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Last-minute PM's trip to Labrador will finalize Muskrat Falls loan: sources


Prime Minister Stephen Harper responds to a question during question period on Parliament Hill in Ottawa on Thursday November 29, 2012. THE CANADIAN PRESS/Sean Kilpatrick

ST. JOHN'S, N.L. - Prime Minister Stephen Harper's trip to a military base in Labrador on Friday will finalize a long-awaited federal loan guarantee for the Muskrat Falls hydroelectric project, sources indicate.

The visit appeared to take Premier Kathy Dunderdale by surprise Thursday.

"I haven't spoken to the prime minister's office, no," she told reporters at the legislature. "Our team is in Ottawa negotiating around the loan guarantee, but we're not done yet."

However, late Thursday a news release from the prime minister's office confirmed that Dunderdale and Nova Scotia Premier Darrell Dexter would be attending a news conference in Happy Valley-Goose Bay.

Harper has promised a federal loan guarantee or financial equivalent that could shave hundreds of millions of dollars off the total cost of a project that's expected to exceed $7.4 billion.

Dunderdale's Progressive Conservative government has said it's waiting on the federal backing before it officially approves Muskrat Falls. She has said for months that a deal is imminent and has blamed delays on the tedium of translating agreements in principle into legally binding terms.

Throughout the day on Thursday, Dunderdale and Dexter had declined to comment on a media report that they are attending the announcement at 5 Wing Goose Bay.

The once bustling military airbase is now mostly vacant. News of Harper's visit had raised hopes that he might keep a pledge to increase the number of uniformed personnel at the site, which is now about 80. He has talked in the past of a new rapid-reaction team or perhaps flying unmanned drones from 5 Wing, but has not acted.

Friday's announcement appears to have been a hastily arranged affair, with sources close to the base saying late Thursday they still hadn't received official details. One source said that staff in embattled Intergovernmental Affairs Minister Peter Penashue's riding office in Labrador still knew nothing about Harper's visit by Thursday afternoon.

Dubbed the "run and hide minister" by Newfoundland Liberal MP Scott Andrews, Penashue has been under opposition attack for months for overspending his legal limit in last year's federal campaign.

He has been accused of buying a narrow win by 79 votes over Liberal incumbent Todd Russell, and of accepting free flights around his sprawling riding along with a questionable campaign loan and corporate donations.

On Thursday during the daily question period in the House of Commons, NDP MP Charlie Angus said Penashue should not be involved in Muskrat Falls talks.

"He received an illegal loan from his brother, then he received a corporate donation from (Newfoundland-based construction company) Pennecon that happened to be in business with his dear brother Max, who happened to score really big on the Muskrat Falls project. Despite the family ties, the minister was the political point man on the project.

"Now that the loan guarantees are being finalized, has that member recused himself from the cabinet discussions about the Muskrat Falls project?"

David Anderson, parliamentary secretary to Natural Resources Minister Joe Oliver, said the federal government "has no role in awarding contracts for the Lower Churchill project at all."

Muskrat Falls will "provide significant economic benefits to the Atlantic region," he said. "It will substantially help to reduce greenhouse gas emissions.

"Our government continues to support this important project. We are continuing to move forward by providing a loan guarantee."

Late Thursday, Penashue's office emailed a comment responding to Angus' comments on the minister's involvement in Muskrat Falls.

Penashue's spokesman Corey Hann said in an email that Penashue, "has no role in determining which companies receive contracts through this project."

"The loan guarantee for this project was a campaign commitment prior to the minister being elected and prior to him being appointed to cabinet."

In addition, Hann provided a letter that Penashue sent to Ethics Commissioner Mary Dawson, saying that the minister has disclosed to her his past involvement with the Labrador Innu treaty negotiations.

The letter says she provided a ruling saying, "no additional measure was required ... beyond disclosure to your Office of my prior involvement with the Labrador Innu Treaty negotiations."


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