Ottawa not covering $36M in Maritime Electric's Fiona-related spending

The federal government has turned down P.E.I.'s request to cover millions of dollars in Maritime Electric spending related to post-tropical storm Fiona.

Months after the storm hit P.E.I., the province's electricity supplier said it spent about $36 million in cleanup and restoration costs. That includes costs for external labour, materials to repair lines and accommodations and food for off-Island crews.

Last November, Premier Dennis King said Ottawa had agreed to cover Maritime Electric's storm-related costs — but it seems P.E.I.'s leader spoke too soon.

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Speaking to CBC News on Monday, the premier said he'd learned in the last few days that Ottawa would not be covering Maritime Electric's costs under the Disaster Financial Assistance Arrangements (DFAA) program.

Now, those costs could be passed on to consumers.

"Unless we find a way to deal with this, it's going to be tough news for Islanders to hear, and it's very tough news for me to hear," King said.

"I was quite disappointed that that's the case."

In October, Prime Minister Justin Trudeau promised P.E.I. millions of dollars through the disaster relief program, stating the money would go toward "projects to repair and rebuild storm-damaged critical infrastructure."

Under the program, the federal government pays 90 per cent of costs and the provincial government pays 10 per cent. 

Nearly 90 per cent of the Island was left without power after post-tropical storm Fiona hit the province last September. 

Maritime Electric doesn't meet requirements

The news of Ottawa's rejection of P.E.I.'s funding request comes amidst Trudeau's cabinet retreat on the Island this week. 

On Tuesday, both King and Trudeau announced wage increases for early childhood educators and staff in designated early year centres on P.E.I.

And while it was all smiles between the two leaders at the press conference, King said that in a meeting with the prime minister, he expressed his frustration that Trudeau's government had turned down P.E.I.'s request.

Unless we find a way to deal with this, it's going to be tough news for Islanders to hear.— Premier Dennis King

"As of today, I don't think I feel much more confidence in that the [$36]-million bill from Maritime Electric for pole reconstruction and vegetation is going to be dealt with under the disaster program," King said.

"We felt that would be covered, and now learning that it isn't over the last few days is to say disappointing."

In a letter to King provided to CBC News, former minister of emergency preparedness Bill Blair said Maritime Electric as a private company does not meet the disaster relief program's definition for small businesses. So, its Fiona-related costs would not be eligible.

"I am conscious that eligibility guidelines are limiting for some sectors given the current definition for small businesses," Blair said in the letter.

"Providing support to public utility companies to respond to impacts of Hurricane Fiona would create a precedent for future extreme weather events whereby the responsibility for costs associated for storm preparedness and/or response shifts from public utility companies to the Federal Government."

Blair continued to say that Public Safety Canada is reviewing disaster assistance programs as "it is clear that disasters are growing in frequency and severity in Canada."

Possible extra costs for Islanders

The federal government has put aside $1 billion in its 2023 budget for anticipated requests through the disaster relief program for post-tropical storm Fiona, the federal Emergency Preparedness office said in an email to CBC News.

"We recognize that there are ways this program can be improved to better serve Canadians and reduce the risks they experience by building greater resiliency," the email stated. 

"Last year, we announced an advisory panel of experts from the public sector, academia, non-profit, Indigenous communities, and the private sector that provided recommendations around how to improve the sustainability and long-term viability of disaster financing in Canada and improve DFAA program administration."

Opposition MLA Robert Henderson took aim at the King government in a news release Tuesday.

"There appears to be a trend within this current government: Say anything, do nothing, blame others," the Liberal MLA said.

Premier King failed to manage the hurricane response, the clean-up following the storm and has now failed to manage the clean-up costs.— Robert Henderson

"The lack of fiscal responsibility and oversight demonstrated by this government is alarming. First, Premier King failed to manage the hurricane response, the cleanup following the storm and has now failed to manage the cleanup costs."

Henderson said Islanders should not have to "foot the bill" because the government over-promised while "failing to fully understand the details."

A spokesperson for Maritime Electric said it hasn't received any official confirmation regarding federal financial help.

But if the federal government doesn't pick up the cost, the utility said it could increase rates up to 2 to 3 per cent "depending on the recovery period."

Islanders already pay some of the highest electricity rates in the country and shouldn't have to bear these costs, King said. The premier said he plans to push Ottawa to change its mind.