Analysis

Bills insulating Ford government from lawsuits show it's 'closed for business,' experts charge

It's not every day that the first two bills a government introduces have clauses that protect it from being sued, but in the past two weeks of the summer session at Queen's Park, the Progressive Conservative government has done just that.

Immunity clauses undermine 'our reputation for a predictable, safe business environment,' expert says

Doug Ford told supporters on the night of his election win that Ontario is now 'open for business,' but some experts say recent moves by his government show the opposite. (Tijana Martin/Canadian Press)

It's not every day that the first two bills a government introduces have clauses that protect it from being sued, but in the past two weeks of the summer session at Queen's Park, the Progressive Conservative government has done just that.

Bill 2, the Urgent Priorities Act, enacted back to work legislation for striking York University workers, introduced more transparency for compensation of Hydro One executives and the CEO, and cancelled the controversial White Pines wind turbine project in Prince Edward County. The bill passed on Wednesday it contained a clause that protects the government from civil liability.

Similarly, Bill 4 — tabled on Wednesday — cancelled cap and trade in Ontario and included a clause that says the government can't be sued.

Despite Doug Ford's election night pledge that Ontario is now open for business, some experts say the government's move to protect itself from civil lawsuits by outside companies is a sign of exactly the opposite.

Open or closed?

"It's unusual," Nelson Wiseman, a political scientist at the University of Toronto, said of the use of the immunity clause.

"It happens, but it's not something that you want you want to do, certainly regularly. You'd only want to do it in extraordinary circumstances."

University of Toronto political scientist Nelson Wiseman says two pieces of legislation meant to immunize the government from civil lawsuits send a message to companies that the province is closed for business. (Facebook)

Wiseman said inserting an immunity clause into two major bills casts doubt on Ford's assertion that the province is now putting out the welcome mat.

"It's actually saying quite the opposite: Ontario is closed for business. If we don't like your business we'll do whatever we want to it and immunize ourselves from legal recourse by yourself."

The White Pines wind turbine project — that was killed under Bill 2 — had been under development for nearly a decade.

Earlier this month, the president of WPD Canada, a subsidiary of the German company behind the project, said cancelling the project could cost more than $100 million. The compensation to the company will be limited to the direct cost it has incurred to this point. And the new bill prevents the company from suing.

"Spending 10 years and  $100 million to build this wind farm, only to have an election take place, a new government come in and be told they have to dismantle the project and leave the country: that sends a bad message" said Ross Laver, the senior vice president of policy and communications with the Business Council of Canada.

Cancelling the controversial White Pines Wind Project was one of Doug Ford's key campaign promises. (Nancy Russell/CBC)

Similarly, Bill 4, the Cap and Trade Cancellation Act, could leave companies on the hook for huge amounts of money. Part of the legislation is a compensation framework for companies that have already bought an estimated $2.78 billion worth of carbon credits. But most won't be compensated.

"New governments are completely free to determine their own course. But this kind of sudden change in direction as a result of an election does have an unfortunate by-product," said Ross.

"It undermines our reputation for a predictable, safe business environment."

Keeping promises

The government, for its part, disagrees with the assertion that its bills are bad for business.

Speaking to reporters on Wednesday, the Minister of Environment, Conservation and Parks Rod Phillips said the legislation has been received positively by the business community.

"The feedback I've been getting ... is very positive about this government. I don't have worries about that," Phillips said.

Minister of Environment, Conservation and Parks Rod Phillips speaking to reporters on Wednesday as he announced the government's tabling of the Cap and Trade Cancellation Act (CBC)

Whether the immunity clauses stand up in court, especially if they're tested by international companies, remains to be seen.

But Wiseman says even if they're struck down, it might not damage the provincial government's standing with Ontarians.

"[The PCs] did win the election and more people voted for them than for any other party," said Wiseman.

"Even if [legislation] were to be reversed in a court... people who voted for [Doug Ford] would say he gave it a go, he tried it, and he promised he'd do it."

About the Author

Farrah Merali

Reporter

Farrah Merali is a reporter with CBC Toronto with a passion for politics and urban health issues. She previously worked as the early morning reporter at CBC Vancouver. Follow her at @FarrahMerali