At best, Ottawa’s bailout of this province’s expropriation costs last week was bad optics. At worst, it came across as a pathetic and indefensible copout by this province’s government.
If you argue that, in principle, the polluter should pay, you can hardly justify expropriating a company’s assets and not coming up with reasonable compensation.
Premier Danny Williams was very quiet about the $130-million settlement that made AbitibiBowater’s NAFTA challenge go away, other than to say he was “pleased” with the outcome. It’s not clear whether he was referring to the actual dollar figure, or the fact that someone else picked up the tab.
It’s an important distinction, because the amount on the bill and the chequebook used to pay it are separate issues.
There’s no doubt the province should have absorbed the cost of the settlement. But the actual dollar figure does not, as many have suggested, qualify as a black-and-white legal victory for Abitibi, nor does it imply this province’s actions were necessarily illegal on any plane.
After all, the expropriation act spelled out quite clearly that Abitibi would be compensated for material assets, albeit through unilateral assessment by the province.
On top of that, the premier clearly stated in early days that he would negotiate a compensation amount with company officials.
Talks went nowhere
Now, to be clear, those talks went nowhere. The company obviously didn’t like what it was hearing, and it would be naïve not to think the government was looking to pay a minimal amount.
In short order, the company launched its challenge, and compensation became a matter for trade lawyers.
I, for one, always assumed the NAFTA challenge was a matter of settling on a dollar figure. It was an issue of compensation, not legality. While Abitibi may have received much more than the province would have ever agreed to pay —particularly given the cleanup costs taxpayers have inherited — it was nowhere near the $500 million it asked for in its challenge.
This is where many local observers, and the national media in particular, don’t seem to get it. This was a settlement, not an admission of guilt. The company wanted cash for a forced sale. All things considered, it got a little more than it was probably worth.
This story would have had far less legs nationally had the premier bitten the bullet and promised to absorb the amount in the province’s already hefty budget deficit. But the appearance of letting the old man pay for the damages did not sit well with the other siblings. Worse, it brought out all the old biases and misconceptions about Newfoundland.
The most glaring example was the decidedly unacademic comments from Toronto political science professor Nelson Wiseman. In discussing what he called a “disgusting” outcome, Wiseman projected the usual stereotypes about Newfoundland, waving off any thoughts about Newfoundland’s economic contribution to the country as a “joke.” Perhaps he’s forgotten that his province and ours have recently switched seats on the have/have-not train.
The national media, too, exposed their own typical misunderstandings of the province and its economy. It’s an old script that always gets tacked on when Williams does or says something untoward.
When you’re swimming in debt, as most jurisdictions are these days, it’s hard to protest when someone else picks up an unexpected tab. But in this case, it would only be proper for this province to shoulder the cost.
Better that than shoulder yet more vitriol and ridicule from upalong.
Peter Jackson is The Telegram’s commentary editor. He can be contacted by e-mail at email@example.com.