Top News

Should have listened to critics, Bennett says at Muskrat Falls Inquiry

Cathy Bennett says the $6.2-billion hydroelectric project she supported in 2012 is not the same as the Muskrat Falls project being built today.
Cathy Bennett says the $6.2-billion hydroelectric project she supported in 2012 is not the same as the Muskrat Falls project being built today. - Contributed

Former board chair says government should focus on service delivery

ST. JOHN'S, N.L. —

Cathy Bennett has a unique viewpoint on the Muskrat Falls project, and its financial oversight, being both a former board chair at Nalcor Energy and a former provincial finance minister.

At the Muskrat Falls Inquiry Tuesday, Bennett said she once thought she knew how the provincial government handled information from Nalcor. Then, she became a government minister.

Nalcor reports to the Department of Natural Resources.

“Through my Nalcor experience I assumed at the time there was no way Natural Resources would have operated, or acted, without having Finance with them,” she said.

After becoming minister, she found government departments weren’t naturally working together. It all had to be actively managed.

The transfer of information was an issue. Bennett said there were Finance officials who felt like they were the last to know as numbers changed. There were fears of key people being left out of the loop. She heard concerns the province was missing the full picture on Muskrat Falls.

And from where she stood, Bennett said, there wasn’t a clear understanding throughout government of details relevant to oversight powers, including how the province’s Financial Administration Act worked with the Energy Corporation Act (legislation for Nalcor).

As for communication, she said she personally became angry and frustrated by sudden cost and schedule changes coming from Nalcor, with reference to one in 2017, just a few months after the budget. She said it undermined her position as she worked to assure credit rating agencies the government had things in hand.

She was asked if she trusted former Nalcor Energy president and CEO Ed Martin to give her the “straight goods” on costs.

“Yes, I did,” she said.

Bennett joined the Nalcor board in 2007. She was named chair in 2011, resigning effective May 2012. She announced her desire to enter politics in June 2013 and was elected in 2014 in a byelection, becoming minister after another election win in 2015. She resigned from cabinet in 2017, and left government in 2018.

While at Nalcor, Bennett was a firm supporter of what became the Muskrat Falls project. After leaving in 2012, she joined a short-lived project advocacy group: I Believe in the Power of N.L.

“I believe the work Nalcor has completed has an attention to detail and a discipline to best practice management that has positioned Nalcor as a world-class corporation,” she wrote in a May 2012 letter to the editor.

She said she supported the project, but separates the $6.2-billion project of 2012 from the Muskrat Falls project as it is today (now sitting at a capital cost of $10.1 billion, and $12.7 billion when interest costs are included).

In hindsight, she said, there was not enough quantification of risk, or communication of the full possibilities and probabilities for what could happen. She agreed there were also objections raised in public debate not given adequate consideration.

“Based on my experience over the last decade, I would suggest that Newfoundland and Labrador never take on a capital project of this size ever again,” she said.

“I don’t believe that it’s in the best interest of the people of the province and it’s certainly something that I regret supporting.”

"I would suggest that Newfoundland and Labrador never take on a capital project of this size ever again." — Cathy Bennett

Lawyer Tom Williams (representing former Progressive Conservative government members with standing, with the exception of Kathy Dunderdale) asked if that was “shortsighted.”

“No. I think it’s based on a unique vantage point that I had as both a director of Nalcor and then as a minister of the Crown, understanding the operations of government as it stands today,” she said.

Bennett referred to a high risk of repeat circumstances, without changes within government operations and improvements to the management of Crown corporations.

“I think our focus from a government should be on service delivery and making sure that in the short term we can provide the services we need, and in the long term we can actually pay the bills for those services. Because they’re going to be serviced by debt,” she said.

Twitter: @TeleFitz


RELATED

Recent Stories