FREDERICTON – One line in the Harper government’s long and detailed throne speech on Wednesday caught the attention of New Brunswick Finance Minister Greg Byrne – the promise to restructure Atomic Energy of Canada Ltd.
Byrne said the province is anxious to find out what Ottawa is planning in that restructuring and how it will affect the costly refurbishment of the Point Lepreau nuclear power plant near Saint John.
“We’re looking to ensure AECL has sufficient funding to undertake its current commitments, including the refurbishment of the Point Lepreau generating station,” Byrne said following the throne speech address in Ottawa.
“And, obviously, we have put the federal government on notice that we are expecting a contribution with respect to the cost overruns.”
More details on the federal government’s plans for the nuclear agency, a federal Crown corporation, are expected in today’s budget.
Byrne made it clear there’s a lot at stake for New Brunswick, which has included Lepreau in the sale of NB Power generating assets to Hydro-Québec. The Quebec utility will hold on to its $1.4-billion purchase payment for Lepreau until the refurbishment is complete and the 600-megawatt Candu reactor is up and running.
“We want to ensure that, under the budget, AECL has sufficient financial commitment to be able to complete the refurbishment project,” Byrne said.
The reference to AECL was fleeting in the throne speech, read by Gov.-Gen. Michaëlle Jean in the Senate.
“Our government” will position Canada’s nuclear industry to capitalize on the opportunities of the global nuclear renaissance – beginning with the restructuring of Atomic Energy of Canada Ltd.,” the speech states.
The federal government in December invited companies to signal their interest in whether they would consider buying into AECL’s Candu reactor division.
The move to encourage private investment has drawn the ire of opposition parties, who worry the government is prepared to hold a fire sale of AECL’s assets while its value is low.
Premier Shawn Graham has told Ottawa it must cover cost overruns on the Lepreau refurbishment, or the New Brunswick government will sue AECL.
The $1.4-billion overhaul of Atlantic Canada’s only nuclear power plant is being done by AECL. The project was supposed to have been completed last September, but it’s running at least 18 months behind schedule.
The province is paying close to $1 million per day to buy replacement power while the reactor is off-line and provincial Energy Minister Jack Keir estimates it will cost about $400 million for replacement power if the project remains a year-and-a-half behind schedule.
There are no major spending cuts in the throne speech, but there’s also none of the big spending of past budgets.
Byrne said he is pleased that federal stimulus spending will continue for one more year before the taps are shut off. But he warned that may be too soon to end the spending spree.
“I’m encouraged the federal government is maintaining the stimulus program, although they have indicated that it will come to an end,” he said.
“Obviously there is a concern that the economy may not be recovered sufficiently at that point.”
Finance critic Bruce Fitch said the federal decision to end stimulus spending should serve as a lesson for the province.
“The government doesn’t have deep enough pockets to keep spending year after year because that’s when you run the risk of a structural deficit,” Fitch said.
“That’s the concern here in New Brunswick – this government has been spending significant amounts of money – a $750 million deficit for the upcoming year and $748 million for the last year.”
He said Ottawa has a better ability to repay deficits than New Brunswick because it has more revenue streams and economies of scale and scope on its side.
“We have to take a lesson from Ottawa and realize the spending can’t go one forever.”
Both Byrne and Fitch said they were pleased to see the promise of more support for research and development in Canada; enhancement of the child tax benefit; more opportunities for training and attracting foreign investment.
Charles Cirtwill of the Atlantic Institute for Market Studies in Halifax said the good news for New Brunswick is the promise of a continued commitment to military spending.
As well, he said the fact that Ottawa intends to pursue free trade agreements, especially with India and Europe, is good news for Atlantic Gateway projects.
“To me, that would be the most significant thing the federal government could do in support of the Gateway,” Cirtwill said in an interview.
“Forget about cutting cheques to Belledune or Saint John. If they can get those free trade agreements in place, that would be a significant achievement.”