Labrador's member of Parliament is rejecting the idea of Ottawa putting up a loan guarantee to develop Muskrat Falls, arguing that the massive hydroelectric project would have no benefit to his constituents.

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Labrador MP Todd Russell (centre) shown speaking with Churchill Falls youth in 2009, is opposed to loan guarantees from Ottawa to fund the Muskrat Falls hydroelectric project. ((Todd Russell))

"Why have a loan guarantee if the people who are most impacted by this are going to be shafted?" said Liberal MP Todd Russell. "I would not be able to in all good conscience do that."

Newfoundland and Labrador and Nova Scotia announced in November a $6.2 billion deal to develop the Lower Churchill hydroelectric megaproject, bypassing a historical roadblock at the Quebec border.

The province and Nova Scotia have asked Ottawa for loan guarantees that could help shave hundreds of millions of dollars off the $6.2 billion project at Muskrat Falls.

And Newfoundland and Labrador Premier Kathy Dunderdale said earlier this week that she expects an answer from Ottawa in the next few weeks on whether Ottawa would contribute.

Dunderdale raised the issue during a recent meeting with Prime Minister Stephen Harper.

However, Russell said people in Labrador are worried about the environmental impact and an increase in hydro rates. He also said they are frustrated about the lack of power for the coast of Labrador.

He is encouraging his constituents to speak up at the environmental assessment hearings set for next month.