Dawson’s wastewater treatment plant. (Jesse Winter/Yukon News file)

UPDATED: Yukon government discontinues lawsuit over Dawson wastewater treatment plant

A government lawyer filed a notice of discontinuance to Yukon Supreme Court Feb. 19.

The Yukon government has discontinued its lawsuit against Corix Water Systems, a British Columbia-based contractor that built Dawson City’s troubled wastewater treatment facility.

A lawyer for the government filed a notice of discontinuance to the Yukon Supreme Court Feb. 19.

In a joint press release Feb. 28, the Yukon government and Corix said that they’d “reached an agreement” to not “pursue any further legal action on any past, present or future matters relating to the construction contract of the wastewater treatment plant, and the contractual relationship between Corix Water Systems and the Government of Yukon is now over.”

“Neither the Government of Yukon nor Corix will pay the other any amount of money in addition to what has been paid to date,” the press release says.

“Both parties are satisfied with the agreement and are now able to move forward without the time and expense of legal disputes.”

The release did not share the terms of the agreement, or how much money was exchanged between the parties before the agreement was reached.

The Yukon government took Corix to court in February 2017, alleging in a statement of claim that the plant, which has been running since 2012, doesn’t work and that Corix wouldn’t fix it. It was seeking $27 million from the company, which was the value of the contract to design and build the plant as well as a $12 million bond.

The government took over the maintenance and operation of the plant at the same time, but in January 2019 announced that it would be shuttering the facility by 2026, describing the cost to run it — $950,000 a year — as unsustainable.

Dawson’s town council voted earlier this year to replace it with a sewage lagoon.

In a phone interview, Community Services Minister John Streicker said the Yukon government had a “holdback” on Corix’s payment, meaning Corix did not receive the entire value of the contract for the plant and the Yukon government retained some of the $27 million. (Streicker said he could not reveal how much the Yukon government kept.)

Some of that holdback money, Streicker said, was used to cover the cost of the installation of a tertiary filtration system in 2018 to address water quality issues.

Discussions about reaching a settlement have been underway since “day one” of the Yukon Liberal government taking office, Streicker said.

The government, he said, wanted to “move on” from the issue.

“The original (statement of) claim was before the plant was meeting the effluent standards … That original statement was for a plant that wasn’t working at all. Now, what we have a plant which is working technically but which is not sustainable,” he said.

“This really isn’t about Corix in my mind, honestly,” he added. “… We just want to move on to a sewage lagoon, that’s what we want to do, and it should be Dawson’s sewage lagoon, not the Yukon government’s sewage lagoon, and we’re working closely with Dawson to help make that a reality.”

With files from Ashley Joannou and Julien Gignac

Contact Jackie Hong at jackie.hong@yukon-news.com

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