No sur­prise in Churchill Falls de­ci­sion

The Aurora (Labrador City) - - Saltwire Wheels - BY DAVID MA­HER

Premier Dwight Ball wouldn’t rule out any fu­ture court ac­tion to try and over­turn the Churchill Falls power con­tract, but the fo­cus now is on 2041.

The Supreme Court is­sued a 7-1 de­ci­sion on Fri­day against re­open­ing the lop­sided con­tract.

This prov­ince pre­sented a “good faith” ar­gu­ment, say­ing when the con­tract was writ­ten the en­su­ing in­equity couldn’t have been pre­dicted. Be­cause of that, $27.5 bil­lion has flowed into Que­bec, while New­found­land and Labrador has seen around $2 bil­lion.

The in­equity was caused by higher than pre­dicted elec­tric­ity prices, as nu­clear en­ergy else­where in Canada didn’t take off as ex­pected at the time.

The good faith ar­gu­ment was first pre­sented in court in 2010, with Fri­day’s de­ci­sion end­ing eight years of ar­gu­ment.

Jus­tice Mal­colm Rowe, the only judge from New­found­land and Labrador, was the dis­sent­ing opin­ion.

The court’s de­ci­sion es­sen­tially fol­lowed suit with pre­vi­ous de­ci­sions against the mat­ter: the con­tract isn’t a joint venture con­tract and a deal’s a deal:

“Both par­ties to the con­tract were ex­pe­ri­enced, and they ne­go­ti­ated its clauses at length,” wrote Jus­tice Cle­ment Gas­con, in his de­ci­sion. “The Court can­not change the con­tent of the con­tract, nor can it re­quire the par­ties to rene­go­ti­ate cer­tain terms of the con­tract or to share the ben­e­fits oth­er­wise than as pro­vided for in the con­tract.”

For Ball, the fo­cus is on re­build­ing a long-strained re­la­tion­ship with Que­bec, with the con­tract be­ing one of the pri­mary sore points.

“We’re dis­ap­pointed, but it’s not un­ex­pected,” said Ball. “It will not in­ter­fere with the work­ing re­la­tion­ship we have with Que­bec.”

It’s hard to say whether an­other case will make its way through the courts.

“I’m not go­ing to pre­dict what the fu­ture will be with court chal­lenges, but what I am com­fort­able in say­ing is that we are com­mit­ted to strength­en­ing re­la­tion­ships with other prov­inces, in­clud­ing prov­inces like Que­bec,” said Ball.

Pro­gres­sive Con­ser­va­tive Leader Ches Cros­bie also wouldn’t say for cer­tain whether he’d snuff out any fu­ture court ac­tion against the con­tract. But he says the un­cer­tainty lead­ing up to the de­ci­sion was a missed op­por­tu­nity to rene­go­ti­ate the con­tract out­side of court.

“No­body can say with cer­tainty what they out­come is go­ing to be. They rec­og­nized there was a risk — a very sub­stan­tial risk,” said Cros­bie. “When the other guy rec­og­nizes there’s a risk, that’s some­thing you could work with the put in place an agree­ment to deal with the risk and takes it off their plate.”

Two pre­vi­ous ar­gu­ments to the Supreme Court went in Que­bec’s favour in pre­vi­ous years, along with many other cases in lower courts that all went in Que­bec’s favour.

In a state­ment, New Demo­cratic Leader Gerry Rogers says it’s time to move for­ward to other is­sues.

I share with all New­found­lan­ders and Labrado­ri­ans the frus­tra­tion that this lop­sided con­tract with Hy­dro-que­bec has not been, and likely won’t be, reme­died to our sat­is­fac­tion,” she said. “Ul­ti­mately, the ques­tion of whether or not N.L. should chal­lenge the con­tract once again is one best an­swered by gov­ern­ment’s ex­pert le­gal pro­fes­sion­als and ad­vi­sors who are in­ti­mately fa­mil­iar with the mat­ter.”

A state­ment from Nal­cor says the util­ity tried “ev­ery le­gal av­enue” in Que­bec court and the Supreme Court of Canada to change the con­tract, but it will re­spect the de­ci­sion.

“This de­ci­sion is fi­nal and brings to an end an eight-year le­gal process. We are dis­ap­pointed with the out­come but will con­tinue to hon­our the con­tract and con­tinue to work co­op­er­a­tively with Hy­dro-québec,” read the state­ment.

Nal­cor’s own le­gal feeds as of Septem­ber to­tal $5.8 mil­lion. The de­ci­sion awarded $1.5 mil­lion in dam­ages to be paid to Que­bec.

The power con­tract ex­pires in 2041.

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