Harper and Newfoundland: a mystery solved

Glimpse at last-minute brokering offers a closer look at Nigel Wright’s work on trade files


Fascinating story today out of St. John’s, where Newfoundland and Labrador premier Kathy Dunderdale told a business lunch that a deal to announce a federal loan guarantee for Muskrat Falls almost fell apart last November when Harper demanded she deregulate the province’s fish-processing industry in return for the favour. In one of a few versions of the story, she slammed the phone down on Nigel Wright, then Harper’s chief of staff, rather than accede to the demand.

Dunderdale’s version is obviously self-serving — she positions herself as a defender of Newfoundland and Labrador fish-processing plants against bullies in Ottawa and Brussels who would take them away — but a source familiar with the federal position on these last-minute negotiations tells me her version is broadly accurate.

What’s striking is that the deregulation Dunderdale was asked to agree to was demanded by Harper’s PMO as part of the CETA negotiations with Europe. The second-largest provincial delegation at Canada-EU negotiations has often been Newfoundland’s, as the province has long been wary, under Dunderdale and her predecessor Danny Williams, about big trans-atlantic competition for the province’s fishery.

This excellent feature, written at the time by the Halifax Chronicle Herald’s Paul McLeod, will remind you how wild the home-stretch negotiations were.

At The Chronicle Herald we had already put our story on the Friday announcement to bed, confident because we had confirmed the event through multiple, unrelated sources.

 Then our sources started calling us back. The deal was off.Finally the deal was back on, and Harper flew out East to make the announcement.

So here’s what’s striking. First, that the PMO tried to add  a condition to the PM’s appearance — to make it the condition of his presence — and, when rebuffed, blinked and followed through on the announcement anyway. Bluffers rarely have their bluffs called. When they do the results are sometimes surprising.

Second, that the PM’s chief of staff was brokering the deal. This used to be the business of intergovernmental-affairs ministers, but Harper hasn’t had one of those worth mentioning since Mike Chong quit in 2006. A lot of power on these fast-moving files is concentrated in, basically, one guy. Who incidentally just quit.

Third, that Wright was trying to herd the provinces to get a CETA deal six months ago and that the specific bone of contention remains outstanding. If CETA was Wright’s file, if his purported legendary touch on trade issues hit a speed bump this big, and if half a year has gone by since then, and if Wright’s gone now, then one starts to think CETA isn’t going great.

But note that in McLeod’s article Harper actually talks about the timing of the Muskrat Falls announcement, which came all of four days after the federal cabinet signed off on the loan guarantee.

“Let me be frank about this. Our view is we worked on it for a long time but that once we concluded it we wanted to make the announcement quickly,” said Harper.

 “It’s a very big deal, and as leaders, we want to announce what is done, not wait for other people to leak it out for us.”

The same modus operandi would have CETA continuing to look like a mess until just before, or just after, Harper attends the G8 in Northern Ireland on June 17-18. He would either complete the deal in time to announce it at the summit, or crunch it with European officials at the summit and announce it somewhere else, days later. Hell if I know.

But if we get to the end of June and there’s no deal, it’s going to start to look like Wright’s ability to work magic on trade files started to fall apart last November at Muskrat Falls.


Harper and Newfoundland: a mystery solved

  1. P & P had a segment about this as well. I wonder if Dunderdale is in that much political trouble, because this really feels like going full on scorched earth against the government. Can’t imagine it’s a common occurrence to publicly reveal details of secret negotiations like this.

    It’s interesting but hardly surprising that Harper doesn’t let his Ministers handle their own files. That said, the CETA talks probably require someone significantly more capable than the calibre of a typical minister on Harper’s front bench.

    Maybe I’m failing to recognise the importance of this to the EU, but it hardly seems like an insurmountable obstacle. There must be other sticking points in the negotiations, and surely there must be at least a few concessions Canada can offer to mollify the EU enough to overlook this particular issue. I doubt any premiers will stretch to help Harper secure a deal, regardless of whether or not Harper has his Bay Street dealmaker managing the file. This kind of large, complex, and all encompassing accord might just be too unwieldy to put together by anyone.

    • Harper’s unwillingness to meet with the premiers certainly doesn’t earn him any goodwill.
      As to Dunderdale, well, let’s just say she’s no Danny, and many in NL refer to her as Dunderhead.

  2. I fail to see the urgency of ‘getting’ a CETA deal. It seems simplistic at the least to negotiate a complex deal, and then judge it a success without any knowledge of the contents, simply because it happened, and happened ‘on time’. With NAFTA, the entire country knew all the gory details, and judged the deal on it’s relative merits. The losers, and winners knew what they were winning and losing, and were able to present a public case for, or against. In this case, the terms and conditions will be unknown to the public. It will just happen with or without our consent and agreement.

