The Ontario government announced on Monday that construction will stop on a power plant west of Toronto, nine weeks after it suddenly pulled the plug on the controversial project.
The government's electricity planning arm has reached an agreement with Greenfield South Power Corporation, the company that was awarded the contract to build the plant, to stop construction immediately.
However, the terse statement from the Ontario Power Authority makes no mention of the amount of damages the government likely will have to pay for cancelling the project midway through construction.
"The OPA and Greenfield will continue to discuss details, including an agreement on facility relocation," the statement says.
The Liberals cancelled the project during the campaign for the Oct. 6 provincial election, less than two weeks before voters went to the polls.
The surprise announcement marked a victory for residents of Mississauga, who vigorously opposed the Liberals' plans to build a 280-megawatt, gas-fired electricity plant in their neighbourhood. But it further called into question Mr. McGuinty's pledge that he won't tolerate the "not-in-my-backyard" attitude of opponents to green-energy projects, his flagship job-creation initiative.
Residents complained that the proposed site on the Mississauga-Etobicoke border was too close to homes and a hospital, and had vowed to make the plant their number one election issue. The community had the support of Charles Sousa, the Liberal MPP for the riding Mississauga South.
Although the about-face on the plant likely saved Mr. Sousa's seat, it has been embarrassing for the government. The Progressive Conservatives released photos to the media earlier this month, showing that construction continued on the site, despite the government's assertions that the plant would not be built.
But cancelling such a project is no easy feat, said one industry executive who asked not to be named. These contracts don't come with "buyer's remorse" clauses, he said.
Greenfield likely had no choice but to fulfill its end of the contract and continue with construction, despite the Liberals' campaign pledge, the executive said. He added that the further along construction is, the higher the damages for the company.
Greenfield has agreed to stop construction immediately, Energy Minister Chris Bentley said in a statement on Monday.
"We are pleased with this progress," he said. "We listened to local concerns from all residents, taking into consideration the changes in the area, including residential development since the plant was proposed."
Progressive Conservative MPP Vic Fedeli said on Monday he is shocked that the government is not saying how much the 57-day delay will cost taxpayers or where it plans to relocate the power plant.
"We think the cancellation of the power plant was a seat saver program," he said. "It worked, but ...we have more unanswered questions today."
This is the second time the governing Liberals have retreated on a power project in the face of opposition from local residents. The opposition said it once again shows they are willing to allow politics to trump policy.
In 2010, the government abandoned plans to build a 900-megawatt, gas-fired power station in the affluent enclave of Oakville, west of Toronto, after residents complained that it would be too close to neighbouring homes and schools.
Opposition members said the Liberals cancelled that project when they realized it could cost them a seat in this year's election. Kevin Flynn, who won re-election in the riding of Oakville, had introduced a private member's bill, opposing the plant.
Karen Howlett