May 19, 2024
Why is the rest of Canada bailing out Newfoundland?
Newfoundland needs to take ownership for its fiscal irresponsibility — not only on Muskrat Falls, but also a decade and a half of massive government spending.
Newfoundland needs to take ownership for its fiscal irresponsibility — not only on Muskrat Falls, but also a decade and a half of massive government spending.

The federal government is coming to the rescue of Newfoundland and Labrador’s hydroelectric megaproject at Muskrat Falls, a decade after it was started and later endorsed, through a pair of loan guarantees, by Ottawa itself. It’s been an appalling case of politicized economic development that deserves protest from Canadian taxpayers, who are being asked to save an ill-conceived venture.

The exact details of the bailout haven’t yet been released. But Natural Resources Minister Seamus O’Regan, the MP for St. John’s South—Mount Pearl, is pledging more federal help for a project that’s been plagued by delays and will cost more than double the original estimate.

The current price tag is about $13 billion for the dam, transmission lines and interest charges, in a province of only half a million people. Muskrat Falls hasn’t produced a watt of power 10 years on, has been badly managed and may never be profitable.

For years, it’s been conventionally accepted that the only way out of this mess is federal financial aid. And so, Prime Minister Justin Trudeau’s Liberal government, having already extended access to more cheap debt to keep the project alive, is stepping up once again.

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See Also:

(1) Liberals exploring proposed $2 billion tunnel to link Newfoundland to mainland

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