For better or for worse, the deed is done, the money borrowed, the electrical customers truly on the hook.
“This is one of those occasions we should tell our children about and help them understand how important this moment is for them and their future,” Premier Kathy Dunderdale said Tuesday night in an announcement that the province had borrowed billions of dollars to build Muskrat Falls. “Today, history is being made.”
Well, every day, history is made — it just isn’t always the history we expect it to be.
Right now, the government maintains the Muskrat Falls project is the most examined venture in the province’s history. It’s a venture that is supposedly the most economic source of electric power possible, yet a project that apparently can’t stand on its own two feet without legislation expressly forbidding all competition, and that has to be exempted from review by the province’s Public Utilities Board, the one agency that actually has a mandate to protect electrical consumers from unreasonable rate hikes.
It’s not the only curious thing about this project.
The government has resolutely maintained that the
$5 billion isn’t really “debt,” because it will be secured by an asset that is legislated to make revenue, no matter how much the project costs. Semantics aside, we’ll all owe
$5 billion more — and the only place that money is set to come from is this province’s electrical consumers. The actual details of the borrowing have not been made public: the only real information is that the blended rate is 3.8 per cent over the 40-year term of the loan, and that financial houses gobbled it up. Of course they would; the details of the project don’t matter to financial houses — what matters is that the federal and provincial governments have absorbed all the risk, guaranteeing the repayment.
And the simple math? If you borrow $5 billion at 3.8 per cent, you pay $190 million in interest every year.
Any more information than that will have to wait until the details of the financing are released — if they are. For now, we just have another announcement of the same project, and another speech.
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Of course, no political announcement would be complete without over-the-top hyperbole, in this case Dunderdale’s, “Just like the first permanent telegraph cable, that in 1866 connected Europe to North America at Heart’s Content, this cable will be a game-changer — a link of nation-building significance no less important for us than ‘the Last Spike’ when it was nailed.”
There’s more: “These Newfoundlanders and Labradorians are using the experience and expertise gained on megaprojects around the world to build a world-class project right here at home,” Dunderdale said.
Sounds like almost anything else said about major deals: here’s then-premier Joey Smallwood on a different Labrador hydro project: “It gives me real pleasure that Newfoundlanders can show those mainlanders how to build a hydro-generating station.”
When an announcement like Tuesday’s spends much of its time praising its own people for being “brilliant,” lauding the project not once, not twice but thrice in a single speech as a “game-changer,” it begins to make you wonder.
And that’s before the adjectives “amazing,” “thrilled,” “best,” “maximum,” “historic,” “tremendous vision,” “largest,” “robust,” “exceptional,” “most affordable,” “world-class,” “beyond reproach,” “second to none,” “change our future,” “like never before,” “trail-blaze,” “immense,” and “shining beacon.” Oh, and “proud,” at least six times, just for good measure.
It’s almost as if she was trying over-hard to convince us of something. Now, imagine you’d just been told all that about a used car …