The wind-power company that won a $28-million trade award over the Ontario government’s decision to kill its Lake Ontario wind farm is going to court to collect, it said Tuesday.
Windstream Energy hasn’t been paid the damages an international tribunal awarded it at the end of September, the company said.
The arbitration panel from The Hague gave Canada 30 days to fork over the compensation for Ontario’s sudden decision to stop wind farms in the Great Lakes in 2011, after urging companies to come and build them. But the Permanent Court of Arbitration doesn’t have direct enforcement power for its decisions – it can’t order a bank to hand over money from a government account. For that, Windstream needs a Canadian court’s co-operation.
“From Windstream’s perspective, this investor-settlement dispute under NAFTA raises serious concerns if the Canadian government cannot fulfil its NAFTA treaty obligations to American companies,” said Windstream director David Mars, in the statement announcing the decision to go to court. “As interest continues to accrue, we hope that Canada abides and complies with the NAFTA award without further delay.”
Mars is a New York venture capitalist. Because the ruling is an international trade dispute – Windstream is U.S.-based, and alleged it was treated unfairly in part because of that – it’s the federal government that’s supposed to pay up. The case was actually argued by federal lawyers working under the then-governing Conservatives, stepping up to defend a decision by the Ontario Liberals.
The federal government is working on getting Windstream its money, said Austin Jean, a spokesperson for Global Affairs Canada.
“Canada stands by its international commitments and fully intends to honour the tribunal’s award in the case,” Jean said by email. The department is also “in discussions” with the provincial government, presumably about getting Ontario to cover the cost.
Windstream’s plan was to build a 300-megawatt wind farm off Kingston, the same capacity as a very large land-based wind farm or about half that of a nuclear reactor. It was one of several such projects in various stages of planning when the Ontario government put a moratorium on them all in the lead-up to the 2011 election. The official reason, given by then-environment minister John Wilkinson, was that the government wanted to do more research on whether it was safe to stir up sediment from the lakebeds that might contain old pollutants and fertilizer.
No such research has been done in the six years since. Now the provincial government says it’s keenly watching an experimental wind-power project in Lake Erie, off Cleveland, which is just getting underway. There are a lot of wind farms in oceans around the world, especially off Europe, but only a handful of very small ones in freshwater lakes. Former deputy premier George Smitherman testified that the decision made Ontario look like a “banana republic.”
Wind farms are also pretty unpopular among Ontario voters who can see them from their property. An earlier moratorium on lake-based wind farms went on before the 2007 election, then was lifted afterward.
Windstream compared its treatment at the government’s hands to that of the Canadian companies that were going to build gas-fired generating stations near Toronto, which were well-compensated for Ontario’s decision to stop them. It sought more than $500 million in compensation, the panel from The Hague awarded the company $25 million plus legal costs.
But the panel also said Windstream still has an enforceable contract to supply electricity to the Ontario grid, despite the Ontario government’s refusal to let it build its wind farm. Getting out of that could well cost Ontario more.
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