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
Trudeau to announce temporary GST relief on select items heading into holidays
Prime Minister Justin Trudeau will announce a two-month GST relief on select items heading into holidays to address affordability issues, sources confirm to CTV News.
'Ding-dong-ditch' prank leads to kidnapping, assault charges for Que. couple
A Saint-Sauveur couple was back in court on Wednesday, accused of attacking a teenager over a prank.
Border agency detained dozens of 'forced labour' cargo shipments. Now it's being sued
Canada's border agency says it has detained about 50 shipments of cargo over suspicions they were products of forced labour under rules introduced in 2020 — but only one was eventually determined to be in breach of the ban.
'It changed my life': Montreal-area woman learning how to walk after being hit by stray bullet
A 24-year-old woman is learning how to walk again after being shot while lying in her bed in Repentigny, Que.
DEVELOPING International Criminal Court issues arrest warrants for Netanyahu and Hamas officials
The International Criminal Court issued arrest warrants on Thursday for Israeli Prime Minister Benjamin Netanyahu, his former defense minister and Hamas officials, accusing them of war crimes and crimes against humanity over the war in Gaza and the October 2023 attacks that triggered Israel’s offensive in the Palestinian territory.
Genetic evidence backs up COVID-19 origin theory that pandemic started in seafood market
A group of researchers say they have more evidence to suggest the COVID-19 pandemic started in a Chinese seafood market where it spread from infected animals to humans. The evidence is laid out in a recent study published in Cell, a scientific journal, nearly five years after the first known COVID-19 outbreak.
REVIEW 'Gladiator II' review: Come see a man fight a monkey; stay for Denzel's devious villain
CTV film critic Richard Crouse says the follow-up to Best Picture Oscar winner 'Gladiator' is long on spectacle, but short on soul.
Donald Trump picks former U.S. congressman Pete Hoekstra as ambassador to Canada
U.S. president-elect Donald Trump has nominated former diplomat and U.S. congressman Pete Hoekstra to be the American ambassador to Canada.
Alabama to use nitrogen gas to execute man for 1994 slaying of hitchhiker
An Alabama prisoner convicted of the 1994 murder of a female hitchhiker is slated Thursday to become the third person executed by nitrogen gas.