When Jean-Benoit Deslauriers speaks of the terroir that makes this part of Nova Scotia special, he sounds like an alchemist discussing a particularly magical transformation. And why not? The Gaspereau Valley soil and climate have produced sparkling wines recently compared to the very best Champagne has to offer. Rare earth to liquid gold.

“The idea is for the wines to speak for themselves,” says Deslauriers, the winemaker for Benjamin Bridge, the boutique winery that is generating buzz and setting palates a-tingle far beyond the province’s borders. “It won’t be about us, per se. It will be about Nova Scotia, and about the terroir that we were able to transparently convey.”

Benjamin Bridge has been at the vanguard of a growth and renaissance period for the Nova Scotia wine industry. Its flagship white, Nova 7 — compared to “sex in a glass” by one particularly smitten Toronto critic — is the first wine from Nova Scotia ever sold in Ontario liquor stores (a limited run of 55 cases that were quickly snapped up last summer). But Benjamin Bridge’s true raison d’être is its Brut Reserve sparkling wines, which garnered rave reviews in no less an Upper Canadian bastion than the Globe and Mail. (See related sidebar at the end of this article)

Benjamin Bridge winemaker Jean-Benoit Deslauriers (left) - pictured with general manager Devon McConnell-Gordon - says working at the Nova Scotia winery is "one of those once-in-a-lifetime opportunities... I kind of pinch myself every day."

Benjamin Bridge is a success story a decade in the making. “It was truly an experiment,” says Devon McConnell-Gordon, the winery’s general manager. Her parents — Nova Scotia mining executive Gerry McConnell and the late lawyer and businesswoman Dara Gordon — began working on the project around the turn of the millennium. They wanted to not just do it, she says, but do it right. That meant bringing in top level consultants, who determined that not all varietals were suitable for the climate, but pinpointed which ones could be done at a world-class level. At the top of that list
were sparkling wines.

Deslauriers came onboard in 2008. He is from Quebec, but was toiling in the vineyards of California before being lured back east. “I knew that the Canadian wine industry was definitely on the rise, so I had an interest in coming back,” he says. Deslauriers acknowledges he didn’t know much about the industry in Nova Scotia, but it didn’t take him long to realize it was “a really special project” underway in the Gaspereau Valley.

“And it’s probably the best decision I’ve ever taken,” he says. “It’s very, very rare for a winemaker to have the opportunity to tap into a huge amount of resources, to encourage, stimulate and create quality products.”

To date, roughly $4.5 million has been poured into building Benjamin Bridge, including land preparation expenses and the cost of a new building on the site.

“If an owner is ready to wait for 10 years before marketing the product and putting it on the shelf … there’s probably an unconditional dedication to quality that is (there),” Deslauriers notes. “And that’s extremely rare. …It’s one of those once-in-a-lifetime opportunities to be part of a project where things are done from the inside out, and I kind of pinch myself every day.”

There are technical reasons why the Nova Scotia soil is perfect for sparkling wines. The growing seasons are short, Deslauriers notes, and the potential for ripeness is limited. The base wine for sparkling requires very little alcohol, because secondary fermentation adds a second dose. That means the grapes need to be very low in sugar. Deslauriers says that can be done anywhere in world, simply by picking very early. But Nova Scotia’s big advantage lies in being able to pick the grapes in mid-October, when their sugar content is as low as early August in California. “We have the ability to keep the grapes on the vines for an additional two months,” Deslauriers notes. That helps the maturity and complexity of the end product. Acidity, he adds, is another key to making more complex Champagne-style sparkling wine, as opposed to Italian-style Prosecco. Although Benjamin Bridge grapes are picked late, they maintain high acidity. “And that’s something that gives us a real competitive advantage.”

And just how rare is that combination? “As far as I know, it’s unique,” Deslauriers says.

But the timelines involved in sparkling wine production left the winery with a dilemma, according to McConnell-Gordon — how to get Benjamin Bridge’s name out there while the sparklings were waiting in the cellar for up to 10 years. The answer turned out to be another wine, Nova 7, the white that put them “on the map in terms of the Nova Scotia population,” she notes.

“Nova 7 allowed us to put something in the marketplace that we could start to build our brand — because no one knew of us prior to (that).”

