I rise today to inform members of this Honourable House and the general public, of action taken today by Churchill Falls (Labrador) Corporation as a result of information which was passed onto that corporation by the Provincial Government.

As everyone in this province is aware, in 1969 CF(L)Co signed an agreement with Hydro Quebec for the development of the Upper Churchill River. Today the terms of this agreement provide grossly inequitable compensation in favour of Hydro Quebec, while our province reaps a pittance by comparison.

For example, last year it is estimated that Hydro Quebec reaped profits from the Upper Churchill contract of approximately $1.7 billion, while Newfoundland and Labrador received a mere $63 million. CF(L)Co is also responsible for the running, up keep and maintenance of the Upper Churchill facility.

Power which is bought from our province for a quarter of a cent per kilowatt hour is then re-sold by Hydro Quebec for up to 36 times the price they pay for it.

The gross inequity of this agreement cannot be denied. It is without a doubt considered the biggest give away of resources by this province; in fact, I would venture to say there are no other similar agreements of such a disproportionate magnitude in the entire country.

Several previous administrations have attempted to remedy this either by requesting a re-negotiation of the contract with Quebec or through the pursuit of various legal actions. To date, neither venue has successfully addressed the inequity of this contract.

A couple of years ago, I instructed officials to undertake an extensive and thorough review of potential legal remedies. As a lawyer by profession, I was determined to ensure that no legal stone was left unturned.

As a result of this review, we have discovered a very legitimate and compelling legal argument that has not yet been tested in relation to the Upper Churchill Contract. Under Quebec�s own civil code there is an obligation imposed by law for parties to act in good faith in all legal relationships, including the negotiation and ongoing performance of contracts.

It is a very important and fundamental underpinning of the Quebec civil code, and one we feel is very relevant to the 1969 Upper Churchill contract. After many, many months of research and having received firm legal opinions from some of the most eminent and brilliant legal minds in Quebec, our Department of Justice informed CF(L)Co of our legal opinion.

Today, President and CEO of CF(L)Co has informed me that after seeking and receiving their own legal opinions, he has sent a letter to Hydro Quebec requesting they enter into negotiations to amend the pricing terms of the contract for the future so as to finally provide a fair and equitable return to both CF(L)Co and Hydro Quebec. This would be consistent with the good faith principle that is fundamental to the Quebec civil code.

It is our firm hope and desire that Hydro Quebec will affirm their desire to renegotiate this lopsided contract based upon the moral principles of fairness and more importantly upon the legal obligations under Quebec�s own law which ensure that both parties in an agreement enjoy equity.