Justice Richard LeBlanc’s Inquiry into the Muskrat Falls project will go as far back as the development of Churchill Falls to determine what went so wrong for the beleaguered Muskrat Falls hydroelectric project.
LeBlanc issued his interpretation of the terms of reference of the inquiry Wednesday afternoon, which will direct the inquiry’s focus.
LeBlanc says one of the key areas will be whether or not the government or Nalcor Energy did due diligence in determining whether Muskrat Falls was indeed the lowest-cost option for the province. LeBlanc wants to find out if any options were considered aside from Muskrat Falls and the isolated island option.
“Really, what is primarily being asked of the commission is to explain what was done by Nalcor and the Government of Newfoundland and Labrador to cause the Muskrat Falls project to be sanctioned, whether the analysis done by Nalcor and the government was reasonable considering best industry practice and why the project cost has escalated so significantly,” LeBlanc says in his 22-page report.
As the seeds of the Muskrat Falls project were sewn with the Churchill Falls deal, the inquiry will go all the way back to the development of that project to ensure the full context is understood when the final report is delivered in December 2019.
A focus on broader context also means LeBlanc and inquiry lawyers Kate O’Brien and Barry Learmonth will examine not only the actions of previous Progressive Conservative administrations, but also the current Liberal administration, to examine the level and thoroughness of oversight for the project.
Scrutiny will also be given to the decision to exclude the Board of Commissioners of Public Utilities (PUB) from examining the project. The PUB, then led by former St. John’s mayor Andy Wells, started a review of the project, but was denied a time extension by the government, meaning it couldn’t finish its work.
“To assess the possible impact of the PUB exemption or lack of scrutiny of the development, costs and operation of the project, the commission will be investigating the full circumstances surrounding the PUB’s degree of involvement,” states LeBlanc’s report.
The LeBlanc Inquiry will also examine Nalcor’s dealings with Emera Inc., which built the Maritime Link. The inquiry will seek to determine “whether or not the negotiations conducted by Nalcor were in fact appropriate and reasonable based upon the information available at the time.”
LeBlanc says he intends to investigate whether Nalcor was even able to handle a project as huge as Muskrat Falls.
The terms of reference also explicitly state the need for Indigenous involvement in the inquiry, which LeBlanc acknowledges is essential to the inquiry’s understanding.
LeBlanc also outlines what is not going to be investigated as part of his review.
First, he says he has been granted no power by the province to investigate the federal loan guarantees issued by Ottawa, though he will hear evidence relating to it. The terms of reference prevent LeBlanc from commenting on whether or not the federal government did due diligence in agreeing to the loan guarantee.
Second, while LeBlanc will review the environmental studies done surrounding the project, he says he can’t “assess the correctness of the positions taken by the various parties.”
LeBlanc says he won’t deal with questions surrounding the October 2016 protests at the Muskrat Falls project site.
Finally, LeBlanc says he has been given no power by the government to shut down the project.
Dates for hearings of the Muskrat Falls Inquiry have yet to be set.