Province to rewrite laws in the wake of Abitibi decision

James McLeod
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The former owners of the former AbitibiBowater paper mill in Grand Falls-Windsor will not have clean up contaminated sites, the Supreme Court of Canada has ruled. Now the province says it will rewrite its laws to ensure the situation won’t happen again. — TC Media file photo

Premier Kathy Dunderdale said Monday that as far as she’s concerned, the government would be on the hook for cleaning up an environmental mess at the abandoned Abitibi mill in Grand Falls-Windsor even if it hadn’t accidentally expropriated it in 2008.

Dunderdale is also promising legislation to change the province’s environmental protection laws to make sure the government doesn’t get stuck with the bill again.

Abitibi dominated question period in the House of Assembly after the Supreme Court of Canada ruled Friday the paper manufacturer isn’t responsible for cleaning up environmental liabilities at the mill it once operated in Grand Falls-Windsor.

Liberal Leader Dwight Ball was pressing for answers and accountability on the estimated $100-million cost for cleaning up the mill site, along with unknown legal costs the government will have to pay as a result of losing the Supreme Court challenge.

But Dunderdale said the Supreme Court case really doesn’t have anything to do with the province’s botched expropriation of the Grand Falls-Windsor mill.

In 2008, when Abitibi was preparing to shut down operations in Newfoundland and facing the possibility of entering bankruptcy protection, the provincial government moved quickly to expropriate water and timber rights from the company along with associated hydroelectric dams.

In the rush, mistakes were made.

Ball tried to hold Dunderdale personally responsible, and tied the issue back to the ongoing debate over whether to develop Muskrat Falls.

“When government made this $100-million mistake, the premier was then the lead on this file. Mr. Ed Martin was the CEO of Nalcor; he provided technical briefings. The current minister of natural resources was the minister of finance, and the current minister of finance was the minister of justice. They all played key roles in this botched expropriation,” Ball said in the House of Assembly. “I ask the premier: since the same people of the expropriated Abitibi mill by accident are now leading the charge on Muskrat Falls, how can the people of this province have confidence in this multibillion-dollar project?”

Speaking to reporters after question period, Dunderdale addressed the mill issue directly.

“We’ve never tried to shy away from the fact that we never meant to expropriate the mill. We did that piece of work over four or five days,” Dunderdale said.

“We felt we had to move quickly to secure those assets before we lost access to them, so we prepared legislation quickly.”


But Dunderdale — who was natural resources minister at the time, and responsible for the Abitibi file — said there are other contaminated Abitibi sites in the province that the government didn’t take, but they’ll still be on the hook anyway.

“They haven’t done anything in Stephenville nor do we believe do they have any intention in cleaning up Stephenville. They closed Stephenville, you know, a year or more before they found themselves in crisis and in bankruptcy protection,” Dunderdale said.

“No question. You know, we expropriated the mill and we ought not to have done that, and certainly and in context of the bankruptcy proceedings we’re going to be liable for the cleanup, but we’re also liable in those other places and we didn’t expropriate them. So can anybody tell me why they believe that Abitibi was going to come in and clean up Grand Falls-Windsor if we hadn’t expropriated it.”

Dunderdale said this isn’t an issue that’s limited to Newfoundland and Labrador; she said the Supreme Court decision that bankruptcy proceedings effectively trump environmental laws means that governments across the country will need to rewrite legislation.

She said she’ll be looking into pressing Ottawa to change bankruptcy legislation, but in the meantime, the government won’t be sitting still here.

“We’re going to undertake legislation to put in place financial undertakings when people intend to develop and operate an industrial site for remediation,” she said. “So we’ll do in these circumstances now the same as we do with new mines operating in the province. You have to give undertakings — financial undertakings — at the beginning before you actually develop the mine for remediation of the mine when the work is completed.”

Twitter: TelegramJames


Organizations: Supreme Court of Canada, Nalcor

Geographic location: Abitibi, Grand Falls-Windsor, Newfoundland and Labrador Muskrat Falls Grand Falls Stephenville Ottawa

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Recent comments

    January 05, 2013 - 20:12

    The provincial Government would have been on the hook to clean up the Abitibi site anyway! But if they didn't move when they did they would have lost the power generating plant also, which would have possibly been sold for scrap. SO THE PROVINCE MADE A SMART MOVE!

    • david
      January 16, 2013 - 21:27

      Exhibit A in the case for protective incarceration.

  • disgusted taxpayer
    December 11, 2012 - 15:37

    rewrite the laws, you got to be kidding us. you politicians better go to a kindergarden class for some sound advice before you rewrite any laws. we the taxpayer don't want you as you said yourselves ACCIDENTALLY screwing up.