It’s been a success — production ramped up from 225 cases in Nova 7’s first year to 2,966 cases this past year. But there has been no drop in standards, Deslauriers says, even with the increase in quantity. “We owe it to ourselves to hold ourselves to really high quality standards, because there’s a lot to lose for a brand like ours, to release anything that would be a lesser product or a lesser wine than the previous version.”

Benjamin Bridge is not the only success story in the province’s growing industry.

Membership in the Winery Association of Nova Scotia has grown to 14, according to Christine White, the organization’s director of communications and events. The association started in 2002 with six members. In the last five years alone, six new wineries have opened, White noted. There are currently 520 acres planted in the province. The industry and provincial government are working together on a plan that would, by 2020, increase the number of Nova Scotia wineries to 20 and bump the acreage of grapes grown up to 1,000.

"It's not our philosophy to be the largest," says Hanspeter Stutz (pictured), founder of Domaine de Grand Pré. "Our philosophy is to be the best."

Hanspeter Stutz, founder of Domaine de Grande Pré near Wolfville, says he has seen great improvement in the quality of local product since getting involved in the province’s wine industry more than a decade ago. “Honestly, you couldn’t drink the wine here, as a wine lover,” he says of the early days.

But that’s not the case anymore, says Stutz, sitting in Le Caveau, the renowned restaurant at Domaine de Grand Pré. He says visitors from Austria and Germany came through the day before and were impressed by the local Tidal Bay appellation: “Wow! Nova Scotia, this is high-quality wine,” he recalls them saying. He adds: “These people are coming from wine regions.”

Domaine de Grand Pré has won many awards since opening in 2000, he notes. Quantities are kept low, in the range of 7,000 cases per year. “It’s not our philosophy to be the largest. Our philosophy is to be the best.”

And the restaurant has added to Grand Pré’s reputation — Wine Access magazine recently chose Le Caveau as one of 20 best winery restaurants in the world, favourably stacking it up against operations from Australia to Argentina, South Africa to Spain. “That’s an incredible, incredible announcement for us … but it’s not only for us — it’s for the industry, and it’s for the province,” Stutz says.

But, he notes, hurdles remain to growing the Nova Scotia wine industry to the next level. Chief among those are provincial borders and liquor board monopolies. “For me, as a European, that’s the most critical part,” Stutz says.

Domaine de Grand Pré wine is available within Nova Scotia, but not in neighbouring provinces. “It’s, for me, unbelievable that, in a domestic market, we have barriers between (provinces),” Stutz says. “It’s easier for me to sell 20 cases to China, to Boston, to Zurich, to Stuttgart or somewhere than a case to Newfoundland or a case to New Brunswick. And that’s wrong. That’s completely wrong.”

There is some hope — perhaps faint, but hope nonetheless — of action on that front. In September, Dan Albas, the Conservative MP for the riding of Okanagan-Coquihalla in British Columbia’s wine country, tabled a private member’s bill to help remedy the problem. Bill C-311 aims to repeal a Prohibition-era law, and make it OK for private citizens to purchase wine in one province and import that wine back home into another province for personal consumption. But private members’ bills rarely become law, and as of deadline, Bill C-311 was still grinding its way through the parliamentary process.

Problems or not, Nova Scotia’s wine producers are making headway, and looking to the future.

Back at Benjamin Bridge, general manager Devon McConnell-Gordon says the winery has had internal discussions about where it wants to be, while always maintaining quality. The current production level —5,000 cases per year — is “very small,” she acknowledges.

But she sees Nova 7 as a possible entry into bigger markets. And Benjamin Bridge would love to take its sparkling wine into places like New York City and London — “even go give the French a run for their money,” she says. “We have all those type of dreams. Can we do that on the scale of a boutique winery?”

The growth of the Nova Scotia industry has led wineries to support each other — “because we’re pioneers and we can only be as strong as our weakest member,” McConnell-Gordon says.

Good buzz for one winery, she notes, helps the others. “People try ours, or they try Gaspereau’s, or Domaine de Grand Pré’s, and they like it, so they want to try everyone else’s. So then right there, you see several wineries getting exposure that maybe they wouldn’t have normally had, through the success of someone else.”

Deslauriers says there is “great spirit” among Nova Scotia’s wineries.

“The industry is at a size that is very small. In order for a wine region to become a legitimate national destination, there needs to be a concentration of wineries that will create that destination, make it worthwhile for people to really come from away. We’re not at this stage yet. …

“Therefore I think most of the wineries understand, and it really has an impact on how we all relate to each other. I don’t think we look at each other as competitors, but more as partners in a growing industry.”