    • Although it took several years to realize how hollow the enforcement process was.

      • That may (or may not) be the case, however the enforcement provisions were also publicly argued, with knowledgable negotaitors pointing out in public that the enforcement provisions could be perverted. The point is that we knew what we were getting into, and the Progressive Conservatives were meticulous in ensuring a very full, and very public debate. The elctorate bought in to their plan, gave them a majrity, and NAFTA is 100% legitimate in the eyes of all Canadians as a result.

    • The good news is you don’t have to worry about it being on time any more.

  3. A free trade deal in fish means that Portuguese fisherman take fish in our waters then process them in Portugal. What exactly is reciprocal about that? There are no fish in Portugal’s waters. There are no fish in EU waters or they would not be over here overfishing out waters too.

    That Harper would even consider giving in on this is not surprising – he wants to be knows as the guy who got the trade deal signed.

    That is not the only and not the worst part of the EU deal. The worst part is the foreign investor protection parts of the deal – which will allow foreign companies to sue for lost profits on imaginary projects.

    Harper has given Chinese firms (many state owned) more power to sue Canadian governments than any Canadian company has. The Trans-Pacific Partnership gives those rights to companies in all the countries in that deal. These deals cement international corporate power over government power.

    That Dunderdale is standing up for her province once again shows us that Newfoundland remains the heart of the resistance to corporate takeover of the entire country.

  4. So deregulate the fishery but fight to keep the supply management system in place for dairy and poultry? Good for Dunderdale.

    • The proof that I used to work at the National Post is that I still live in a nutty dream world where we could dismantle them both.

      • I do not know much about Fisheries regulation, but my (pretty old) Economics degree taught me that while a truly free market tends to deliver optimal results (optimal for all paticipants), very few markets are actually free in an economists view. The tragedy of the East coast fisheries lies in the overexploitation of a limited supply, the global commons of an international fishery. More and more fleets piled in to catch the last of the Cod. Even NP reporters must recognise that regulation is often needed to tame predatory practices. Free market is not a religion that one should have faith in. It is the product of reasoning, and welfare economics that tells us that it will deliver better overall results. So the test of good policy should not be that it minimises regulation, it should be that it delivers optimal outcomes. In international trade even more so. I do not see how de-regulating the fisheries will be of any benefit to Canadians, Do you see any benefit? There better be a honking big quid pro quo.

        • Au contraire. If we are to get cheap high quality Reggiano to the masses and not so cheap high quality BMWs to the upwardly mobile, then someone has to pay the price. The consumers of Calgary, Vancouver, Montreal et al., aren’t particularly concerned about a few thousand hand working fisheries workers in NL, can’t they all go dig for bitumin in AB or something? After all there should be a market for it over there along with NL fish, once the deal is done. Who cares where it is processed…unless you happen to be a fish plant worker in NL.

      • Ha! They probably still believe there is such a thing as free markets that are unfettered by national interests too. You’re better off out of there :)
        Look at Coyne now. I swear he is going to get himself a set of mutton chops and a blunderbuss one of these days. Still, love the guy for some reason though.

  5. On my shelf at work I’ve got a copy of ‘Making Policy’ by Glen Milne. Even though it was published in 2011, I find that I’m reading it now purely for the nostalgic value.

  6. “The same modus operandi would have CETA continuing to look like a mess
    until just before, or just after, Harper attends the G8 in Northern
    Ireland on June 17-18. He would either complete the deal in time to
    announce it at the summit, or crunch it with European officials at the
    summit and announce it somewhere else, days later. Hell if I know.”

    The hell if anybody knows…including i suspect Harper! Why don’t we just ask the premier of Northern Ireland or the EU bureaucrats to cut and and negotiate the deal for us? For all the input the people of this country have, we may as well.
    The contrast to the deal Mulroney cut, or rather the way it was debated in THS country, is quite telling. We had a raucous and at times mean and messy debate on free trade back then.Granted this is quite different, it doesn’t involve the Americans for one thing, but the contrast is startling. Seems like NL is understandably the one province or jurisdiction with the most to lose[ along with the SM crowd] so she pushes back. At least they have some spirit left to fight for their rights.
    There seems to have been pretty near zero attempt to sell this to the people of this country. Say what you want about Mulroney, but he could sell, and he knew the value to the future of a consensus, or at least an open national debate on the issue. And look at the result decades later. No one can say we weren’t consulted or had our say.
    It never fails to amuse me how Harper keeps on thinking that working in the shadows with only the righteous inside the deal, is an effective strategy to get him where he thinks we should go. We see this on file after file with the guy…only now are they making an effort to sell Keystone and projects like NGP to us proles. Significantly it comes in the form of govt ads, rather than a hands on process.[ well can anyone see Oliver winning any charm battles?] But this only after exhausting all attempts at bullying and demonizing of key opponents.
    The man simply never learns. It is like his controlling side is at war with his rational side. He doesn’t trust the people to make their own minds up through open consultation – key stake holders are of course welcome to make their case quietly and preferably behind closed doors. Even if this deal gets done, it will have a tough time because it never was put honestly to the citizenry by a man who doesn’t trust them to make the right decision.
    Harper missed his calling. He should have become a faceless bureaucrat or CEO, he has the all the right instincts, and none of the ones to make a great politician. He simply cannot sell unless the issues are already heavily in his favour.
    Just a little taste of how bad these guys are as salesmen. Why would you do this when you are trying to sell Key stone and our environmental record to a skeptical president?

