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One man's legal fight to stop Muskrat Falls

ST. JOHN'S, N.L. - If Brad Cabana's lonely court crusade against the Muskrat Falls hydro megaproject was a Bible story, it would be David versus Goliath and Goliath's whole legal team.

He cheerfully concedes that he's no lawyer, let alone a constitutional specialist. Yet the 48-year-old political blogger, small businessman and retired military captain says he has spent four months and $10,000 of his own cash to take on the Newfoundland and Labrador government and its Crown corporation Nalcor Energy.

In a multi-pronged legal challenge that he'll argue next month in provincial Supreme Court, Cabana asserts that construction of the $7.7-billion project near Happy Valley-Goose Bay in Labrador should be halted.

At issue, he argues, are legal uncertainties and constitutional breaches that could spell financial disaster for his adopted province.

"Once that dam is built and Hydro-Quebec challenges it, at that point in time it's too late," Cabana said from Saskatoon where he runs an interior decorating and painting business when he's not at home in tiny Hickman's Harbour near Clarenville, N.L.

Cabana moved from Saskatchewan to Newfoundland three years ago, drawn by ancestral ties to the Rock. He soon made headlines when he unsuccessfully vied as a virtual unknown for the Progressive Conservative party leadership, and then the Liberal party helm.

"In a sense what I'm doing is I'm pre-empting Hydro-Quebec for the benefit of the Newfoundland and Labrador people," he said of his bid to stop the Muskrat Falls development. "Apparently the government of Newfoundland and Labrador doesn't have the people's interests at heart."

The joint venture between Nalcor and private Nova Scotia utility Emera (TSX:EMA) would bring power from the lower Churchill River in Labrador to Newfoundland then Nova Scotia using subsea cables. Construction is underway with first hydro expected in 2017.

The provincial Progressive Conservative government commissioned studies that found Muskrat Falls is by far the cheapest option to meet power needs over time. Critics, however, say it was never endorsed by an independent regulator.

In court documents filed Friday, Cabana says a 2009 water management agreement between Nalcor and Churchill Falls (Labrador) Corporation amounts to an unconstitutional breach of Hydro-Quebec's rights under a 1969 contract governing the Upper Churchill power station.

The water management agreement requires co-ordination of the Upper Churchill dam with the planned Muskrat Falls dam and power station to optimize use of the Churchill River.

"Hydro-Quebec has the right to operationally manage the Upper Churchill plant in accordance with the power contract (of) 1969," Cabana says in his court filing.

He argues that amendments in 2007 to Newfoundland and Labrador's Electrical Power Control Act, along with the water management agreement, interfere with and detract from Hydro-Quebec's various river flow contract rights "and therefore do violate the extra-provincial civil rights of Hydro-Quebec."

Other project critics have asked whether Hydro-Quebec could ever challenge Newfoundland and Labrador's ability to manage water flows required for adequate output from Muskrat Falls.

Hydro-Quebec spokeswoman Ariane Connor declined comment when asked about any potential conflict.

But Hydro-Quebec does say in a letter to the Board of Commissioners of Public Utilities in St. John's, dated Dec. 15, 2009, that its power contracts enjoy protections under the Electrical Power Control Act that came before the water management agreement.

Gilbert Bennett, Nalcor vice-president for the Lower Churchill project, said Friday that "Nalcor does not believe that Mr. Cabana's claim has merit.

"Contrary to Mr. Cabana's statements, the applicable legislation, regulations and the water management agreement itself all respect Hydro-Quebec's rights under the Power Contract," he said in an email as he travelled in Goose Bay.

An affidavit filed with the court on Jan. 18, signed by Bennett, says work at the Muskrat Falls site is now costing about $500,000 per day.

"For each month that the Muskrat Falls project is delayed, Nalcor will incur direct costs of approximately $10 million," it says.

Cabana and lawyers in the province who've raised concerns about Muskrat Falls say ratepayers should be uneasy. He said he asked around for professional help with the case, pro bono, but found no takers.

"It's kind of a riverboat gamble," Cabana said of Nalcor's approach. "We'll push ahead, let them take us to court and then we'll deal with it.

"Muskrat Falls is too big to lose."

The case is set to be heard over four days starting Feb. 19. Cabana said he's not worried about getting slapped with court costs if it's tossed out. "I'm not concerned at all because I'm not going to lose."

He throws a number of other constitutional challenges into his case. They include his stance that the Innu Nation's ratification vote on a compensation deal related to Muskrat Falls amounted to a referendum — a say on the megaproject that Cabana argues was unjustly denied other voters in the province.

And he says the provincial government "is wrongly ignoring its duty to (accommodate) and meaningfully consult the NunatuKavut" Community Council, representing the Inuit-Metis of southern Labrador. The group says its members have been shut out of Muskrat Falls benefits.

The province counters that it has consulted the group even though it does not have a federally recognized land claim.

Cabana, a divorced father of two who has remarried, graduated with a political science degree from the University of Saskatchewan and wound up living in Elstow, Sask., with a population of about 150.

He ran for mayor to help fix problems with the town's water quality and, in the early 1990s, joined a national campaign against the proposed Goods and Services Tax. His growing public presence led to his retirement from a seven-year military career when he was asked to choose between it and political activism, he said.

Cabana's high profile in Newfoundland has also cost him, he said.

"They were living full-time in Newfoundland but decided to go to school on the Prairies," he said of his 17-year-old daughter and 16-year-old son. Cabana said his kids were ridiculed because he is outspoken.

His wife Katie says she supports her husband's legal odyssey, though they've talked at length about the possible financial consequences.

"He has to be able to look at himself in the mirror and I have to live with him," she said. "And I think he's on to something."

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