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Letter: Cancelling Muskrat Falls wasn’t a viable option

A downstream view of the spillway at Muskrat Falls, February 2017.
A downstream view of the spillway at Muskrat Falls, February 2017.

I wish to respond to Brian Jones’ opinion piece “Bad governance is a way of life,” June 30, 2017. Mr. Jones states: “It was obvious at the Liberals election in November 2015 that the most important and immediate decision that had to be made was the cancellation of the Muskrat Falls project.” I only wish it were this simple.

Leading up to the general election of 2015, the Paul Davis Progressive Conservative government stated the provincial deficit was $1.1 billion. Despite then-leader of the Official Opposition Dwight Ball writing Davis on Sept. 28, 2015, requesting a fiscal update in advance of election day, this request went unanswered. Only upon forming government did we discover this number had been low-balled and the actual deficit would have been $2.7 billion.

This province had no borrowing plan and credit rating agencies were on the cusp of downgrading our credit ratings — the result of PC mismanagement.

If there was one thing the Conservatives were extremely successful in doing, it was locking down the Muskrat Falls project so it could never be undone. Initially sold to the people of this province as a $6.2-billion project, plus financing costs, the total project cost now, including financing, is at $12.7 billion.

We have done much to ensure better controls exist on what had been a poorly conceived and poorly managed project, including appointing a new CEO and board of directors, negotiating additional federal loan guarantee support and strengthening the oversight committee by adding an extra layer of independent oversight in appointing individual experts from outside of government to provide feedback and advice.

Just recently, our government was given a copy of the SNC-Lavalin Risk Assessment 2013. In it, many of the project's disastrous consequences we are enduring today are foreshadowed as potential risks. The former CEO has claimed he was aware of project risks, which implies the former PC government knew these risks as well. I encourage all residents to read this document, which is available on the Department of Natural Resources website.

By the time the Liberal party formed government in December 2015, most of the legal and contractual arrangements were fixed, including some $7 billion in contractual obligations, a legal commitment to supply energy to Nova Scotia for the next 35 years, and a completion requirement under the federal loan guarantee that the PC government had acquired from Stephen Harper. To cancel the project would mean forfeiting the costs already spent to date but also paying to get out of the contracts already signed, such as the Astaldi contract. To break these contracts would have cost billions of dollars, and we would be on the hook to both Ottawa and Nova Scotia.

All of these factors and more combined gave us no choice but to carry on with this project — a project we did not support, and a project for which we led the longest filibuster in history in the House of Assembly to oppose. Muskrat Falls has become a financial noose around Newfoundland and Labrador’s neck, thanks entirely to the PC government’s willingness to lock the contracts down.

This is why I agree with the premier that a forensic audit or an inquiry must be called into this project. It is not a matter of if, but when. Our focus remains on keeping rates affordable for the people of Newfoundland and Labrador.

Mark Browne, MHA
Parliamentary assistant to the premier

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