Former premier testifies about moments of ‘stress’ after Muskrat Falls sanction

FILE: Premier Christy Clark chairs the final press conference. (Photo: Province of British Columbia/Flickr, CC BY-NC-ND 2.0)

ST. JOHN’S, N.L. — The former premier who sanctioned Newfoundland and Labrador’s controversial Muskrat Falls hydroelectric megaproject says she would have dropped the project if she thought it would compromise the public’s trust in her government.

“Nobody was married to Muskrat Falls,” Kathy Dunderdale told the inquiry looking into cost and schedule overruns that have plagued a project she once championed. “It wasn’t Muskrat Falls no matter what, or no matter what circumstances.”

The cost of the 824-megawatt dam has essentially doubled to more than $12.7 billion since Dunderdale’s government signed off on it in December 2012.

On Tuesday, the former premier testified that she contemplated having to pull the plug on the project — even though such a move could have ended her political career.

She said she approved the project after securing a .

5-billion federal loan guarantee, but she recalled a period of “stress” months later when she learned Nova Scotia’s Emera, a partner in the venture, had not met all conditions for the loan guarantee.

“It was a couple of days of a lot of tension and a lot of stress,” Dunderdale said.

More importantly, she said, it meant possibly taking an about-face that threatened her credibility with the public.

“I didn’t want to be in a position where anyone could say that I had misled the people of the province … and that I’d be in a spot where I’d have to go back and undermine confidence of people in their government.”

She also discussed a moment in November 2012 when she rejected an initial loan guarantee from former prime minister Stephen Harper, because a federal negotiator asked one of her staff for concessions on free trade negotiations with Europe.

“At that moment, when I was saying no to the prime minister of Canada around a loan guarantee, my political career was gone,” Dunderdale said.

“I was going to have to answer to the people of the province … but I’d much prefer to do that than to have to answer somewhere along the line or even carry within myself that I had done something that wasn’t straightforward, that was underhanded.”

Inquiry co-counsel Barry Learmonth questioned Dunderdale about her testimony the previous day, when she said she trusted in the numbers provided by Crown corporation Nalcor Energy and did not instruct her staff to verify Nalcor’s information.

Earlier, the inquiry learned the provincial government had asked that a risk analysis not be included in an independent review of the project by Manitoba Hydro International.

Dunderdale said Monday that she wasn’t aware the risk analysis was taken out of MHI’s work, but maintained that she had complete faith in the information Nalcor was presenting to her.

Learmonth asked Dunderdale if she was aware that improper risk analysis is a common factor in other megaprojects with runaway costs around the world.

“If I sat here told you that I did a study of megaprojects around the world before we started down the road of Lower Churchill development, it wouldn’t be true,” she said.

Dunderdale was also asked about the decision to proceed without waiting for the Public Utilities Board to endorse Muskrat Falls as the least-cost option for the province’s power.

Her government did not approve the board’s request for an extension on the work.

Dunderdale said she “lost faith in the process” largely because of public comments made by then-chairman Andy Wells, who described his efforts to get Muskrat Falls documentation from Nalcor as “torturous.”

“To me, the whole process had been compromised by the conduct of the chair,” Dunderdale said.

“He almost became a lobbyist against Muskrat Falls while reviewing the project, so I wasn’t really interested in moving on with Mr. Wells.”

Dunderdale was also asked about the decision not to fully clear all vegetation from the Muskrat Falls reservoir, as recommended by a review panel during environmental assessments.

Research indicated that flooding the uncleared reservoir could cause a spike in methylmercury contamination in wild food sources used by local Indigenous communities. A 2016 Harvard University study suggested the risk could be lessened if trees and topsoil are cleared before flooding.

Dunderdale said her government would have had to “lay the ground bare” of organic matter, and there was “just no way we could do that,” she said, because the work would be too costly and dangerous.