N.L. government set to break apart Nalcor Energy

Big changes are coming at Nalcor Energy, the Crown corporation in charge of the Newfoundland and Labrador government's investments in oil and gas and the Muskrat Falls project.

Sources have confirmed for CBC News that government wants to separate the controversial Labrador hydro project, which is over budget by billions of dollars, from the revenue-generating oil and gas sector.

The start of the reorganization is set to be announced in Tuesday's provincial budget.

Sources have confirmed that part of the reasoning is to allow government the ability to rebrand the money-making oil sector from the hydro project widely referred to as a boondoggle.

During a press conference late Monday morning, Natural Resources Minister Siobhan Coady declined to comment on the matter.

"I think what you're asking is, whether or not there will be something in the budget tomorrow. I guess tomorrow will be budget day."

Question Period on Monday afternoon saw Progressive Conservative and NDP MHAs ask for more information about the Nalcor news.

However, Coady and Premier Dwight Ball deflected answering, saying instead to wait for the budget on Tuesday.

According to Nalcor financial statements, the energy corporation generated $65 million in profits from oil and gas operations over a recent nine-month period.

That's in addition to the most recent estimates of $735 million in oil royalties expected to flow into provincial coffers over the 2017-18 fiscal year.

On the opposite side of that is Muskrat Falls. The province funnelled over $1 billion into Nalcor Energy in 2016-17 and planned to provide half a billion in 2017-18 — equity investments largely made to fund construction of Muskrat Falls.

Full details of the move will be announced on Tuesday.

CBC News will have live budget online, on CBC Radio One and Facebook beginning at 2 p.m. NT.