Nfld. & Labrador

Ball, Davis get heated after terms set for judicial inquiry into Muskrat Falls hydro project

The Newfoundland and Labrador government Monday announced terms of reference for an upcoming inquiry into the Muskrat Falls hydroelectric project.

Former premier Danny Williams hopes inquiry will bring 'balanced picture'

Premier Dwight Ball is flanked by Justice Minister Andrew Parsons, left, and Natural Resources Minister Siobhan Coady as he announces terms for the Muskrat Falls judicial inquiry. (CBC)

With vigor in his voice, Newfoundland and Labrador Premier Dwight Ball shouted across the floor at his adversary, Paul Davis.

The subject of his anger — the Progressive Conservative approval of the Muskrat Falls hydroelectric project in 2012.

"Is he still proud of the project that he sanctioned?" Ball shouted.

Davis, the leader of the opposition Tories, fired back by accusing Ball of stealing political points on the eve of a byelection.

It was a rare moment in the provincial legislature with two leaders not known for raising their voices.

The dispute was triggered earlier in the day, when the ruling Liberal government announced terms of reference for an upcoming inquiry into the Muskrat Falls hydroelectric project.

Ball, who announced the inquiry into the over-budget, behind-schedule project in September, told reporters on Monday in St. John's just what aspects of the project the inquiry will examine.

They include:

  • Sanctioning: Were reasonable assumptions made? Were other options properly considered? Was the least-cost determination reasonable?
  • Execution: Were best practices used in dealing with contractors? Did contracts handed out lead to cost overruns and delays? Did contractors take on as much risk as they should have?
  • Was it justifiable to exclude the Public Utilities Board from oversight?
  • Was government fully informed?
The construction site of the hydroelectric facility at Muskrat Falls, Newfoundland and Labrador, is seen on July 14, 2015. (Andrew Vaughan/Canadian Press)

"This is not about the work of men and women on this project," Ball told reporters in the morning. "They have done what they have been asked to do."

The government now estimates that Muskrat Falls, which will generate power on Labrador's Churchill River, has a current budget of $12.7 billion, including financing costs. When the ambitious project was unveiled in 2010, development and construction costs were pegged at $6.2 billion.

Another aspect the inquiry is not specifically mandated to examine is the environmental impact of the project. While Indigenous groups will be able to have standing at the inquiry, the terms of reference don't address the environment.

In announcing the terms of reference, the premier and Natural Resources Minister Siobhan Coady also distanced the current Liberal government from the sanctioning of the project.

"We will learn if the project today is indeed the project people were sold in 2012," said Ball, with Coady reaffirming that the project will not be scrapped.

 "We will continue to move the project forward as effectively as possible despite the challenges we inherited," she said.

Ball also said the commissioner will have the authority to review all cabinet records.

PC MHA and former cabinet minister Keith Hutchings said he has no issue with records from when when his party was in power being part of the inquiry

"We have nothing to hide, certainly the leader of our party has said we have nothing to hide when they talk about bringing an inquiry into this," he said.

Report will come after next provincial election 

Muskrat Falls will generate 824 megawatts of power, which will be transmitted across Labrador and then funnelled underwater to Newfoundland. 

Nalcor Energy, Newfoundland and Labrador's Crown energy corporation, is developing the project in conjunction with Halifax-based Emera Inc., which will receive 20 per cent of the energy for its own use through a 35-year contract. A subsea cable will carry some of Muskrat Falls power from southwestern Newfoundland to Nova Scotia. 

Planning is now underway for the inquiry, which will begin in January. Newfoundland and Labrador Supreme Court Justice Richard LeBlanc will head the the inquiry, with a final report due Dec. 31, 2019.

That date is after the next provincial election, but Ball said it was set by Leblanc, who will be able to hire any expertise he needs for the inquiry, such as financial, engineering and business.

"The timing is awful," said interim NDP leader Lorraine Michael.

"To have a report that's not going to be released until after the next election is bad."

Danny Williams hopes for 'balanced picture'

Danny Williams, who was premier when the Muskrat Falls deal was announced, issued a statement Monday afternoon saying he was "pleased" to see the inquiry called.

"There has been so much negativity surrounding this project in recent years, and I completely appreciate the public's desire to see this inquiry proceed," Williams said in his statement.

"It is my hope that not only will the project's alleged deficiencies be carefully examined; but also that we might see the positive aspects highlighted for a complete and balanced picture."