Atlantic Loop energy project seen as an economic boost for the region

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The Atlantic Loop was only mentioned once in the Speech from the Throne this week – but if the project comes to fruition it could transform the energy market in Eastern Canada, resulting in billions of dollars and thousands of new jobs in the region.A leading Liberal source called the Atlantic Loop a “top regional priority” for the federal government. The general concept is to improve the transmission capacity on the east coast to allow hydroelectric power from Labrador and Quebec to replace the use of coal in the region.

He enjoys the support of the four Atlantic Premiers. They met with the Premier of Quebec, François Legault, in St. John’s in January to discuss the possibility of using both surplus hydropower from Quebec and the soon available electricity from the Muskrat Falls project in Labrador as a solution. clean energy for Atlantic Canada.

“It’s clear that we have, right now, some capacity and we can add to that capacity,” Legault said in January. “So why not work together on a plan, a comprehensive plan, to serve 100% clean energy in all of our provinces?

In the months that followed, the loop garnered the support of enough key people in the federal government to earn a spot in the Speech from the Throne. In early September, Prime Minister Justin Trudeau expressed his support for the project during an appearance on Newfoundland and Labrador radio station VOCM.

Key allies at the cabinet table

“I think the idea of ​​an Atlantic Loop, the idea of ​​investing in removing coal from Nova Scotia and New Brunswick is getting a lot of interest,” Justin Trudeau told Paddy Daley , host of Open Line. “We have many opportunities to envision a greener future that involves strong, solid investments in hydropower and Muskrat Falls will certainly be part of the mix. ”

Natural Resources Minister Seamus O’Regan – who is also the only federal minister in Newfoundland and Labrador – defends the plan. The same goes for the Minister of Intergovernmental Affairs, Dominic LeBlanc, whose home province of New Brunswick would benefit from a cleaner energy supply and the possibility of continuing the development of tidal energy with an improved grid.

“We believe in the idea. Let’s work together to get there, ”said Minister of Economic Development Mélanie Joly, whose department would probably be involved in the project through the Atlantic Canada Opportunities Agency.

Several federal and provincial sources tell CBC News that the Canada Infrastructure Bank is also considering an investment in the project.

Sources say Michael Sabia, chairman of the Infrastructure Bank, has spoken to regional utility companies about the project. A spokesperson for the Infrastructure Bank did not confirm these conversations when contacted by CBC News.

“While we cannot comment on any specific project, what I can tell you is that we are open to governments and investors who submit due diligence proposals to us,” said Félix Corriveau, Senior Director of Communications from the Canada Infrastructure Bank.

“(The bank) is interested in new infrastructure projects that generate income, public interest and are commercially structured to attract private sector investment. “

A second chance for Muskrat Falls?

Several federal sources say the Atlantic Loop is the largest green infrastructure project available in the region – a project that could help stabilize electricity rates, which are high across Atlantic Canada.

Eliminating the use of coal – a key step towards meeting Canada’s carbon emission reduction targets – could result in steep increases in electricity prices. A large federal investment like the one represented by the Atlantic Loop could mitigate the impact on prices while reducing the region’s emissions. It could also allow the Atlantic provinces to attract new employers by promising them long-term stability in electricity prices.

Including energy from overbudget and the overdue Muskrat Falls project into the loop also paves the way for Ottawa to help Newfoundland and Labrador overcome its massive financial woes.

Newfoundland and Labrador Premier Andrew Furey is counting on the federal government to help his province escape a financial crisis. (Government of Newfoundland and Labrador)

Newfoundland and Labrador Premier Andrew Furey is close to Trudeau and LeBlanc and relies on these relationships to help find a solution to his province’s financial crisis, made worse by the pandemic recession and volatility of resource markets. Furey’s predecessor Dwight Ball wrote to the premier in March warning him the province was unable to finalize its borrowing programs and would be strapped for cash and unable to pay its pay by April.

Soon, Newfoundland and Labrador will face the added challenge of paying for excess electricity from Muskrat Falls – a project that has doubled in cost since it was sanctioned and now accounts for about a third of the debt. overwhelming of the province. Ball called Muskrat Falls the biggest economic mistake in the province’s history.

But an open path for hydropower exports could increase the income of the besieged project. And depending on the extent of federal involvement in the Atlantic Loop, it could also open the door to a restructuring of Muskrat Falls finances, or even the development of the much larger Gull Island project in Labrador.

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