    • Interesting contrast of styles between Harper and Mulroney. I was about 12 years old when Mulroney retired, so my knowledge of him & his years in power come primarily from textbooks/articles (and to a lesser extent people’s opinions). From what I’ve gathered, he did this country a lot of good.
      Was there really a referendum on free trade during Mulroney’s tenure as PM? I don’t recall reading/hearing about any such thing.

      • There was no referendum, although the 1988 federal election was utterly dominated by the issue, so many pundits have (understandably) treated that election as a de facto referendum on the original FTA.

      • Memory is getting hazy myself now. I don’t recall without looking it up if there was an actual referendum, but the 88 election served as a referendum on free trade. [ probably getting the referendum on Meech or Charlotte town conflated with the free trade debate]

        • Guranteed there was no actual referendum on the FTA. There was a referendum on Charottetown, and it went down in flames.

          • Brain cramp on my part.

    • HARPER knows NOTHING of the fishery in NL…then again neither does Dunderdale!

    • If you have difficulty with this, then you should get ready for when the government finally announces a FATCA IGA with the US. The government has been negotiating this with the US behind closed doors for months now. Unless something drastic happens, any announced IGA will turn either the Canadian government (Model 1 IGA) or Canadian financial institutions (Model 2 IGA) into de facto extensions of the US IRS. There will be much bleating about reciprocity, BUT the deal will have nothing like true reciprocity – Canada will fork over much additional financial data to the US and the US will give just about nothing more in return. Of course, true reciprocity would endanger Delaware’s, Florida’s, and Texas’ tax haven status – so just don’t expect it. Add to this the costs to financial institutions in complying with FATCA (even a Model 1 IGA) and you have yourself something that can only leave you scratching your head.

      Basically the US is holding a gun (threat of 30% withholding on US transactions) to Canada’s head and ramming thru an extremely one-sided, expensive to comply with, agreement. Hence the secrecy.

  7. Fascinating thing to watch[ and listen to with er, some difficulty] that Dunderdale scrum. Did she just throw SH under the bus? I bet he thought so.
    A treat to watch a smart, articulate, humourous politician making her case, unscripted, in the trenches with a bunch of the media that know their local stuff. Glad to see this still goes on, at least at the provincial level, if not the federal. We’ve almost forgotten what it is like to see a Canadian PM stand on his hind legs and simply make his case, unscripted, flying by the seat of his pants, somewhat.
    I hope Harper was taking notes. He probably was, noting that Dunderdale is far too loose a cannon to have on his Conservative sloop. It’s probably the plank for her if he has any say in the matter. But that’s how you build trust with the electorate long term PM; not by debating the issue behind closed doors or issuing 11th hour veiled threats, but by fighting for your agenda openly and candidly. Politics is meant to be messy. It is simply healthier for everyone that way.

    • We might see that again someday.

      • Fingers crossed.

    • She the female version of Harper

      • Is She? I wouldn’t know, but she’s much better on her feet than he is – funnier too.

  8. I thought by now that we would have learned from the last free trade agreement that we give up controll of a lot of our country and in return if they do not want something from us, they do not not accept it.
    For the NAFTA agreement this can be held true for Softwood lumber, beef, oil, and anything related to security. But when Canada tried to protect our resources they went straight to the resolution comitee. It would be no different with the EU. They will come and take what they want and accept nothing in return.
    It is interesting that we are finding out what we stand to lose (dairy, fishing etc.), but which of our industries stand to gain? What will we export to the EU that we do not already export? It will not be manufacturing. It will not be grain (GMO’s are not allowed in the EU).

  9. Interesting that Ed Fast, in response to a question from Jack Harris, denied any link between fisheries regulations and Muskrat falls in QP yesterday.

  10. so it was signed

  11. Re June 3 tweet. I thought you were doing a book on Rob Ford!

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