Costs rise & opposition grows to Muskrat Falls dam as provincial budget cuts loom

The Council of Canadians at a rally vs Muskrat Falls, St. John's, October 2016.

Council of Canadians activists from across the country expressed their concern about the Muskrat Falls dam in Labrador when they gathered for the Groundswell conference in St. John's in October 2016.

The Muskrat Falls hydro-electric dam project would see two large dams on the lower Churchill River in Labrador. The dams are being built on Innu territory, but the Inuit also claim part of the lands that would be affected by the project as their traditional territory. In 2012, the federal government removed federal oversight of the Churchill River in their Navigation Protection Act.

Now CBC reports, "A group protesting the Muskrat Falls project demonstrated outside the office of Labrador and Aboriginal Affairs in Happy Valley-Goose Bay Monday, demanding the resignations of Premier Dwight Ball as minister responsible for that department, and the MHA for Lake Melville, Perry Trimper. The Labrador Land Protectors carried signs as they gathered outside the office. Protesters have expressed concern about potential health risks to people living downstream of the hydroelectric project, because of methylmercury related to reservoir flooding. They have also criticized the escalating cost of the project, the stability of the North Spur and the impact on power bills."

A poll released this week by Corporate Research Associates found that 48 per cent of residents in Newfoundland and Labrador are completely or mostly against Muskrat Falls, while 45 per cent of residents either completely or mostly support the project (down from 63 per cent support in February 2013). VOCM reports, "Premier Dwight Ball says he's not at all surprised that support for Muskrat Falls continues to decline. Ball says that's not surprising, and he expects support to continue to decline, but halting the project is not an option. He says the people of the province will have to pay for the project whether it's completed or not."

Last week, The Telegram reported, "Ball made it clear he’s looking to make big spending cuts in the 2017 provincial budget at a speech to the St. John’s Rotary Club [on January 5]. In addition to spending cuts, Ball referenced the ongoing public-sector contract negotiations as a possible avenue for saving money."

Earlier this week, CBC reported, "The impact of the Muskrat Falls project will be so devastating that the Canadian government will be forced to intervene, according to one business analyst. Electricity rates will become so high to pay off the $11.7-billion megaproject that it will drag down the provincial economy, according to Ian Lee, a professor at Carleton University's school of business. He says the situation is set to become so bad the federal government will be compelled to provide some sort of financial relief to Newfoundland and Labrador."

That article also notes, "Lee says the only solution he can see to the predicament is federal assistance — perhaps through a revised equalization payment or a one-off arrangement. He says a federal bailout is not being discussed much right now, but he believes the federal government will eventually see the need. Lee predicts Ottawa will act on a bailout package or another alternative before the next federal election [in October 2019]."

Adding to this situation, another CBC article reports, "A researcher from Newfoundland and Labrador studying renewable energy says the province has the greatest potential for wind energy development in North America, yet it fails to do so. Nick Mercer, a Ph.D candidate at University of Waterloo, [says] 'It's essentially against the law to build wind turbines in the province.' Bill 61 was passed in 2012 in preparation for the Muskrat Falls hydroelectric project. It provides Newfoundland and Labrador Hydro 'the exclusive right to supply, distribute and sell electrical power or energy' to retail or industrial customers for use by their operations on the island portion of the province, with certain exceptions."

Given the original cost of the dam was to be $6.2 billion, a cost that has now risen to $11.7 billion with two-years still to go before the dam is to be operational, Newfoundland and Labrador Hydro is not likely to invest in wind power in the near future.

For numerous campaign blogs about the Muskrat Falls dam, please click here.

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