By Sean Burton, October 28, 2018


The public inquiry into the hydro megaproject at Muskrat Falls in central Labrador has been active for over a month now. Much has already been said by this author and many others over the course of the project’s completion. Hailed by former premier Danny Williams as something that would reap benefits for generations to come, the dam and generating station are now infamously over budget, set to cost the province around $13 billion.

Williams naturally continues to insist that Muskrat Falls is in our best interest, defending the project as a witness at the inquiry. What is not clear is whether the project was indeed the “best option” for power development. It will be some time before the inquiry concludes its business, but from the get-go many failures are apparent.

First and foremost is the matter of indigenous rights. For all the talk of reconciliation, this project, like Site C in BC, is fundamentally affecting the land of Labrador Innu and Inuit. While there is some conflict within Labrador over the matter of needing local jobs, indigenous Labradorians have been at the forefront of opposition to the hydro project, dubbing themselves “land protectors”. Many of them continue to face court proceedings for blocking access to the construction site in earlier demonstrations.

Then there is the matter of the cost itself. Cost overruns in a large project are not unprecedented, but Muskrat Falls is now over double its original estimate. It remains unclear where much of the power is going to be sold, and the people of the province have been told to expect substantial increases to their electric bills in order to cover the cost.

With the cost of living high enough as it is, premier Dwight Ball has attempted to mitigate concerns by saying that ratepayers should not be affected when Muskrat Falls comes online. The plan is unclear, other than the Public Utilities Board is looking into it.


As identified last month, much of the electricity in Newfoundland is retailed to us by a private utility, Newfoundland Power, which is owned by Fortis. Bringing Newfoundland Power under public ownership would eliminate the need to increase rates to please Fortis investors, but that of course is not on the table.

Another question is what contributed to the outrageous cost overruns. Nalcor, the crown corporation responsible for the project and NL Hydro, contracted out much of the construction work, principally to the Italian firm Astaldi.

Astaldi was contracted in 2013 for $1.1 billion. The company asked for more money to finish the project and the contract was revised to $1.8 billion in 2016. Early in October this year, Astaldi applied for creditor protection. It seems to be unable to pay its bills and is facing bankruptcy. It is no stretch to say that our public money has been squandered keeping a private foreign construction firm going a little bit longer. When it became clear that Astaldi was no longer in a position to pay their workers, Nalcor ordered the company to cease work and send their five hundred workers home. Nalcor insists it can finish the remaining work at the site without them.

In the midst of this is the issue of the carbon tax. Of course a carbon tax is not by itself going to change anything. We are not going to fight climate change just by making industries and individuals pay a bit more in taxes. Indeed, the provincial carbon tax scheme will barely affect people. We will have a slight increase in gas taxes, and numerous sectors are exempt including agriculture, fishing, forestry, offshore exploration, mineral exploration, and methane gas.

According to natural resource minister Siobhan Coady, the oil and gas sector is expected to reduce emissions by up to 12% over four years; if they fail to do so, they simply pay into an “emissions reduction fund” or buy “credits”. So, a slap on the wrist really. None of this has teeth, and there is nothing to tackle other problems like reliance on gas-powered cars and trucks. The oil-fired generating plant at Holyrood will eventually be shut down, perhaps the only real positive of Muskrat Falls coming into operation.

Newfoundland and Labrador needs clean alternative energy sources under public ownership, recognition of the sovereignty of First Nations and Inuit, strict laws to punish polluters, and a vastly expanded public transportation system.

(The above article is from the November 16-30, 2018, issue of People's Voice, Canada's leading socialist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)