Wagering against the wilderness

Michael Johansen
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Dear Ed Martin, please seek help for your gambling addiction before you bankrupt the province and make the Labrador woods a nasty place.

Please try to control your impulse to throw tens of millions of dollars into a high-risk wager on whether you can make any money at all on a hydro megaproject in Labrador. Even if you could just stop placing any more bets until after your bosses (that is, the citizens of Newfoundland and Labrador) actually give you permission to start building your dam on the Churchill River, you will be saving everybody a lot of money.

Nalcor Energy, the public corporation Ed Martin happens to be president and CEO of, has started awarding contracts to build a road that will provide access from the Trans-Labrador Highway to the south bank of Muskrat Falls, spending millions on infrastructure that won't be needed if or when the provincial government's latest Lower Churchill aspirations pop once again.

Nalcor told the Joint Review Panel that it needed 375 kilometres of such roads cut through various pristine woodlands to places on both banks of the Churchill River. Unfortunately, the company neglected to reveal how many of these it planned to build ahead of time.

The current contracts are only for the single stretch to the falls, but according to Nalcor's plans, a road is to eventually follow the south bank all the way west to the Minipi River.

Three more major access roads are to go to Lake Winokapau and to the mouths of Metchin River and Bob's Brook.

Even though none of these roads may be needed in the end, Martin apparently feels quite justified in spending a considerable amount of taxpayers' money to build them in advance of official sanction. In fact, he presents it as a sound business decision.

"This expenditure is prudent when we consider the financial savings to be gained by preventing the delay when a sanction decision occurs," Martin is quoted as saying in a news release.

What Martin seems hesitant to consider are the financial losses taxpayers will face should the decision go against sanction. Remarkably, however, the CEO has shown one sign he may be prepared to follow the example of at least one Progressive Conservative cabinet minister and concede that there's a chance his favourite boondoggle might get cancelled.

"Martin also noted that an asset like the road will be a benefit regardless of the timing of the sanction," the Nalcor release reveals.

As president of this province's public energy company, is it Martin's job to spend tens of millions of taxpayer dollars building new roads willy-nilly in Labrador on the gamble that they might one day be useful? Apparently so, although that would rightly seem the purview of the minister of transportation.

Regardless, Martin has now taken on the job himself and he's so anxious to get underway that he can't even wait until spring melts the winter snow, but is paying extra to have it cleared off the forest floor.

If the issue of premature road-building was only a question of Nalcor presumptively wasting money, it would be bad enough, but Nalcor's actions also show a disturbing disregard of the political and social implications they may have for Labrador. Martin could be making a bad situation worse, but in fairness he didn't create it.

It is the provincial government that chose years ago to ignore the aboriginal rights claimed by the Metis-Inuit and to deal exclusively with the Innu Nation when exploiting resources on ancestral lands.

For his part, Martin didn't have to jump the gun and send workers from two Innu companies into the woods, where they just might find themselves on the front lines of a confrontation with fellow Labradorians, forced to stand against their neighbours on the side of Nalcor and the government in St. John's.

If Martin only waits until the financing is secured and the House of Assembly gives the go-ahead, he could deprive those opposed to the dam of an easy target for protest and save Labrador from possible hurt and grief.

So, Mr. Martin, even if your gamble makes business sense, it certainly makes no common sense.

Michael Johansen is a writer living in Labrador.

Organizations: Martin's

Geographic location: Newfoundland and Labrador, Churchill River, Muskrat Falls Minipi River Lake Winokapau Metchin River St. John's

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Recent comments

  • Maurice E. Adams
    April 28, 2012 - 08:54

    Muskrat Falls makes no business sense......... Muskrat Falls power (delivered) costs between 35-40 cents/KWh, while natural gas has brought wholesale prices for electricity in the U.S. down to 2-3 cents/KWh. NO MONEY THERE (only costs for NL ratepayers and losses)........The mining companies in Labrador can get all the power it needs from Quebec for about 5 cents/KWh. NO MONEY THERE (only costs for NL ratepayers and losses)........... Emera gets 20% of MF power for 35 years with no revenues to Nalcor. NO MONEY THERE (only delivery, reliability costs to NL ratepayers and losses)....... Also Emera really has guaranteed access to about 30%, not 20%, due to the fact that the 20% has to be delivered during a daily 'peak' 16 hour period........ As to the island? NL ratepayers pay for the whole lot (including cost overruns, debt servicing costs, losses) ----- AND WE DON'T NEED THE POWER ----about 500MW (25%) of our existing installed net capacity is unused year over year, every year. Our growth rate is FLAT and Vale will add only 4.5% of additional demand on the system (all while NL Hydro allowed $100 million of oil equivalent energy to be spilled over its existing hydro dams last year --- that amount alone is more than the 10-year average cost for oil for Holyrood)........ And NL ratepayers should give Nalcor $10 billion to waste and to more than double this province's debt ???