Judge Bernard Godbout acknowledged the government did contaminate the water and awarded a maximum of $15,000 in compensation to about 300 people for inconveniences caused by disruption to water services and wells.
Residents, who claim they were sickened by ground water contamination near the CFB Valcartier military base, say they're disappointed with the ruling.
Caroline Duplain is one of 3,000 residents who signed on to the class action lawsuit. She told the CBC she was diagnosed with breast cancer seven years ago and her father died of multiple brain tumors over a decade ago. "I feel so sad. I told my mother this morning, 'my father's death cannot be in vain. Something good has to come of this.'"
Residents claim they've experienced unusual health problems and there have been as many as 500 cancer cases. They were demanding 200 million dollars from the Department of National Defence and Valcartier Industries.
In December 2000, residents learned the chemical degreaser had been dumped decades earlier and had seeped into private wells near the base and the adjacent town.
Wells in some neighbourhoods contained up to 180 times the level of TCE considered acceptable by Health Canada.
In 2009, researchers participating in the class-action suit said they found a link between cancer rates and the chemical in Shannon and exposure to TCE.
Justice Godbout said the plaintiffs in the case failed to prove a causal link between TCE detected in the town's water supply and the number of cases of cancer reported in the community.