Some Day the Sun Will Shine and Have Not Will Be No More

by Brian Peckford

  In short, in our opinion both parts of the question should be answered in favour of Canada.

  Just when we were gaining some hope, this decision put a dagger to the heart. You are no sooner off the mat than you are knocked down again.

  Mr. Trudeau’s resignation led to a Liberal Convention on June 16, 1984, at which John Turner was elected leader and automatically prime minister. In July, Turner moved swiftly, calling an election for September. The Liberal fortunes started to rise in the polls, and a Progressive Conservative victory, probable only a weeks before, now seemed very uncertain.

  For once, luck was on our side. A secret deal between Trudeau and Turner saw a flurry of appointments to the Senate and other government agencies and some questionable appointments by Turner himself, all reflecting badly on the Liberals. In the public television debates during the campaign, Mulroney exploited this Liberal largesse and cronyism, putting Turner on the defensive and delivering a major blow to the Liberal fortunes. Mulroney’s now-famous line during the debate, “You had an option. You could have done better,” referring to Turner and his position on the appointments, resonated with the voters.

  On election night Mulroney won a landslide victory of 211 seats in the 282-seat House of Commons, the largest seat victory in Canada’s history.

  The period from the Mulroney victory on September, 1984, to February, 1985, marks perhaps the five most important months in the history of our place. Talks began again on the offshore. Our minister Marshall and the federal minister Carney were at the negotiating table, taking instructions from their respective first ministers and Cabinets.

  Gone were the acrimony, intimidation, and paternalism of the federal government. Commitments made were commitments met. Bill Marshall has commented upon the negotiations with the new Energy minister, Pat Carney: “No longer were we being treated as dupes in a game whose ultimate end was to force acceptance of outright federal suzerainty over oil and gas off our shores. This time it was for real!”

  As a relevant aside, which I know will be hard for readers to believe, I remember an incident when we were in a meeting with then Energy minister Jean Chrétien over the big principle of us insisting on the establishment of an Offshore Board (with equal federal and provincial representation, with an independent chairperson with the full compliment of employees) and that it be stationed in the province. Shockingly, the federal side mused about where the children of the employees would go to school.

  Marshall goes on to say:

  In the Carney round of negotiations there was no divergence between the word of the Federal Energy Minister to me and what her officials told our officials that they were instructed to translate into the formal agreement. In fact, she saw to it that a trusted and highly competent lieutenant, Harry Near, co-opted specifically for the purpose, sat in on the meetings of the officials to assure that Federal Policy was being so translated.

  The Atlantic Accord was born!

  Our last game changer, our last chance, did not go down to defeat by the refusal of a federal government for constitutional change, as in the fishery; it did not go down to judicial defeat as in Churchill Falls—but from such crushing defeats rose an agreement unlike any in our history.

  To quote a few of the main elements of the Atlantic Accord:

  “To recognize the right of Newfoundland to be the principal beneficiary of the oil and gas resources.”

  “To provide that the Government of Newfoundland and Labrador can establish and collect resource revenues as if those resources were on land, within the Province.”

  “To recognize the equality of both Governments in the management of the resource.”

  “The offices of the Board and its staff shall be located in Newfoundland.”

  “The two Governments recognize that there should not be a dollar for dollar loss of equalization payments as a result of offshore revenues flowing to the Province.”

  “The Government of Canada and the Government of Newfoundland and Labrador hereby establish an offshore development fund [See Appendix II]. The Fund will consist of a $300 million grant, cost shared 75% federal and 25% provincial.”

  And so for the first time in our history, we had negotiated an agreement that gave to Newfoundland meaningful and effective levers to be a major player in one of our own resources—this time, oil and gas.

  Sadly, it is forgotten now that Brian Mulroney could have easily taken a tougher stand, armed as he was with a recent Supreme Court of Canada decision clearly and categorically adjudicating in the federal government’s favour. But he did not.

  NEVER A SECOND OR a minute during our talks with the prime minister or Minister Carney was advantage taken or pressure applied as a result of that decision. Yet, here we were with de facto ownership, consistent with national responsibilities, with the levers of ownership and jurisdiction. February 11, 1985, was a great day—the signing of the Accord.

  I remember sneaking away for an hour or so to be by myself, driving to Signal Hill. I passed by the house at the bottom of the hill that Joe Peckford had built, glanced down Temperance Street to where Joe had his own “rooms” now all filled in and where the Terry Fox Memorial now stands.

  Once on top of Signal Hill, I glanced out at the North Atlantic and my life passed before me: my parents, my great teacher and confidant, Brose Paddock, the basketball team in Springdale, the men who plied the waters of Green Bay, Pistolet Bay, the French Shore, and the Labrador Coast with me, advised me, and assisted me in “growing up,” who experienced with me the frustrations and tribulations of people who were without, or troubled, or just plain looking for help or guidance—of making do, struggling with few resources and not whining and complaining; the people of Green Bay who stood by me at all times, many sensing, I think, the big picture, the greater good, and what I was seeking.

