N.L. loses again in battle over power profits
ST. JOHN’S, N.L. Newfoundland and Labrador’s premier said he was disappointed but finally ready to turn the page Friday, after yet another court loss in the province’s long feud with Quebec over Churchill Falls power revenues.
Premier Dwight Ball says 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 HydroQuebec agree to purchase Churchill Falls power for 65 years 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- Quebec.
The latest challenge began in 2010, when Churchill Falls (Labrador) Corp. Ltd. (CFLCo) argued unsuccessfully before the Quebec Superior Court that Hydro- Quebec 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-Quebec on Friday, finding no duty to renegotiate, regardless of the contract’s unanticipated “substantial profits” for Quebec.
A majority of the Supreme Court said CFLCo was seeking to undo certain aspects of the contract while keeping the ones that suit it. In effect, it was asking HydroQuebec to give up the benefits it obtained in exchange for the sacrifices it made to get the massive project up and running — a situation from which CFLCo has been benefiting since 1969 and continues to benefit today.
Nalcor energy, the provincial Crown corporation that is the parent firm of Churchill Falls (Labrador), said in a statement Friday that it accepts the court’s decision.
“This decision is final and brings to an end an eight-year legal process,” the statement read. “We are disappointed with the outcome but will continue to honour the contract and continue to work cooperatively with Hydro- Quebec.”
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.