By J. F. Collins
Is it too late for rescue? Though already one-fifth the way down the path to disaster, must we still go the other four-fifths over the cliff?
The reference is, of course, to the monstrous Muskrat Falls sleight-of-hand. Shamelessly trading on the credulity of the Newfoundland people for legacy and corporate hubris purposes, with little regard for negative effects on the majority of people affected, that self-serving venture is now blown out of the water through its own cynical machinations.
Hopefully the Nova Scotia regulator report is widely read. Have our people (and seemingly naive government) finally taken that devastating decision to heart?
Crux of the problem
A once-strategic ploy of the whole undertaking has spectacularly backfired, i.e. the embroilment of a historically wily player (Nova Scotia) in a hugely expensive (for Newfoundland and Labrador) linkage to that province.
Nova Scotia is now to be guaranteed most (60 per cent) of Muskrat Falls output at minimal cost, leaving this province with 40 per cent egg on its face and 80 per cent of the total expenses. This is much worse than the Upper Churchill.
The big question now, however, is not how did we get ourselves into this, but are we going to get ourselves 100 per cent out of it?
• Completing Muskrat Falls as proposed will cause an 80 per cent increase in Newfoundland and Labrador Hydro “blended” wholesale power costs.
• $255 million paid annually by Newfoundland and Labrador ratepayers in out-of-province subsidies are designed solely for Nalcor’s benefit.
• Whereas Nalcor and the government builds its case for the province’s “power need,” Muskrat Falls, in fact, will not add even half the grid megawattage (MW) needed to get us to Upper Churchill rescue.
• The Newfoundland and Lab-rador government’s and other equity investments in Muskrat Falls adds $6.4 billion to our real public debt, costing an extra $300 million per year for 50 years in budgetary outlays.
• Nalcor forces another $130 millions yearly from Newfoundland and Labrador to cover Muskrat Falls expenses. A total of $685 million ($260 monthly per average family) leaves little left over for those other annual public investments regularly necessary to keep the economy on track.
We will also need funding to transition 2041 Upper Churchill power to this province’s energy demands, and for real export income.
An understanding of these financial implications is woefully lacking at the ministerial level. Citizens must insist on suitable remedies. Lessons from the past must be re-called. There have been many.
• Brinco’s failure to pre-plan sensible power market sales is emulated exactly by Nalcor (with Nova Scotia in place of Quebec.)
• The ill-considered, secretive Stephenville linerboard project support hugely matched by today’s Nalcor distain for public and experts’ inquiries.
• Sprung Greenhouse, with followup royal commission advice which is completely ignored, specifically against government joint-venturing (see Newfoundland and Labrador Power’s sensible attitude) and for fully independent advisers.
• Government’s recent blunder in expropriating the Grand Falls mill, stemming directly from absent advice.
How many more history lessons must we suffer at great cost before avoiding history repeats? To date, served up are legislated review barriers ( Bill 29 and PUB inhibition), and public duress through unsanctioned project initiation.
At a minimum, to prevent ongoing financial damage: there must either be a government ban or a legal citizens’ injunction against on-site activity, preferably with the federal government’s concurrence.
An appointed expert, independent review of project profile and corrective revisions.
Amending/rescinding offensive parliamentary acts (including the 2007 Energy Corporation Act), and a submission to have the Supreme Court reconsider the 1982 Water Rights Reversion Act (prior objectional features expired).
J.F. Collins was provincial minister of finance from 1979-1987. He writes from St. John’s.