Spin-Off And Sale Of Epcor Assets Stand: Union group loses their bid to shut down deal as judge rules in favour of city council

The mayor and city councillors acted legally when they privately approved the sale of Epcor shares in April, the Alberta Court of Queen's Bench announced Friday, Sept. 25.

The court decided council could act as shareholders outside public scrutiny because "natural person powers" provided under legislation allowed for them to bypass sections of the Municipal Government Act.

Gil McGowan, president of the Alberta Federation of Labour, expressed dismay at the ruling. He teamed up with Civic Service Union 52 and the Canadian Union of Public Employees 30 two weeks ago to contest council's private vote to support the multibillion-dollar deal placing Epcor's power generation branch with Capital Power and offering public shares.

"We're deeply troubled by this decision," he said in a statement released the same day. "It seems to imply that there are no limits to the powers of city council to delegate important civic functions and decisions to individuals and bodies that are not accountable to the public. It's a blank cheque for politicians who want to make unpopular decisions without any public input."

However, Darrell Lopushinsky, a lawyer with the city law branch, said "natural person powers" is not an official excuse for council to do whatever it pleases.

"It means," he says, "that unless there's some statutory prohibition, a municipality, acting through city council, can do things that any natural person or corporation could do."

Such legislation was introduced to move municipalities out of the strict confines of statutes.

"The idea," Lopushinsky says, "is that municipalities are given a bit more freedom to do things, but it doesn't give them carte blanche to do whatever they want."

Still, McGowan says representatives should not act separately from the public.

"Ruling or no ruling," he said in the press release, "the fact remains that major assets owned by the citizens of Edmonton were sold off in secret and without any public consultation. The mayor and senior managers from Epcor and Capital Power can now say that what was done is technically legal, but that doesn't make it morally or ethically right."
The loss marks another failed attempt to challenge the Epcor spinoff and city council's role as private shareholder since local lawyer Bill Pidruchney tried unsuccessfully for an injunction against the sale of shares in July.

That has not discouraged McGowan from tackling the matter further. According to the press release, the union coalition plans to pursue the issue, possibly through an appeal of the court decision, or the union group could push city counillors by making Epcor's privatization a major issue in the next municipal election.

See Magazine, Thurs Oct 1 2009
Byline: Tim Cooper

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