A Labrador environmental group says it would be unlawful for the federal government to issue a loan guarantee for the Muskrat Falls hydro project at this point in time.
Roberta Benefiel, a spokesperson with Grand Riverkeeper Labrador, said that the environmental assessment panel responsible for reviewing Muskrat Falls didn't fulfill its duties.
"The panel, in our opinion, has not finished their job," Benefiel said. "They have not assessed the alternatives."
The group said the Muskrat Falls loan guarantee cannot be made without a proper environmental assessment, and while its case is in the federal courts.
"If our government did intend to issue a real loan guarantee, they're rolling the dice," Benefiel said.
"Our lawyer has informed us that the judge may be [two to three] months before he issues a ruling on our case."
On Friday, Prime Minister Stephen Harper was in Happy Valley-Goose Bay to announce a federal loan guarantee for the hydro project.
Newfoundland and Labrador Premier Kathy Dunderdale, Nova Scotia Premier Darrell Dexter, and federal cabinet ministers Peter Penashue and Peter MacKay were all present for the announcement.
Benefiel said she believes Harper was in Labrador to support Penashue who has recently been under fire for overspending on his 2011 federal election campaign.
"It leaves little doubt that the prime minister's visit to Goose Bay was much less about a loan guarantee, but probably more about showing up his fallen-from-grace MP," Benefiel said.