Ontario Pays $28 Million Trade Penalty for Offshore Wind Moratorium
Ontario has been assessed $28 million in damages and legal costs under the North American Free Trade Agreement (NAFTA) to U.S.-based Windstream Energy LLC, after it issued a moratorium that scuttled plans for a proposed offshore wind farm on the Great Lakes in 2011.
The moratorium was the province’s second in five years, the Ottawa Citizen reports, both announced in election years when the supposed health and aesthetic effects of wind development had been stoked into public controversies. “After the first moratorium in 2007, the government pronounced itself satisfied with the safety of wind farms in the lakes,” the paper reports. “Until, in 2011, it wasn’t again.”
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The ruling was issued by the Permanent Court of Arbitration in The Hague.
During the trade hearing, ex-provincial environment minister John Wilkinson said he’d been concerned “that installing windmills would churn up decades of toxic industrial gunk on the beds of the Great Lakes, and he wanted more scientific research done to address those worries,” the Citizen reports. But “by its own admission, the government commissioned no new research on offshore windmills for four years. It has two studies under way now, [neither] of them having anything to do with poisonous sediments on the bottoms of the lakes. Windstream introduced evidence showing ministry employees worrying about how to gin up scientific reasoning to justify what the politicians wanted to do.”
Former deputy premier George Smitherman, who shepherded the province’s landmark Green Energy Act during his term as energy minister, testified on Windstream’s behalf, “saying the on-again-off-again-on-again moratoriums made Ontario look like a banana republic,” writes the Citizen’sDavid Reevely.
The province “on the whole did relatively little to address the scientific uncertainty surrounding offshore wind that it relied upon as the main publicly cited reason for the moratorium,” and “did little to address the legal and contractual limbo in which Windstream found itself after the imposition of the moratorium,” the NAFTA panel ruled.
Much of the ruling is still confidential while officials in The Hague strip it of commercially confidential material, but Windstream took a victory lap in a news release yesterday and the Ontario government confirmed basic details. “Ontario is carefully reviewing the decision and we understand that Canada is doing the same in order to determine next steps,” the provincial energy ministry said in a release, noting that Windstream had only been awarded a small fraction of the $475 million in damages that it originally claimed.
Under international trade rules, the federal government is obliged to defend provinces when they face NAFTA claims.