Newfoundland should pay up

Peter
Peter Jackson
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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.

Misunderstandings

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 pjackson@thetelegram.com.

Organizations: NAFTA

Geographic location: Newfoundland, Abitibi, Toronto

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  • Ness
    September 01, 2010 - 12:04

    Two years ago the Harper Government cut approximately $1.5 Billion from Newfoundland and Labrador's share of the Federal Budget. I assume the Feds saw the demise of the News Print Industry coming. No doubt, the Feds must have been quite aware of the danger traps in the NAFTA Agreement, AND it was touted for a long time before that Federal Budget, that the Paper Print Industry was threading dangerously close to its demise. In my opinion If they, indeed, knew what was coming down the chute, then they must have thought it would be smart to secure themselves by deducting the monies from NL's share of that Budget. The Feds must have known of the danger clauses included in the NAFTA Agreement which would ensnare and encumber a big swath of land in NL, 3 times the size of PEI. Also the Ottawa Government having had so much to do with orchestrating the NAFTA Agreement and bringing it into being, no doubt, didn't want to do any harm to NAFTA, thus, with all the knowledge to and affiliation with that Agreement, they knew a payment would have to be made, if NL did what it had to do confiscate that property so it didn't fall into hostile hands. But Peter where is the other $1.35 Billion dollars belonging to NL? Will the province of Newfoundland and Labrador get that money back.? WHY ISN'T YOUR PAPER ASKING ANY QUESTIONS ON THAT ENIGMATIC PIECE OF INFORMATION? I, for one, would like an answer on the location of that money. Are there any others amongst us who would like to know where that money has gone? Now let us go back to NL Bureaucrats and Politicians NOT backing up their province when asked pertinent questions on what the province of Newfoundland and Labrador contributed to Canada's economic well-being. Peter, do you really expect that someone who has been living of the avails of Government pay cheques is going to go against their paymaster? You don't think, DO YOU, that with all the abuse and pilfering of Newfoundland and Labrador's Resource base over the past 61 years, for use of creating economies in other parts of Canada, that anybody having anything to do with the Federal Government decision to conduct governance in that manner, first before creating an economy in NL, is going to agree with NL's side? Such people have to toe the party line for whichever Government is in power, or else their good-time working years will be over for the rest of their lives, then they will have to look for REAL WORK with much less pay. Bureaucrats AND Politicians, in my opinion, who commit such a crime against their province and its people are DISGUSTING! When I see those people on the Power Play and the other political shows, they make me nauseous!

  • Eugene from Town
    September 01, 2010 - 06:52

    The ire of upalongs is borne out of Harper's actions: capitulating to an inflated evaluation of losses in order to kowtow to NAFTA. If Canadians truly embrace NAFTA, as Harper seems to, they may have issue with Williams' actions, my theory is that Canadians don't generally support NAFTA so it's not so easy to decipher sentiment, unless you follow the rightist media spinsters, they'll definitely be on the bash Chavez wagon.

  • ness
    August 31, 2010 - 17:10

    For Mr. Wiseman's information: Peter while listening to BNN (Business National News Network) last Wednesday I heard a statistic that astounded me, that being, 98 per cent of the Iron Ore utilized in Canada is produced in the province of NL. Two years ago it was announced on BNN that the 2 Billionth Ton of Iron Ore had been produced at that point. I wonder how much did that one resource, Iron Ore, profit the rest of Canada's Manufacturing industry? Then, of course, its the FISH RESOURCE that has been utilized for the procurement of International Trade for the rest of Canada, the $2 Billion dollars worth of HYDROELECTRIC ENERGY that benefits Quebec annually, the other MINERALS, including NICKEL which keeps 2 smelters in Central Canada percolating, and the Oil resource which adds hundreds of Millions of dollars a year to the Ottawa coffers and keeps refineries percolating in 2 Maritime Provinces. The way I see it is that certain people who have hailed from this province would sell their mother to get into the good graces of Ottawa. It is shocking what some people will do to look after their own financial well-being while selling the masses of us down the river. Also Peter the NAFTA Agreement is a Federal Contract signed by Canada, so why should a 100 year old Contract which was signed in our province with Bowaters be subjected to that Agreement, it wasn'tt the province of NL that signed that Agreement with NAFTA which ensnared and encumbered a piece of land three times the size of PEI, and all the natural resources contained on that land.

  • baie boy
    August 31, 2010 - 14:30

    A Quebec headquartered company with most of its assets in Quebec get a $130M shot in the arm. Happens all the time. Remember if Abitibi doesnt come out of recievership Feds dont pay.

  • Pierre Neary
    August 31, 2010 - 13:10

    Peter, the province will pay one way or another. Whether it is monetary or in some other form. We are already still paying for the ABC Campaign. Right now NL has the fewest federal public service jobs in our history. Whatever side deal was struck on the 130 million with the Premier and PM will come out eventually. I would probably start to sweat a bit if I were a Liberal MP in this province right now. Makes one wonder who will be calling the shots politically in NL in the future?? The PM once said, if you get in bed with Danny Williams you end up on bottom. I think the PM just found himself on top this time.

  • Penney
    August 31, 2010 - 10:09

    What's annoying about this whole issue is that nearly every professional commentator presumes the exppropriation was justified or was in fact illegal. Abitibi bailed on a 100 year old agreement which gave it the resources in exchange for operating a mill. All sympathy lies with a huge multinational corporation that walked out on workers that gave it everything they had. Williams promised compensation and they got it well enough - if they had not the settlement would have been much higher. They were essentially relieved of severance payments to their workers and the burdens of paying for environmental damage. If the federal government decided to do what no one expected they would do - settle rather than drag Abitibit through the mud in a drawn out legal process - than that's the federal government's cock-up. In any case I believe the decision to settle with Abitibi was basically a bail-out of a Quebec company that is in dire straits. It was an easy opportunity for the federal government to help prop up a Quebec company that has major operations in that province. It couldgo some distance to settling the various disputes between NL and QC.

  • PTM
    August 31, 2010 - 09:38

    Let me guess Peter, you also believe Quebec is correct in challenging the transatlantic power cable from Newfoundland to Nova Scotia!

  • Watcher
    August 31, 2010 - 08:39

    Peter, I completely disagree. You sound like one of those Newfoundland apologists. I for one am a proud Newfoundlander and I couldn't care less about what the "mainlanders" think of me or this province. Paying the 130 million wouldn't do a thing to alleviate the predjudice we've been dealing with from the rest of Canada since we joined Confederation. When the Globe and Mail and the National Post start showing Newfoundland and Labrador in a positive light, I might change my tune. But until then I make no apologies for how "they" view "us". I won't get into the fishery and other resource mismanagement issues, or the fact that the current Prime Minister lied to us outright, but as far as I'm concerned "mainland Canada" can kiss me where the sun don't shine!

  • John Smith
    August 31, 2010 - 08:04

    No Peter, I for one could give a rats a$$ about the vitriol and ridicule from upalong. That will be there till the sun goes nova. I'll take the money thank you very much. A small payment on the 2 billion Stevie stole from us with the accord.