Feds OK controversial Labrador hydroelectric project

This image shows Muskrat Falls. (QMI AGENCY FILE)

This image shows Muskrat Falls. (QMI AGENCY FILE)

QMI Agency

, Last Updated: 12:46 PM ET

The benefits of a proposed $6.3-billion hydroelectricity project in Labrador far outweigh the risks, according to the federal government.

The Canadian Environmental Assessment Agency (CEAA) gave the Muskrat Falls project a green light on Thursday on the heels of a report from a joint federal-provincial panel that warned the plant will endanger fish, wetland, caribou, fishing and sealing industries and local culture.

The federal government reviewed the panel's report and announced its approval for Muskrat Falls on Thursday, in a move Intergovernmental Affairs Minister Peter Penashue called "an important step toward realizing the full potential of one of North America's most ambitious renewable energy projects."

The provincial government welcomed the news.

"Today's release from the environmental assessment process represents another important milestone and a major step forward as we move towards our decision on final project sanction of Muskrat Falls," Natural Resources Minister Jerome Kennedy said. "Development of the Muskrat Falls hydroelectric project will result in countless benefits to our province, the most important being the provision of reliable, least-cost power to meet the growing demand for electricity."

Premier Kathy Dunderdale won the provincial election on a platform to build the hydroelectricty project, which aims to generate energy at Muskrat Falls on the Lower Churchill River in Labrador and is supposed to help the province handle expected increases in energy consumption.

But the project has been mired in controversy because various experts and advocacy groups warn it will be overly expensive and potentially dangerous.

The CEAA has agreed to adopt many of the joint panel's recommendations to protect habitat and local culture.


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