We’re waiting on Muskrat Falls financials: Ottawa

James McLeod
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Joe Oliver says feds still don’t have information needed for loan guarantee

Federal Natural Resources Minister Joe Oliver wanted to make it crystal clear: he’s not behind any delays for a Muskrat Falls loan guarantee.

It’s been more than eight months since Oliver signed a memorandum of understanding, committing to providing a loan guarantee for the $6.2-billion project, but the final guarantee has yet to come through.

The federal government wants to assess reams of financial data before it formally gets behind the loan guarantee, and increasingly, it looks like the delays are coming from Nova Scotia utility Emera Energy, which is a partner in the project.

On March 12 in the House of Assembly, Premier Kathy Dunderdale said the province has already turned in its homework on Muskrat Falls.

“The federal government is not awaiting any information from the Prov-ince of Newfoundland and Labrador, or from Nalcor,” she said. “The information they are waiting on, Mr. Speaker, is from Emera in Nova Scotia, and I understand that has already been provided or is in the process of being provided.”

A spokesman for Emera refused an interview request on the matter, but sent a statement to The Telegram by email.

“A federal loan guarantee for the Maritime Link initiative is and will continue to be part of confidential negotiations between the parties involved,” spokesman Jeff Myrick said in a statement.

“The federal government has already committed to a loan guarantee and has assured us of this commitment repeatedly. We continue to make progress and are confident in the process that has been put in place.”

The loan guarantee would allow both Nalcor and Emera to borrow money using the federal government’s credit rating, which would result in lower interest rates.

Nalcor CEO Ed Martin has said that it will likely mean borrow rates two percentage points lower.

When Oliver signed the MOU back in August, it committed that the federal government would turn all of the Muskrat Falls data over to a group of Bay Street financial experts, who would assess the project.

Within eight weeks of getting all the data, the federal government said it would make a final decision on the guarantee.

“It’s quite complex, a lot of moving parts, and to put together a loan guarantee we have to have the full business arrangement,” Oliver said this week. “We’re committed to moving as quickly as we have when we have all the information, and we’re doing information now with the information we do have.”

Oliver’s provincial counterpart, Natural Resources Jerome Kennedy, was out the province and not able to comment Thursday.


jmcleod@thetelegram.com Twitter: TelegramJames

Organizations: Emera Energy

Geographic location: Muskrat Falls, Nova Scotia, Ottawa Newfoundland and Labrador Bay Street

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Recent comments

  • McLovin
    April 20, 2012 - 13:01

    What energy needs?

  • Maggy Carter
    April 20, 2012 - 12:49

    Ottawa says it doesn't yet have the information it needs on Muskrat (who does?), but John Smith, speaking on behalf of NALCOR, says the guarantee is a 'done deal'. But just in case there is a snag, says Smitty, "we don't need the loan guarantee" and "we don't need Emera either". And of course Smitty and NALCOR are right. They don't need any of these things as long as they have the ordinary household ratepayer to take up the slack, a gullible taxpayer who typically has no concept of what this doubling of the provincial debt will mean to his take home pay, and an extraordinarily naive, pliant and fixated government that cannot admit when it has made a mistake and is in over its head. The hubris we are seeing from government, NALCOR, and their associated schemers and sycophants has only one parallel in Newfoundland history - and that, of course, was during the run-up to the Upper Churchill. It too was a project that came with great fanfare, its own glee club and cheerleading squad. Neither Oxford or Webster could supply superlatives enough to describe what the development of Hamilton Falls would do for every many, woman and child in this province. The imminent affluence was unstoppable. If Confederation was a disappointment, surely all that Labrador power coursing through the veins of central Canada and the northeastern U.S. would turn all our frowns upside down. Instead we got nothing but years of grief, regret, and ridicule. The ongoing legal battle over the Upper Churchill contract has proven the most expensive, protracted, and unsuccessful litigation in Canadian history. For more than half a century, Newfoundlanders have had to suck-it-up in the knowledge that we were had - that Hydro Quebec and their entourage of self-serving leeches had seen Joey coming. They had quickly judged that his pride, arrogance and imbecilic incompetence would make for easy pickings. And they were right. And now with Muskrat it is de ja vue all over again. Our politicians are still the blunderers they have always been but the difference this time around is that the public in this province is much better educated, much more knowledgeable and much more difficult to con. We know there is already widespread public skepticism. What we don't know yet is whether that skepticism will find a public voice that can put an end to this madness before it has a chance to damage this province, once again, to its very core.