“We’re an agent of the Crown, we’re held by the people who live in Atlantic Canada, and we have a responsibility to — when appropriate, and when practical, and when it’s not subject to laws and legislation — to be as open as we possibly can,” ALC vice-president of stakeholder relations Chuck Bridges said in an interview this week.

“But we may not be able to tell you everything you need to know, or want to know, at the exact time you want to know it. But at some point, that information would become available.”

As Atlantic Business Magazine reported in its November/December 2011 cover story, ALC has quietly kicked the tires on potential lottery opportunities as far afield as Illinois and Albania, sending a senior executive to both locales to assess the lay of the land.

Prior to the story’s publication, ALC was reticent to disclose much about its shift in focus to seek out offshore business opportunities. The corporation redacted the locations of those trips from documents released under freedom-of-information laws, and turned down requests to reconsider the decision. Atlantic Business Magazine independently confirmed ALC’s dealings with Albania and Illinois.

The corporation’s new assurances about transparency, however, come just months after an ALC official denied the existence of the department in charge of seeking out new opportunities.

That department, called Corporate Development, was actually set up in 2009.

But this summer, when Atlantic Business Magazine asked for an itemized list of costs incurred by ALC in Corporate Development, the official who responded to the freedom-of-information request said: “We do not have a department that’s called Corporate Development.”

As a result, no details on actual spending in the department were provided to the magazine, and weren’t immediately available this week.

Bridges now says that was a misunderstanding, because the Corporate Development department originally had a different name. He conceded, however, that the department was called Corporate Development at the time of the magazine’s request.

The Corporate Development department currently has an annual budget of less than $1 million overall, according to Bridges — $400,000 plus the salary costs of its five employees.

The department was set up two years ago as part of a strategic review of the corporation, Bridges said, and was approved by the board of directors, which represents the four Atlantic governments. “They have the final say on what we do,” he noted.

ALC has spent millions on potential forays into external and online businesses.

Another freedom-of-information request revealed that the corporation paid between $3 million and $4 million to external suppliers to develop online poker/casino gambling from 2009 to early 2011, despite the fact that no province has yet signed on to the plan.

And ALC has sunk $3.85 million into the company behind a U.K.-based online lottery called GeoSweep, although the corporation won’t say much else about the nature of that investment. Business, legal and due diligence consulting tacked on another $313,000.

ALC began looking outside the region to help stem flat and ebbing profits from its operations within Atlantic Canada.

Those numbers have not been helped by a jump in operating expenses of 60 per cent over the last five years. Bridges said ALC officials are examining spending as well. “Yes, we do every day take a look at our expenses, and we’re going through an exercise right now, because we’re very conscious that these are tough economic times everywhere. We’ve continued to take a hard look at all of our expenses across the entire company.”

While ALC has not previously been keen to discuss its expansion plans, Bridges said the recent spate of publicity has actually helped bring potential partners to its door.

“We’ve had a large number of organizations and companies call us now that they know we’re interested in doing this kind of business,” he said.

Bridges declined to discuss how many inquiries ALC has received about potential new opportunities — “as my mom would say, bigger than a breadbasket and smaller than a Volkswagen” — where they are, or who made them.

“At this point, it’s not somewhere we would want to go,” Finance Minister Tom Marshall said in an interview.

Marshall said the provincial government informed ALC of that decision more than a year ago, when Danny Williams was still premier. “It hasn’t changed,” he noted.

As Atlantic Business Magazine reported in this edition’s cover story, ALC has eyed potential lottery opportunities as far afield as Illinois and Albania. While Marshall was aware of the corporation’s plans in principle, he said he didn’t know where ALC was looking for external expansion. “I didn’t know about Illinois, I didn’t know about Albania, because we had said no. We had said no to both (international and online opportunities).”

Newfoundland and Labrador has benefitted from a glut of resource revenues in recent years. Those mining and petrobucks have pushed the province to five years of surplus over the past six.

That cash influx, Marshall acknowledged, has helped with the decision not to sign on to new forays in gambling. “We’ve been very fortunate over the last few years, as you know. Our revenues have been quite robust.”

Marshall said the only time the province would review its decision to opt out of new ALC initiatives would be as part of a revised overall gambling strategy. But that “won’t be soon,” he added.

