NB Power deal unpopular from start: documents

The New Brunswick government knew the proposed deal to sell NB Power to Hydro-Quebec was unpopular from the very beginning, according to government internal polls and focus groups obtained by CBC News.

The New Brunswick government knew the proposed deal to sell NB Power to Hydro-Québec was unpopular from the very beginning, according to government internal polls and focus groups obtained by CBC News.

The Liberal government held focus groups a week before it announced a memorandum of understanding to sell NB Power to Hydro-Québec and again on Oct. 29 when the $4.8-billion sale was announced.

The focus groups were already showing the government the proposed energy deal would be a tough sell with the public.

Finance Minister Greg Byrne said the results of the focus groups and polls showed there was a high degree of public anxiety over the deal from the start.

"There was a demand for the public to receive additional information; that was constant through the research," Byrne said.

"And again, our mission was trying to identify the specific concerns that New Brunswickers had and to try and address those through the framework of the [memorandum of understanding]."

Participants wondered why Quebec would want to buy NB Power if the New Brunswick utility was losing money, as the provincial government suggested. Others told the focus group leaders they thought Quebec was getting the better part of the proposed energy accord.

They concluded New Brunswick must be losing out in the deal, and they didn't buy Premier Shawn Graham's main sales pitch — that the deal would bring about lower power rates.

When the focus groups learned the deal would actually implement a five-year rate freeze and not a cut in energy prices, they became suspicious.

"One participant said, 'If I am paying the same, it's not a cut,'" according to a document.

The original deal announced in October would have seen NB Power's debt cleared and residential rates frozen. Large industry would have received a significant rate cut of about 30 per cent. The scaled-back version of the deal announced in January would have seen the large industrial rate cut to 23 per cent and kept the five-year residential rate freeze.

However, fewer assets of NB Power would have been sold to Hydro-Québec in the $3.2-billion deal.

Byrne said it became obvious through the polling data that even the revised version of the power deal would not meet with public support.

"Even that change was not significant enough in the eyes of the public to convince the public of the merits of the deal," Byrne said. "We accept that, and we have learned that."

The deal fell apart in March as Quebec claimed it had concerns about unanticipated costs.

Opposition rose

The New Brunswick government's first poll on the possible sale sampled opinions between Oct. 29 and Nov. 2. The poll indicated 48 per cent of respondents were against the deal and 26 per cent didn't like it but felt it was necessary. Only 15 per cent of respondents said the power deal was a good idea.

Support for the contentious energy deal continued to drop as the debate unfolded, according to the polling and focus group numbers.

A poll done between Nov. 9 and Nov. 11 found 58 per cent of respondents were against the proposed deal, 25 per cent disliked it but thought it necessary, and seven per cent believed it was a good idea.

In a poll that came out around the time the province announced the second deal in late January, 60 per cent of those polled opposed the deal and 19 per cent said they didn't like it but thought it necessary. Support for the deal was 13 per cent.

People became increasingly angry with the sale process, in particular with how the provincial government secretly negotiated the deal and sprang it on people.

It became impossible for the government to overcome the public's cynicism, the documents indicate.

One focus group participant scoffed at the government website set up to promote the deal: "lowerratesnb.ca."

"Just seeing the address, I wouldn't believe what's in there," the participant said.

The final poll, which was done between March 24 and 26 after the deal died, showed the public had mixed views about how the deal was handled by the provincial government.

The public opinion poll indicated 54 per cent of New Brunswickers felt the provincial government should have known better. Fifty-three per cent of those surveyed questioned the competence of the government if it couldn't finalize a deal it had cared so much about.

Although 51 per cent of those polled were angry the government walked away from the energy deal, 51 per cent also worried the deal would come back after the Sept. 27 election. Fifty-three per cent said they thought the Liberal government was doing what it thought was the best for the province by pushing for the accord.

Additionally, the poll suggested 56 per cent of New Brunswickers thought the deal demonstrated the Graham government was willing to take on tough issues, 75 per cent thought the government learned an important lesson and 76 per cent supported the decision to halt the negotiations with Quebec.

All of the polls and focus groups were conducted by Innovative Research Group.