Contrasting energy policy – version 1

I suspect that energy will be a key part of the election. Maybe not to the extent that auto insurance was last time, but it does seem to be an issue. So, I’ll take an initial crack at what I have seen so far in this area.

Lord’s policy:

Jiggered with the structure of NB Power a couple of years ago – somebody fairly senior at NB Power told me that this just added confusion.

Said the Point Lepreau refurbishment could not go ahead without Federal subsidies. Said this would push up power rates by something like 8% per year. The NB Power board recommended against it. Lord went ahead and did it anyway. Not that I disgree with doing it, I found it amazing but typical how the process played out.

The Orimulsion issue. No discussion needed here.

Now comes the time to pay the piper. No more delays. Rates are going up dramatically. However, Lord decides to rebate the NB portion of the HST on electricity bills to cushion the blow. Cost to New Brunswickers? Some have estimated this to be $50 million or more per year.

No interest in developing the McCully gas field into a economic develpment tool for that region.

No real interest in supporting Saint John in its desire to be an Energy Hub.

So, in a nutshell absolutely it seems there is no interest in using the energy industry in New Brunswick for economic development.

Then we have Mr. Graham’s plan. I won’t comment on it too much but I will react to one point in the media this a.m – Graham’s call for a feasibility study on converting Dalhousie to natural gas. This was called ‘foolish’ by the industry lobby and others. Over the life it would cost $1 billion more, the expert said.

Interesting. That’s just about how much Lord’s HST break on electricity will cost the province over 20 years. The difference is that Lord’s HST break is a political move with no direct economic benefit to the province and Graham’s is a move designed to open up Northern New Brunswick to natural gas in the hopes it may support economic development.

Do I like the Dalhousie/nat. gas thing? I don’t think I have the credibility to comment on it. Do I like the idea of a government thinking about energy as a tool for economic development – even if it requires some public cross-subsidization? Absolutely.

And before you get your hackles up, look at it from my perspective. From the perspective of opportunity cost.

Canadian taxpayers spend about $400 million per year on EI payments for northern New Brunswick. If things remain roughly the same (and they are actually increasing), that will mean about $8 billion over 20 years.

I am not an economist but there is at least $1 billion per year in Equalization that is going to subsidize northern NB because the region does not generate the tax base to sustain its public services. That’s $20 billion over 20 years (this is rising too).

Now, on top of that, the region is shedding population on a daily basis. Thousands of people gone since 1999.

And you are going to quibble about $1 billion spred over 20 years?

I would spend $10 billion over 20 years if it meant revitalizing that economy and reducing society’s $28 billion dollar deficit up there over 20 years.

It’s absolutely funny how we indignantly talk about the ‘cost’ of any ideas that are meant to stimulate economic development and don’t even mention the hundreds of millions more paid out in EI – so that people don’t have to work.

Priorities, folks. That’s what it’s all about. We have a government now that spends every spare nickel on health care (and HST rebates on electicity) and brags about it. Health care is an expense. We need a government that will spend a little more on investing in our future.

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0 Responses to Contrasting energy policy – version 1

  1. Cooker Boy says:

    You just justified my comment on a previous blog David. I don’t feel sorry for Graham because if the newspapers we have would actually report facts, they would have have given the pro’s/cons just mentionned in your post.

    News should be a forum to debate ideas and concentrate on potential weaknesses so they can be corrected. Nowhere did I read or hear in the NB press about the potential economic spinoff of the policy.

    I’m an undecided, I want all the facts before I cast my vote.

    I say: Do not feed me propaganda!!! 😉

  2. yetgtp says:

    My point is this, it clearly demonstartes bias and damages a media outlets credibility when they do no present all the facts. The majority of people I speak to in the Moncton area skim through the Times and always question everything printed and not printed. Most people who do vote will go to the websites to get the real facts.

    Graham needs to get out in front of the electorate if he wants his message heard.

  3. David Campbell says:

    I will make every attempt to be unbiased in my presentation of factual information. At one point in my career I was on the spin team and I think that may be justifiable when you are selling NB externally but not when you are trying to dupe the electorate.

    As for my personal vote – look I am not getting any younger and I really would like to grow old in a province that is moving in the right direction – incubating new industries, rebuilding its population, maintaining vibrant rural communities for those choosing to live in that environment, etc.

    All I see right now is government managing our demise as a province – and not very effectively – and that’s depressing.

    We can only two ways: 1) we continue to decline and be an increasing economic burden on the rest of Canada and by 2025 we are forced to amalgamated with PEI and NS into one regional province and have services cut way back; or 2) we turn the beast around and by 2025 we are moving in the right direction. I, frankly, don’t see NB off Equalization by 2025. The economics just don’t work – you would need an Alberta or Ireland style turnaround. But I think by 2025 we should be able to say we are much more self-sufficient than in 2006. I think we should be able to say we have become a world player in these [fill in blanks] industries. I think we should be able to say we stabilized and inreased our population.

  4. Cooker Boy says:

    I am on a similar wave as you David, however; I am more and more convinced that there isn’t any appetite for major change in NB.

    People fear change, and that can work in a govt’s favour.

    I predict a small PC majority with the lowest voter turnout in NB’s history.

  5. scott says:

    Good point cooker boy. Much like the 2003 NS election, auto insurance was an issue. Their ensuing election, two months ago, was a snoozer with very little new ideas or debate within the mix. Could we be in for the same here??

    Somehow, I don’t think so. This ones going to get dirty.

  6. Anonymous says:

    Keep in mind that public insurance is still on the page. Last january the liberal party made public insurance a formal policy. I wonder how often that’s going to be brought up. Of course Graham is under no requirement to follow it, that would make too much sense that a party actually do what their party says they are going to.

    But for energy, getting gas up north when they already have it down south seems to be obvious. However, I still think wind power is far more akin to economic development. Imagine a place like Dalhousie, two wind turbines powering an industrial park and boom, you’ve got yourself free power. There’s economic development.

  7. Cooker Boy says:

    The issue with power is the cost to implement the infrastrucure and having a market to support product. It’s literally the chicken or the egg scenario.

    **Assumption** To build wind power infrastructure would make it unafordable to business and homeowners in the region. You could make it more affordable by having goverment subsidizing it to lower the cost. Personally, I would rather see that money spent on education, which would greatly benefit the North which would eventually create economic opportunity for the north.

    The more I look at a tax rebate for Hybrid vehicules the more I beleive it is bound for failure. Primarily because it is a new technology which at the present time is costly to maintain. There are many backyard mechanics in this province who wouldn’t go near a hybrid. Also, there is a higher cost to taxpayers to make sure that emergency response can react to the accidents involving hybrids. I hope the plan takes that into account. Kudos to the Libs for showing initiative, but I beleive that the market will truly dictate lower prices for those vehicules soon enought. What I do like is building the infrastructure to support alternatives like ethanol, which the big 3 car manufacturers are supporting. I also like the R&D initiative in their plan, but are universities on board with this plan?