Meanwhile, Newfoundland and Labrador NDP Leader Lorraine Michael is demanding more information from ALC on what ethical guidelines it plans to follow in pursuing business opportunities in other countries.

“We have to deal with the devastating problems associated with gambling in our own society,” said Michael. “Do we really want to profit from those same problems on the backs of people in other countries?”

Representatives with the Nova Scotia and New Brunswick governments have yet to respond to interview requests from Atlantic Business. A spokeswoman in Prince Edward Island has yet to reply to a list of questions sent Friday.

But P.E.I. Finance Minister Wes Sheridan told CBC News last week that he supports ALC’s efforts to reverse the recent slide in revenues, saying it is important for the corporation to “stay relevant in the marketplace.”

But Sheridan did express concern about ALC’s expenses, which have risen 60 per cent over the last five years.

“I would certainly want to have a good look at this and have some due diligence on their numbers, no question,” Sheridan told the CBC.

“We have a responsibility to make our shareholders aware of what’s taking place and then it’s up to them to decide,” ALC vice-president of stakeholder relations Chuck Bridges told CBC Radio’s St. John’s morning show.

Atlantic Business Magazine’s cover story on ALC and its quest for new opportunities online and overseas has been picked up by other media outlets across the region. While ALC officials declined interview requests from Atlantic Business prior to the story’s publication, Bridges has since been doing the rounds in response to inquiries from other media outlets.

“In all cases, whenever we see a business opportunity, we have a vetting process internally and we have a division that’s looking at new business opportunities and they spend a considerable amount of time researching opportunities,” Bridges told CBC.

“And then we put it through a litmus test to be sure that there are enough factors taken into play — including political stability, financial stability, viability of the market — and any sort of vetting that we put through would be what any good billion-dollar company would do.”

Those opportunities are then taken to the ALC’s board of governors, Bridges said, which has representation from all four Atlantic governments.

“They either accept or reject, and then, ultimately, it’s up to the provincial governments to decide what business we get into, which is where we are for instance with internet (casino and poker) right now … So we look at them seriously, but we don’t make the final decision. The people who are elected by the people of the respective provinces make that decision.”

While internet gambling is one of ALC’s areas of interest, the corporation is also looking at business opportunities outside of Canada. ALC sent a senior executive to Illinois last year, but ultimately decided not to pursue an opportunity to bid on running the state lottery there. ALC is also eyeing a possible lottery opportunity in the eastern European nation of Albania.

“Yes, it’s a popular topic,” Bridges acknowledged when the CBC broached Albania with him.

“Let me be clear. We were looking at it because it was an opportunity presented to us. So it goes through the same litmus test that we put through any other business opportunity, and there’s no decision to be made right now. It’s simply under investigation, under research, because there is an opportunity there. What recommendation we’ll take to our board, or what we’ll take to the government remains to be seen, if any at all. But it’s there. There is supposed to be an RFP for lottery in that country. So it’s something we would look at. How far down the road we would get … that really remains to be seen at this time.”

He noted that “offshore is one of the ideal areas to investigate” for new revenue opportunities.

While the U.S.Central Intelligence Agency has raised concerns about corruption in Albania, Bridges stressed that ALC’s litmus test would include “political stability, criminal activity, and other activities that would help us make a decision, and the financial viability.”

The Atlantic Lottery Corporation says its players have been “dreaming big” since 1976. That’s when ALC began offering lottery games on behalf of the governments of Nova Scotia, New Brunswick, Newfoundland and Labrador and Prince Edward Island.

Fast forward 35 years, and ALC seems to be dreaming big itself. The corporation is working to expand its suite of games both beyond the geographic confines of Atlantic Canada, and into the brave new world of cyberspace.

That quiet, behind-the-scenes search appears to be a major shift in philosophy for the corporation, which until now has been focused on offering gambling options to the two-plus million people living east of Edmundston and west of St. John’s.

The broader focus has led ALC to some surprising places.

Last year, the Illinois government announced plans to outsource the management of its state lottery. ALC met with officials there, but ultimately decided not to pursue that business opportunity.

And ALC is also eyeing the possibility of running the national lottery in the eastern European country of Albania. Albania, while now seeking EU membership, is among the poorest countries in Europe and has a checkered history that includes a near-civil war in 1997 dubbed the “Lottery Uprising.”

To date, the new focus on external opportunities has seen ALC ink one deal, with a U.K. company that offers a web-based lottery game.

