Re Upper Churchill Water Rights Reversion Act
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| Re Upper Churchill Water Rights Reversion Act | |||||||||
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| Hearing: September 28 - October 1, 1982 Judgment: May 3, 1984 |
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| Holding | |||||||||
| Where the pith and substance of provincial legislation is intra-provincial, it may have incidental extra-territorial effects. | |||||||||
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Chief Justice: Bora Laskin |
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Unanimous reason by: McIntyre J. |
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Reference Re Upper Churchill Water Rights Reversion Act [1984] 1 S.C.R. 297 is a famous constitutional reference question put the Supreme Court of Canada. The Court found that legislation passed by the government of Newfoundland to take back water rights contracted out to the province of Quebec was unconstitutional. The decision had a huge impact on both provinces, as the Churchill Falls is one of the biggest producer of hydro-electric power in the region and the agreement guarantees Quebec will receive a majority of the revenue from the Falls until 2034.
[edit] Background
By an Act of the province of Newfoundland, the Churchill Falls (Labrador) Corporation developed hydro-electric generators at the Churchill Falls in Labrador. In 1969, the company entered an agreement with Hydro-Québec to sell a large majority of the power generated by the Falls at a low fixed rate for the next 65 years.
From 1974, the government of Newfoundland began exploring ways to get a greater portion of the power generated from the Falls. In 1980, the legislature passed the Upper Churchill Water Rights Reversion Act that reverted ownership of the Falls to the provincial government and repealed the Act that granted the land to the Churchill Falls Corp and expropriated the companies assets.
The province submitted a reference to the Newfoundland Court of Appeal which found it intra vires (within the power of) the province.
[edit] Supreme Court of Canada Judgment
The Court stated that the Act was ultra vires the province and should be struck down. In performing pith and substance analysis on the legislation by looking at the Act's purpose and effect, the Court found that the Act was Colourable. That is, the form of the Act appears to address a valid matter but in substance actually addresses a matter outside its authority. The "Pith and Substance" of the Act, (ie. its dominant feature or purpose) was to interfere with the right of Hydro-Québec granted by the agreement with Churchill Falls Corp to receive power from across the provincial border.
