$6.5M legal bill for failed Churchill Falls contract challenge - Action News
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$6.5M legal bill for failed Churchill Falls contract challenge

The province of Newfoundland and Labrador has spent more than $6.5 million on its unsuccessful challenge of the Churchill Falls power contract.

More money needed to keep fighting at the Supreme Court of Canada

Newfoundland and Labrador has been unable to convince Quebec courts to to overturn the 1969 contract that sells power from Churchill Falls at a very low price (CBC)

A seven-year battle with Hydro-Quebec over the Churchill Falls power contract has cost Newfoundland and Labrador more than $6.5 million, according to a confidential briefing note obtained by CBC News.

In October officials in the Department of Natural Resources told the minister more money was needed to continue the legal fight.

The note was obtained by CBC News through access to information legislation.

In 2010 Newfoundland and Labrador launched a legal challenge to the agreement with Hydro-Quebec, arguing the 1969 deal was lopsided because it allows Quebec to purchase power from Churchill Falls at extremely low rates, reaping big profits when it resells that power.

Courts in Quebec have all sided with Hydro-Quebec, and now Nalcor wants to take its case to the Supreme Court of Canada.

The department had $900,000 budgeted to spend between 2016 and 2018, but late last year told the minister it needed more money to argue the case before the Supreme Court of Canada. The court hasn't yet agreed to hear the case.

Minister of Natural Resources Siobhan Coady said government will continue to fund the court challenge of the Churchill Falls contract because it has the "potential to benefit all Newfoundlanders and Labradorians." (Mark Quinn/CBC)

The department blacked out how much money it was asking for, citing solicitor-client privilege.

The minister, SiobhanCoady,also declined to say how much will be spentthis year, saying in a statement that the government continues to supporta case that "has the potential to benefit all Newfoundlanders and Labradorians."

Most of the money has been used to pay for lawyers in Quebec to prepare and argue the case.

Department officials warned that if more money wasn't handed over the case would stop and it would "eliminatethe potential that N.L. might begin to obtain fair value for the inequitable power contract."

Could have to cover Quebec costs

The legal fight could get a lot more expensive.

In ruling against Newfoundland and Labrador, the Court of Appeal of Quebec also ruledN.L. also has to payHydro Quebec's legal costs. The briefing note doesn't say how much that could be.

But if Newfoundland and Labrador does win at the Supreme Court, the tables could turn, and Hydro Quebec could be forced to pickup this province's costs.

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