$664M to Nalcor creates more questions than answers

James
James McLeod
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Jerome Kennedy

In the hours after the provincial budget was rolled out, there was $664 million that slipped past a lot of people.

But not Liberal Leader Dwight Ball.

The money is being transferred to provincial energy corporation Nalcor, for what Ball assumes is the Muskrat Falls project.

“We don’t have a Muskrat Falls project yet,” Ball said.

“We still have a lot of issues that we need to discuss and we need to figure out with this, with Muskrat Falls, and here we are this year with $664 million. That’s $1,300 for every man, woman and child in this province.”

The amount of $664 million is equivalent to more than eight per cent of the total government expenses in the coming fiscal year.

However, the money was not mentioned in any of the government’s press materials on the budget, and only mentioned as a line item in the 290-page Budget 2012 Estimates document.

Last year, the provincial government mentioned it in the much smaller “Budget Highlights” document when they transferred $348 million to Nalcor.

Speaking to The Telegram Tuesday, Natural Resources Minister Jerome Kennedy called the money “equity investment for Nalcor if sanction was given.”

That seemed to refer to the decision the government will make later this year on whether to sanction the $6.2 billion Muskrat Falls hydroelectric project on the Churchill River in Labrador.

“In other words, if the decision on sanction is made in the fall, then what this allows them to do is to continue construction through the winter,” Kennedy said.

“If the project isn’t sanctioned then the money won’t be utilized — at least not for the Lower Churchill.”

As it turns out, according to the budget documents, none of the $348 allocated to Nalcor last year was ever actually spent.

Kennedy said that none of the $664 million allocated this year would be used unless the project is sanctioned.

“If sanction is approved, then part or all of the money could be spent. If not, then it won’t be spent,” Kennedy said.

Several hours after Kennedy spoke to The Telegram, a spokeswoman speaking on his behalf said that $75 million of the money would actually be used to make investments in the oil and gas sector.

Speaking to The Telegram, Kennedy made no reference to some of the money being used for investments in the oil and gas sector.

No explanation was given for why the $664 million wasn’t included in any of the province’s press materials, or in the highlights documents.

The spokeswoman said the reason why none of the $348 million was spent last year was because of delays in the Muskrat Falls environmental assessment process.

“Funds were budgeted in anticipation of a release from (an) environmental assessment in 2011 and the commencement of project works. A delay in (the) environmental release meant that the planned project activities did not take place. No funds were provided to Nalcor in 2011/12.”

Apart from the $664 million, Ball didn’t have a lot to take issue with in what he called a “passive” budget.

NDP Leader Lorraine Michael said it just maintained the status quo.

“It certainly isn’t an exciting budget,” she said.

“They’ve thrown a few crumbs to some people, like to the seniors a few crumbs, but no investment in programs such as a real home care program, a real child care program, a drug program.”

Both Ball and Michael also expressed concerns that the province’s net debt is continuing to rise.

jmcleod@thetelegram.com

Twitter: TelegramJames

Geographic location: Muskrat Falls, Churchill River, Labrador

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  • Maurice E. Adams
    April 25, 2012 - 11:14

    I understand that Danny was in the gallery when government brought down its budget (with more than $600 million for Nalcor)....... What a democracy we have......... As premier, Danny set up this Muskrat Falls plan, a plan that could be used to suck our tax dollars out of government and billions more out of captive island ratepayers........ And for whose benefit? ......for the benefit of multi-billion dollar mining companies in Labrador. ..........He then promptly quit government and not too long after, got appointed Senior Advisor to one of those companies and to the Board of Directors of another........... Of course, if he had stayed on as Premier, he could not have been appointed to these positions.......... And our new Premier Dunderdale is buying into this travesty.... and preparing to saddle her government (and her fellow citizens) with a debt burden for an insanely expensive hydro project that not only is not needed on the island but, come 2041, will have taken away the only potential alternative market for a major chunk of Upper Churchill power ---- so that we will again be at the mercy of Quebec.... as Quebec will then, once again, be the sole market for that near-zero cost Upper Churchill power ------- all while we on the island will be enjoying our multi-billion dollar debt and 35-40 cent/KWh Muskrat Falls power. UNBELIEVABLE.......

