George Murphy Question Period (11.29.2012)

MR. SPEAKER: The Member for St. John’s East.

MR. MURPHY: Thank you, Mr. Speaker.

The cost to government will go up with Muskrat Falls, costs such as those from higher energy costs for schools, hospitals and government buildings will also be on the rise. What analysis has government done on these added costs, and will the minister table these reports?



SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Natural Resources.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Thank you, Mr. Speaker.

I am not aware of what the member is talking about. In fact, what we know is that as the cost of oil goes up – which it will, by the way, and will maintain around $100 per barrel in the next number of years – it is going to cost more for electricity.

With Muskrat Falls, the cost of electricity will go down. So, I fail to see where the question is coming from. There will be cheaper power with Muskrat Falls than without Muskrat Falls.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The Member for St. John’s East.

MR. MURPHY:Mr. Speaker, I thought that was a pretty easy question. If electricity costs are going to go up in the next little while, particularly with Muskrat coming on stream in 2017, that the cost per kilowatt hour was going to go up. Government has to account for the extra costs to the taxpayer.

Mr. Speaker, costs to operate government programs such as the Low Income Seniors Benefit will also go up due to an aging demographic. People’s electricity bills will be going up, which may include a higher payout from a revamped heating rebate program, for example.

Can the minister promise the people of this Province that they will not face higher taxes as a result of also having to deal with the debt that will come from having to pay down on the Muskrat Falls Project?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Finance and President of Treasury Board.

SOME HON. MEMBERS: Hear, hear!

MR. MARSHALL: Mr. Speaker, Muskrat Falls will not increase our net debt by one cent – not a cent.

The Government of Canada is giving a guarantee to Nalcor subsidiaries to do this project, and the cash flow from the project will pay for that indebtedness. There will be a dividend come to the Government of Newfoundland and Labrador so that money is available to spend for the people of Newfoundland and Labrador.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The Member for St. John’s East.

MR. MURPHY: Thank you, Mr. Speaker.

It is nice to hear the first hinting of a federal loan guarantee coming out from the Minister of Finance.

Mr. Speaker, the Natural Resources Minister says that the price of electricity is going to go up anyway, with or without Muskrat Falls.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. MURPHY: That is not true.

Any increase to rates has to go through a hearing of the Public Utilities Board, and any increase is never guaranteed. If oil prices fall under the Harvard study findings, for example, then under the rate stabilization formula, the rates will have to come down. Mr. Speaker, the ratepayer gets protection.

Why will the government not give the taxpayer the same protection and send Muskrat Falls back to the PUB for full review?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Natural Resources.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Yes, Mr. Speaker, there was a paper released by the Department of Natural Resources that dealt with electricity rates. As opposed to outlining misleading statements, Mr. Speaker, the member opposite should read what is in the report and then come back with some tangible criticisms.

Mr. Speaker, there was a 32 per cent increase between 2001-2011 in residential electricity rates. Between 2011-2016, it will go up another 16 per cent, Mr. Speaker. Without Muskrat Falls, the increase in rates will be twice what it will be with Muskrat Falls – it is that simple.

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