Nfld. & Labrador

N.L. finance minister 'disappointed' by Quebec's opposition to extended Muskrat Falls loan guarantee

"Unneighbourly" and "disappointing" are the two words N.L. Finance Minister Cathy Bennett is using to describe Quebec's attempt to block an enhanced loan guarantee for the Muskrat Falls hydro project.

Cathy Bennett says Quebec isn't being a good neighbour.

The sun rising over construction on the Muskrat Falls project. (Derek Doody/Submitted)

"Unneighbourly" and "disappointing" is how Newfoundland and Labrador Finance Minister Cathy Bennett is describing Quebec's attempt to block an enhanced loan guarantee for the Muskrat Falls hydro project.

The province has asked the federal government to increase the 2013 loan guarantee it gave the province for its multi-billion dollar power project in Labrador.

Earlier this week, Quebec argued the federal government should turn down that request.

Bennett paused and smiled when she was asked about that during a news conference Thursday.
Newfoundland and Labrador Finance Minister Cathy Bennett giving reporters the province's fall fiscal update, Oct. 27. (CBC)

"Earlier this week, the finance minister in Quebec announced a $2.2 billion surplus and I think they also receive $10 billion worth of equalization," she said.

"I'm sitting here telling the people of the province that we're going to target a $1.6 billion deficit and we receive zero equalization. I think we can do things a little differently under Canadian values than try not to support our neighbours."

Muskrat Falls cost

The cost of the project — that's been dogged with delays, cost overruns and protests over methylmercury contamination — has ballooned to $11.4 billion. That's an increase of $4 billion compared to projections four years earlier.

Natural Resources Minister Jim Carr confirmed Tuesday the federal government is "seriously" considering the province's request to extend the loan guarantee granted by the Conservatives in 2013.

Quebec's minister of inter-governmental affairs, Jean-Marc Fournier, said Wednesday it's unfair that Ottawa is helping Newfoundland and Labrador when it didn't give his province any help to build its hydroelectric projects.

Loan capped right now

Earlier this fall, federal officials said the amount of debt currently guaranteed by Canada is capped at $5 billion for the Nalcor-led portion of the Lower Churchill project.

The loan guarantee is a very active file for the premier and our cabinet.- Finance Minister Cathy Bennett

Bennett said increasing the amount covered by the loan guarantee is a priority.

"The loan guarantee is a very active file for the premier and for our cabinet. We have all been working very hard on the federal loan guarantee, as I'm sure our federal MPs have been working on our request for an enhanced loan guarantee."

"We continue to be optimistic that the federal government will understand the situation that Newfoundland and Labrador finds ourselves in today and we look forward to a positive resolution on the enhanced federal loan guarantee."

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