UPDATE: Nalcor CEO disagrees with court ruling on Churchill Falls contract

Decision will be appealed, Martin says

James McLeod jmcleod@thetelegram.com
Published on July 25, 2014
Transformers at the Upper Churchill power plant. — Transcontinental Media file photo

Around $4 million of taxpayers’ money has already been spent, but Nalcor CEO Ed Martin said today he’s ready to appeal all the way to the Supreme Court of Canada, when it comes to the province’s good faith court case dealing with the Churchill Falls hydro contract.

This week, a Quebec judge issued a lengthy ruling against the Churchill Falls Labrador Corporation (CFLCo) — which is owned by the Newfoundland and Labrador government.

The government argued that the 1969 electricity contract between CFLCo and Hydro-Quebec needs to be revised because it’s so lopsided in favour of Quebec.

Judge Joel Silcoff dismissed that argument.

The judge referred to “newly identified and creative legal theories” on the part of CFLCo, but said that at its core, they were arguing essentially the same thing that the Newfoundland and Labrador government has complained about since the 1970s.

Martin, speaking to reporters Friday morning, said that Nalcor fundamentally disagrees with the ruling, and is planning on appealing.

Ultimately, he said, it could go all the way to the Supreme Court of Canada.

Thus far Nalcor has spent $4 million on the court case, but that doesn’t count the $1.4 million in court costs that CFLCo was ordered to pay to Hydro-Quebec in the ruling. That part of the ruling is subject to appeal as well, so Martin said the taxpayers aren’t necessarily on the hook for that yet.

Almost immediately after Martin announced that Nalcor is planning to appeal, New Democrat Leader Lorraine Michael took to Twitter to voice her disappointment.

“More of the people's money going down the drain,” Michael wrote.

jmcleod@thetelegram.com Twitter: TelegramJames

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(Earlier story)

Government loses Churchill good faith court case

The Newfoundland and Labrador government has lost its good faith court case in Quebec, seeking to renegotiate the terms of the Churchill Falls hydro contract, as a result of the overwhelmingly lopsided deal.

The court case, which was started in 2010, asked a Quebec court to amend pricing terms for the 1969 contract, which runs for another 26 years through to 2041.

Moreover, judge Joel Silcoff awarded Hydro-Quebec court costs of more than $1 million in the case.

For years, the Newfoundland and Labrador government has argued that it’s incumbent on Hydro-Quebec to renegotiate the contract because power prices have increased dramatically since the 1969 contract was signed, and the deal unfairly benefits Quebec.

Hydro-Quebec argued that except under very limited instances in Quebec law, there is no authority for courts to revise a validly negotiated contract just because of a change of circumstances.

The court found that both Quebec and Newfoundland and Labrador thought the contract was reasonable when it was signed.

Examining the contract history, the judge concluded that both parties got what they bargained for.

Read the court decision here.