Ontario Finance Minister Dwight Duncan signalled Tuesday that the province is heading for a showdown with Ottawa over the fate of Atomic Energy of Canada Ltd.
Even though the federal government is getting out of the nuclear business, Mr. Duncan said, it can't walk away from bearing part of the financial risk of potential cost overruns on building new reactors in Ontario.
The Harper government is set to announce the sale of AECL's commercial division to Montreal-based engineering firm SNC-Lavalin Group. But the sale, which could come as early as this week, does not mean Ottawa gets to abandon Canada's homegrown nuclear industry, Mr. Duncan said.
On the contrary, he told reporters, the issue is about fairness, which in this case means Prime Minister Stephen Harper should treat Ontario the same as Newfoundland and Labrador.
"They are certainly backstopping Newfoundland in exporting power to the United States," he said. "Now I guess the question to them will become as we move forward, what are they going to do for Ontario?"
Mr. Duncan's comments revive long-standing tension between Ottawa and Queen's Park over AECL, as the province tries to rein in the cost of its proposed new reactors and the Harper government tries to get out of a money-losing business that has been a drain on federal resources.
The Ontario government remains committed to buying two new reactors as part of its long-term plan to have nuclear power supply half of the province's electricity, and would prefer to purchase from AECL. But Premier Dalton McGuinty has made it clear he expects Ottawa to stand behind any AECL reactor sale.
Tensions between the two governments have dragged on for years over AECL because it has taken Ottawa forever to find a buyer and Ontario is in no hurry to build new reactors, especially in an election year.
"I can't imagine we'd be in a position to sign any nuclear deals before Oct. 6," Mr. Duncan said Tuesday.
But when Ontario finally does go ahead with building the province's first two new reactors in more than two decades, he said, it wants to be treated the same as Newfoundland and Labrador, where Mr. Harper has pledged a $4.2-billion loan guarantee for the Lower Churchill hydro project.
Separately in Ottawa, the Official Opposition NDP called on the Auditor-General to perform a value-for-money audit before any deal is completed.
"One of Canada's largest Crown corporations is slated to be sold off in a single-bidder deal conducted in total secrecy," natural resources critic Nathan Cullen said in a statement. "Canadians are rightly worried about getting their money's worth."