There’s still time to rethink Muskrat Falls

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Former premier Danny Williams had a dream of electrical power independence for Newfoundland and Labrador. He passed his dream along to Premier Kathy Dunderdale, who appears to be implementing the dream as in a dream, apparently without due consideration to whether or not we can afford it.

The Muskrat Falls project will cost $8 billion to $12 billion, not including financing costs, and will increase our provincial debt to some $13 billion to $17 billion. We have been given no idea where the money will come from to amortize this debt. What sources of funds are available other than increased income tax rates, sales tax rates, the number and size of fees and the price of unregulated electricity (read tax)? What reductions to health, education, welfare and, indeed, all government programs will be necessary? When we have a budget deficit or the project requires money in excess of that guaranteed, where will we possibly find anyone to fund it? The turmoil of layoffs, reduced programs and increased fees this year may be just an insignificant example of what will happen as we start repaying our massive debt.

Who is at risk? Certainly not the federal government. It stands to collect hundreds of millions in additional revenue because of the project, without contributing a dime. Certainly not the financial community with the federal government guarantee of payment. Certainly not the business people involved, who will get first crack at the borrowed money and can invest their profits elsewhere. Certainly not Quebec, which can underprice us in any power market in which they choose to compete. Certainly not the highly qualified, six-figure salaried employees of the government and Nalcor who can take their money and investments and move on. No, as usual it is every man, woman and child of the province, now and in the future, the 98 per cent, who can least afford the consequences.

If the government has made an analysis of the risk this project poses to the provincial economy, it’s about time it was made public. If it has not been done, it should be. The tipping point has not been reached and there is still time for a determination if this project should proceed. There is a need for a well-prepared, transparent, non-political and inclusive study of the risks in its undertaking. It is not a question of us versus them but concerns the economic future of this province. I hope the premier’s decision will be an informed one and not one that will live in infamy.

John Janes

St. John’s

Geographic location: Muskrat Falls, Newfoundland and Labrador, Quebec

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Recent comments

  • GINN
    June 26, 2013 - 17:57

    They rant and roar like true unbelievers, they rant and roar on any pretext, ne'er mind the studies and work completed,they rant and roar to hear themselves repeat their unproven theories, the more preposterous the better. GIVE IT UP PLEASE!!

  • Just Sayin
    June 25, 2013 - 20:12

    The risk continues to escalate but there is no plan to monitor and reassess that risk, to prevent passing the tipping point. Circumstances have dramatically changed the economics for the worse, and responsible leaders should acknowledge these changed circumstances and do the right thing. This is not a matter of having egg on your face, but requires true leadership. How can they be wilfully blind to the changed circumstances. The gravy train has left, except for the contractors, suppliers and the banks.

  • Cyril Rogers
    June 25, 2013 - 18:29

    There is, and will be time to cancel this project for at least another year yet....although my hopes are not likely to be realized. Any sane person, or anybody with no vested interest in making a profit at the expense of the ordinary people of this province, would understand the insanity of this deal. As I have stated repeatedly, the chickens will come home to roost for the PC administration in 2015 but.....we will have no roost to go to. Will we be able to indict this government for gross negligence? Will we be able to sue former Premier Williams for promoting this nightmare??? Probably not! The current PC members will either go off into the gold-plated pension sunset or, in some cases, cross the floor but we will be left with brass assets masquerading as gold. Come on members of the PC government.......... Stand up for the people of this province and not the self-serving, big business supporters who care nothing for the long term health of the people or the province.......... Cross the floor........... Serve as Independents.........Do anything to get the attention of the blind administration that is the PC Cabinet.

  • Ben Turpin
    June 25, 2013 - 16:04

    We are a have province in ever metric devisable. This super-important threshold is inferred from 233 people responding positively, 137 negatively, and 32 being indifferent, or undecided in a CRA poll done in May. 0.08% of the population have spoken, and it is a have province we are, for sure. Trouble is, in a have province (see Alberta legacy) you need to have more and more to counter the "have" inflation. The paradox of the have province is the resource curse theory in practice, where an abundance of point-source non-renewable resources like Iron, Nickel, Gold and Oil & Gas, tend to have less economic growth and worse development outcomes than countries with fewer natural resources. This is hypothesized to happen for many different reasons, including a decline in the competitiveness of other economic sectors, unstable revenues from the natural resource sector due to exposure to global commodity market swings, government mismanagement of resources, or weak, ineffectual, unstable or corrupt institutions (possibly due to the easily diverted actual or anticipated revenue stream from extractive activities). Sure sounds like NL to me, but blaming the politicians for this is like blaming the dog for crapping in a locked room. We put them in there, and failed to put them out when necessary.

    • Eli
      June 25, 2013 - 18:41

      Recall process is unknown in Newfoundland & Labrador and the government and Nalcor damn well know it.

  • Eli
    June 25, 2013 - 14:11

    This freight train is too far out of control to apply the brakes.

  • Tony Rockel
    June 25, 2013 - 12:09

    A dream, yes, but the dream is about to become a nightmare for everyone except Danny and his cronies.

  • Maurice E. Adams
    June 25, 2013 - 07:20

    Costs to ratepayers are critical........Minister Tom Marshall has said that over 50 years government will get $20 billion (OVER AND ABOVE THE $15 BILLION in debt servicing and operating costs) from ratepayers (and that is based on the DG2 numbers)......... Total? $35 billion out of ratepayers' pockets.... Now, you do the math....... The DG3 numbers increased the cost by 24% (and that was with only 50% of the project design work completed)....... Since then, we may have to add another $1.5 billion if Nova Scotia turns down the Maritime Link (or pay for Emera's cost overruns), ... and since Nalcor is still doing its below ground analysis of the North Spur and have allowed up to the end of 2013 for the completion of a design fix ............ The few hundred million that had been spent todate is nothing compared what ratepayers will ultimately pay.