The corporation has also spent millions on the pursuit of online casino gaming that its shareholders — the four Atlantic governments — have yet to sign onto.

The overall strategy is not something ALC officials are keen to discuss. The corporation redacted the locations of those foreign business opportunities from documents released under freedom-of-information laws, and turned down requests to reconsider the decision. Atlantic Business Magazine independently confirmed ALC’s dealings with Albania and Illinois. When confronted with that information, ALC defended the initiatives. The corporation declined interview requests, offering only written responses to questions.

The stakes are big. ALC is a $1-billion-a-year business in Atlantic Canada. The corporation funnels all of its profits back to the four Atlantic governments, which can use them to do things like build hospitals, hire teachers and fix roads. But those profits have f lattened in recent years, and operating expenses have skyrocketed.

There has been little to no public discussion about ALC casting a wandering eye to opportunities outside the region. And there has been similarly little disclosure of exactly what the strategy entails — what the rewards are, and what the risks and costs may be, as a company that oversees gambling makes its own roll of the dice.

So why? Why would ALC look beyond Atlantic Canada’s borders?

The answer lies, in part, on the lottery corporation’s balance sheet. In recent years, ALC has funnelled between $371 million and $398 million in annual profits back to the four provincial governments. That’s big cash.

But those earnings have been flat — in fact, annual profits were down 5.8 per cent in 2010-11 compared to 2005-06.

Meanwhile, ALC’s operating expenses (before capital-related costs) are up sharply over the same time frame, jumping to $125.1 million from $78.3 million — an increase of 60 per cent. The corporation cites a number of factors for the jump, including costs associated with new lines of business, opening race track and casino operations in P.E.I., transition costs for outsourcing of IT services, increased pension costs due to market conditions, and increases in sponsorships and marketing.

In an interview last year, Newfoundland and Labrador Finance Minister Tom Marshall said ALC is projecting declining revenues from its current game offerings. That is not good news for governments whose thirst for revenues is never slaked.

The debate was polarizing, the decision in doubt. In the spring of 2008, the Nunatsiavut government in Labrador discussed implementing a three-year moratorium on uranium mining in areas under its jurisdiction.

“When people are hasty to encourage economic development for the sake of accessing jobs and revenues, important details get overlooked,” said Todd Broomfield, the assembly’s Speaker and ordinary member for Makkovik, during the debate.

“(The) Nunatsiavut government does need time to be able to stand on solid ground before taking part in an environmental assessment for a proposed uranium development on Labrador Inuit Lands. One common virtue that Inuit culture is based on is patience. We are an Inuit government.”

Broomfield spoke about the “millions of tons of tailings” that could be produced by a uranium mine in the region, and noted it was imperative that hazardous materials be isolated “for eternity” from the local environment.

“At the end of the day, so to speak, it is our children and grandchildren who will still be here in Nunatsiavut. It is what they will inherit from us that will enable them to enjoy Nunatsiavut, our beautiful land.”

On the other side of the debate was Nunatsiavut’s economic development minister, Darryl Shiwak, from the town of Rigolet. Shiwak feared the moratorium could send a bad message to other business attraction efforts.

“It’s going to impact how nickel … explorers come to our land,” Shiwak told the assembly. “They’re going to see this as, ‘Wait a minute, these guys are putting a moratorium on this right now, maybe they’re going to do the same thing for us.’ Maybe there’s a forestry industry coming into place, maybe they’ll do the same thing … This is (a) concern for me, (that) this moratorium will have an impact on future investments and developments in other areas of Nunatsiavut.”

After debate concluded, the votes were cast. The motion in favour of the three year uranium moratorium passed by a razor-thin margin, eight to seven.

Fast forward to 2011. In September, the government of Nunatsiavut voted to review the legislation that imposed the moratorium. That review includes a series of public consultations overseen by a special committee of the assembly. The consultations are slated to be completed – and a report filed – before the next meeting of the Nunatsiavut government, scheduled for the second week of December.

“If the special committee recommends the moratorium be lifted, based on a review of the legislation and the outcome of the public consultation process, I will present a bill during the next sitting of the Nunatsiavut assembly to remove the restriction on the working, production, mining and development of uranium on Labrador Inuit Lands,” Lands and Natural Resources Minister Glen Sheppard said in a press release.

If the bill becomes law, the new legislation will come into effect on the same date as the Nunatsiavut Environmental Protection Act — on or before March 9, 2012.

