N.L. to receive $ 2.5 billion from Ottawa for over 38 years in renewed Atlantic deal


The province will receive $ 2.5 billion in a "new stream of guaranteed revenue" through a renewed Atlantic Accord agreement with Ottawa, Premier Dwight Ball announced Monday in St. John's.

The revenue stream from the federal government's equity stake of 8.5% in Hibernia is top-line, with $ 1.9 billion – about 60% – of funds to be received by 2030, Ball said.

The cash installments will run from this year until 2056, without restrictions on the use of funds, said Ball, who praised the agreement as a predictable source of revenue for the province over time.

The result is the immediate reduction of provincial debt by about $ 5,000 for everyone in the province or $ 2.5 billion, with a total 16% reduction in debt and an interest savings of about $ 100 million during the agreement, Ball said.

In addition, the federal government will work with the province to mitigate the fee related to the besieged Muskrat Falls project, said Seamus O & # 39; Regan, the federal minister of indigenous services, in the announcement at the Sheraton Hotel – in the same meeting room where The Atlantic agreement was signed, O & # 39; Regan pointed out.

"The Canadian government will be working quickly with the province to examine the financial structure of the project so that the province can reduce the interest rate," said O & # 39; Regan.

To that end, Bill Morneau, the Federal Finance Minister, will travel to St. John's on Friday to work with the premier on mitigating electricity tariffs, said O & G; Regan, who played a key role in negotiations as regional minister of Newfoundland and Labrador. .

Ball says the revised agreement will provide interest savings of about $ 100 million over the contract. (Gary Locke / CBC)

A federal committee to examine the financial structure of Muskrat Falls will be formed, along with a federal committee to strengthen joint management of the province's offshore development.

The Atlantic Agreement was signed for the first time in 1985 to manage the province's oil and gas sector and to direct its revenues between levels of government. Ball and O & # 39; Regan signed the renewed agreement the day after the 70th anniversary of the Confederation of the province with Canada.

"The agreement we get makes me as proud of being Canadian as I am proud to be a Newfoundlander and a Labrador," Ball said.

& # 39; Pre-election razzle dazzle & # 39;

The provincial opposition leader, Ches Crosbie, who participated in the announcement. said the deal would require further analysis by experts in the coming days, but his first impression was that "it's a pre-election delirium."

"Checks are in the mail, and some of them have not come 40 years," Crosbie said after the signing of the agreement, adding that the money provided by the agreement will not eliminate the province's $ 600 million shortfall.

Previous monday Crosbie Ball pressed during question time in the House of Assembly to make the documentation behind the agreement publicly available after the announcement.

"Without materials and background analysis, academics, economists, members of the public and members of the House of Representatives whose constitutional responsibility is to question government actions, they will not be able to ask intelligent questions about the outcome," he said. Crosbie.

Ball dodged Crosbie's question several times before granting, "This information will be made public."

The federal government will transfer money from the Hibernia oil field to Newfoundland and Labrador. (HMDC)

He then alluded to the ongoing controversy surrounding the over-budget and overdue project, Muskrat Falls, saying, "The agreement will speak for itself. Money goes into the pockets of the inhabitants of Newfoundland and Labradoriansdo not take money away. "

Until the thread

Prior to Monday's announcement, several federal and provincial sources confirmed that the agreement was reached after an intense final week of negotiations. Negotiations came on Sunday evening, with an informed source of the talks saying the paint was still being put into the paper on Monday.

The money goes into the pockets of Newfoundlanders and Labradorians, does not take money.– Premier Dwight Ball

A federal source said CBC News that when the talks started seriously last fall, the two sides were separated by billions of dollars and the discussions almost failed several times.

But the federal source credits Ball's Morneau for keeping conversations on the table.

Negotiations focused on ensuring that the province maintained its position as the main beneficiary of the agreement, and Ball and O & # 39; Regan both praised that position as a result of the agreement on Monday.

Document drama

The terms of the Atlantic Agreement are not foreign to the controversy, and were last renegotiated under former Prime Minister Danny Williams.

In 2003, the Royal Commission for Renewal and Strengthening Our Place in Canada revealed that Terra Nova and Labrador were receiving only 15% to 20% of revenues from the offshore sector, despite the initial promise of the agreement that 100% would go to the province.

Danny Williams was premier when the Atlantic Agreement was renegotiated in 2005, resulting in a payment of $ 2 billion for N.L. (CBC Archives)

After that, Williams led a public prosecution against Ottawa, lowering the Canadian flags of the government buildings. The fight ended with a revised deal in 2005, and about $ 2 billion was passed on to Newfoundland and Labrador.

This version of the agreement contained a clause requiring a review of its terms by the end of March 2019, with Ball writing to Trudeau in February 2018 asking for that review to begin.

Read more about CBC Newfoundland and Labrador


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