Ontario's energy minister says he hopes squabbling between Ottawa and the Newfoundland and Labrador government will not derail a hydroelectric megaproject in Labrador.

Dwight Duncan, who visited Newfoundland and Labrador government officials Monday, said the planned Lower Churchill project fits perfectly with Ontario's future energy demands.

Ontario Energy Minister Dwight Duncan (right) met Monday with N.L. counterpart Kathy Dunderdale.
(CBC)

"This is clean, green, renewable power that we'd like to get into the southern Ontario market," Duncan said.

"We have an air quality problem. We have a need for new power. We think the east-west energy grid is the railroad of the 21st century."

Newfoundland and Labrador is hoping to develop the Lower Churchill — a two-site megaproject that could potentially deliver enough electricity to power about 1.5 million homes — on its own.

However, the province is seeking a multibillion-dollar loan guarantee from the federal government.

Relations between Premier Danny Williams and the governing federal Conservatives have been strained because Williams says Prime Minister Stephen Harper changed party policy on including non-renewable resource revenues in the equalization formula.

Williams and his ministers have acknowledged they would like to see Harper unseated in the next federal election.

Natural Resources Minister Kathy Dunderdale said Monday that federal participation is not essential to a Lower Churchill deal.

"One thing you can take to the bank is that we are going to do this project, one way or the other," she said.

"We will do it with federal government help, hopefully, but in any case the project will proceed."

Duncan would like to see the federal government step up for a project that he says will help Canadians in several provinces.

"Ontario sees it as essential for the federal government to be at the table as well, regardless of who is in office," Duncan said.

"If any government has a national vision, if any government sees a future for this country, they have to look at this."

Meanwhile, Newfoundland and Labrador Hydro president Ed Martin said the next 12 to 15 months are critical for the success of the Lower Churchill proposal.

Martin said if the project hits all points on its timeline, Lower Churchill power could hit the market by 2014, which is the same year that Ontario is projecting its greatest energy need.