Varcoe: Deputy premier and NDP government named in $1M defamation suit over power deals

Deputy Premier Sarah Hoffman at the Alberta Legislature, in Edmonton Thursday March 22, 2018

The Notley government’s quagmire over power contracts continues to deepen, with Deputy Premier Sarah Hoffman and the premier’s communications director now in the crosshairs of a new $1-million defamation lawsuit.

While chiding the former PC government in 2016 for mammoth public losses over power purchase contracts — loses tied to their own actions after taking power — the NDP government also sought to shift some of the blame to now-defunct Enron Corp. for its lobbying efforts.

What they likely weren’t counting on was a former Enron lawyer in Calgary suing them for defamation in the matter.

Last week, Robert Hemstock did just that, filing a $1-million lawsuit against the province, Hoffman and the premier’s communications director, Cheryl Oates, along with other unknown individuals involved in the matter.

Hemstock, who is now semi-retired, alleges the province implied he “caused the billions of dollars of losses to Albertans when it was the government’s own actions which caused the loss,” according to a statement of claim filed in Court of Queen’s Bench.

“The defendants defamed Hemstock by lowering his reputation to the public at large, and by identifying him as the Enron lobbyist and accusing him of illegal and unethical conduct, knowing fully his professional standing as a practising lawyer requires that he act legally and ethically,” it states.

“At no time did Hemstock, personally or on behalf of Enron Canada, in any way do anything unethical, unlawful, in secret or in a back room or otherwise hidden from public knowledge.”

A statement of claim contains allegations that have not been proven in court.

Government officials said Friday they were aware of the case and are in the process of retaining counsel. A response to the claim is forthcoming, but as the matter is before the court, the province wouldn’t comment on any specifics.

In an interview, Hemstock said Friday he was shocked and disappointed by the government’s actions and wants a chance to defend his reputation.

“I don’t relish the idea of bringing this lawsuit. It would be much easier to move on, but I can’t do that,” he said.

“My reputation … is extremely important and I intend to protect it.”

The issue centres around power purchase arrangements (PPAs) created in the late 1990s as the Klein government deregulated Alberta’s electricity sector.

The contracts allowed companies to buy electricity from power generators and then resell it to consumers.