04/29/2012 10:02 EDT | Updated 06/29/2012 05:12 EDT

Penashue not worried about Quebec Innu court bid

Court action by a group of Quebec Innu to overturn federal government approval of the Muskrat Falls hydroelectric megaproject is not keeping Labrador MP Peter Penashue awake at night.

"That's been settled and dealt with. And, of course, there's always people who complain," Penashue, who is Newfoundland and Labrador's federal cabinet representative, told CBC News, responding to a filing in Federal Court of Canada by the Innu of Ekuanitshit, who live at the mouth of Quebec's La Romaine River.

The court challenge says the plan to create a dam at Muskrat Falls on Labrador's Churchill River will create a 60-kilometre-long reservoir while also flooding 36 square kilometres.

The Quebec Innu argue that their ancestral hunting land stretches as far as the Churchill River, and is not bound by the Quebec-Labrador border.

But Penashue, the minister of intergovernmental affairs, said the government was within its rights to support the project, which includes a commitment for a loan guarantee or equivalent financial aid.

"The legal standing of aboriginal issues in Labrador have been addressed," he said.

"There's an agreement with the Innu Nation of Labrador, and that's the only outstanding comprehensive land claims process that is present," said Penashue, who was a land claims negotiator for the Innu Nation before entering federal politics.

"As a government we've dealt with the issues that need to be dealt with."

'Absolutely supportive' of megaproject

Penashue said he is not worried that the court challenge will affect the federal government's loan guarantee.

"Those commitments are there … We're absolutely supportive of the Lower Churchill project," he said.

The Muskrat Falls megaproject, which was described as having a development budget of $6.2 billion when a tentative agreement was reached in 2010, has not yet been sanctioned.

However, Newfoundland and Labrador Premier Kathy Dunderdale told CBC News Friday that partners were "very close" to reaching a term sheet that would lay out the legal language of a final deal.

Nova Scotia Premier Darrell Dexter cancelled appointments to attend meetings with Dunderdale Friday on the matter. While Nova Scotia is not a partner, its support is considered necessary because of its need to buy hydro power from Halifax-based Emera Inc.