Mr. Speaker, on behalf of the minister, it is my pleasure to reply to the hon. member for St. John's West, who raises some legitimate questions.
The potential of the lower Churchill River as a source of electricity supply to the North American market is well known. It is a renewable cost-competitive source with low or zero greenhouse gas emissions.
The Government of Canada recognizes that the development of hydro electricity can be an important option to reduce greenhouse gas emissions in Canada.
The federal government is determined to fulfil its stewardship role to ensure that the Labrador projects are carried out with full respect for the environment. The government has made considerable progress in the development of a standard environmental assessment process in co-operation with the governments of Quebec and Newfoundland.
The government also stressed the importance of direct participation by aboriginals who have an interest in the project and whose land claims are currently under review.
Turning to the issue of the transmission line from Labrador to the island of Newfoundland, the province of Newfoundland and Labrador and the Government of Canada agreed that federal and provincial officials would work together to carry out economic and financial feasibility studies of electricity supply options.
Joint Canada-Newfoundland studies were undertaken to determine the best option for meeting Newfoundland's future electricity demands. Two options were examined: one, building a transmission line, infeed, from the proposed new Labrador hydro electric project; or two, expanding on-island capacity and selling all the Labrador power to other markets.
This work proceeded until May 2000 when the governments of Quebec and Newfoundland issued a joint statement announcing the scaling back on negotiations and work on the Labrador power in light of uncertainties over electricity pricing in the deregulated U.S. markets.
With the decision by the premiers of Newfoundland and Labrador, and Quebec to scale back negotiations on the Labrador power project, work on the joint feasibility studies on electricity supply options was suspended until the scope and the structure of the hydro development project are finalized. Since the size, ownership and financing of the project remain fluid, the transmission line study cannot be completed at this time.