There was in place at that time a series of Cabinet committees on policy: the Resource Policy Committee, the Social Policy Committee, and the Planning and Priorities Committee. In the normal course of events, any Cabinet paper that involved resource or social matters was referred to the respective committees before moving up the chain for full Cabinet consideration.
The Planning and Priorities Committee, chaired by the premier, was the senior Cabinet committee and dealt almost exclusively with new policy initiatives, including of course the offshore file. This was not the way that Mr. Barry wanted to proceed, and all the other members of the committee, including me, had trouble with the process that he wanted to have implemented. The committee made it clear to Minister Barry that there was a process and that he must follow that and get direction from the committee as negotiations moved forward; in many cases full Cabinet would have to be involved. It was obvious that the minister was on a collision course, either by accident or design, and so one morning after a day where the Planning and Priorities Committee had made its position very clear to the minister, he visited me in my office to submit his resignation, with me about to ask for it. This was not the only issue I had with the minister at the time. In recent weeks and months, the minister had been travelling outside the province on various matters involving the department, but without informing me of these travels. A recent incident had occurred relating to travel to meet individuals and companies in Chicago. The minister was obviously not a team player, and it was this very characteristic that I was implementing in the Cabinet process. It was not long before he became a Member of the Opposition, the Liberal Party, and then its leader.
This turned out to be a very favourable happening since it brought to the fore one of Newfoundland’s most able ministers ever, William (Bill) Marshall. I was fortunate that Bill Marshall, Gerald Ottenheimer, and John Collins (all leadership supporters) became integral parts of my Cabinet: Ottenheimer, Justice; John Collins, Finance; and Marshall, responsible for offshore and Newfoundland Hydro Corporation. All three understood government, its strengths and weaknesses, the role of a minister of Cabinet and of the premier. They were key advisers and loyalists, and always respectful of one another. With Collins on the budget, Ottenheimer on the Constitution, and Marshall on the key energy issues of offshore oil and gas and water power, this trio arguably had no match in Canada.
Marshall approached his job with conviction and analytical prowess. Here was a Newfoundlander through and through, steeped in Newfoundland history and tradition, painfully aware of our past resource mistakes and cognizant of the power and influence of an overarching federal government. It wasn’t long before Marc Lalonde and Jean Chrétien, two of Prime Minister Trudeau’s Energy ministers, and the federal bureaucracy realized that they had more than met their match in this Newfoundlander.
But a difficult road lay ahead, not made easier by some (a minority) of our own people and the national media, which often failed to actually read or listen to what we were saying. This is most aptly demonstrated by a letter I was forced to write to Peter Newman, then editor of Maclean’s magazine, our only national magazine, on September 22, 1980:
In the discussion of offshore resources by your reporters in the September 22 issue dealing with the Constitution, I wish to make the following points:
I’m not aware that Mr. Trudeau offered what he said would be oil revenues equivalent to Alberta’s.
What the federal government has “offered” is that “offshore revenues” would be owned by the federal government and the Province would get “significant revenues,” much less than we would receive if the Province owned its offshore oil and gas in the same way as Alberta owns its oil and gas.
There is no provincial power as it relates to “control” of the rate and kind of development in the federal proposal. A substantial rural fishing society must have power in this vital area; otherwise its delicate social fabric could be destroyed.
Finally, the federal government has indicated that somehow, when and if (don’t hold your breath) we in Newfoundland become a “have” province, we will be treated differently (different federal-provincial revenue sharing, less for the Province) than other “have” provinces are treated.
I submit to you, therefore, that the brief general paragraph on this matter in the article referred to does not do justice to Newfoundland’s position.
One would think that such a pointed rebuttal of the comments in the article would have stimulated further correspondence with the province and the magazine, who, following good journalist standards, would have wanted to get at the facts, at the truth. However, only silence followed.
At this juncture, chronologically, we were advancing on all three: the Churchill Falls issue regarding the lease was before the courts; constitutional talks were moving and we would be seeking greater say over the fishery through this process; and despite the setback with the defeat of the Clark government, we were still trying to advance the offshore file.
We were encouraged in this regard by a statement made by the new prime minister, Pierre Trudeau, in St. John’s on May 5, 1981, in which he said:
My colleagues and I have constantly maintained that your best interests lie not in total provincial control of the offshore but in rather a negotiated partnership between our two governments in joint management. We consistently maintain that ownership is not the important issue and that reaching a negotiated agreement on shared management is the vitally important issue: either it will be negotiation or it will be a court decision. I am offering the choice to negotiate. I would still prefer that, because I feel it would be a better deal for Newfoundland and for Canada.
