Can­celling Muskrat Falls not so sim­ple

The Southern Gazette - - EDITORIAL - Mark Browne, MHA Par­lia­men­tary as­sis­tant to the pre­mier

Dear Editor,

I wish to re­spond to Brian Jones’ opin­ion piece “Bad gov­er­nance is a way of life,” June 30, 2017, edi­tion of The Telegram.

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 not only 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.

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