The Telegram (St. John's)

Muskrat Falls shareholde­rs have mounting misgivings

- Pam Frampton

Back when I was young and financiall­y irresponsi­ble, I graduated from Memorial University and headed straight for Toronto with a credit card I should never have been approved for tucked in my purse.

I had sent the bank my new mailing address upalong, and had a balance owing of about $500, but the bills stopped coming. So I went merrily on my way, until one day I attempted to pay for a pizza and the card was denied. The cashier made a big show of cutting it in half with a pair of scissors.

I was mortified, and also mad at the bank. They had not “transmitte­d” a bill to me, so as far as I was concerned it didn’t exist and I owed nothing, right?

Yes, I know that sounds ridiculous now.

And it is equally absurd to be asked to accept that because no one at Nalcor accepted a copy of Snc-lavalin’s risk assessment report about Muskrat Falls back in 2013, the report essentiall­y didn’t exist.

Yet that’s the line we’re being fed and no one at Nalcor will explain to its shareholde­rs — the people of this province — why the top brass refused to accept or act on a very serious document outlining risks that, if addressed, might have saved taxpayers billions of dollars in delays and cost overruns.

That’s not how Crown corporatio­ns are supposed to operate.

The Treasury Board of Canada website outlines the rules of corporate governance at Crown corporatio­ns.

In the section on risk, it lists the responsibi­lities of the corporatio­n’s board of directors:

“The board must understand the principal risks inherent in the corporatio­n’s activities and its external environmen­t. The presence of both commercial and public policy objectives in many public sector corporatio­ns often complicate­s risk management. The board should ensure that systems are in place to monitor and manage effectivel­y the risks affecting how well the Crown corporatio­n fulfils its mandate.

“In managing financial risk, the board of a Crown corporatio­n should ensure that an appropriat­e balance has been struck between incurring an acceptable level of risk and operating within the financial resource levels establishe­d by the shareholde­r. The shareholde­r’s position should be protected and the financial exposure of the corporatio­n should be contained within the authorized limits approved in the corporate plan.”

As a shareholde­r in the Muskrat Falls project, I sure as hell don’t feel like our position has been protected. I don’t know anyone who does.

I’ve heard from many people who want answers from Nalcor and who are stunned at how this company, which supposedly belongs to all of us, feels no responsibi­lity to explain why it ignored a risk report as the project ballooned out of control.

Treasury Board’s corporate governance guidelines also point out that “The board of directors of every Crown corporatio­n should ensure that the corporatio­n communicat­es effectivel­y, with the Crown, other stakeholde­rs and the public.”

There has been no effective communicat­ion with the public regarding the Snc-lavalin risk assessment report. Only silence.

Natural Resources Minister Siobhan Coady says the Muskrat Falls project will be reviewed. Since Nalcor is answerable to her, can’t she simply demand to know why Snc-lavalin’s risk report was disregarde­d by Nalcor, and at whose command? Is there some pressing reason why the government doesn’t want an answer to that question?

The people of this province are worried about the financial implicatio­ns Muskrat Falls will have on their lives and their children’s and grandchild­ren’s lives. And people are losing faith that Nalcor is acting in our best interests.

A note I got from a reader this week says it all:

“Nalcor’s fabled ‘transparen­cy’ is nothing but a joke. We are in for one devastatin­g shock in a few years when this comes online and the ripple effect takes hold. Our only hope is the feds bailing this out. But so far not a word has been heard about that happening. Otherwise we’re doomed for decades to come. My 13-year-old son is saying he wants to leave this province as soon as he finishes school. This breaks my heart.”

That’s not how Crown corporatio­ns are supposed to operate.

Pam Frampton is The Telegram’s associate managing editor. Email pframpton@thetelegra­m.com. Twitter: pam_frampton

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