The process, however it turns out, should provide clarity to those on both sides of the debate — industry interests who tout the safety of uranium mining and stress its economic benefits, versus those who worry about environmental issues.

The stakes are huge — the fate of hundreds of potential long-term jobs, and untold millions in investments into the remote region of Labrador.

“The discovery of uranium, near Makkovik, in eastern Labrador more than 50 years ago led to intense exploration, during which time, several uranium deposits were discovered,” notes a 2009 report published by the Newfoundland and Labrador Department of Natural Resources. “In the late 1970s, development plans for two of these deposits faltered, due to the collapse of global uranium prices and concerns about the environmental impact from mining.”

For a long time in Nova Scotia, coal was undeniably king. The mines of Cape Breton provided the bulk of the province’s power. But those days are over. The last large coal mine in the region shuttered a decade ago. And now, Nova Scotia is going down the road to a greener future. The government has legislated hard targets to replace dirty energy with cleaner power, and penalties if those targets are not met.

“It’s an investment in clean, green renewable energy, and we believe it’s the right way to go,” Energy Minister Charlie Parker said in an interview. “In the end, it will be less expensive than fossil fuels.”

To foster this change, Nova Scotia’s renewable electricity plan sets goals of 25 per cent renewable electricity by 2015, and 40 per cent by 2020.

There are penalties set out in the regulations of up to $500,000 per day or $10 million a year if those renewable targets are not met.

Nova Scotia has a long tradition of producing electricity by burning coal. Until very recently, according to Parker, almost 80 per cent of the energy used in the province came from coal, petroleum-coke or fuel oil.

Parker noted that made some sense in the days when Nova Scotia was supporting its domestic coal industry, and before the province understood its environmental costs.

But now most of the coal burned in Nova Scotia is imported, resulting in millions being spent outside the province. “It makes us vulnerable to increasing costs and concerns about stability of supply,” Parker noted in a recent speech to energy industry interests in Halifax. “In fact, in the last five years coal prices have increased over 75 per cent.”

And while the coal is now imported, Nova Scotia remains “blessed” with a supply of natural resources, including wind, tides, farms and forests.

The government commissioned a study to weigh the province’s power options. That study concluded that investing in renewable energy was the best choice going forward. While there would be marginal upfront price increases, according to Parker, the payoff would be decades of stable rates in the future.

Nova Scotia Premier Darrell Dexter stressed that the targeted shift to renewables has become “matters of law.” The province’s plan, Dexter told the Core All Energy conference in Halifax in October, “lays out the path to get there. Regulations are in place, the feed-in tariffs have been established, and more is on the way.”

In fact, Dexter noted, the community feed-in tariff program “is being lauded around the world” for its approach to maximizing use of the existing distribution capacity while building community support for renewable projects.

The government received more than 70 applications for that community feed-in tariff, or COMFIT, program.

The overall renewable energy plan calls for Nova Scotia to more than double the amount of its renewable energy supply between the end of 2009 and 2015, and nearly quadruple it between the end of 2009 and 2020.

The government says wind projects will be “the mainstay” of its efforts to reach its 2015 target, with some support from limited amounts of biomass. To reach the 2020 goal, there are a number of options on the planning table. Those include intermittent resources such as wind and tidal, firmed up by natural gas. The province calls tidal the “sleeping giant” among Nova Scotia’s potential renewable power sources.

Then there is imported clean hydro power. Nova Scotia, through energy giant Emera Inc., will get a share of energy from the planned Muskrat Falls hydro project on Labrador’s Lower Churchill River, in exchange for building a subsea link to Newfoundland. That chunk of electricity is equivalent to about eight per cent of Nova Scotia’s entire domestic power needs. Muskrat Falls is scheduled to come online in 2017. In addition to the block of energy guaranteed as part of the deal, Nova Scotia also has the option to buy excess power from Muskrat.

The Supreme Court of Newfoundland and Labrador Court of Appeal reversed a lower court ruling this week, and ordered the government to turn over disputed documents to the information and privacy commissioner.

That earlier decision — by Supreme Court Justice Valerie Marshall — decreed that anything the government considered legal advice was exempt from review by the watchdog.

Previously, the commissioner was able to review such information, to ensure the government was correct to withhold it.

By law, the commissioner has the power to carry out investigations and issue reports, but has no authority to force the government to take any action. Only the courts can do that.

