Lorraine Michael Question Period (12.06.2012)

MR. SPEAKER: The Leader of the Third Party.

MS MICHAEL: Thank you, Mr. Speaker.

The loan guarantee term sheet for the Muskrat Falls Project allows for a sale or change of control of subsidiaries among the different parties to the loan guarantee. Section 4.11 does not specify which subsidiaries are referenced.

So, Mr. Speaker, would the Premier specify which entities of Nalcor this section refers to?


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.

Section 1.4 of the federal loan guarantee deals with the question of subsidiaries of Nalcor for borrowing, and it will become clear next week, Mr. Speaker, but one of the reasons our subsidiaries are set up are to allow for non-recourse borrowing, which will result in the Province not being on the hook if something goes wrong. So, these are normal commercial arrangements that – I think there are four companies that have been set up that will deal with the various issues of the Labrador asset, in terms of the transmission asset, the Labrador-Island Link, and the generating station. The loan guarantee is set up so that the Province is protected.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The Leader of the Third Party.

MS MICHAEL:So, Mr. Speaker, it seems to me if Nalcor is unable to meet its financial obligations incurred because of the debt it takes on, it appears that it could lose ownership and control of the Muskrat Falls generation facility, the Labrador-Island Link, and the Labrador transmission assets.

So I ask the Premier to confirm that Nalcor could privatize by a sale to any of the partners, but especially to Emera, the assets belonging to the people of this Province if it does not have the money to pay its debt for building Muskrat Falls, because that is what this section means, Mr. Speaker.

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 have no idea what the Leader of the Third Party is talking about. Mr. Speaker, Nalcor was set up for the people of this Province to ensure a bright and prosperous future in our oil and gas industries, our hydro industries, and there is certainly no intention on anyone's part to sell Nalcor, like the Liberals were going to do many years ago, Mr. Speaker.

What we have is a situation, Mr. Speaker, where there is a loan guarantee. The effect of a loan guarantee is that if there is a problem, then the federal government comes in. The Prime Minister of Canada, after a rigorous economic audit, said last week: There is minimal risk to the taxpayer of Canada. Then he went further and said a zero risk, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: That is as good as it gets right now. We have every confidence in this project. We have every confidence in Nalcor, Mr. Speaker. This is a good project and it is for the people of this Province.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Third Party.

SOME HON. MEMBERS: Hear, hear!

MS MICHAEL: Thank you, Mr. Speaker.

I point out to the minister: I was not talking about Nalcor. Section 4.11 says very clearly there cannot be a change of control or sale of Nalcor, but it does say there can be a change of control or sale of the subsidiaries.

So, once again: Yes or no – does that mean those four subsidiaries can be sold to one of the other partners or control can go to one of the other partners?

That is what this section is saying, Mr. Speaker, and I ask the minister to say yes or no to that question. I am not talking about Nalcor – the subsidiaries.

SOME HON. MEMBERS: Oh, oh!

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

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

MR. KENNEDY: Excuse me, Mr. Speaker.

I am looking at the section here we have, Mr. Speaker, and it deals with change of control. There is not going to be any change of control. Nalcor is around for the long run. These companies were set up, Mr. Speaker, to allow for commercial financing. Separate parts of the asset –

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MR. KENNEDY: – will be financed separately. Essentially, Mr. Speaker, they were set up in terms of allowing non-recourse financing, which the minister, I am sure, will talk about next week.

When I look at the subsidiaries, I do not know how you sell a subsidiary and you do not sell Nalcor. It is not happening. Everything is safe.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Leader of the Third Party.

MS MICHAEL: Thank you very much, Mr. Speaker.

Then I ask the minister: Why does it very specifically say in one sentence the subsidiaries can be sold or a change of control can happen, and a very separate sentence says but not Nalcor?
That means they can be dealt with separately from the mother company. He should know that.
Yes or no?

SOME HON. MEMBERS: Hear, hear!

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

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Mr. Speaker, the loan guarantee 4.11 says: "There shall be no sale or change of control of any Borrower or subsidiaries, except as among the Parties, and no sale of any material Project assets. There shall be no sale or change of control of Nalcor."

Mr. Speaker, I really do not know what the Leader of the NDP is talking about. All I can indicate, Mr. Speaker, is that she should perhaps look at what her party did yesterday in voting against the future of this Province, the jobs we are going to see created, the creation of revenue – and shame on her for voting to keep Holyrood in place.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: Order, please!

The hon. the Leader of the Third Party.

MS MICHAEL:Thank you very much, Mr. Speaker.

Shame on that government, Mr. Speaker, for signing a loan guarantee that has that section in the loan guarantee.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MS MICHAEL: Mr. Speaker, the loan guarantee term sheet stipulates the federal government is to receive regular and thorough financial and operational –

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

I remind members one more time, this is Question Period, important questions are being posed. It is an issue that is very important to the people of Newfoundland and Labrador. I ask all members to respect the individual who has been recognized by the Chair and who has the opportunity to speak.

MS MICHAEL: Thank you, Mr. Speaker, I will make it short.

Will the Premier make public the reports that will have to be made to the federal government according to the term sheet?

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Premier.

SOME HON. MEMBERS: Hear, hear!

PREMIER DUNDERDALE: Thank you, Mr. Speaker.

Mr. Speaker, we have negotiated a collaborative agreement with the Government of Nova Scotia, with Emera, particularly Nalcor and Emera, that brings benefit to Newfoundland and Labrador, $1 billion at the very least to ratepayers because of that collaboration. We have protected the people of Newfoundland and Labrador, Mr. Speaker. We have reduced rates – we will reduce rates because of that collaboration.

Mr. Speaker, we have negotiated with the federal government terms that are favourable to the people of Newfoundland and Labrador, favourable to the people of Canada. When the Prime Minister of the country says this loan guarantee poses zero risk to the people of Canada, Mr. Speaker, that is only good news for Newfoundlanders and Labradorians.

Associated Caucus Members: 

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