Nuclear energy company gets $20M boost from province, Higgs says

Premier Blaine Higgs used an upbeat state of the province speech Wednesday to announce his government will spend more taxpayer dollars to support the development of small modular nuclear reactors in the province.

Higgs announced Wednesday that the province will hand Saint John's ARC Clean Energy $20 million dollars to support its SMR technology.

"We are convinced that, through this investment, not only will we support the development of local expertise, we will also contribute to creating a critical mass to attract the best talent, which will enable other companies to grow," Higgs said.

He said the funding "will unlock significant private-sector investment."

ARC is one of two companies with operations in Saint John hoping to develop and market the technology for small modular nuclear reactors.

Higgs didn't mention any new money for the other company, Moltex Energy, but said he expects the federal government to announce funding to support its work.

The premier also announced a major reduction in this year's deficit projection, telling an online audience that it's now expected to be $13 million, a dramatic drop from an initial forecast of $343 million last June that was revised to $183 million later in 2020.

And while touting a booming real estate market in the province, Higgs also acknowledged growing concerns about affordable housing and rent increases and announced a 90-day review of the rental market in the province.

"We will be evaluating the market, vacancy rates, rental fees and trends, and the impact COVID-19 may be having on all of the above," he said.

We are putting New Brunswick back on the map as a global emissions reduction leader, and we will be at the forefront of this emerging sector.- Blaine Higgs, Premier

Tenants have complained about soaring rents in the province's largest cities and activists have been pressing the government for action.

Higgs told reporters he wants "a very rapid analysis so we can make the necessary changes and improvements." He said he anticipates that the review will find most landlords are "fair and reasonable."

The $20 million for ARC Clean Energy is the first public funding since the previous Liberal government gave it and Moltex Energy $5 million each.

In last year's provincial election campaign, Higgs said a federal government announcement of funding for the two New Brunswick companies was imminent. But six months later that money has yet to materialize.

Higgs said again Wednesday he was looking forward to upcoming federal announcements and said that New Brunswick is fertile ground for new nuclear technology.

"We have an under-utilized supply chain, with existing industrial and mechanical businesses right across this province, that we could activate to participate in a worldwide SMR market and bring that revenue back to New Brunswick," he said.

"We are putting New Brunswick back on the map as a global emissions reduction leader, and we will be at the forefront of this emerging sector."

ARC Canada CEO Norman Sawyer called the premier's announcement "a significant step forward and provides a clear signal of government support that is important to private investors."

He said the funding marks the start of the next phase of the review of ARC's design by federal regulators.

NB Power has estimated that an SMR industry in the province would create thousands of jobs and $1 billion in economic growth, though the utility has not released details of the business case used to generate those figures.

Critics have questioned the viability of the small reactors, given the high up-front development costs and the fact that many other companies in Canada and elsewhere are working on their own versions.

Both ARC and Moltex say power utilities will be key customers for their reactors.

The province and the federal government both say nuclear power, which does not emit greenhouse gases, isessential to reducing carbon dioxide emissions in the coming decades.

Higgs included the SMR announcement in his annual state of the province speech, a political ritual that for decades has allowed the premier of the day to tout his record to an unfiltered television audience.

Speech focuses on pandemic response

This year the speech was delivered via an afternoon livestream because of COVID-19 restrictions, instead of to the usual live evening dinner audience of hundreds.

Higgs focused mainly on the province's response to the COVID-19 pandemic, which has dominated the past year.

Despite dire predictions early in the pandemic that the province would be economically hammered, low case rates have allowed New Brunswick to weather the situation better than most jurisdictions, Higgs said.

He noted that Scotiabank forecast a drop in gross domestic product of 8.4 percent and a deficit of $1.2 billion.

But the GDP decline was only about half that amount and the projected deficit this year is $13 million, and employment is back to 99 percent of pre-coronavirus levels, he said.

The premier said the province's discipline around the pandemic has allowed his government to continue its agenda of sparking economic growth, particularly in the private sector.

"Who knew that amidst a global pandemic, I would be standing here sharing highlights of well over $200 million in new private investment projects: new capital expansions, new equipment for automation and productivity, new buildings, and new production lines?"

But Liberal Leader Roger Melanson pointed to a study by the Canadian Centre for Policy Alternatives last month that said New Brunswick was spending the least of any province on COVID-19 relief and was relying on Ottawa for 99 per cent of its pandemic measures.

That's why Higgs was able to get the projected deficit so low, Melanson said.

"It's been his only way of seeing things for our society, our province, to get the deficit under control," he said. "During a pandemic, there needs to be help for the businesses and the people who are struggling."