The government’s lawsuit over legal advice was one of two that sought to further restrict the commissioner’s already limited powers.

The beginnings of the case go back nearly three years, when an employee of the Department of Justice asked for records in the file of a government lawyer related to a personnel issue affecting her. Those records included correspondence between the minister, deputy minister and other senior officials in the department.

The department denied access, citing solicitor-client privilege. The applicant filed an appeal with the commissioner.

But the department wouldn’t turn over the files to the commissioner either. The attorney general then sued to block his access.

Last year, Supreme Court Justice Valerie Marshall ruled in favour of government. The commissioner’s office appealed.

In a unanimous ruling issued this week, the Court of Appeal said Marshall “erred in law” in making that decision.

“In principle an employment file would likely contain documents (like pay stubs, memos, etc.) that on their face would not normally be considered solicitor-client privileged,” Justice Michael Harrington wrote in the Court of Appeal decision. Chief Justice Derek Green and Justice Malcolm Rowe concurred.

“Yet the DOJ in this case is claiming privilege for the whole file, not on a document-by-document basis. No affidavit was filed by the minister with the commissioner identifying, generally, the type of documents in issue and explaining why particular ones met the test for solicitor-client privilege.”

The Court of Appeal ordered the government to turn over the documents for review, and suggested a possible solution for future disputes.

“The court is concerned by the possibility of misuse of authority conferred by the legislation,” Harrington wrote. “One form of misuse would be for the DOJ to claim a ‘blanket’ privilege for files which, while they contain some privileged documents, also contain others for which privilege clearly does not attach. Another form of misuse of authority would arise if the information commissioner demanded to have documents produced that he could reasonably conclude, without inspecting them, were covered by solicitor-client privilege.”

The Court of Appeal ruling noted that Justice officials could provide the watchdog with an affidavit in such cases, identifying which materials were withheld for legal reasons (by subject matter, date and solicitor). “Such an arrangement, it seems to me, should operate to deal with the vast majority of cases,” Harrington wrote.

“The key to all this is good faith in the exercise of authority.”

A spokeswoman said the Department of Justice would have no comment on the decision. It is not clear whether the department can, or will, appeal it to the Supreme Court of Canada.

Information commissioner Ed Ring is expected to address the matter on Friday.

The case is one of two restricting the powers of his office.

Last year, Supreme Court Justice Robert Fowler ruled that anything the government says falls under a 10-point section of the act is also off-limits to the watchdog. Ring’s office did not appeal. But a similar case now before the courts is testing that ruling.

That case involves access to e-mails sent by a cabinet minister at a time his aide allegedly threatened a Progressive Conservative party leadership hopeful.

The St. John’s Telegram asked for “all e-mails from … Minister Ross Wiseman’s government e-mail account, and text messages from Minister Wiseman’s Blackberry for the dates of Jan. 4, 2011, to Jan. 6, 2011, inclusive.”

Potential candidate Brad Cabana has alleged that an aide to Wiseman tried to bully him out of the leadership race on Jan. 5. Cabana has said he was  threatened with “personal destruction” in a conversation at his Hickman’s Harbour home.

Natural Resources Minister Shawn Skinner lost his seat in the Oct. 11 general election. The NDP candidate, filmmaker Gerry Rogers, defeated Skinner by more than 500 votes in the district of St. John’s Centre.

Exploration is a key issue for a province so dependent on oil revenues — more than three dimes out of every loonie that clatters into the Newfoundland treasury can be directly attributed to the offshore.

The province’s three producing fields — Hibernia, White Rose and Terra Nova — were all discovered more than a quarter century ago. Hebron, which is set to become the fourth, was found all the way back in 1981.

Production has already peaked from existing projects, and won’t return to those levels even after Hebron comes on stream in 2017.

In an interview this summer, Skinner acknowledged that the government is aware it must help the industry to remain competitive with other jurisdictions.

“It is possible that government will offer some incentives to allow companies to do exploration, and we may go so far even as to financially help with some of that,” he said in June. “We understand that our oil fields out there have, we believe, great potential, and a large part of it has certainly not been prospected the way it could be, or should be. So we need to entice more people to come and do that.”

Skinner said he wasn’t worried about the optics of providing aid to so-called “Big Oil” — a favourite punching bag for politicians.

