Natural Resources Minister Christian Paradis said Ottawa will not pay any extra costs associated with the delayed Point Lepreau Nuclear Generating Station. (Adrian Wyld/Canadian Press)

The federal government is holding firm to its position that it will not pay extra costs associated with the growing delays at the $1.4-billion refurbishment of New Brunswick's Point Lepreau Nuclear Generating Station.

Natural Resources Minister Christian Paradis dampened expectations — which had been raised earlier on Tuesday by the provincial government — that Ottawa would ante up extra funds.

"We as [the] federal [government] have to pay according to our contractual agreement and we will respect our contractual agreement according to that," Paradis said.

Atomic Energy of Canada Ltd., the federal nuclear agency, has admitted its original contract deadlines on the massive construction project on Atlantic Canada's only nuclear reactor were not realistic.

AECL is more than 18 months behind schedule on the world's first refurbishment of a Candu 6 reactor. The reactor is being rebuilt from the inside and it is anticipated that the refurbishment will extend the power plant's life by 30 years.

When AECL and the New Brunswick government announced the refurbishment and retubing contracts in 2005, those new agreements included penalty clauses if the project ran behind schedule.

The penalty clauses do not cover all of the costs associated with the mounting delays. Before the refurbishment project began, NB Power took out insurance to help cover any unexpected costs.

The New Brunswick government wants Ottawa to cover all costs associated with the delays, even if the federal government is not contractually obligated to do so.

With the Point Lepreau reactor still offline, NB Power pays more than $20 million a month in added fuel costs. The province has argued the federal government should also pick up the tab on those bills.

Premier Shawn Graham's office released a letter he wrote to Prime Minister Stephen Harper that suggested the federal government might reconsider its earlier position that it would not pay extra refurbishment costs.

'I think the prime minister sees that argument, that New Brunswickers shouldn't have to pay for that. There's certainly been some movement and discussions.'— N.B. Energy Minister Jack Keir

Graham thanked Harper in the letter for recognizing the provincial government should not bear the cost of AECL learning on the job during its first-ever refurbishment of a nuclear reactor.

New Brunswick Energy Minister Jack Keir also suggested on Tuesday that Harper is coming around on the possibility of cutting the province a bigger cheque for the refurbishment project.

"I think the prime minister sees that argument, that New Brunswickers shouldn't have to pay for that," Keir said.

"There's certainly been some movement and discussions, but I haven't seen any cheques written yet."

Keir has also complained there's no communication from Ottawa about possible additional delays.

Paradis points out NB Power is working on the refurbishment with AECL and Keir can ask them.

The federal natural resources minister said everyone associated with the delayed project is trying to get it back on schedule.

"I understand that there are technical challenges and the fact it goes over delays put extra cost that we as [the] federal [government] have to pay according to our contractual agreement," Paradis said.

"We will respect our contractual agreement according to that, but of course I think we wish everybody that that thing could be quickly done as soon as possible."

Technical problems

AECL is more than 18 months behind schedule in returning the Point Lepreau Nuclear Generating Station back to NB Power. (CBC)

The reactor's main challenge surround its calandria tubes, which are about seven metres in length and 13 centimetres in diameter.

The calandria tubes penetrate the reactor face in big circular rows. All of the nuclear activity of the reactor occurs inside them.

AECL has run into problems, as the seals have not met acceptable standards for tightness. AECL said in a July 21 statement that it had completed 75 per cent of the project, but did not give a timeline for the remainder of the refurbishment.