This very public statement, coupled with a later public television interview in which the prime minister indicated the federal government was prepared to accept the idea of sharing offshore the same as if the resources were on land until a certain level of wealth was attained, led us to believe that a good chance at achieving a negotiated agreement outside constitutional considerations was possible.
This led to a first negotiating meeting on October 2, 1981, and a further meeting on November 12, 1981, both of which addressed the principles that were necessary from the province’s point of view in order to advance toward detailed negotiations and a final agreement. The second meeting incorporated these principles into a thirty-one-page document entitled “A Framework for an Agreement.” Some of the principles in this framework included:
The Agreement should be permanent and entrenched in the Constitution making a determination of ownership by the courts unnecessary;
Joint Management;
One set of regulations;
The province being able to capture significant economic benefits;
Location of offices related to the offshore in Newfoundland;
A compensation fund for the fishery in case of pollution from offshore; and
Revenues to be shared as if the resource was on land.
It was clear, in writing, then, right at the beginning of these talks, what the province was seeking, and most importantly it seemed to us these principles were very consistent with Mr. Trudeau’s public pronouncements.
We were shocked, therefore, when at a December 14, 1981, meeting the federal response failed to meet these basic principles. Mr. Marshall wrote the federal minister, Marc Lalonde, on December 18 requesting a ministerial meeting, which was held on January 8, 1982.
The province once again repeated its position and a further officials meeting was to be held, and another ministerial meeting in early February. To further elaborate and make crystal clear the province’s position and to attempt to see a negotiated settlement, the province produced yet another document entitled “A Proposal For Settlement,” dated January 25, 1982.
On February 10, 1982, only sixteen days after our “Proposal for Settlement” was presented, I was forced to write (telex) the prime minister:
The Government of Newfoundland is presently in emergency meetings on the question of o
ur offshore negotiations.
Your statements in the province on May 5, 1981, left no doubt that you were prepared to set aside permanently your government’s claim to exclusive ownership. However, everything put forward since then by your government denies this position. The key issue is that it now appears you have not agreed to put aside permanently your exclusive claim to ownership. We are prepared to do so. Unless you agree to this, clearly and unmistakably, it is impossible to have a permanent joint-management, revenue-sharing arrangement since at any time in the future any party found by the court to own the resource can elect to exercise its rights of ownership and destroy the agreement. This is exactly what happened in Australia where the federal government renounced a ten-year-old joint management scheme after winning in court. No agreement is worth anything, therefore, unless both parties are willing to set aside their exclusive claims to ownership permanently.
Your own minister, Honourable Marc Lalonde, has made some statements which were inconsistent with your statements of May 5, 1981, and in his telegram of yesterday reiterated that position. Your government’s position of refusing to join Newfoundland’s motion for a postponement in the SIU case is further evidence of this.
In any case, the issue is clear. Without both parties agreeing to put aside permanently exclusive claims to ownership, no agreement is beyond attack in the future by one party or the other.
Therefore, the Government of Newfoundland requests that you confirm in writing your agreement with the following position:
The Government of Canada is willing to put aside its claim to exclusive ownership of the mineral resources off Newfoundland and Labrador, both during negotiations and permanently, if an agreement is successfully concluded.
With this written commitment from both sides, the Newfoundland government feels that fruitful negotiations on joint management and resource sharing can continue without any fear that the agreement, once reached, is subject to challenge and destruction in the future.
Given the gravity of the situation, I earnestly request an unequivocal answer by tomorrow. I have released this communication to the people of Newfoundland today.
No answer was received from the prime minister to this request.
Further frustrating our efforts at this moment was the other matter referred to in the telex—the SIU case. This case before the court would necessitate the jurisdiction of offshore being considered, up to then not before the courts. The federal government’s refusal to agree with us, to have this court case deferred until negotiations were completed, blatantly demonstrated that the federal government was really not serious in dealing up front with us on the issue.
Obviously, we were left with no choice but to take serious action; hence, on February 18, 1982, we referred the case of jurisdiction to the province’s highest court, the Court of Appeal.
We had to show just how serious we were on this, and we held out hope that such an action may put sufficient pressure on the federal government that they would return to the negotiating table. But the federal government went about its business of undermining our position with two federal government actions quickly following one another: first, on March 2, 1982, the federal government and the Government of Nova Scotia signed an offshore deal; then on March 5, 1982, the federal government requested that we agree to suspend our Court of Appeal reference and go directly to the Supreme Court of Canada for a decision. We immediately rejected this request. Our minister of Justice, Gerald Ottenheimer, responded to Jean Chrétien, then federal Attorney General for Canada.
