1. Pursuant to the agreement of the disputing parties to apply the 2010 UNCITRAL Arbitration Rules, except to the extent modified by the provisions of Chapter 11 of the North American Free Trade Agreement ("NAFTA"), Canada provides this Response to the Notice of Arbitration filed by Windstream Energy LLC ("the Claimant").

I. PRELIMINARY STATEMENT

2. On January 28, 2013, the Windstream Energy LLC ("the Claimant") filed a Notice of Arbitration against Canada pursuant to Articles 1116, 1117 and 1120 of Chapter 11 of NAFT A. The Claimant brings this claim on its own behalf and on behalf of its alleged investment, Windstream Wolfe Island Shoals, Inc. ("WWIS"). It alleges that they have suffered damages of $4 75,230,000 as a result of measures adopted by the Government of Ontario relating to their proposed offshore wind energy facility in Lake Ontario. For the reasons explained in detail below, the Claimant's allegations are without merit and should be dismissed.

3. In 2009, WWIS submitted an application to the Ontario Power Authority ("OPA") for a Feed-in-Tariff contract ("FIT Contract") with respect to its proposed 1 00-turbine offshore wind energy generation facility in Lake Ontario, one of the Great Lakes. At the time that WWIS made its proposal, there did not exist a single freshwater offshore wind energy generation project anywhere in the world. Today, only one such facility exists, a small 10-turbine pilot project in Sweden that began operations in 2010.

4. As a result, there remains a significant amount of uncertainty regarding the effects of such projects on human health, safety and the environment. Because of this uncertainty, Ontario has yet to develop a comprehensive regulatory framework for the approval of offshore wind energy projects. In particular, requirements related to the construction, operation and decommissioning of such projects have never been fully developed.