  And my late new friend in La Poile would be a proud Tory today.

  Oil did not flow right away, of course; not until 1997 did the first oil flow from the first development, Hibernia. But when it did, it began the real movement to a better time.

  Professor Richard Cullen, presently a law professor at Hong Kong University, published a book in 1990 entitled Federalism in Action: The Canadian and Australian Offshore Disputes, based on his doctoral thesis that he completed at Osgoode Hall, York University. In it he said, “Through these two Accords (Newfoundland’s and then later Nova Scotia’s, which was based on Newfoundland’s), these two Atlantic provinces have gained, in important ways, more than they would have gained had they each won in court” (p. 193).

  Later he continues: “The provinces have achieved the setting up of an offshore policy-making and management board truly independent of federal control. And they have also gained the same access to revenues from the adjacent continental shelf that the award of provincial sovereign rights thereover would have afforded them” (p. 193).

  The last word concerning the Accord must go to Lin Jackson, in his book Surviving Confederation, who said of it:

  But it is no piece of paper; it is a brand new Term of Union which confers upon Newfoundland an unprecedented constitutional status with respect to the use of resources off its shores. One need only glance at the history of this area to realize that no other single factor contributed so persistently and significantly to retarding Newfoundland’s economic growth and its social well-being over the centuries than precisely the fact that total jurisdiction of the oceanic resources upon which the local people always have depended, lay out of reach in the hands of others. The Atlantic Accord is not “historic,” a “watershed,” “the most significant document since Confederation” simply because Premier Brian Peckford said it was. It is so because for the first time in our 500-year history the people and Government of Newfoundland have at long last been afforded a direct role in determining the management, use, and benefit of the great traditional resource of the banks of Newfoundland. (114)

  On November 3, 2008, I received an email from Shelly Banfield, producer of the St. John’
s CBC Radio Morning Show, which said in part:

  Hi Mr. Peckford:

  I don’t know if you heard the news yet, but Newfoundland is officially off equalization.

  One day the sun will shine and have not will be no more!

  EPILOGUE

  POINT ONE

  THE HIBERNIA DEVELOPMENT WAS thefirstdevelopment under the Atlantic Accord; we bargained hard for a reasonable deal and I think we succeeded. So the Hibernia Statement of Principles, July 18, 1988, was another great day marking as it did a real, tangible result of the Accord. But given the time, there were many risks and oil prices were a far cry from where they are today. The federal government had to step in and assist. Once again Brian Mulroney came to the fore as well as Michael Wilson, Marcel Masse, and John Crosbie, his Cabinet members. A $1 billion contribution and a $1.6-billion guarantee were needed. Later the project hit further trouble with the withdrawal of Gulf Canada and its 25% of the project. The federal government stepped in again, taking 8.5% with the remainder of the 25% taken up by Murphy Oil, Mobil, and Chevron.

  Of course, such support from the federal government did not miss the eye of those from away who saw this as some terrible mistake, while millions of federal dollars were going into all sorts of projects for car plants in the country’s heartland and into an area that had enjoyed for years the great advantages of an Auto Pact with the United States, when at the same time we were forced to sell unprocessed fish to the United States because we had no access like the central Canadians had with their cars and car parts. The Globe and Mail led the charge with its editorial on December 29, 1992. Its headline: “A Happy Ending to Hibernia—and Soon.”

  In the first paragraph it described the project as “the makings of a grand tragedy,” and on a “historic scale” talked about the oil being the most costly on earth.

  I was no longer in government when this was written, but I responded the next day with a letter to the editor:

  Let me express my utter disgust with your editorial of December 29 concerning the Hibernia Project. I find it strange indeed that the marriage of the private and public sectors which built this country finds so little favour with your paper. In advancing new frontiers, it has been this partnership that has been so important. It is no different with the first major offshore oil project development in this country. Strategic investment by the public sectors has been a characteristic of this country for decades. It is noteworthy that the strongest economies in the world today are those that have mastered the simple idea of strategic co-operative arrangements between the public and private sectors.

  Newfoundland and Labrador is eager to work based on gifts that nature has provided. Co-operation by all sectors is essential to make it happen. Already, Ontario, Quebec, and western-Canadian companies have benefited from the Hibernia project. We do not begrudge the billions of dollars that provincial and federal governments have invested in Ontario and Quebec and in energy and agricultural sectors in the west. In order for all regions to grow and contribute, fairness demands the same support to ensure the natural resources of Newfoundland and Labrador are developed for the benefit of all of Canada.

  In closing, I would like for your paper to provide me with the data—economic and financial—that was used to reach the conclusions in your editorial.

  Needless to say, I did not receive a response to the letter and I am unaware of whether the paper later ever made amends for its unfortunate analysis and predictions. I have contacted the paper, and in getting them to send me many of their later editorials, I cannot find where they have acknowledged their monumental blunders regarding the price of oil and the cost of Hibernia oil.

