{"id":133680,"date":"2021-07-28T19:45:01","date_gmt":"2021-07-28T19:45:01","guid":{"rendered":"https:\/\/precoinnews.com\/?p=133680"},"modified":"2021-07-28T19:45:01","modified_gmt":"2021-07-28T19:45:01","slug":"canada-to-offer-up-to-c5-2-billion-to-debt-ridden-province-of-newfoundland","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/canada-to-offer-up-to-c5-2-billion-to-debt-ridden-province-of-newfoundland\/","title":{"rendered":"Canada to offer up to C$5.2 billion to debt-ridden province of Newfoundland"},"content":{"rendered":"
OTTAWA (Reuters) – Canada will offer up to C$5.2 billion ($4.1 billion) to debt-ridden Newfoundland and Labrador to help it complete a problem-plagued hydroelectric power plant and also ease the Atlantic province\u2019s fiscal plight, Prime Minister Justin Trudeau said on Wednesday.<\/p> The government agreed in principle to invest C$1 billion and provide a C$1 billion loan guarantee for the construction of the Muskrat Falls project, which has suffered from big cost overruns since it was announced in 2010, he said at a televised event in St. John\u2019s, the provincial capital.<\/p>\n \u201cThere is more work to be done but we\u2019re confident this agreement is a big step in the right direction,\u201d Trudeau said.<\/p>\n He also said Ottawa was prepared to offer a total of C$3.2 billion in annual financial transfers over the remaining lifetime of the province\u2019s Hibernia offshore oil project.<\/p>\n The money is equivalent to the federal revenues Ottawa has gathered to date from Hibernia, which the province says should continue operating until 2047.<\/p>\n Aides have said Trudeau plans to launch a snap election next month. His Liberals hold six of the province\u2019s seven seats.<\/p>\n The Muskrat Falls project represents a large portion of the remote and sparsely populated Atlantic province\u2019s overall debt.<\/p>\n Premier Andrew Furey said that without the C$2 billion aid package, electricity rates could have doubled.<\/p>\n \u201c(This) is a big day for Newfoundland and Labrador and will finally get the Muskrat off our back,\u201d he told the event.<\/p>\n Last December Ottawa temporarily waived a C$844 million debt payment on the project.<\/p>\n In May, RBC Economics projected Newfoundland\u2019s net debt as a share of gross domestic product in fiscal 2021-22 would dip to 47.0%, second only to Ontario, from 51.8% in 2020-21.<\/p>\n ($1=1.2552 Canadian dollars)<\/p>\n