It was announced with plenty of fanfare in Happy Valley-Goose Bay Friday afternoon, but opponents of the Muskrat Falls project were underwhelmed by the multibillion-dollar federal loan guarantee term sheet.
New Democrat Leader Lorraine Michael wrote it off as a “crazy farce” talking to reporters at Confederation Building shortly after the announcement.
“I have to say I’m disappointed. I think we were all expecting a full loan guarantee and what we have is a term sheet, which probably explains why everything happened so quickly,” she said. “I think it’s not acceptable that the government sanctions based on a term sheet.”
The loan guarantee has been in the works for more than a year and a half. It was first promised by Prime Minister Stephen Harper in St. John’s during the 2011 election campaign — the same campaign where Premier Kathy Dunderdale endorsed his candidacy.
For more than a year, federal and provincial officials have been negotiating the terms of the loan guarantee, and what was presented Friday was an agreement on the broad brush strokes that still needs to be hammered out into formal legal language.
Already with the Muskrat Falls project there have been major delays on that legal wrangling, Liberal Leader Dwight Ball pointed out.
“When you look at what happened between Emera and, for instance, Nalcor, they missed that deadline by about eight months in getting from a term sheet to the formal legal agreements,” he said.
Both Ball and Michael also pointed to the apparent confusion around Friday’s announcement, too, as a cause for concern.
Dunderdale told reporters Thursday afternoon that she didn’t know anything about Harper’s plans to visit the province, and wasn’t aware of any announcement — just 24 hours before she was in Labrador participating in the announcement.
“The big news for me here today is how little involvement the premier has actually had in this, to the point that she didn’t even know it was going to be announced today,” Ball said.
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Michael said if she was the premier, she’d be embarrassed by how it all went down.
The announcement was greeted by expressions of support from several groups, including the Newfoundland and Labrador Environmental Industry Association, and the “I believe in the power of NL” group which is advocating for the development of Muskrat Falls.
But at the same time, the 2041 Group which opposes the current plan to develop Muskrat Falls said the loan guarantee announcement doesn’t really change anything, since it had already been factored into Nalcor’s most recent cost projections.
Dennis Browne, who speaks on behalf of the group, said his real cause for concern is the potential for Nova Scotia to back out of the deal.
“Nova Scotia is a fly in the ointment in all of this, Nova Scotia doesn’t have to sign onto the project until July of 2014,” he said. “If Nova Scotia doesn’t sign on and work has already commenced on Muskrat Falls, what happens then?”
Friday’s announcement also provoked some anger from lawyer Lara Tessaro, who is representing environmental groups on a federal court case challenging whether Muskrat Falls can legally proceed.
“My clients argued to the Federal Court that the government does not have any jurisdiction to issue that loan guarantee. And to put that in really plain language, we say that loan guarantee is unlawful, that basically, in plain speak it is null and void,” Tessaro said.
“Basically what the government is doing in issuing it, is rolling the dice, because what the Federal Court is considering right now is whether or not the government even has the right to issue that loan guarantee.”