Mr. Speaker, it is pleasure to rise in the House to speak to this motion. Just like my colleague from Kingston and the Islands, I have to wonder why we absolutely had to debate this motion now, given that the government has already announced its decision to extend a loan guarantee to the Muskrat Falls project in Newfoundland and Labrador. I have to wonder about that.
Our position on this issue has been known for a long time. We stated it during the campaign. Our leader at the time, Jack Layton, publicly voiced our support for loan guarantees, under certain conditions, one of which being that such guarantees be extended equally to all provinces for the purpose of promoting renewable energy.
I would like to talk about what the Newfoundland and Labrador agreement is not. The agreement is not a loan from the federal government. The agreement is not a subsidy from the federal government for Newfoundland and Labrador. The agreement is not funding for the project. It is a loan guarantee. Newfoundland and Labrador and Nova Scotia, which is a partner in the agreement, will finance the hydroelectric project. The federal government will simply provide a loan guarantee, which is similar to what happens when we apply to a bank for a loan and ask another party to provide a guarantee for that loan. That is all that will result from the federal government's announcement.
We have to be clear that the federal government is not committing any funds. Taxpayers' money will not go to this project unless—and this is not very likely—the Province of Newfoundland and Labrador or Nalcor Energy, a crown corporation and owner of the Newfoundland public electricity company, goes bankrupt. There is virtually no likelihood of that happening. In that sense, there is virtually no risk to the federal government.
The Muskrat Falls project is a hydroelectric project on the Lower Churchill River. The project will generate an estimated 824 MW of electricity. It is not a huge project compared to some in Quebec, such as the mega projects we have become accustomed to seeing with Hydro-Québec. This is the first phase of the project, and it will be followed by phase 2 on Gull Island. The two projects combined will generate 3,074 MW of electricity.
Once again, it is an important project that will help meet the needs of the Atlantic provinces, even though it is not anywhere near the size of the projects we are used to seeing from Hydro-Québec. We consider this to be an important project for Newfoundland and Labrador and for Nova Scotia, the two provinces party to the agreement.
I should note that energy is presently being produced in Labrador. This will be the first time that energy produced in Labrador is transmitted to the island of Newfoundland, which presently receives no hydroelectricity from outside the island. It is important that we understand this in order to realize the impact that the project could have on the Atlantic provinces, especially Newfoundland and Labrador and Nova Scotia.
The project would create a maritime link to the island of Newfoundland and then a maritime link between the island of Newfoundland and Nova Scotia. At that point, if Nova Scotia thinks it is necessary, it would have the opportunity to enter into an agreement with New Brunswick, as well as opportunities for export to the United States.
However, we must be careful. Not all the electricity that is produced at Muskrat Falls or eventually at Gull Island will go to the United States. Right now, under the existing agreement, 60% of the electricity produced at Muskrat Falls and Gull Island will be used by either Newfoundland or Nova Scotia. That is a minimum because the percentage will increase over time since there will be greater domestic demand. This will mean that there will be less electricity available for export, possibly to the United States. One thing is certain: by virtue of the agreement, Nova Scotia will always have 20% of the hydroelectric production.
What reasons are there to support this project other than the fact that it is beneficial for Newfoundland and Nova Scotia? There are also environmental reasons. This project will make it possible to decrease dependence, particularly Nova Scotia's dependence, on coal-fired plants, which emit a lot of greenhouse gases. This will make it possible to eliminate or greatly reduce the production of four coal-fired plants in Nova Scotia.
I am talking about the plants in Lingan, Point Aconi, Point Tupper and Trenton. There is also a plant in Tufts Cove that generates electricity using oil and natural gas. The project would also make it possible to eliminate the Holyrood oil-burning power plant in Newfoundland. This project therefore has many environmental benefits.
Once these plants have closed, it is estimated that the project will decrease these provinces' greenhouse gas emissions by 16 megatonnes a year. By way of comparison, that is equivalent to 3.2 million cars on the road.
Most of the parties in the House are in favour of reducing greenhouse gases in order to mitigate the effects of climate change, which are already being felt. We have to put words into action. We have talked a great deal about the need to eliminate greenhouse gases, but now we need to support measures that go in that direction. Hydroelectric plants go in that direction, particularly the one in Muskrat Falls, which is the subject of the hon. member's motion. That is why we will support this motion.
I would now like to talk about the misinformation surrounding this project. The federal government is interfering in a provincial jurisdiction. I do not see any interference in the Muskrat Falls project or in the loan guarantee that the government is giving Newfoundland for that project. Newfoundland and Labrador and Nova Scotia will always own these projects. Newfoundland and Labrador and Nova Scotia will manage the production and transmission of hydroelectric power. The federal government has no control over the project itself or how it is managed. All it is doing is offering a loan guarantee.
I am truly surprised to hear this argument. I am also surprised to hear that it is not necessarily the best project available and that the government should not give the loan guarantee. There are still debates about this in Nova Scotia and in Newfoundland and Labrador. Some people think that the loan guarantee should not be given.
The decision has been made. The two provinces conducted environmental studies and studies to find better alternatives to the proposed measures, to the construction of Muskrat Falls and the power transmission. The provinces determined that it was the project that best met their needs and their objectives. Nova Scotia has significant targets in terms of reducing greenhouse gases. It is not up to the federal government to decide what project is the best for the provinces. The work has already been done.
The second element directly affects Quebec, and members from Quebec talk about it often. I am talking about competition or the argument that Hydro-Québec would have competition. As I said, Hydro-Québec has done a great job and truly built the Quebec we have today. Every Quebecker is grateful for the role that Hydro-Québec played in the province's economic development. There will be no competition, because Hydro-Québec has no connection to Newfoundland. There will be no competition because Quebec does not do business with Nova Scotia. There will be no competition—or there will be very little—with regard to exporting electricity, because the project will export no more than 300 megawatts of electricity from Muskrat Falls to the United States. Hydro-Québec exports 27,000 megawatts a year. Competition cannot be the only reason to oppose this bill, which will have a positive impact on the environment.
Jack Layton supported this project. The NDP included it in its 2011 election platform, and we did not shy away from that. For once, we are proudly supporting a Conservative government decision, namely a loan guarantee for a project that will clearly be managed by Newfoundland and Labrador, in partnership with Nova Scotia.
I regret not having the opportunity to respond to my colleagues' questions. I know that that is not the tradition for private members' bills, but I was pleased to speak to this very important issue.