With N.L. on the financial brink, Crosbie targets Ottawa with promise to 'fight for fairness'

·4 min read

With Newfoundland and Labrador on the brink of financial disaster, tough-talking PC Leader Ches Crosbie signalled Friday that a new deal with Ottawa on issues like equalization payments, and the threat to electricity rates posed by Muskrat Falls, is the best hope for a recovery.

And Crosbie suggested he's the man best equipped to negotiate with the federal government, and even threatened legal action to get what he wants.

Calling Newfoundland and Labrador an "afterthought in Confederation," Crosbie said a political landscape that features Liberal governments in St. John's and Ottawa is not working.

He said the current formula for federal transfer payments to the province "discriminates" against Newfoundland and Labrador because it claws back revenue from natural resource industries such as oil and gas.

While neighbouring provinces such as Nova Scotia and New Brunswick will each receive more than $2 billion in equalization payments this fiscal year, Newfoundland and Labrador will be shut out.

With changes, Crosbie said the province could receive $300 million in transfers annually.

"There are tough negotiations in front of Newfoundland and Labrador to secure a stable future for our province. Who would you choose to negotiate on your behalf? A doctor or a hard-nosed lawyer with a long track record of proven results?" Crosbie asked.

Not looking for a handout

Speaking during a news conference in Clarenville, with his speech streamed live on the party's Facebook page, Crosbie said five years of "handshakes and back-scratching" between Prime Minister Justin Trudeau, former premier Dwight Ball and current Liberal Leader Andrew Furey have not helped the province's dire fiscal and demographic situation.

He pledged to approach Ottawa from a position of "determination and equal partners," as opposed to a weak province looking for a handout.

And if negotiations over a boardroom table do not produce results, Crosbie said, he's ready to take legal action.

"If we have to go that route, then that's what we'll do," he said later during an interview with CBC News.

"I'm not saying we have to litigate that to the bitter end. But while we're talking we need to display that we can actually throw our weight around in legal terms as well."

How about homegrown solutions?

When asked if he believes federal help is the only solution, Crosbie said, "We do have to do our part," but did not offer specifics.

"If we're to become prosperous again and become a have province again and know that sense of pride again, then we're going to need help from Ottawa," he said.


Like Crosbie, Furey has acknowledged that federal assistance is needed. But unlike Crosbie, Furey has played up his close connections in Ottawa, including his relationship with the prime minister.

Furey has promised to maintain a "robust and healthy" relationship with Ottawa, while being firm in any negotiations.

Meanwhile, Crosbie listed a series of demands that he will take to Ottawa, and promised a tough approach. His demands include:

  • A new fiscal arrangement with Ottawa that reflects the province's vast geography and dispersed population,and the cost of providing services.

  • A revised equalization formula that does not penalize the province for revenues from natural resources such as oil and gas.

  • A deal to ensure affordable electricity rates, with the federal government buying an equity stake in the Muskrat Falls hydroelectric project, which is billions over budget and years behind schedule.

  • Joint management of the fishery, modelled after the Atlantic Accord, which ensures joint management of the offshore oil and gas industry.

His No. 1 priority? The threat of skyrocketing electricity rates when Muskrat Falls reaches full commercial power later this year.

For months, the federal and provincial governments have been trying to reach a deal to to mitigate power rates in the Muskrat era.

Nalcor Energy
Nalcor Energy

Crosbie said a key plank in that plan must include Ottawa purchasing an ownership stake in the project in order to ease the burden on electricity users.

The federal government is already a partner in the province, having guaranteed two loans totalling nearly $8 billion.

"They must now support the project through a direct equity stake in the project. The funding in such an equity stake would be directly applied to the project and provide immediate rate relief," said Crosbie.

Read more from CBC Newfoundland and Labrador