The federal government is prepared to loan Nova Scotia Power and NB Power a total of $4.5 billion toward the cost of building the Atlantic Loop. 

The loop would involve the construction of 800 kilometres of new overhead transmission lines to bring renewable hydroelectricity from Quebec into New Brunswick and Nova Scotia, so coal-fired generating plants in both provinces could be shut down to reduce carbon emissions and meet legislated deadlines.

The Canada Infrastructure Bank would provide the loans, and ratepayers — the utilities’ customers — would have 50 years to repay them. The interest rate would depend on the Bank of Canada rate at the time all the project’s agreements have been signed. Provincial governments in both Nova Scotia and New Brunswick would be on the hook as guarantors. In other words, if ratepayers stopped or were unable to repay the amount through higher electricity bills, all citizens in both provinces would take over payments until 2075.

In response to a question from the Halifax Examiner asking for details on the federal financing proposal currently under discussion, information was provided by Patricia Jreige, senior communications advisor to Nova Scotia’s Minister for Natural Resources and Renewables. According to Jreige, the total estimated cost of the Atlantic Loop, including interest, has risen from $2.9 billion in 2020 to $7.5 billion today.

Houston’s doubts about the Loop

Both Nova Scotia Power executives and Premier Tim Houston agree that importing renewable power from Quebec is the fastest way for the province to move off coal and meet ambitious environmental targets to “green the grid” by 2030. 

But 10 days ago, Houston admitted to reporters he was not optimistic the current Atlantic Loop arrangement could be accepted by the province without more financial support from Ottawa. Houston said he believes the proposal is too risky for ratepayers. Here’s a recap of what he said on June 16:

If it was a different time and a different proposal and a different partnership from the federal government, then the Atlantic Loop might look like a more attractive piece to the overall solution. But it’s not looking like an attractive piece to the overall solution to Nova Scotians right now… If the cost of the Atlantic Loop is too much of a financial burden for Nova Scotians to bear, then we have to look at other alternatives.

As for those alternatives to the Atlantic Loop, which the province is exploring, Houston mentioned Bay of Fundy tidal power, potential offshore wind projects, and even nuclear reactors. Nova Scotians currently pay among the highest power bills in the country.

A white man with grey hair and wearing a blue suit stands in a foyer surrounded by reporters with face masks and holding microphones.
Premier Tim Houston. Credit: Jennifer Henderson

Still, the Examiner asked, what is it about the current proposal under discussion that Houston thinks is bad for ratepayers? Here is the rest of the email response from communications advisor Patricia Jreige at the Department of Natural Resources and Renewables:

The Atlantic Loop running overbudget is one of multiple risks we would bear that would need consideration. Our understanding is that cost overruns would be shared by Nova Scotia, New Brunswick, and to some degree, the federal government.

That’s important, big picture stuff. It also sounds as if details concerning who pays how much are still being sorted out. We will update this story when we get more information, because it’s unclear at the time of publication how the remaining $3 billion in estimated construction and interest costs would be funded or allocated on top of the $4.5 billion in loans.

Also, how much electricity would Hydro Quebec have that’s surplus to growing demands in its own province? How much would be available for export in long-term contracts? And just how much would the utility charge for its highly desirable renewable electricity? These remain significant unknowns prior to signing a commercial agreement.

Working out the deal

Last April, federal Intergovernmental Affairs Minister Dominic LeBlanc told CBC he hoped to have a deal by the end of June. But last week during a visit to Antigonish, Prime Minister Justin Trudeau indicated he hoped a deal could be worked out by the end of the summer. Emera president Scott Balfour indicated earlier this month that without a deal by June, closing coal plants by 2030 would not be realistic. And last year, after negotiations with Ottawa had slowed, New Brunswick premier Blaine Higgs said 2030 was an unrealistic deadline.

Previous reports indicate 550 MW of new renewable energy could flow to Nova Scotia once a new power line is built at the New Brunswick-Nova Scotia border. That’s about 100 MW more than the capacity of the Maritime Link, the undersea cable that delivers renewable energy from Muskrat Falls via Newfoundland to Cape Breton. After years of delays and ongoing software issues, those deliveries from Muskrat Falls have increased the amount of electricity Nova Scotia gets from renewable sources. In 2023, it has risen from 30% to more than 40%.

An additional 10% of market-priced energy from Muskrat Falls could flow to Nova Scotia if and when General Electric gets its software issues sorted out on the transmission system connecting Labrador with Newfoundland. That portion of the transmission system is known as the Labrador Island Link, and is partially owned by Emera. No firm estimate has been provided for when that extra 10% of green power might arrive.

Houston said Nova Scotia remains committed to meeting its legislated target of 80% of electricity generated from renewable sources by 2030. That’s a good thing. But for now, Nova Scotians remain in the dark about how that will happen and how much is tied to the elusive Atlantic Loop.  

Jennifer Henderson is a freelance journalist and retired CBC News reporter.

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  1. What a boondoggle. We should forget the whole thing. Maybe we could harness the tides in the Bay of Fundy next. Oh, wait …

  2. Any deal that includes Quebec Hydro must be approached with the utmost caution. Just ask Newfoundland how well they made out with the Churchill Falls project and the amount of money that Quebec pays for the power they receive from it ($2.00/megawatt-hour). Do you really think that we will get a break buying this electricity?

  3. I don’t know if it is an Atlantic/Maritime thing, a NS thing, or a Canadian thing to just throw all our eggs into the baskets of these megaprojects. But in a world where massive year over year increases in the cost of construction are occurring it is totally irresponsible. Look at the approach increasingly being taken in the US, which is now massively accelerating its build out of green power generation.

    I bet if we pumped the billions of dollars into building out wind and solar alone we would be further ahead. We need power generation to be distributed, and not relying solely on single sources and large power transmission infrastructure with potential single points of failure

    1. Agree with Daniel. We need less concentration in production of power, not more. Nova Scotia has wind, water, tidal, geo thermal (ground and water) energy sources and we should be using them and then conserving to use as little as possible. This is another mega project that will cost more ($7.5B is just a starting point) and deliver less. I note the loop goes through Vermont, New Hampshire, and Maine (even though it’s not the shortest route) so anyone who thinks Nova Scotians will get first dibs on that power is dreaming, even if we pay for the infrastructure.