Newfoundland premier says hydro dispute in past
Supreme Court upholds Churchill Falls deal with Quebec, bringing saga to an end
ST. JOHN’S, N.L. While Quebec welcomed the ruling in its favour Friday, Newfoundland and Labrador’s premier said he was disappointed but ready to turn the page Friday after yet another court loss in the long fight over Churchill Falls power revenues.
Premier Dwight Ball said a Supreme Court of Canada ruling Friday — which leaves his cashstrapped province stuck with a lopsided 1969 deal — will not interfere with the province’s relationship with Quebec.
“The past is the past. For us, the decision is the decision,” Ball said Friday.
“What I’ve recognized a long time ago (is) we make more progress, we get more benefits for people of our province when we work together.”
Ball suggested there would be no further court challenges from his current government of the decades-old contract that saw Hydro- Québec agree to purchase Churchill Falls power at a fixed rate, set to decrease over time.
The deal has since delivered more than $27.5 billion to HydroQuebec and around $2 billion to Newfoundland and Labrador.
The stark imbalance in profits has been the source of decades of animosity between the two provinces — and a number of legal battles that have exclusively sided with Hydro- Québec.
The latest challenge began in 2010, when Churchill Falls (Labrador) Corp. Ltd. argued unsuccessfully before the Quebec Superior Court that Hydro- Québec had a “good faith” obligation to reopen the contract based on unforeseeable changes to the energy market.
The decision was later upheld by the Quebec Court of Appeal.
The Supreme Court ruled 7-1 in favour of Hydro-Québec Friday, finding no duty to renegotiate regardless of the contract’s unanticipated “substantial profits” for Quebec.
In Quebec City, new Energy Minister Jonatan Julien said the Quebec government is “very satisfied” with the ruling and said it is looking forward to working on future projects with Newfoundland and Labrador now that the legal dispute between the two provinces is settled.
“This decision not only ends a conflict, it allows us to look forward,” Julien said, echoing Ball’s sentiments. “The relationship with our eastern partners is important. This decision, I hope, will allow us to go further on future projects.”
Julien would not name specific projects, but said there is potential in the hydro and mining sectors.
“When there is a legal dispute, it’s harder to have a co-operative relationship,” he said. “The end of this legal issue allows for new cooperation.”
Hydro-Québec spokesperson Cendrix Bouchard called the deal a confirmation that Hydro- Québec negotiated the 1969 deal in good faith.
“Now … Hydro-Québec hopes that this will mean the beginning of a new chapter and new collaboration,” Bouchard said.
Nalcor Energy, the Newfoundland and Labrador Crown corporation that is the parent company of Churchill Falls (Labrador), said in a statement Friday that it also accepted the court’s decision.
“This decision is final and brings to an end an eight year legal process,” the statement said.
“We are disappointed with the outcome but will continue to honour the contract and continue to work co-operatively with HydroQuébec.”
Ball said he wasn’t surprised by the judges’ decision. Neither was former premier Tom Marshall, who said in an interview that he was “profoundly disappointed” by the news.
Marshall was justice minister when he was introduced to the “good-faith” argument the case hinged on, that says in such a lengthy contract changes in the electricity market should be considered.
“This action was not asking for the contract to be cancelled. This action was simply asking for fairness,” Marshall said Friday.
“I feel very sad right now, but I think we certainly gave it our best shot and got a fair hearing at the highest court in the land.”
Marshall said he respects the expertise of the judges, but he had been hopeful the “good-faith” argument might result in changes to what he sees as an unfair deal for his province.
“I’m at an age where I’m not going to be around when that contract comes to an end, when they negotiate a new one. I’d like to know what’s going to happen,” Marshall said.
The contract was renewed in 2016 and expires in 2041.