Protecting NL Ratepayers from Muskrat Falls

July 28, 2021

The Government of Canada is committed to a healthy and clean future and an economy that works for everyone. The Lower Churchill projects will contribute effectively to regional electrification and decarbonization efforts in Atlantic Canada. Supporting this project, and others like it, is part of Canada’s plan to address climate change while ensuring economic competitiveness and long-term prosperity.

On July 28, 2021, Prime Minister Justin Trudeau and the Premier of Newfoundland and Labrador, Andrew Furey, announced an agreement in principle for the financial restructuring of the Lower Churchill Projects – a set of hydroelectric generation and transmission projects that will provide a reliable and long-term source of clean power for people in the Atlantic region.

This agreement in principle will contribute to a long-term, sustainable financial base for the Projects and reduce their cost of financing, providing more certainty for people and businesses. It provides $2 billion in federal financing, including a $1 billion investment in the province’s portion of the Projects’ Labrador–Island Link and a federal loan guarantee of $1 billion for the Projects’ Muskrat Falls and Labrador Transmission Assets.

The Prime Minister also announced the Government of Canada is prepared to make annual transfers to the province equivalent to Canada’s yearly net revenue from the Hibernia offshore oil project Net Profit Interest (NPI) and Incidental Net Profit Interest (INPI), which current estimates indicate will total $3.2 billion between now and the end of the Hibernia project’s life. The federal government believes that it is Newfoundlanders and Labradorians who should be the primary beneficiaries of these funds and that these new annual transfers will ensure that. With these funds, the province will be able to meet its objectives, and the transfers will also reinforce the two governments’ longstanding agreement that Newfoundland and Labrador be the principal beneficiary of offshore oil and gas development in the jointly managed offshore area.

Clean energy initiatives such as the Lower Churchill projects will help Newfoundland and Labrador, Atlantic Canada and the entire country to fight climate change and phase out coal power while creating jobs and building a strong, resilient economy.