Nfld. & Labrador

2nd Quebec court rejects appeal of 1969 Upper Churchill contract

The Quebec Court of Appeal has upheld the contract signed 47 years ago between the Churchill Falls (Labrador) Corporation and Hydro-Quebec.
A deal between Newfoundland and Labrador and Hydro-Quebec secured a route for electricity from its Upper Churchill Falls project. But in return, the province agreed to a 65-year fixed rate for the majority of the output. (Jacques Boissinot/Canadian Press)

The Quebec Court of Appeal has upheld the contract signed 47 years ago between the Churchill Falls (Labrador) Corporation and Hydro-Québec.

Nalcor Energy said in a statement that it is reviewing the decision handed down Monday, and will have more to say later.

The case hinges on the fairness of a 65-year power deal signed in 1969, allowing Hydro-Québec to buy energy from Newfoundland and Labrador at flat rates established decades ago, and resell the energy to customers at prices several times higher. 

The initial term of the contract expires at the end of August, when a renewal clause will extend the contract for another 25 years and reduce the amount paid to CFLCo for power.

Newfoundland and Labrador lost in an argument made to Quebec Superior Court in 2014.

In a 250-page ruling, that court said CF(L)Co did not offer a convincing argument to change the deal, and ordered CF(L)Co to pay $1.3 million in court costs. 

Nalcor appealed to the higher court, which heard arguments in April 2016. 

now