THE ELEPHANT IN THE ROOM

Guest Post by David Vardy
The province’s deteriorating fiscal position has been linked with Muskrat Falls but yet it has received scant attention. Virtually absent from the Muskrat Falls Inquiry (MFI), and from the PUB reference Inquiry into Rate Mitigation options, is the fiscal impact of the project. It remains the elephant in the room, in plain view but virtually ignored by both inquiries.  Yet it is the major public policy issue facing the province.

The PUB reference Inquiry is focused on the means whereby revenues can be generated to pay the increased revenue requirements to operate our electrical power system, rather than on the fiscal impact. In its work the PUB has been directed to examine measures to reduce the cost of providing electrical power as well as to identify new sources of revenues.  The fiscal impact of the project remains outside of the scope of the PUB. All of this suggests we must look to the MFI for an assessment of fiscal impact.