  And they were not finished. They followed this up with editorials on January 6, 1993, and January 12, 1993. January 6 was headlined “If Hibernia Can’t Swim—Let it Sink” and the January 12 one was headlined “Hibernia or Uneconomics 101.”

  What is most shocking, besides the colossal errors (mocked as they deliberately inflated Hibernia to produce 700 million barrels— it will now produce over 1 billion) and bad predictions (as if they somehow were blessed with the only perfect crystal ball, saying oil prices will not keep up with inflation) is the zeal with which they denigrated the project. It is as if deep in the heart of the paper there was this gigantic fear that this just might succeed and we can’t have that, so let’s kill it now.

  Ironic, isn’t it, that this paper resides in Ontario, now a “have not” province, and Newfoundland, largely because of Hibernia, is a “have” province? Specifically, in the year 2011–12, Ontario will receive $2.2 billion in equalization and Newfoundland will not receive any. In other words, because of this great tragedy, Hibernia, Newfoundland is now assisting Ontario. This “farce,” as they called it.

  And I have just read a CBC report of July 5, 2011, that the federal government in 2008 and 2009 bailed out the auto industry, largely in Ontario, to the tune of—wait for it—$12 billion.

  POINT TWO

  THE HIBERNIA STATEMENT OF Principles, which we negotiated and signed in 1988, stipulated that a gravity-based structure was to be the production technology used and that it was to be built in Newfoundland (the first in the Western Hemisphere) at the new Bull Arm site (constructed with $95 million from the Offshore Development Fund we had negotiated in the Accord). Its design, as well as the design of the flare boom and subsea lines, was to be done in the province, and the main support frame assembled and outfitted at Bull Arm in the province.

  We were beginning to realize our aim of having an industry, not just a project. There were three provincial royalties: one before the project was paid for, one after the project was paid for, and a super royalty if oil prices rose significantly. Not bad compared with every other major resource deal ever done in the history of the place.

  On February 21, 1997, I was in St. John’s as a member of the board of CBC. I was suddenly confronted by a host of people at the Hotel Newfoundland, all of whom were invited there to witness the exciting, historic tow out of the Hibernia platform. I was humiliated, since I had to inform the curious, questioning people that no, I was not there to witness the tow out, because I was not invited. I made little of it then, although it hurt for a while and, for the record, I say it now.

  POINT THREE

  IN 2010, EFFORTS GOT under way to have a conference/ gathering to highlight and celebrate the 25th anniversary of the Atlantic Accord. Memorial University was involved, as well as individuals who were involved in the provincial government during the days when the Accord was being negotiated, present representatives of the provincial government, and the Newfoundland Ocean Industries Association.

  Unfortunately, the format outlined for such a gathering did not find favour with the provincial government representatives and NOIA. The idea was to have the architects—that is, the politicians and public servants who actually did the deal there—to talk about the events and issues leading up to this historic document. Unbelievably, this did not happen, because of the lack of support from the province and NOIA.

  The event then went forward with just the university sponsoring it under a Memorial Presents series whose “rules” precluded having someone from outside the university to speak. I was told, “Memorial Presents is always a MUN presenter on an issue of provincial importance, along with a panellist or two who provide some counterbalancing perspectives. Having someone of your status or Bill’s as a panellist just did not make sense.” And having someone like us would conflict “with their independence.” And it is not their place to have a “celebration.”

  Well, needless to say, when I heard this I flipped my top and wrote to Memorial University.

  I am having difficulty finding the words to respond to your comments.

  Forget the “celebration” word. That is “different,” I suppose, because we wouldn’t want the hallowed halls of academia to go berserk over one of the greatest achievements of this land, especially in light of the railway, the Hum on the Humber, and the Exploits River Central Newfoundl
and boondoggle, the mining concessions to John Doyle, and the bankruptcy of Come By Chance (a story for another time, and its resurrection, which, of course, could not have the authors describe at some future university-inspired event), not to mention Labrador Linerboard or the Upper Churchill—oh yes—the ground fishery!

  Parenthetically, the first blob of money out of the $300 million development fund under the Accord was to Memorial University for the Geology Building. How could they take it and remain independent?

  “Oh, stop being so narrow, Brian, and not understanding the history and importance of a free and independent institution of higher learning,” I can hear in my ears. I expounded on that at great length in my speech at MUN during the proceedings when I was awarded my honorary degree. Right on side, I am.

  So let’s not get hung up on the word celebration. Agreed! Not at the university—never!

  But to say that you cannot invite authors, signatories to the Accord (1985), because that would somehow break or undermine the “independence” of the university or your series is surely a stretch— no, not a stretch; it is truly puzzling to me.

  How can you say “it did not make sense” to have any of the signatories there? How does one go about framing such rules? Does not the university have authors of papers, poems, novels, fiction and non-fiction, music, and visual art participate in the discussion of their creations?

  Now, I do not mean to just have Bill Marshall or me and one or all of the federal signatories; rather, having the signatories, or some of them, introduce the topic and then others like Cullen and Locke or whoever follow with a full and open discussion.