Ottawa announces close to $270M for N.B. energy projects

Much of the funding is for 'pre-development' work on the Mactaquac Dam renewal project

The federal government says it will put about $270 million into helping New Brunswick improve its energy resilience.

The bulk of the money, $219 million, will be a loan from the Canada Infrastructure Bank to N.B. Power in "pre-development funding” for a project to extend the life of the aging Mactaquac Dam.

About $50 million will go toward improvements at the Salisbury Terminal, a substation that transmits power throughout the Maritimes.

“Together these projects show what smart investments in our grid can do,” Tim Hodgson, the federal energy minister, said at the announcement Tuesday at the dam west of Fredericton on the St. John River.

“They create jobs here in New Brunswick, they make life more affordable for families and business, and they lower emissions and it makes New Brunswick a jurisdiction that will be competitive, prosperous and energy secure for the long term.”

Lori Clark, N.B. Power CEO, said the money for the Mactaquac Dam would be “pre-development funding” for a future project to extend the operational life of the dam.

“It is to help support and partly offset some of the costs related to the engineering work that's required, the planning work that's required to getting to the final investment decision,” Clark said.

The renewal project is meant to address the degradation of concrete at the structure, which opened in 1968 and was expected to last 100 years.

N.B. Power CEO Lori Clark said funding will offset the costs of some of the preliminary work on the Mactaquac Dam renewal project. (Ian Bonnell/CBC)

But a chemical reaction in the concrete has led to “substantial cracking, leading to accelerated concrete deterioration and seepage of headpond waters,” according to N.B. Power.

The conditions of the repayable loan from the Canada Infrastructure Bank were not announced, and a spokesperson from Natural Resources Canada directed inquiries to N.B. Power or the bank.

In an email, an N.B. Power spokesperson said the timeline for the loan was "shorter-term" but did not specifically say when the loan had to be repaid.

The federal funding will barely put a dent into the expected cost of the renewal project, which Clark said is about $9 billion.

Clark said the utility is still looking for a private-sector partner for the project.

Federal Energy Minister Tim Hodgson said the New Brunswick project "show what smart investments in our grid can do." (Ian Bonnell/CBC NB)

“We do believe that there is an opportunity for [the] private sector to be involved in this project,” Clark said.

“I think one of the things that's really important is we need to be sure that it is resulting in either some risk reduction or some overall cost reduction for New Brunswickers.”

Premier Susan Holt said the future operation of the Mactaquac Dam is important not just for New Brunswick but for the region as a whole.

“Having this kind of renewable energy that we can turn on and off is critical not only to our province, but to our neighbours in Prince Edward Island and in Nova Scotia and beyond,“ said Holt.

The funding for the dam will also support First Nations engagement, according to a release from the federal government.

However, several Indigenous groups have long opposed the continued existence of the Mactaquac Dam.

Justice Gruben, the chief of Kingsclear First Nation, says his community wants 'to be involved in that process directly.' (Tara King-Stewart/CBC)

Justice Gruben, chief of Kingsclear First Nation, who was present for the announcement but not an official part of it, said his community is interested in speaking with Ottawa and the province about the renewal project.

“We understand the vitality of these projects in terms of nation building, and we want to work together and be a part of it and be collaborative," Gruben said. "I think that it's an exciting opportunity for us in moving in that direction."

Gruben said that in the spirit of reconciliation the First Nation would like to be given opportunities in training, employment and procurement.

“We want to be involved in that process directly,” Gruben said.

Salisbury Terminal plays key role

The money for the Salisbury Terminal will be spent on the static synchronous compensator, a device that manages grid voltage and is used for voltage stability.

The project is aimed at improving the stability and reliability of the energy grid.

“The Salisbury Terminal is key to managing the flow of electricity across New Brunswick’s grid, and these upgrades will keep electricity flowing safely and reliably even when demand is high,” Hodgson said.

“They will help connect new renewable energy projects to the province's grid, and they will allow the grid to handle more people and business as New Brunswick grows.”

Jordan Gill is a reporter based in Fredericton, New Brunswick.