  • Bob Kieley
    December 11, 2012 - 14:28


  • NL Lawyers Maid Service
    December 11, 2012 - 11:35

    Maybe she can use the money from the failed hebron deal, $150 million to clean it up and pay for this exercise of very,very expensive legal bills. The torys figured rather than create more jobs they would take the lump sum and spend it better than those who could of earned it and help stimulate the ecomony. Instead they will build and/or upgrade a building at MUN. The same MUN who can pull 10 million out of their deep back pockets for the former Battery Hotel. Its bad enough we have to pay to clean up abatibi's mess, but now we have to clean up the governmnets mess too! Two wrongs don't make a Right! Unless you're in a party that has blinders on.

  • david
    December 11, 2012 - 11:34

    Newfoundland---- where every lesson must be learned in the hardest and most expensive of ways, where regularly re-inventing the wheel is a major economic activity, where every occurrence in the province is completely unique and must be fixed with with band-aids and chewing gum, and where history teaches nothing. Not. A. Thing. Enjoy Muskrat Falls.....I'm sure we'll come up with plenty of great new rules after that one!

  • Duggan
    December 11, 2012 - 09:27

    It was a rushed, ill-considred, and very politically motivated move to do the expropriation. Don't blame the opposition parties for not studying the legislation - neither did the Williams government that introduced it. Kathy Dunderdale was Minister of Natural Resources at that time. Both her then Deputy Minister and the government lawyer responsible for the legislation received promotions in the months following the mistakes. Remember as well, The Williams government also violated NAFTA and the Canadian government had to pay $130 million penalty because of it. A penalty the Harper government will get back by closing SAR communications, eliminating federal jobs here and no talking to our current Premier.

    • Eli
      December 11, 2012 - 14:27

      Dunderhead justifies what was done in the expropriation of Abitibi and in the same breath confirms we'll have NEW negislation to make sure it doesn't happen again. Go figure! They made so much of the first female premier but on this "file" even Danny couldn't screw it up right? Right?

  • mr. scrooge
    December 11, 2012 - 09:08

    little too late for that now madam premier. you and your overpayed gang, alone with the help of the liberals and ndp have made fools of the people. the taxpayer are now on the hook for the massive cleanup bill, all thanks to the dumb decision to expropriate the assets from abitibi-bowater. in saying all this my question: WHEN ARE YOU AND THE OTHER MHA'S INVOLVED IN THIS MESS GOING TO RESIGN AND OPOLIGIZE TO THE RESIDENTS OF GRANDFALLS-WINDSOR ?

  • Cold Future
    December 11, 2012 - 08:55

    The rush to the finish line is a good example of how not to get it done. There were also millions paid to union workers which was paid again by the restructured paper maker-no news of any pay back money for the government.The government are about to jump into Muskrat with eyes wide shut again- can't wait to see the result. They have no capabilty with legal and contractual matters and won't hear of any reviews, advice or any input by anyone knowledgeable. Thank god for even the weak effort from the opposition to expose it.

  • roy
    December 11, 2012 - 08:23

    We all know we would nave been holding the bag for cleanup but to listen to the liberals and NDP turns your stomach, they supported the move and are now condeming it and Loraine is saying she should have"studied" it further delayed the vote the same on Muskrat delay study while every year or less the cost is rising. The LIB or NDP have no plans to improve the province unless you call opposing a plan nothing constructive has come from their mouths.

    • Scott Free
      December 11, 2012 - 08:51

      The governing side was full of lawyers; couldn't any of those wizards have taken the time to do proper due dilligence or even skimmed over the documents and offered an opinion other than to bow to Little Man Dan and nod like sheep? Where were our highly paid deputy ministers, civil servants, legal experts, etc., or were they over-ruled by Dictator Dan?

  • Scott Free
    December 11, 2012 - 07:44

    Little Man Dan was the lead on this file; and, as an intrepid lawyer, he couldn't be wrong by expropriating Abitibi assets. And, I remember then Ministers of the Clown, Johnston saying "the polluter pays"; and Dunderdale, "they'll be prosecuted to the fullest extent of the law". The effects of the Danny Damage Era will be felt for generations to come. This monumental boondoggle will cost hundreds of millions in cleanups, legal fees and future settlements. Thanks Dan bye, adding to your legacy.

  • Brett
    December 11, 2012 - 07:16

    Good clear position. Nice to see the misdirection and finger pointing by the opposition party defended and shown for what it is - sensationalism and self serving politics, not being constructive and helping to build the community. I have no issue for holding people's feet to the fire on issues, but only on real items, not fabricated garbage.