Federal funds urged for Churchill project

CBC News
April 4, 2005

St. John’s, Newfoundland: The president of the Canadian Electricity Association says the time is right for the federal government to help with a hydroelectric project on the lower Churchill River.

Hans Konow says the government has a daunting task in trying to meet the strict terms of the Kyoto environmental protocol.

Federal help would make it a lot more feasible to transmit Labrador hydro power across central Canada.

While the federal government was not willing to help when Newfoundland and Labrador tried to launch a hydro project a few years ago, Konow says the government has now signalled a willingness to help with these types of ventures.

"It doesn’t mean the federal purse will simply open up and poor money all over Canada," Konow says.

"I think it will have to be very selective, and the merits of each project will be competitive for a limited amount of financial resources, but I think the timing is probably very good."

In its last budget, the federal government announced a $250-million fund for projects such as east-west transmission links.

Newfoundland and Labrador Premier Danny Williams is expected to release more details this week about possible developments on the Churchill River.

Ontario and Hydro-Quebec announced last week they had set up a partnership with engineering firm SNC Lavalin to bid on a Lower Churchill project that would generate 2,824 megawatts of power.

While some factors appear to be in Williams’ favour – oil prices have been high, and Ontario is winding down its reliance on coal-fired energy – there are no guarantees of a development.

Tom Adams, who works with the environmental watchdog Energy Probe, is not sure the project will proceed.

"It still bears the burden of geography," he says.

"It’s still very far away, and that makes the power relatively costly. So, the economics of Labrador power are by no means a certainty."

Adams says the project would be more viable if the federal government was willing to offer some sort of subsidy.

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