NL: $664M to Nalcor creates more questions than answers

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James McLeod
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The Telegram

The amount is equivalent to more than eight per cent of the total government expenses in the coming fiscal year.

Jerome Kennedy

[ST. JOHN'S, NL] — In the hours after the provincial budget was rolled out, there was $664 million that slipped past a lot of people.

But not Liberal Leader Dwight Ball.

The money is being transferred to provincial energy corporation Nalcor, for what Ball assumes is the Muskrat Falls project.

“We don’t have a Muskrat Falls project yet,” Ball said.

“We still have a lot of issues that we need to discuss and we need to figure out with this, with Muskrat Falls, and here we are this year with $664 million. That’s $1,300 for every man, woman and child in this province.”

The amount of $664 million is equivalent to more than eight per cent of the total government expenses in the coming fiscal year.

However, the money was not mentioned in any of the government’s press materials on the budget, and only mentioned as a line item in the 290-page Budget 2012 Estimates document.

Last year, the provincial government mentioned it in the much smaller “Budget Highlights” document when they transferred $348 million to Nalcor.

Speaking to The Telegram Tuesday, Natural Resources Minister Jerome Kennedy called the money “equity investment for Nalcor if sanction was given.”

That seemed to refer to the decision the government will make later this year on whether to sanction the $6.2 billion Muskrat Falls hydroelectric project on the Churchill River in Labrador.

“In other words, if the decision on sanction is made in the fall, then what this allows them to do is to continue construction through the winter,” Kennedy said. “If the project isn’t sanctioned then the money won’t be utilized — at least not for the Lower Churchill.”

As it turns out, according to the budget documents, none of the $348 allocated to Nalcor last year was ever actually spent.

Kennedy said that none of the $664 million allocated this year would be used unless the project is sanctioned.

“If sanction is approved, then part or all of the money could be spent. If not, then it won’t be spent,” Kennedy said.

Several hours after Kennedy spoke to The Telegram, a spokeswoman speaking on his behalf said that $75 million of the money would actually be used to make investments in the oil and gas sector.

Speaking to The Telegram, Kennedy made no reference to some of the money being used for investments in the oil and gas sector.

No explanation was given for why the $664 million wasn’t included in any of the province’s press materials, or in the highlights documents.

The spokeswoman said the reason why none of the $348 million was spent last year was because of delays in the Muskrat Falls environmental assessment process.

“Funds were budgeted in anticipation of a release from (an) environmental assessment in 2011 and the commencement of project works. A delay in (the) environmental release meant that the planned project activities did not take place. No funds were provided to Nalcor in 2011/12.”

Apart from the $664 million, Ball didn’t have a lot to take issue with in what he called a “passive” budget.

NDP Leader Lorraine Michael said it just maintained the status quo.

“It certainly isn’t an exciting budget,” she said.

“They’ve thrown a few crumbs to some people, like to the seniors a few crumbs, but no investment in programs such as a real home care program, a real child care program, a drug program.”

Both Ball and Michael also expressed concerns that the province’s net debt is continuing to rise.

 

 

Geographic location: Muskrat Falls, Churchill River, Labrador

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