VZCZCXRO6983
RR RUEHGA RUEHQU RUEHVC
DE RUEHHA #0216/01 3261939
ZNR UUUUU ZZH
R 221939Z NOV 06
FM AMCONSUL HALIFAX
TO RUEHC/SECSTATE WASHDC 1132
RUEHOT/AMEMBASSY OTTAWA 0415
INFO RUCNCAN/ALL CANADIAN POSTS COLLECTIVE
RUEHHA/AMCONSUL HALIFAX 1201

UNCLAS SECTION 01 OF 02 HALIFAX 000216 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/CAN 
 
E.O. 12958: N/A 
TAGS: PGOV ENRG PREL PBTS PTER EPET ETRD EIND CA
SUBJECT: ROOKIE NEW BRUNSWICK PREMIER TOUTS STRONG U.S. TIES 
 
REF: A. HALIFAX 0277; B. HALIFAX 0179 AND PREVIOUS 
 
HALIFAX 00000216  001.2 OF 002 
 
 
----------------- 
SUMMARY 
----------------- 
 
¶1. (SBU) Shawn Graham, Canada's newest Premier, is ready to 
implement a U.S.-friendly agenda that is focused on expanded 
trade to the United States, especially energy sales.  While 
electricity exports have been the primary focus, the new Liberal 
government is looking at how Irving Oil's growing influence and 
increased capacity could someday make southern New Brunswick a 
new energy hub for the United States.  Premier Graham and his 
ministers fear the Western Hemisphere Travel Initiative (WHTI) 
could erode decades of cooperative shared services along the 
Maine-New Brunswick border.  END SUMMARY. 
 
¶2. (SBU) Border Security, energy matters and increased trade 
were the main topics of discussion when Consul General (CG) made 
his first visit to the province of New Brunswick October 24-26. 
In private conversations with new Liberal Premier Shawn Graham, 
his ministers and senior bureaucrats, CG heard how the new 
government is shaping its agenda after their victory in the 
September 18 provincial election.  Following are the main points 
that emerged during these meetings.  (Post has already reported 
in REF A the new government's opposition to the building of LNG 
terminals in Maine.) 
 
---------------------- 
Border Security 
---------------------- 
 
¶3. (SBU) In separate meetings with the Premier and Public Safety 
Minister John Foran, CG explained that the U.S. mission in 
Canada views the U.S.-Canada border as a top priority in the 
bilateral relationship. In particular, the CG discussed the 
timetable for implementation of the WHTI and underscored the 
need for New Brunswickers to get passports as soon as possible. 
While the Premier and his minister appreciated the CG's update 
on WHTI, they voiced concerns that the new entry requirements 
could have a detrimental effect on the free movement of goods 
and people between New Brunswick and Maine.  Minister Foran also 
pondered the possible effects on long-standing MOUs between his 
province and Maine.  These agreements have been around since the 
1970s and provide a framework for shared public and emergency 
services in isolated border communities.  CG assured the Premier 
and Minister that the USG would strive to implement the WHTI so 
as to minimize any disruption and allow continued cooperation 
along the border.  CG also advised them of his plans to visit 
several of these New Brunswick-Maine border communities (and 
their border crossing stations) to observe first-hand the close 
business and cultural ties. 
 
---------------------------------------- 
Trans-Border Energy Policy 
---------------------------------------- 
 
¶4. (SBU) Both Graham and Energy Minister Jack Keir were upbeat 
about New Brunswick's energy sector, saying that it has enough 
potential as a money-maker to someday move the province away 
from its dependence on federal government equalization payments. 
 At the moment, the province's electricity production is the 
primary focus.  The minister explained that New Brunswick is 
unique among the Atlantic Provinces since it uses a much more 
diverse mix of power generation, including thermal, hydro and 
nuclear power.  The province produces enough electricity for its 
domestic market and has surpluses to export to neighboring 
provinces and Maine. (In 2005, sales to Maine amounted to over 
$US 225 million.)  Presently, the electricity is carried to 
Maine via one cross-border transmission line, but a second line 
is now under construction and will become operational by the end 
of 2007. 
 
¶5. (SBU) While Graham and Keir were keen to promote increased 
electricity sales to the United States, they both acknowledged 
that, because of the impending refit of the Point Lepreau 
nuclear plant, the province will soon be in the tough, but 
temporary, position of having to import power from Maine and 
Quebec.  The Point Lepreau facility will be offline for 18 
months during a C$ 1.4 billion refit starting in 2008 and timed 
to coincide with the completion of the second international 
power line.  Keir noted that New Brunswick is committed to 
nuclear power as a key element in its energy strategy. 
Moreover, the government is pondering the economic feasibility 
of constructing another generating station at the Lepreau site 
which would give the province more export potential to the 
United States. 
 
¶6. (SBU) While underscoring the importance of New Brunswick's 
electricity potential, Minister Keir told CG that his government 
 
HALIFAX 00000216  002.2 OF 002 
 
 
views Irving Oil as even more significant in terms of potential 
new energy sources for the United States. Irving Oil is 
considering building a second refinery to augment its 300,00 
barrel-per-day capacity refinery in Saint John (the largest in 
Canada).  Irving is also teaming up with Spanish partner Repsol 
in constructing a new liquid natural gas (LNG) facility outside 
Saint John, which will be able to provide one billion cubic feet 
per day of regassified LNG to the market in Canada and the 
United States.  With those Irving projects (and the longer-term 
possibility of a Lepreau II) Keir sees southern New Brunswick as 
soon becoming a new energy hub focused on expanded energy 
shipments to the United States. 
 
---------------------------- 
Cross-border Trade 
---------------------------- 
 
¶7. (SBU) Premier Graham and his trade minister Greg Byrne were 
both quick to point out how energy sales to the U.S. along with 
mineral and forestry exports have moved New Brunswick ahead of 
Ontario as the province with the highest percentage of its 
exports (90%) going to the United States.  Moreover, the Premier 
has taken a personal interest in expanding cross-border trade. 
One new area of interest is the province's aerospace industry 
where New Brunswick companies are looking for new U.S. partners 
in businesses such as aircraft overhaul, computer-assisted 
training and parts manufacturing. The Graham government is also 
examining possible new trading relationships in Asia, especially 
with India and China where New Brunswick officials will be 
visiting later this fall. 
 
--------------------------------------------- -------------- 
---------------------------------- 
Comment: Preliminary Views of the New Graham Administration 
--------------------------------------------- -------------- 
---------------------------------- 
 
¶8. (SBU) Fresh from their victory in the September 18 provincial 
general election, Premier Graham and his ministers were still in 
a celebratory mood, but keen to get down to the job of 
governing.  In particular the amiable and confident Graham was 
especially upbeat given that just a few short months ago pundits 
were fearful that he was slipping in the polls and might have to 
face a leadership review.  Now that all this is behind him, 
these same pundits and even party heavyweights are quick to 
comment that the new Premier is very much up to the task of 
running the province.  Another boost could come the Premier's 
way later this fall if the rumor mills are correct in predicting 
that ex-premier Bernard Lord will resign the leadership of the 
provincial Tories and accept a position outside elected 
politics.  Should Lord make his exit, the leaderless Tories 
would find it more difficult to mount a spirited challenge to 
the new Liberal government.  With all that it appears that 
Graham could have a good first year in the Premier's office as 
he implements an agenda very much focused on strengthening U.S. 
ties.  End Comment 
FOSTER