CIBC's Jim Prentice Makes the Case for
the Lower Churchill at APEC Luncheon
Atlantic Provinces Economic Council
An Atlantic Provinces Economic Council luncheon in Halifax on Sept. 28, 2011 featured a presentation by the Hon. Jim Prentice, Senior Executive Vice President and Vice Chairman of CIBC. APEC welcomed Mr. Prentice's views as part of a broader dialogue that it believes should also include greater public discussion, particularly in light of the significant investments that Atlantic Canadians are being asked to make in the Lower Churchill project.
Mr. Prentice's speech "Nation-building in the 21st Century: The Case for the Lower Churchill Hydro Development" drew upon his insight from the corporate world and from his previous roles as the federal Industry and Environment Minister. In his presentation he compared the mega-projects of the present day to the grand nation-building initiatives of Canadian history, such as the building of the trans-Canada railroad. And in this spirit of nation-building he views energy projects such as Labrador's Lower Churchill as offering opportunities to develop the country's broader, longer-term interests.
He emphasized the significant impact Canada's energy mega-projects will have over the next 20 years as 40,000 MW in new electrical generating capacity will come on line. The anticipated investment of $300 billion could generate 320,000 jobs over the next two decades.
And so he urged governments' timely support of these energy infrastructure projects which generate wealth, rather than relying on short-term stimulus spending. He cited the federal Government’s loan guarantee of the Lower Churchill as an inspired public policy decision which will reduce the cost of the project without significant effect on current deficits. In order to further speed these projects along, he advocated governments to expedite and streamline the regulatory and environmental approval processes for mega-projects.
The Lower Churchill project will put in place a critical link in Canada’s electricity transmission grid, with undersea cables carrying power from Newfoundland and Labrador to markets in Nova Scotia, New Brunswick and New England. Particularly significant will be the opportunity to sell the Lower Churchill's renewable electricity into the New England market, which still produces 55% of its electricity from burning fossil fuels, while a mere 13% comes from hydro and renewables. He stressed the importance of Canada and the United States working together on the diplomatic front to advance our energy relationships and enable the free flow of clean Canadian hydro electricity into the American market.
Environmentally, he predicts the Lower Churchill will be a major milestone in Canada’s efforts to wean itself from power generation that burns coal or oil, and to produce clean energy for export. When Muskrat Falls is completed around 2017, it will provide sufficient carbon-free power for Newfoundland and Labrador’s needs, with excess capacity available for sale to Nova Scotia and other jurisdictions. When Gull Island -- the project`s second phase -- is completed, the amount of power available for export will dramatically increase while the environmental impact will be immense. The combined 3,074 MW from Phases 1 and 2 will displace more than 16 megatonnes of CO2 annually – the equivalent of taking 3.2 million cars off the road.
APEC believes the economic benefits of the Lower Churchill project are considerable, but a thorough evaluation of the project's economic impact is still necessary. And because the project requires a significant investment by Atlantic Canadians, project proponents need to initiate more public information and dialogue to encourage the project to move forward in a manner that is supported by the entire region.