04/30/2012 07:03 EDT | Updated 06/30/2012 05:12 EDT

Labeaume defends legality of arena law

Quebec City mayor Régis Labeaume testified in court Monday, maintaining his stance that the city acted 'legally' when it awarded a multi-million-dollar contract to media giant Quebecor.

Labeaume is defending Bill 204 — a controversial law aimed at protecting from court action the deal that granted Quebecor control over the city's future arena.

The law, which declares that the deal is legal and respects municipal contracting guidelines, was adopted after months of acrimonious debate in September 2011.

Quebec City's former city manager, Denis de Belleval, and another citizen, Alain Miville de Chêne, are contesting Bill 204's constitutionality, charging that it contravenes the right to freedom of expression and freedom of conscience.

"The legislator has to make laws that do not go against the rights of the citizens," said Miville de Chêne outside the courthouse Monday.

Mayor cites potential legal 'glitch'

Labeaume was the star witness Monday — the one who had first contact with Quebecor president Pierre-Karl Péladeau over management of the future and potential NHL arena. He was also the man who signed the management agreement with the media giant.

In his testimony, Labeaume told the court he knew early on there might be a potential 'glitch' with the way the deal had been negotiated.

He said under the charter for Expo-Québec, there is no requirement that forces projects to go to tender. But under provincial laws which govern municipalities, there was what Labeaume described as a possible 'interpretation' problem.

He said a special law was required because both Quebec investors and the public needed protection from the possibility of court action that could dissolve the deal.

The mayor said cities regularly have recourse to such protection.

Deal gives Quebecor control of arena

Under the terms of the deal, Quebecor is to get control of a building worth an estimated $400-million.

In exchange, Quebecor would give the city a down payment of $33 million cash, in addition to $3 million per year, 15 per cent of the arena's profits and a pledge to use the building for community events.