Ottawa hands N.L. $5.2 billion for troubled Muskrat Falls hydro project
Prime Minister Justin Trudeau was in Newfoundland and Labrador Wednesday to announce a $5.2-billion deal to help the province cover the costs of a troubled hydroelectric project ahead of an expected federal election call.
Trudeau's visit to St. John's, N.L., wrapped up a two-day tour of Atlantic Canada that featured several major funding commitments, and he concluded his day in Newfoundland and Labrador by announcing the province will become the fourth to strike a deal with Ottawa for a $10-a-day child-care program.
As he addressed reporters, the prime minister was flanked by the six Liberal members of Parliament from the province. He alluded to the mismanagement that led the over-budget Muskrat Falls hydroelectric project to become what Liberal Premier Andrew Furey has called an "anchor around the collective souls" of the province.
"The pressures and challenges faced by Newfoundlanders and Labradorians for mistakes made in the past is something that Canadians all needed to step up on, and that's exactly what we did," Trudeau said.
Furey, who joined Trudeau for the two announcements and was effusive in his praise for the federal government, said the federal funding will help Newfoundland and Labrador avoid a spike in electricity rates that had been expected when Muskrat Falls begins generating power this November.
"Muskrat Falls has been the No. 1 issue facing Newfoundlanders and Labradorians now for well over a decade," Furey said, adding that he is regularly asked by people whether their electricity rates are going to double.
"We landed on a deal today that I think -- I know -- is a big deal for Newfoundland and Labrador and will finally get the muskrat off our back," he said.
The agreement-in-principle between the two governments includes a $1-billion investment from Ottawa in a transmission portion of the project, as well as $1 billion in loan guarantees. The rest will come from annual transfers from Ottawa equivalent to its annual royalty gains from its share in the Hibernia offshore oilfield, which sits off the coast of St. John's. Those transfers are expected to add up to about $3.2 billion between now and 2047, when the oilfield is expected to run dry.
The money will help cover costs set to come due when the Labrador project comes online, preventing rate increases that would have been needed to pay the bills. Though electricity rates in the province will still rise, to 14.7 cents per kilowatt hour from the current 12.5 cents, that's well below the projected 23 cents that officials had said would be needed to cover the project's costs.
Muskrat Falls was commissioned in 2012 at a cost of $7.4 billion, but its price tag has since ballooned to $13.1 billion. Ottawa previously backed the project with billions of dollars in loan guarantees, and in December, Trudeau announced he had appointed Serge Dupont, former deputy clerk of the Privy Council, to oversee negotiations with the province about financially restructuring the project.
Its looming impact on the provincial budget is set against an already grim financial situation: the province projected an $826-million deficit in its latest budget, coupled with $17.2 billion in net debt.
After visiting with children from a daycare centre in the College of the North Atlantic, Trudeau and Furey announced that in 2023, the average cost of regulated child care in the province for children under six would be cut to $10 a day from $25 a day. Trudeau said that within five years, almost 6,000 new daycare spaces would be created in the province.
"As part of the agreement, a new full-day, year-round pre-kindergarten program for four-year-olds will also start rolling out in 2023," the prime minister told reporters. "For parents, this agreement is huge."
Newfoundland and Labrador is the fourth province, after Prince Edward Island, Nova Scotia and British Columbia, to sign on to the federal government's child-care program.
This report by The Canadian Press was first published July 28, 2021.
CTVNews.ca Top Stories
DEVELOPING Hurricane Milton strengthens into a Category 5 storm. Florida orders evacuations
Hurricane Milton strengthens into a Category 5 storm off Mexico and threatens Florida, forecasters say.
'Selfish billionaire': Chip Wilson's mansion vandalized after political sign erected outside
Days after a political sign was erected outside Chip Wilson's Vancouver mansion, the waterfront property has been vandalized with graffiti.
Cissy Houston, Whitney Houston's mother and a Grammy-winning singer, dies at 91
Cissy Houston, the mother of the late Whitney Houston and a two-time Grammy winner who performed alongside superstar musicians like Elvis Presley, and Aretha Franklin, has died. She was 91.
Two people injured in apparent road rage incident, shooting in Toronto
Two people are in hospital after they were chased and shot at in what appears to be an act of road rage before eventually flipping their car while trying to escape, police say.
Canadian soldier wins compensation for cancer linked to burn pits after Veterans Affairs denied claim
A Canadian soldier who was exposed to toxic chemicals from burn pits while serving in Afghanistan has been awarded full medical compensation for testicular cancer after Veterans Affairs initially denied his claim.
Sammy Basso, longest living survivor of rare rapid-aging disease progeria, dies at 28
Sammy Basso, who was the longest living survivor of the rare genetic disease progeria, has died at the age of 28, the Italian Progeria Association said on Sunday.
A Canadian woman was recently diagnosed with scurvy. Here are the factors tied to the disease
Scurvy is not just an archaic diagnosis of 18th-century seafarers and doctors should watch for possible cases, according to researchers following a recent case.
Canadian leaders, demonstrators hold events on anniversary of Oct. 7 attack
Ceremonies, events and protests are being held across Canada today to mark the anniversary of a Hamas attack on Israel that triggered the ongoing war in Gaza.
Who will end the debate? Political gridlock continues in the House of Commons
Federal political parties appear to be locked in a game of chicken over a debate that has stalled almost all business in the House of Commons.