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rfmcdonaldLed by its charismatic premier Danny Williams, the Canadian province of Newfoundland and Labrador is currently engaged in another act of attention-getting economic nationalism.
Newfoundland and Labrador has traditionally been the poorest Canadian province, with an economy founded on the cod fisheries that once called the Grand Banks their home. After the fisheries' exhaustion in the early 1990s, I suspect that Newfoundlanders have moved to a more hard-edged stance based on the most enthusiastic defense possible of provincial prerogatives in regards to resource rents and provincial autonomy. Before this, highlights were the demands that the nickel of the Voisey's Bay deposits be processed locally and requirements for a maximum of economic benefits from the province's offshore oil deposits, both of which have been successful. In the realm of federal politics, Williams has been very vocal, at one point taking down Canadian flags in Newfoundland government facilities in the middle of a dispute with the Conservative federal government over the federal equalization system, and more recently leading the Anything But Conservative campaign that successfullly block the election of any Conservative Party MPs in the province during the recent federal elections.
Comparions between him and Hugo Chavez have been made by his detractors, rather unfairly given Williams' commitment to democratic ideals. For the record, I can't find myself especially concerned for AbitibiBowater. Many's the one-industry resource town outside of the core urban areas of Canada that has been devastated by the decision of one corporate headquarters or another to rationalize production heedless of the expense to local communities, and if one local government wants to try to prevent that what's the problem?
The provincial government, responding to the forestry giant's decision to close a money-losing mill in central Newfoundland, rushed through legislation on Tuesday taking control of the company's hydro assets and resource rights.
There may be unspecified compensation for physical assets seized.
The company has been mulling its options since, but some experts warned that a NAFTA challenge to the province's actions is inevitable. And it is not the province that will be on the hook.
It is Ottawa, as signatory to the international treaty, that will have to respond, and it is Ottawa that will be liable if the decision favours the company.
"Canada would have to defend the claim," Lawrence Herman, international-trade counsel at Toronto law firm Cassels Brock & Blackwell, said yesterday.
"I would imagine that Newfoundland could provide a good portion of the legal costs, but it would be Canada's fight."
[. . .]
After unionized workers there twice rejected restructuring plans, the company announced it would close the paper mill at the end of March. The move would put hundreds of people out of work.
Mr. Williams's government struck back with this week's legislation. The move brought sharp condemnation from AbitibiBowater, but the Premier said yesterday that the company will find it has no recourse.
Revisiting his campaign theme of "no more giveaways," Mr. Williams wished the company well, but said it will leave the province with the same resource rights it had on arrival: none.
"The legislature in Newfoundland and Labrador is paramount in this jurisdiction and we stand by that," he told the CBC.
"If Abitibi wants to launch any legal challenge, then that's up to them; we have no control over that. I'm sure, though, they will get legal opinions that indicate that our legislature has full authority to do what it's done."
Newfoundland and Labrador has traditionally been the poorest Canadian province, with an economy founded on the cod fisheries that once called the Grand Banks their home. After the fisheries' exhaustion in the early 1990s, I suspect that Newfoundlanders have moved to a more hard-edged stance based on the most enthusiastic defense possible of provincial prerogatives in regards to resource rents and provincial autonomy. Before this, highlights were the demands that the nickel of the Voisey's Bay deposits be processed locally and requirements for a maximum of economic benefits from the province's offshore oil deposits, both of which have been successful. In the realm of federal politics, Williams has been very vocal, at one point taking down Canadian flags in Newfoundland government facilities in the middle of a dispute with the Conservative federal government over the federal equalization system, and more recently leading the Anything But Conservative campaign that successfullly block the election of any Conservative Party MPs in the province during the recent federal elections.
Comparions between him and Hugo Chavez have been made by his detractors, rather unfairly given Williams' commitment to democratic ideals. For the record, I can't find myself especially concerned for AbitibiBowater. Many's the one-industry resource town outside of the core urban areas of Canada that has been devastated by the decision of one corporate headquarters or another to rationalize production heedless of the expense to local communities, and if one local government wants to try to prevent that what's the problem?
