Churchill Falls, Hydro-Québec, Labrador Corporation, courts, Supreme Court of Canada, contracts, renewal provision
The 1969 Churchill Falls contract between Hydro-Quebec and the Churchill Falls Labrador Corporation has been the subject of political controversy. It has also been challenged in the courts, with appeals reaching to the Supreme Court of Canada. Yet, despite the scrutiny of those court cases, the political rhetoric, and the literature that has been spawned by this matter, an extraordinary element of that contract remains remarkably obscure. It is the contract's renewal clause. At the expiry of the contract's forty-four-year term in 2016, that clause requires an automatic renewal for twenty-five additional years at a fixed nominal price that is lower than what prevailed in the 1960s. Since many billions of dollars worth of electricity will be involved, renewal is certain to become a matter of serious dispute, likely involving political and legal dimensions. The authors provide the first systematic investigation ofthe origins of this renewal provision, based largely on archival sources including hitherto unknown documents, and suggest that the events at issue may raise questions of business ethics and law.
James P. Feehan and Melvin Baker, "The Origins of a Coming Crisis: Renewal of the Churchill Falls Contract" (2007) 30:1 Dal LJ 207.