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Murky details on ethanol award

Issue has been “resolved” but few details about who paid the $4.1 million

According to the Oshawa Port Authority board chair, the $4.1 million arbitration award that the port owed to FarmTech has been resolved. However, few details have been provided beyond that.

By Joel Wittnebel/The Oshawa Express

The final details around the money owed to FarmTech by the Oshawa Port Authority from the defunct ethanol plant proposal have been resolved, but that what means remains unclear.

According to Gary Valcour, the chair of the port authority board, things have reached some form of a conclusion.

“The only update I can give you is that the parties have resolved the matter,” he says.

When asked further about what that entails, and whether the OPA has paid the $4.1 million owing to FarmTech, Valcour again remained mum on the topic.

“As I indicated in my last response, the parties have resolved the matter,” he said in a follow-up email.

The Oshawa Express then reached out to Oshawa’s representative on the OPA board, Bruce McArthur. However, he was unable to provide any more information, only noting that the federal government and Transport Canada were taking charge of the file and he was unsure of where it stood.

“It’s out of our hands,” he said.

The ethanol plant proposal from FarmTech Energy was approved by the OPA board in 2012, despite heavy blowback from residents, council and accusations of political cronyism among the heads of the company and the local Conservative Riding Association. However, the plant never materialized, and in the summer of 2014, the OPA terminated the lease contract with FarmTech for breach of their agreement as the plant was not moving forward. The item then went to arbitration where an adjudicator eventually sided with FarmTech, noting the OPA was not acting in good faith when they terminated the lease. The decision awarded FarmTech  $4,189,965.25.

It’s still unclear as to whether this award has been paid to FarmTech. Requests for comment from lawyers that represented the company during the arbitration were not returned as of The Oshawa Express press deadline.

Transport Canada says they have not, and in fact are not allowed, to pay the arbitration award on the port’s behalf.

“The government of Canada is not able to provide funds to a Canada Port Authority, except under specific circumstances,” says Marie-Anyk Cote, a media relations advisor with Transport Canada. “The Canada Marine Act stipulates that port authorities, including Oshawa, are responsible for satisfying their own obligations and liabilities. Transport Canada is not in a position to comment on the arbitration award.”

One such avenue in which the federal government can provide dollars to the port authority, would be for capital projects. Recently, the port announced they are in the process of developing a new grain storage facility at the harbour.

TC says they have not provided any assistance for that project either.

“The Oshawa Port Authority did not receive any funding from Transport Canada for a grain facility. Section 25 of the Canada Marine Act prevents the Government of Canada from providing funds to Canada Port Authorities, except under very specific circumstances. Canada Port Authorities, like the Oshawa Port Authority, are arm’s length from the federal government. They can make business arrangements with third parties if they are in line with the legislation and regulations.”

Further requests for comment on whether TC has become involved with the arbitration award’s legal proceedings were not returned as of The Oshawa Express press deadline.

The Express also attempted to reach FarmTech owner Dan O’Connor along with the lawyers who represented him during the arbitration, however, those requests for comment went unreturned.