The Liberal Government has announced that it will proceed with a public inquiry into the Muskrat Falls Project. Justice Richard D. LeBlanc of the Supreme Court of NL will begin his work as Sole Commissioner of the Inquiry in January.
The goal of the inquiry is essentially to assess whether Muskrat Falls was the best and least-cost option for a new power source for the province, why the project ended up costing twice what we were told it would, and why the project was excluded from oversight by the Public Utilities Board.
The inquiry is expected to take approximately two years, with the final report due December 31, 2019. That is a date which NDP Leader Lorraine Michael is already questioning, because it falls after the next general election. “The Premier says he wants to get answers for the people. I have to question why he doesn’t want those answers prior to the next election,” said Michael.
“To have a report that’s not going to be released until after the next election is unacceptable.” This week in Question Period, she asked why the Liberal government didn’t pause the project two years ago to assess the situation, and that is a sentiment echoed by MHA Gerry Rogers, who says that delaying an inquiry into Muskrat Falls for two years after coming to power may have eliminated the possibility of stopping the project.
Minister of Natural Resources Siobhan Coady has said “we will continue to move the project forward as effectively as possible despite the challenges we inherited,” as if a government inheriting a bad hand in today’s economy is something new.
What is feeling new here, is this Liberal government’s propensity for shifting public outrage over our economic situation onto money bleeds like Muskrat Falls or MUN’s alleged overspending. It’s easier to win public esteem by screaming “bad guy!” and pointing a finger, but that amounts to nothing more than deflection of grander issues, like what do we do now?
This expensive inquiry feels like a witchunt for someone to hang for cost over-runs. People have already hung for that crime. Money being spent on this inquiry would be better spent elsewhere. We’re a unique province: we’re financially screwed, but it’s not because we’re not making money. Our auditor general, Terry Paddon, has said “The Province generates more revenue, on a per capita basis, than every other province … revenue is not the primary issue creating deficits.” Our spending is. Our problem is that we spend more per capita than every other province. And no, not just on what the public perceives in Facebook commentary (like overstaffed government agencies and overpaid government employees).
Contrary to the desire of the public to be mad at someone for our problem’s, it’s no one’s “fault” that we are overspending, because many of our challenges are somewhat unique to our province, like having a small population spread out over a massive area. Instead of having a few well populated centres like most provinces, our province has many communities in need of expensive public services like roads and electricity and snowclearing and ferries, whether 100 people live in a certain town or 10,000 live there. Most of us don’t want to force resettlement as a means to curb government spending, so why not use this inquiry money to form a panel on bettering this geographic issue of ours .
Our province has an older-than-average population, and the elderly cost more in healthcare needs. Worse still, there is a tsunami of baby boomer seniors about to crash down on our healthcare system and wreck havoc on it, and healthcare is already our biggest expense as a province. Would a panel doing an inquiry into how to ameliorate this forthcoming financial blow have been a better use of the money earmarked for this inquiry?
Who knows, but what happened at Muskrat Falls is fairly well known. The origins of developing Muskrat were pretty clear. The province’s demand for power was forecasted to increase beyond what the old, dirty station in Holyrood could provide (remember #DarkNL?). Also, the cost of oil was assumed to be going nowhere but up, so we were looking to ditch our reliance on fossil fuels for financial, and conveniently, environmental reasons. Muskrat, being an untapped source of bountiful and renewable hydroelectric energy, could meet our coming demand for more energy, replace the Holyrood station, and spare us from the rising and fickle costs of oil. (Hydro energy is stable energy, meaning its rates don’t change, whereas energy tied to oil prices, like the electricity produced at Holyrood’s facility, goes up and down with the cost of oil). So yes, Muskrat seemed a logical a way to stabilize energy prices, while meeting our forecasted energy needs.
We also know part of what went wrong, and that was seeing Muskrat as an opportunity to not just meet our own provincial energy needs, but make money. That really did seem like a good idea at the time, because Muskrat Falls will generate way more energy than we need, so why not sell it off to other provinces and American States looking for more energy or clean energy? Money made from selling this excess energy could buy us new hospitals, road repair, ferry services for remote communities, or it could even be used to lower our energy bills.
Unfortunately, no one predicted a sad turn of events in that regard. Power prices in the Northeastern American States, where we intended to sell this energy, have collapsed on account of a robust supply of natural gas. So, while we can still sell excess power from Muskrat Falls into these markets, the amount we’ll make from it will fetch lower prices than we expected. To make matters worse, we had to run a wire through another province to reach those markets in the Northeastern States, so we entered into a deal with Nova Scotia to build “The Maritime Link” (an undersea cable from NL to NS), and that dragged on and on, while the project as a whole doubled in costs. Now we the people are going to be forced to pay for this mistake with hiked energy bills.
This leaves the burning question of how in the hell did the well-intentioned project double in cost? This new inquiry may answer that, and that’s great, we would all love to know. But we have limited money to spend these days, so we should be in survival mode, not retribution mode.
It’s simple economics to ensure capital is directed at activities that yield the greatest profit for government and/or benefit to taxpayers. Finding more people to hang for the sins of Muskrat Falls Cost Over-runs is essentially just funding more real life soap opera material for local media to write about. Are we simultaneously funding inquiries into what do we do now, about our deficit, about the interest rate on our credit, about the unique costs of our population dynamics, or about the forthcoming blow to the costs of delivering healthcare in NL?
Muskrat Falls was a smart but ambitious idea, poorly executed, and plagued by bad luck. End of story? No, it’s the beginning of another 2 years of belabouring it. But hey, if you were Dwight Ball, you’d use taxpayer money on an inquiry that would tarnish the PC Government that made Muskrat happen too. I mean, the PCs are Ball’s only real competition for more years in power, and he already has said he plans to run again. Or maybe Ball is just giving the contemptuous people of the province what they want: a costly inquiry. If so, then we’re to blame for more money going down the Muskrat drain.