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Financial Post: Ontario DOES have a Way to Kill Green Energy Contracts

Bruce Pardy — Financial Post — May 14, 2014

Hudak’s Ontario Conservatives can easily and legally negate the giveaways the Liberals had lavished on renewables developers

Tim Hudak says the Ontario Conservatives, if elected, will cancel lucrative wind and solar contracts put in place under the Liberals’ green energy program. Can he do so without racking up huge compensation costs?

The answer is yes – if he does it the right way.

The wrong way is to direct the Ontario Power Authority to simply terminate existing contracts, which have robust compensation clauses. The liabilities would dwarf the $1.1-billion paid out by the Liberals for cancelled gas plants.

The right way is to legislate: to enact a statute that declares green contracts to be null and void, and the province to be free from liability. The compensation clauses in the contract will be rendered inoperative if the statute says so.

Statutes can override iron-clad provisions in a contract because that is the nature of legislative supremacy: Legislatures can pass laws of any kind, as long as they are within their jurisdiction and do not offend the constitution. Legislating on electricity production is clearly a provincial power, as are “property and civil rights.”

Since the Canadian constitution does not guarantee property or contract rights, there are no obvious constitutional limitations on a provincial legislature’s ability to change any contract as it likes. Unlike the U.S. Constitution, in Canada there is no constitutional right to compensation for property expropriated by government.  Continue reading here…..

Also read Lawrence Solomon’s article about Ontario’s Odious Debts which outlines a similar way to get out of these contracts.

 

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