Governments have tried it before, with limited success — arbitrarily changing the terms of contracts with the private sector.
Sometimes, the solutions sound absolutely ridiculous: faced with a court decision that a liquor levy was improperly implemented and had to be paid back, the provincial government in Newfoundland and Labrador actually wrote new law, and turned back the clock, proclaiming the legislation to have come into effect years before it was written. Legislators passed the bill in 2008, but deemed it to have come into effect years earlier, in 2001. With a stroke of a legislative pen, the government extinguished its own liability.
Fast forward to today, and the new Ontario administration of Premier Doug Ford.
The new government has announced that it will cancel a wind project known as White Pines. The owners of the project, wpd Canada Inc., say the cancellation will cost ratepayers $100 million.
It’s just one of 758 renewable energy projects that the Ford government is planning to wind down or back out of.
It’s recently become popular for governments, from the president of the United States on down, to spend the first part of an administration undoing the work of preceding governments; find the things that rankled during the campaign, and make a great show of unravelling them.
But the government insists that reneging on the contracts will have no impact on ratepayers or taxpayers.
Government House Leader Todd Smith says the new government plans to write their way out of that risk, crafting legislation to extinguish any provincial liability for their actions.
“All of the details are going to be available when the legislation comes out. … (This) is going to be a legislated end to this contract and the government holds that power to legislate the end to this contract,” Smith told reporters. “What it does is immunize the province from any kind of domestic litigation.”
It’s recently become popular for governments, from the president of the United States on down, to spend the first part of an administration undoing the work of preceding governments; find the things that rankled during the campaign, and make a great show of unravelling them.
But is it a good idea to use the full power of the legislature to insulate governments for the costs of their actions? Even if you are the duly elected government, should you be able to “immunize” yourself from litigation?
Bad faith is bad faith, no matter how many bills you ink to justify your behaviour.
The end may be protecting ratepayers or taxpayers, but the means aren’t justified by that.
Faced with such actions, as a business, do you just stop contracting with government, or do you build in a way to protect yourself — either through higher fees, or though insisting that future contracts carry an explicit rider exempting them from legislative second thoughts?
Using twists and turns in law to go back on your word and do what you can’t do otherwise is bad practice. You don’t get a “get-out-of-bad-deals-free” card.
Let’s hope it doesn’t catch on.
