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Pam Frampton: Muskrat Falls shareholders have mounting misgivings

Photo courtesy of Nalcor Energy
The Muskrat Falls hydroelectric site in Labrador
Photo courtesy of Nalcor Energy The Muskrat Falls hydroelectric site in Labrador

Back when I was young and financially irresponsible, I graduated from Memorial University and headed straight for Toronto with a credit card I should never have been approved for tucked in my purse.

Pam Frampton

I had sent the bank my new mailing address upalong, and had a balance owing of about $500, but the bills stopped coming. So I went merrily on my way, until one day I attempted to pay for a pizza and the card was denied. The cashier made a big show of cutting it in half with a pair of scissors.

I was mortified, and also mad at the bank. They had not “transmitted” a bill to me, so as far as I was concerned it didn’t exist and I owed nothing, right?

Yes, I know that sounds ridiculous now.

And it is equally absurd to be asked to accept that because no one at Nalcor accepted a copy of SNC-Lavalin’s risk assessment report about Muskrat Falls back in 2013, the report essentially didn’t exist.      

Yet that’s the line we’re being fed and no one at Nalcor will explain to its shareholders — the people of this province — why the top brass refused to accept or act on a very serious document outlining risks that, if addressed, might have saved taxpayers billions of dollars in delays and cost overruns.

That’s not how Crown corporations are supposed to operate.

The Treasury Board of Canada website outlines the rules of corporate governance at Crown corporations.

In the section on risk, it lists the responsibilities of the corporation’s board of directors:
“The board must understand the principal risks inherent in the corporation’s activities and its external environment. The presence of both commercial and public policy objectives in many public sector corporations often complicates risk management. The board should ensure that systems are in place to monitor and manage effectively the risks affecting how well the Crown corporation fulfils its mandate.
“In managing financial risk, the board of a Crown corporation should ensure that an appropriate balance has been struck between incurring an acceptable level of risk and operating within the financial resource levels established by the shareholder. The shareholder’s position should be protected and the financial exposure of the corporation should be contained within the authorized limits approved in the corporate plan.”

As a shareholder in the Muskrat Falls project, I sure as hell don’t feel like our position has been protected. I don’t know anyone who does.

I’ve heard from many people who want answers from Nalcor and who are stunned at how this company, which supposedly belongs to all of us, feels no responsibility to explain why it ignored a risk report as the project ballooned out of control.

Treasury Board’s corporate governance guidelines also point out that “The board of directors of every Crown corporation should ensure that the corporation communicates effectively, with the Crown, other stakeholders and the public.”

There has been no effective communication with the public regarding the SNC-Lavalin risk assessment report. Only silence.

Natural Resources Minister Siobhan Coady says the Muskrat Falls project will be reviewed. Since Nalcor is answerable to her, can’t she simply demand to know why SNC-Lavalin’s risk report was disregarded by Nalcor, and at whose command? Is there some pressing reason why the government doesn’t want an answer to that question?

The people of this province are worried about the financial implications Muskrat Falls will have on their lives and their children’s and grandchildren’s lives. And people are losing faith that Nalcor is acting in our best interests.

A note I got from a reader this week says it all:

“Nalcor’s fabled ‘transparency’ is nothing but a joke. We are in for one

devastating shock in a few years when this comes online and the ripple

effect takes hold. Our only hope is the feds bailing this out. But so far not

a word has been heard about that happening. Otherwise we’re doomed for decades to come. My 13-year-old son is saying he wants to leave this province as soon as he finishes school. This breaks my heart.”

 

Pam Frampton is The Telegram’s associate managing editor. Email pframpton@thetelegram.com. Twitter: pam_frampton

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