Prime Minister Justin Trudeau went to Newfoundland and Labrador recently to announce a $5.2-billion deal to support the province in a bid to cover the costs of a highly troubled hydroelectric project.
The visit of Trudeau to St. John’s, N.L., concluded a two-day tour of Atlantic Canada that featured many major funding commitments, and he wrapped up his day in Newfoundland and Labrador by announcing that the province would become the fourth to agree to a deal with Ottawa for a $10-a-day child-care program.
While addressing reporters, Trudeau was flanked by the six Liberal members of Parliament from the province. He agreed to the mismanagement that made the over-budget Muskrat Falls hydroelectric project become what Liberal Premier Andrew Furey has labelled an “anchor around the collective souls” of the province.
Trudeau said: “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.”
Furey, who was with Trudeau for the two announcements and was unrestrained while praising the federal government said the federal funding will help Newfoundland and Labrador in avoiding a spike in electricity rates that had been anticipated when Muskrat Falls starts power generation this November.
He said: “Muskrat Falls has been the No. 1 issue facing Newfoundlanders and Labradorians now for well over a decade.”
He added that he is regularly asked by people whether their electricity rates are going to double.
He said: “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.”
The agreement-in-principle between the governments includes a $1-billion investment from Ottawa in the project’s transmission portion and $1 billion in loan guarantees. The remaining will come from annual transfers from Ottawa equivalent to its yearly royalty gains from its allocation in the Hibernia offshore oilfield, which operates off the coast of St. John’s. As expected, those transfers will add up to about $3.2 billion between now and 2047, when the oilfield will run dry.
Muskrat Falls was launched in 2012 with a cost of $7.4 billion, however, its price tag has since increased to $13.1 billion. The federal government previously backed the project with billions of dollars in loan guarantees. In December, Trudeau announced the appointment of Serge Dupont, former deputy clerk of the Privy Council, to supervise negotiations with the province about the financial restructuring of the project.
Trudeau said: “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.
“For parents, this agreement is huge.”
Newfoundland and Labrador is the fourth province to sign on to the federal government’s child-care program.
