New Brunswick

Province's fight for Lepreau compensation not registering with Ottawa's top brass

"The premier himself bringing it to the prime minister himself," said Premier Brian Gallant in 2013 to former Premier David Alward about the proper way for New Brunswick to deal with Ottawa's share of Lepreau's troubles.

Premier needs to lead fight, Brian Gallant claimed in 2013 as Opposition leader

New Brunswick Premier Brian Gallant has highlighted his strong relationship with Prime Minister Justin Trudeau on social media, but his government will not say if he has been using that relationship to settle Lepreau compensation claims. (Instagram/Brian Gallant)

The New Brunswick government won't say whether a direct and personal push from Premier Brian Gallant to Prime Minister Justin Trudeau is part of its current effort to win "full" compensation of cost overruns suffered by NB Power during the Point Lepreau nuclear plant refurbishment — despite Gallant's one-time insistence that was a New Brunswick premier's duty.

"The premier himself bringing it to the prime minister himself," said Gallant in 2013 to former Premier David Alward about the proper way for New Brunswick to deal with Ottawa's share of Lepreau's troubles. 

On Monday, Gallant released a 24-page report card on his government's record of keeping promises it made during the 2014 election campaign, including a promise it made to pursue Ottawa for Lepreau compensation.   

The report notes there was a recent settlement of insurance claims at the nuclear plant and then states compensation talks between the two levels of government have since begun.

"NB Power reached a settlement with several insurers who underwrote a construction all risk insurance policy during the refurbishment project at the Point Lepreau Nuclear Generating Station," reads the document.

"Follow-up discussions with the federal government are now underway."

Level of discussion unknown 

But the province won't say if those discussions are occurring at a senior political level, including between the premier and prime minister.

NB Power has said it has "potential claims" against its former Lepreau contractor and federal crown corporation, Atomic Energy of Canada Ltd (AECL).

The renovation of the Point Lepreau plant was expected to take 18 months and cost $1.4 billion, but it ran three years late and went $1 billion over budget. ((CBC))

But other than those contacts between the two Crown corporations, there are no outward signs of political efforts at a higher level by the province to win the compensation fight.

A spokesman for Trudeau's office referred questions about whether any high level talks have been held to Natural Resources Minister Jim Carr. 

His spokesperson, Catherine Leroux, said in an email the federal government has talked to New Brunswick about Lepreau in the past, but compensation is not being dealt with at the ministerial level.

"We consider this to be an issue between AECL (Atomic Energy of Canada Ltd.) and New Brunswick Power," she wrote.

The Point Lepreau nuclear station was built in the 1980s and its reactor section underwent a life extension refurbishment beginning in 2008 under the direction of AECL.   

The renovation was expected to take 18 months and cost $1.4 billion but ran three years late and went $1 billion over budget.

The plant has also not performed as well as expected since the refurbishment, undergoing 451 days of planned and unplanned outages for maintenance and repairs since its restart in 2012 — 97 per cent more downtime than originally planned.

Three successive New Brunswick provincial governments, two Liberal and one Progressive Conservative, have insisted Ottawa should compensate the provincial utility, NB Power, for the extra refurbishment costs that it blames on AECL's poor performance.

Gallant pushed premier to act in 2012, 2013 

New Brunswick Liberals pushed the importance of federal compensation for Lepreau during the entire government of Progressive Conservative Premier David Alward, saying he needed to leverage his party connections to then Conservative Prime Minister Stephen Harper to New Brunswick's advantage

Even after NB Power filed a lawsuit against insurance companies for some of the cost overruns in 2012, then Opposition leader Brian Gallant said Alward still needed to act.

When he was leader of the Opposition, Gallant said former New Brunswick premier David Alward, pictured above, should push the federal government to cover the cost overruns associated with the refurbishment. (CBC)

"What are their plans to ensure that we get the cost overruns covered by Stephen Harper. We need Point Lepreau cost overruns to be covered by the Stephen Harper government," Gallant said in the legislature in the fall of 2013. 

"I think the premier himself, I would hope, is bringing this up with the Stephen Harper government. I would hope it would be the premier himself bringing it to the Prime Minister himself considering it's been three years we've been raising the issue, considering we are talking about billions of dollars."

Little action since 2014 election 

In the 2014 provincial election, New Brunswick Liberals committed to fighting for Lepreau compensation, but little has happened politically since, even after the election of a federal Liberal government led by JustinTrudeau in 2015.

Last year, Gallant's office would not say if the premier had even raised the Lepreau issue with Trudeau, claiming NB Power's lawsuit with insurance companies prevented public comment — even though Liberals frequently demanded answers about Lepreau compensation during the lawsuit when Alward was premier.

However, two months ago, NB Power announced it had finally settled its six-year fight with insurance companies over Lepreau.

NB Power has not released details of its insurance settlement, but based on changes the settlement triggered in the utility's capital structure and finance payments, it appears to have been in the $150-million range.

If accurate, that would still leave $850 million in cost overruns to be negotiated with Ottawa. 

Questions to the province about its compensation effort, including whether the premier has been raising the issue directly with the prime minister, went unanswered this week with government spokesman John McNeil suggesting contact has been limited to AECL.

"AECL is a federal crown corporation," said McNeil in an email Wednesday. "There has been significant effort and a number of discussions about compensating New Brunswick for cost overruns at Point Lepreau, and we're hoping there will be a positive outcome." 

ABOUT THE AUTHOR

Robert Jones

Reporter

Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.

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