in protest against the Government’s refusal to abide by the Board’s decisions to deny the original Gilligan owners the right to earn a return on their investment. Maybe the residents of Point du Chene will be given the operating license for Gilligan’s as compensation for noise pollution. Maybe the public will demand that common sense prevail.

Take a look at what’s happening at the Point du Chene Wharf. The primary infrastructure has been restored. New buildings and new businesses have been added. It’s an exciting and fun place to visit. Gilligan’s should be the centrepiece for development at Parlee Beach. It should be a place that attracts tourists and gives them reason to spend money. That would be good for the local economy.

The script options boggle the mind. My favourite is still a lawsuit with the Government having to defend its contradictory actions in respect to Gilligan’s. The media would have a field day. Picture this: CNN breathlessly reporting that a small group of Canadian business people have sued their Provincial (they would probably have to explain that a Province is the Canadian version of a State) government for market manipulation. It would be like Enron all over again. Heads would role. Lives would be ruined. Stakeholders would be left with nothing but sand in their bank accounts.

In reality, Government holds all the cards but that should not prevent it from paying the original owners of Gilligan’s fair market value for their business.