Province of Newfoundland and Labrador Introduces Legislation Regarding Abitibi Bowater

December 16, 2008

Executive Council - December 16, 2008

The following statement was issued by the Honourable Danny Williams, Premier of Newfoundland and Labrador. It was also read in the House of Assembly:

Province Introduces Legislation Regarding Abitibi Bowater

I stand today to inform my honourable colleagues and the people of the province of a very important piece of legislation our government will introduce today in this legislature.

This piece of legislation is very simply about trees and water – the most basic of all natural resources. Natural resources that rightfully belong to the people of Newfoundland and Labrador. Indeed, our province is home to an abundance of natural resources; some of which have not been properly managed or protected in the past.

However, this government stands for something different. We stand for the protection, preservation and fair and proper development of all our natural resources. This certainly includes those related to the forestry industry.

We all know that the pulp and paper industry has faced tremendous challenges in the past few years. The people of Stephenville felt this first-hand when Abitibi Bowater closed their mill a couple of years ago. And I am proud to say that the people of that region were resilient and strong in the face of that adversity and survived and thrived.

Today, our people in Grand Falls-Windsor and surrounding region are facing the same fate. Abitibi Bowater has announced that after a century of operations, they will be closing their doors on March 28, 2009.

I would like to quote from a letter dated March 24, 1903, from Mayson Beeton, President of the Anglo-Newfoundland Development Company Limited – the predecessor to Abitibi - to the Right Honourable Sir Robert Bond. He said, "I have come to this colony for the purpose of ascertaining whether there are available any timber lands and water powers suitable for the creation of pulp, paper and lumber mills of the capacity we want for the supply requirements at home."

Furthermore, Section 3 of the 1905 Charter Lease states, "The Lessee shall be entitled (so far as the Government can, consistently with any grants heretofore made and actually subsisting grant the same) to have, use and enjoy for its milling and logging business all streams, lakes, watercourses, springs or water in, upon under or intersecting the demised premises, and all water power or powers in and upon Exploits River down to and excluding Bishops Falls and particularly, but not by way of limitation, the entire water power of Grand Falls on said Exploits River…."

These statements lay out the clear indication of the purpose and being of the company in this province.

This company has been granted some very generous terms in the past, in order to ensure they continue operations in this province. Now, through their decision to close their operations, they have effectively told the province that they are no longer willing to stand by their commitments. Abitibi has reneged on the bargain struck between it and the province over the industrial development of the province's timber and water resources for the benefit of the residents of the province.

Having said that, we cannot as a government allow a company that no longer operates in this province to maintain ownership of our resources. We will not give away our valuable timber and water resources to a company that does not honour its historic commitments on industrial development of our timber resources.

For 100 years, Abitibi and its predecessors have enjoyed the privilege of Newfoundland and Labrador′s natural resources. It simply makes sense that if Abitibi are not going to continue the operation of a pulp and paper mill and renege on their commitment to our province they will no longer have access to our natural resources.

We will, therefore, today introduce a bill to ensure these valuable natural resources are returned to their rightful owners – the people of Newfoundland and Labrador.

There are numerous charters and licensing agreements which allow Abitibi to operate in this province and those relevant to the natural resources of Newfoundland and Labrador will be repatriated to the province.

The Provincial Government will also be taking control of the power plants of Abitibi as without these power plants the hydro power would be wasted. Nalcor Energy will now manage this asset. Abitibi may be compensated for any power related infrastructure assets which the Provincial Government takes control of.

It is not our intention to adversely affect the business interests of lenders or independent business partners of Abitibi in Newfoundland and Labrador and we will be discussing this matter with lenders and partners in the days ahead.

While the Government of Newfoundland and Labrador will now own and control these assets, we will allow Abitibi full use of them until March 31, 2009 so that the mill can remain in operation as indicated by the company.

Once Abitibi ceases operations in Grand Falls-Windsor our government task force which is already fully operational will continue to work for the best interests of the people of the region.

I have complete confidence in the resilient people of Grand Falls-Windsor and the surrounding area and the viability of the community, and our government is committed to stand by them through this transitional period.

2008-12-16; 1:50 p.m.


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