“Those revenues are allowing us to do a whole bunch of good things that we need to be doing, and should be doing, but those revenues are going to be declining if we don’t continue to have prospecting happen, and then exploration happen,” Skinner said this summer. “The oil companies have lots of opportunities elsewhere in the world, and they will go there unless we have some reason to attract them here.”

He added that the province expected to make up its mind on how to proceed “before the fall.”

In fact, at the time, sources indicated an announcement was imminent, and could happen within weeks or even days.

But it didn’t. The October election campaign came and went, with no news.

Meanwhile, the governing Conservatives’ so-called “blueprint” of election promises contained only boilerplate on the issue: “Through a working group comprising the provincial government and petroleum industry representatives, including Nalcor, we will continue to identify measures to promote targeted exploration activity and address other industry needs.”

Now Skinner is gone, and a new minister will soon take the reins of one of government’s most complicated — and important — portfolios.

In the past year, industry players have made some noise about the region’s cost and competitiveness. Senior officials with Suncor and Husky have both publicly highlighted the need for more exploration off Newfoundland’s shores, and suggested that help is necessary to make that happen.

Earlier this month, Nalcor Energy Oil and Gas vice-president Jim Keating said the province is now on the edge of passing the 50-per-cent mark of oil produced versus oil remaining.

To date, Keating said, the province has received one-quarter of anticipated royalty revenues, with an estimated $40 billion to come from this point forward.

But in an address to a Halifax energy conference, Keating said he remains optimistic.

“I do believe that whatever oil and gas we have in play right here, right now, is just the very beginning of upcoming phases of new discoveries and new productions,” Keating said in an address to the Core All-Energy Conference.

But more exploration is necessary, he said.

“Is the glass half full, or is the glass half empty?” Keating asked.

“I think we’ve got to get a bigger glass.”

Nalcor is Newfoundland and Labrador’s Crown energy corporation. It holds the province’s equity stakes in oil projects.

Last year, Nalcor commissioned a satellite oil slick mapping project covering all of Newfoundland and Labrador. That satellite seeps study is aimed at helping identify possible areas of exploration interest in the region.

And Nalcor will contribute $6 million towards a 2D seismic program that began this fall and will take two years to complete.

Charest called the ambassador “to allay the notion, expressed by some, that the U.S. Federal Energy Regulatory Commission (FERC) should be concerned by the proposed acquisition,” according to the cable, posted online last week by the whistleblowing website WikiLeaks.

“Charest explained the terms of the deal, stating that it is a good deal for both parties with New Brunswick being relieved of a heavy debt burden and gaining reduced electricity rates while Hydro-Quebec gains additional transmission capacity for sending electricity to the U.S. market,” the cable said.

“Charest noted to the Ambassador that Hydro-Quebec will take over NB Power’s nuclear generating plant only once the ongoing rehabilitation is complete and the plant is recertified — thus leaving any cost and regulatory risk with New Brunswick.”

According to the cable, dated Oct. 29, 2009, Charest acknowledged that Newfoundland and Labrador Premier Danny Williams was “having a stroke” about news of the deal.

Newfoundland and Labrador has denounced Hydro-Quebec for years, alleging that the power giant is blocking access to market for electricity from the potential Lower Churchill hydro project in Labrador.

But according to the leaked cable, Charest asserted that “Hydro-Quebec always ‘plays by FERC rules.’”

FERC is the independent American energy regulator that enforces open-access transmission regulations south of the border.

Charest also told the ambassador that Hydro-Quebec was planning to acquire the privately-owned Prince Edward Island power company. “The generating assets involved are quite small, but Charest said Hydro-Quebec would be also acquiring important wind assets and environmental credits,” the cable noted.

Jacobson thanked Charest for the head’s up and told him the United States remained “satisfied customers” of Canadian energy. The ambassador said he would be reporting the news back to Washington.

In the cable, U.S. officials acknowledged the agreement’s potential benefits to Quebec. “The deal is attractive to Hydro-Quebec because it will gain possession of major electricity transmission lines from NB to Maine and enhance its electricity export capacity to the United States. Canadian and American electricity grids are interlinked and Canada, in particular Hydro-Quebec, supplies significant amounts of electricity to New England and New York.”

The U.S. embassy in Ottawa forwarded a message to FERC asking whether there were any American regulatory concerns with the deal.

A public outcry in New Brunswick soon saw the scope of the potential Hydro-Quebec-NB Power acquisition scaled down.

Ultimately, the deal collapsed; Quebec pulled out in March 2010, citing cost issues.