A contract dispute over asbestos at the Labrador Correctional Centre has landed in court, with the company hired to renovate the Happy Valley-Goose Bay jail suing the Newfoundland and Labrador government for more than $3 million while the facility’s HVAC system remains out of service.
Moss Development Corporation filed the lawsuit on Sept. 29 in the Supreme Court of Newfoundland and Labrador, alleging the province’s handling of repeated asbestos conditions at the jail caused delays and financial losses. The company claims the government’s actions put Moss Development in breach of its contract. Moss Development is seeking special damages exceeding $3 million, along with a court declaration that the province, not the company, is responsible for the delays and that it did not breach its contract. The provincial government has not yet filed a statement of defence, and none of the claims have been tested in court.
HVAC System Down Since July
According to the statement of claim, the jail’s rooftop heating, ventilation and air conditioning system went out of service in July and remained offline when the lawsuit was filed in late September. Workers discovered a substantial accumulation of dust inside the ductwork on July 8 during a planned HVAC replacement, which the company says dispersed into the control room area. Moss Development says it halted work immediately given the facility’s history with asbestos, a mineral once used widely in insulation that the Canadian Cancer Society says can cause cancers including lung and ovarian cancer.
Asbestos was first confirmed at the jail in the summer of 2024, when inmates and staff were relocated after the substance was identified in material brought in for an inmate carving workshop; the lawsuit alleges it originated from soapstone.
Dispute Over Testing and Remediation
Moss Development alleges the province told the company the building was asbestos-free following remediation completed in January 2025, but says asbestos was discovered again in April 2026. The province then brought in a separate contractor for abatement work, which the lawsuit says was stopped before completion in June.
After the July 8 discovery, Moss Development says it asked the province for laboratory analysis of the suspected material but the request was declined. The company further alleges the province had a different contractor clean the ductwork before the material could be tested, relying instead on air-monitoring results that Moss Development says are less reliable. A provincial representative stated on July 29 that the jail was safe to occupy, according to the lawsuit.
Moss Development says it has refused to connect a new rooftop HVAC unit to the affected ductwork without a certified abatement contractor first completing what it describes as Type 1 asbestos procedures. The lawsuit cites an Aug. 21 opinion from the province’s environmental consultant, Pinchin Ltd., which it says confirmed asbestos in settled dust within the duct system and found a potential airborne asbestos risk from air sampling. Pinchin reportedly recommended Type 1 procedures take place before the HVAC connection proceeds.
Default Notice and Union Concerns
The lawsuit states that while Moss Development was arranging an abatement contractor in September in consultation with a provincial project manager, the government placed the company in default on Sept. 21, giving it five days to resolve the issue after alleging Moss Development had failed to keep the facility operational. Moss Development denies it was in default and denies responsibility for the delays.
The lawsuit also alleges that on Sept. 18, the province acknowledged the lack of ventilation was causing condensation, mould and health concerns at the jail, prompting the introduction of dehumidifiers. Jerry Earle, president of the Newfoundland and Labrador Association of Public and Private Employees, which represents correctional workers, called the situation extremely concerning and said staff have raised the issue repeatedly. Earle said at least eleven weeks without ventilation has created a range of safety concerns, and expressed worry about heating at the facility if the HVAC system remains out of service.
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