Before the election, the McGuinty government put a moratorium on
offshore wind projects, claiming that further research was needed.
Now, one of the companies that planned to build an off-shore wind
farm in Lake Ontario is suing for compensation.
Trillium Power Wind Corp. filed a statement of claim reportedly claiming
that the moratorium constituted "a confiscation of property
rights, without warning or substantive justification."
However, Trillium has not posted its statement of claim, and did
not return calls last week.
The claim raises the question to what degree developers can rely
on government policies, and whether government can be called to
account for losses suffered when it changes its mind. Certainly,
the moratorium was inconsistent with the Green Energy Act
and many government speeches encouraging the development of
renewable energy projects. Trillium may have incurred substantial
losses, but does a government invitation to invest in developing a
resource really constitute a property right, before any licenses
have been issued? As noted in an
earlier blog post regarding Attorney General of Canada v. Fielding
Chemical Technologies Inc., private companies can
sometimes sue the Crown for damages suffered as a result of a
change in government policy. In Fielding Chemical's case,
however, the damages flowed from a ban on the export of PCBs found
in an earlier case to have violated Chapter 11 of
the North American Free Trade. In Trillium's case, there was
nothing similarly illegal about the moratorium.
Another offshore wind development company, Windstream Energy, is
taking a different approach, moving ahead with development plans on the
assumption that the moratorium will eventually come to an end.
Unlike Trillium, Windstream is the only company to hold a signed
contract to sell electricity from offshore wind into the provincial
This case highlights the risks, to both the public and the
private sector, of flip-flops in government policy. Stable and
consistent energy policies are essential for any well-managed
energy future, especially for newer technologies such as renewable
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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