Court hears Innu call for injunction to block Muskrat Falls rate mitigation deal

A Newfoundland and Labrador Supreme Court judge will soon decide whether to temporarily block the finalization of the Muskrat Falls rate mitigation deal.

Ottawa and the Newfoundland and Labrador government reached a framework agreement-in-principle on rate mitigation for the troubled hydro megaproject earlier this summer.

But Labrador Innu say they were not properly consulted, and the agreement will hurt them financially.

The Innu have filed a lawsuit, and are in court this week asking for an interim injunction to prevent the final agreements from going through, pending the results of a trial.

The feds and the province are being accused of breaching the Crown's fiduciary duties to the Innu, breaching the duty to consult and accommodate, and breaching the honour of the Crown.

On Wednesday morning, a senior provincial government official faced cross-examination.

John Cowan, the deputy minister of industry, energy and technology, was pressed about the level of consultation the province had with the Innu.

Prime Minister Justin Trudeau and Premier Andrew Furey announced the agreement-in-principle on July 28.

• $5.2B deal reached between feds, N.L. government to stave off skyrocketing power bills

While there were exchanges of information with Ottawa throughout the first half of the year, Cowan said things didn't ramp up until July 23, five days before the deal was ultimately announced.

Cowan said that's when the "first real offer" from the feds arrived. He added that the final details weren't finalized until shortly before the signing.

In a call the evening before the July 28 announcement, Cowan advised Innu leaders that news of an agreement was forthcoming, but did not share specifics with them.

He defended that decision, saying the province could not start modelling the impact of the deal on Innu benefits until the final power rate of 14.7 cents per kilowatt hour was determined something that was finalized the day the deal was announced.

The court heard that there were several models outlining Innu benefits under varying scenarios.

The lowest benefits total was linked to the situation at the time of project sanction, nearly a decade ago.

The highest amount would flow to the Innu in a scenario with no rate mitigation at all.

The current, pending, scenario the rate mitigation deal announced in July would result in benefits falling somewhere in between.

The Innu are contesting that outcome.

The exact dollar figures of what's at stake will not be made public as part of the court process, after an earlier ruling on that confidentiality matter.

Hearings scheduled to wrap Friday

The $5.2-billion rate mitigation agreement is aimed at preventing electricity bills on the island from spiking when the Muskrat Falls hydroelectric project is commissioned this fall. It involves a combination of new money and refinancing arrangements.

Within hours, Innu leaders were sharply criticizing how the deal went down.

• Muskrat Falls deal 'betrayed the Innu people,' says Innu Nation

"Canada made a deliberate choice to help the province at the Innu's expense," Etienne Rich, grand chief of the Innu Nation, told CBC News in early August.

"The Innu people will not stand for this."

Proceedings on the injunction application are scheduled to wrap up Friday, with Justice Alexander MacDonald expected to render adecision soon after.

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