  • John Smith
    April 20, 2012 - 11:45

    yep, it will be a ...cold future...indeed if we don't prepare now for our future energy needs...interesting to see the naysayers losing ground everyday with their weak, nonsensical, politically motivated rhetoric. I thought Mr. Martin did a very good job on VOCM yesterday, once again answering those same questions, that the vocal minority keep asking...over and over. This is by far the best answer to our energy needs...there are no viable alternatives.

  • Cold Future
    April 20, 2012 - 09:28

    It is time to shelf this debacle in the making - get it way way off the stove beyond the back burner. Joey Smallwood initiated the biggest giveaway so far in our history and we are sick of talking about it. But Joey did not do a deal which caused his contsituents to pay through the nose for electricity until 2067 and beyond. Those of us who can afford it will move to the mainland to obtain cheaper energy and avoid the high cost of the take or pay power being sold at subsidized rates into the mainland. Stay isolated island grid, repatrate the Upper Churchill Power in 2041 and thereby provide the best and most cost effiective eneergy to the island part of the province.

  • Maurice E. Adams
    April 20, 2012 - 08:30

    So the province says nothing when the federal government cannot make a decision on a loan guarantee (which costs them nothing) because they do not have sufficient information to do so, but Minister Kennedy, Premier Dunderdale, former premier Williams and wanna be premier Dean MacDonald are all over our own provincial public utilities board (who, with great difficulty, is trying to protect the interests of ratepayers) when they say they do not have sufficient information to say whether or not the proposed $6.2 billion Muskrat Falls project makes sense for island ratepayers....... Even yesterday, on VOCM, Ed Martin would not say whether the cost is now $7.3 billion, up from $6.2 billion. ..... This project is nothing but spin and a travesty. Nalcor's senior people and government should be ashamed of themselves for trying to pull the wool over the eyes of their fellow citizens and for putting the very economic viability of the entire province at risk.

  • John Smith
    April 20, 2012 - 08:18

    The loan guaratee is a done deal. it is impotant to remember that not only do we not need the loan guarantee for this project to receive saction...we don't need Emera either. The project was costed, and reviewed without the emera, or loan guarantee included in the numbers. What a non-story...

  • McLovin
    April 20, 2012 - 08:09

    They will only save $120 Million Dollars with this guarantee? BIG DEAL!! Our Provincial Government underestimates the profits from Oil and Gas by more than this amount on an annual basis!!!

  • George S.
    April 20, 2012 - 08:02

    Thank goodness it is a loan guarantee OR financial equivalent. Should the latter be granted, no one will touch the debt with a ten foot pole. Apparently Crown Corporations in this Province need greater oversight as to how they are spending tax payers' monies. Sadly, I also chuckle at a Newfoundland tax payer-owned monopoly spending a fortune on a loyalty program! Yup. NL Liquor Corp and AirMiles. Hundreds of thousands of dollars in fees and advertising to promote a product only they sell. Sheer brilliance. Thank goodness our last premier ran a monopoly with a regulated rate of return and shared the business accumen of such a daunting task with his inner circle.

  • simms
    April 20, 2012 - 07:06

    Yeah, a dam on the muskrat sure sounds good, until you hear the details or ask any questions. This isn't a complex deal, although the governmnet wants us to think it is. Nalcor will get its return and there bussiness plan to make money is to sell our EXPENSIVE power for LESS than 1/4 of the price it costs to produce it. No wonder why it was left on the table so long, but if seen people do less for money! This is politicial driven project and has nothing to do with supplying power to the island. What kind of industrial rate could hydro quebec supply to the mining companies in northern lab if need be? I figure the only thing stopping that avenue is our own government. By The sounds of this story nalcor has all the answers but are afraid to let anyone the REAL details, Strange? I always said if they can't get the provinces money out through the front door, they'd try and float it down the muskrat thru the back door. Wake up NL.

  • Randy
    April 20, 2012 - 06:25

    Dunderdale and kennedy have sold the soul of nl to Harper for what amounts to 120 million. What a crime