The Government of Newfoundland cannot accept your proposal that the question referred to the appeal division of the Supreme Court of Newfoundland be referred immediately to the Supreme Court of Canada. The effect of acceding to your request would be to pre-empt the appeal division of the Supreme Court of Newfoundland of the opportunity of giving its judgment on this matter. The Government of Newfoundland is of the firm conviction that the people of Newfoundland have the right to a decision by the highest court of the province on a matter so vital to the future of the province. Furthermore, the government is of the opinion that the Supreme Court of Canada should have the benefit of the judgment of the appeal division of the Supreme Court of Newfoundland before it renders its decision.
These were uncertain times, to say the least, and this tussle over offshore resources was intensifying. A lot had happened in three short years: the Constitution talks, the court references concerning the Churchill Falls contract, and the economic recession—all bearing down on a very financially fragile government.
We knew by now that two of our three big issues were in jeopardy: our aim to get greater fisheries through the constitutional talks had failed, and the court references relating to the infamous Churchill Falls contract were problematic.
However, our third issue, the offshore, was still in play. Given the federal government’s recent blatant moves to pressure us, I had to do something to strengthen my hand and keep the momentum in the face of this formidable adversary.
I called an election on April 6, 1982, to ask for a new mandate to negotiate regarding the offshore. The people responded, giving me and the party a great victory and increasing our majority in the 52-seat legislature from 33 seats to 44 seats. Surely this mandate would affect the federal government’s approach and bring them back to the negotiating table.
Well, no!
The federal response was swift. On May 19, 1982, they unilaterally referred the offshore issue to the Supreme Court of Canada. The same day I responded: “The Government of Newfoundland is shocked beyond comprehension by this arrogant and cowardly act.” I went on to refer to the January 25 proposal that was never answered.
Given that the federal government refused to respond to our January 25 proposal and the fact that it was unclear what answer the court would give to the SIU case earlier this year, this government embarked upon two specific courses of action to protect the vital interests of the people of Newfoundland and Labrador: 1) we referred the matter to the Supreme Court of Newfoundland, 2) we called an election on the issue to get the views of the people of the province.
We now find that the Government of Canada is blatantly ignoring these two actions. Never before has a federal government ignored the legitimate rights of the Supreme Court of a province to adjudicate on a matter of such importance to the province. Never before has a federal government so arrogantly dismissed the expression of opinion of a people of a province on an issue which so greatly affects them.
We appealed to the legislature for a unanimous resolution condemning the action of the federal government and to call on them to return to the negotiating table based on the proposals put forward by the province. The legislature passed the resolution unanimously. Additionally, we cancelled a ceremony celebrating the new Constitution and called for a “day of mourning.” We also called on our five Liberal MPs and our senators for their support, and also the two federal party leaders, Mr. Clark and Mr. Broadbent.
A note of some significant merit at this time was the support of Liberal Senator Eric Cook—no small decision for a man who had been a Liberal all his life. Bill Marshall had this to say on the matter:
By far the sharpest criticism was levied by Senator Eric Cook in his address to the Senate several days after the federal reference when he resigned from the Liberal caucus over it, and sat throughout his remaining days in the Senate as an Independent. He scorned Prime Minister Trudeau and Justice Minister Chrétien for acting with “great impropriety” and their show of “shocking discourtesy and complete lack of statesmanship.” He pointed out that the move dealt “a severe blow to the public perception of the Supreme Court of Newfoundland,” whilst observing if these two lawyers had had any real experience of practising before the courts, they would have had second thoughts before treating with contempt one of the Superior courts of the nation.
Not unusual, the national media had a hard time understanding Newfoundland’s position, even though it was put in writing in
the clearest terms; they seemed to favour the federal position, which was factually contradictory. Puzzling indeed!
This lack of understanding is perhaps best exemplified by the contents of the most watched national TV news show of the day, The Journal, with Barbara Frum. Ms. Frum interviewed Mr. Chrétien (no one from the Newfoundland side was present, of course) concerning the offshore matter. But the facts were not provided, forcing me to write Ms. Frum on May 21, 1982:
You failed to mention in your questioning two points:
You left unchallenged Mr. Chrétien’s contention that Newfoundland went to court first. For the record, the federal government enlarged the SIU case before a federal court to include ownership of the offshore, forcing Newfoundland to refer the matter to the Supreme Court of Newfoundland.
Secondly, no mention was made of our January 25 proposal that was presented to the federal government, to which no reply has yet been received. If a prompt resolution is what the federal government wants, negotiation using this proposal can be much quicker than court reference.
Meanwhile, the Nova Scotia agreement and the federal government’s unilateral reference to the Supreme Court kept the pressure on us notwithstanding our great election victory.
There were many who thought we should accept a Nova Scotia– type deal. However, we refused to accept a deal that did not reflect real management and revenue sharing—and that was the Nova Scotia deal.
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