  • Graham
    April 25, 2012 - 10:53

    Well well Jerome Williams...oops Kennedy at hsi best. The master of manipulation just like his buddy Danny I cant tell the difference between the two can you. Look at the eye contact little or none. look at the hand gestures..never ending..is this man telling us everything? You decide. I allready have. As for Tom Marshall that man is lost totally..his budget is based on oil being 124.00/barrell rather than base it on a realistic number so right away knowing full well 124.00 will NOT be anywhere near the average price he has his excuse for saying we will be in defecit right up until the next election..STOP feedig us all this B S Tom...You dont manipulate the truth half as good as Jerome....Sad thing is we are expected to believe all of it and not dare to question anything. Is Danny Williams still hidden away somewhere in Confederation Building because the lies cover ups and corruption are just the same as when he was there. Only difference is that Jerome and Tom arent quite as good at it as he was. As for our Premier..well she dosent even deserve a comment on any of this shes being manipulated by Jerome anyway. When is the next popularity and performance poll coming out for this government and our Premier? That will be an interesting read for sure.

  • sealcove
    April 25, 2012 - 10:49

    Someone has to pay for the new road nalcor is building what everyone been asleep

  • Foghorn Leghorn
    April 25, 2012 - 10:40

    It is amusing to see how many people are bent out of shape over 3 Million dollars to the Republic of Doyle TV show, they have pumped in excess of 1 Billion dollars into Nalcor over the past 2 years and hardly a whimper! Human nature can be a funny thing for sure.

  • Brad Cabana
    April 25, 2012 - 09:37

    That's $1 billion if you include last year's contribution to Nalcor. Under the Muskrat Falls plan it's not just Nalcor that's guaranteed an annual ROE (return on equity). Nalcor, Emera, and NL Power are all guaranteed 8.3%. So the people of Newfoundland and Labrador will be getting hit in their power bills, their tax bills, and the debt itself will keep growing while the population ages. Look at the bright side, atleast Danny's buddies in Labrador developing those mines will be looked after with cheap power.

    • Read it
      April 25, 2012 - 10:30

      I think you missed it. It said "...none of the $348 million was spent last year..." .

  • Randy
    April 25, 2012 - 09:26

    Kennedy says the money 400 million given to nalcor last year wasn't spent.. How does he know .when that crowd aren't subject to an audit. This Nalcor just seems like a sink hole for tax-payer's dollars, in order to get peaple richer.

  • Maurice E. Adams
    April 25, 2012 - 08:37

    The average cost oil for Holyrood over the last 11 years (2000-2010) was $92 million ($112 million and $114 million in 2002 and 2003). In 2010 it was $100 million, up less than 1% per year, and down from 10 years ago). I think the real reason rates are going up is due to Premier Danny's government doubling the rate of return (profit) for Nalcor than was previously permitted for NL Hydro (from around 4.5% to 10 or 11%)........ As to investment for the future ---- Muskrat Falls is the means by which billions of dollars will be taken from captive island ratepayers (who don't need the costly power) to build very expensive power for the benefit of Danny's multi-billion dollar mining companies in Labrador...... High cost for us ---- so that the mining industry will get power for about 20% what it will cost us to produce. -------- Great investment --- but for whom? And at who's expense?

  • jerome bennett
    April 25, 2012 - 08:32

    Does Nalcor operate at the break even point in it's everyday operations or does the gov.get a return from this so called crown co.?If not it's becoming an awful drag on this Province.

  • John Smith
    April 25, 2012 - 07:44

    Lorraine wants this program, and that program...program is another word for free...so the NDP want to give away money like drunken sailors? The money for Nalcor is an investment in our future, so we can turn on the lights. Oh and don't forget the big rise in power bills coming this summer...to pay for the oil fired jenny in Holyrood.

  • Really
    April 25, 2012 - 07:31

    @Holden, ummmmm ... it's money being spent, not money coming into the government. How would it add to the "surplus"? I guess this is why the province is in the state is is, if this is the kind of support this "government" is getting. Perhaps there should be more investment in the education system.

  • Holden
    April 25, 2012 - 06:56

    The $664 Million wasn't mentioned in the news releases? Probably because, if they had, they would have reported a $406 Million Surplus. This guy has got to stop manipulating the budget figures to match their political spin.

  • W Bagg
    April 25, 2012 - 06:33

    that's over a billion in 2 years for Nalcor, that's a lot of money..............so is the project 5.2 B if it goes ahead now.