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20 December 2008

Weekend reading: unilateral action edition

1.  Telegram editor Russell Wangersky’s Saturday column in which he suggests the court action over the government’s expropriation of assets belonging to AbitibiBowater, Fortis, CHI, Inc and Sun Life could get “tangly.”

Interpretation is always in the eye of the beholder, and in this case, the final beholder is likely to be a very senior judge.

If AbitibiBowater goes to court, it will be the nuanced interpretation - probably of the original lease document from 1905 and other similarly dated material - that will decide the day.

The province has already signalled it will argue that AbitibiBowater broke its lease by announcing the closure of the mill.

AbitibiBowater, if it fights, will argue that, if any leases have been broken, they've been broken by the province.

All in all, there's only one thing for certain: it's bound to be rich fodder for lawyers and more than enough paper for all.

Wangersky’s right.  AbitibiBowater was already suing the provincial government over another unilateral change to leases, this time from 2002/2003.  That lawsuit was settled – without costs –entirely arbitrarily by the provincial government.  It included a line in the expropriation bill which quashes the suit.

Period.

What exactly would stop the provincial government from doing that again, with respect to any other lawsuit it doesn’t like?

The are plenty of aspects to this expropriation bill which make it far more complex than the claim that it was merely about trees and water.

2.  Financial Post editor Terence Corcoran who highlights a few other issues worth pondering:

The union and the government appear to have misjudged the company’s intentions, or they are playing hard ball to force the company do what it does not want to do.

It’s a dangerous game for Mr. Williams. Newfoundland isn’t exactly a fiscal powerhouse. Its latest financial update shows that if the price of oil is at $60 a barrel, the province “could be facing a deficit of several hundred million dollars next year, and could potentially be facing deficits in the years to come.”

At the same time, the province is paying lavish wage increases to unionized civil servants of 20% over four years. This is a formula for fiscal disaster down the road. And if the province also has to pay out big dollars to settle a NAFTA case, along with suffering a hit to its reputation as the Venezuela of the North, the outlook is even bleaker.

3.  The Telegram editorial on another unilateral action, this time by the provincial cabinet to replace appointees to the Memorial University board of regents with a raft of new faces.  The one thing the new faces have in common:  they are all close partisan and personal associates of cabinet ministers. They join another batch of appointees, all of whom have impeccable Provincial Conservative credentials. They will follow orders.

One of the regents the government removed, Mary Broderick, was on her way to a Board of Regents meeting when her cellphone rang and she was dismissed.

Wonder of wonders, Broderick was vice-chair of the board, and also sat on an ad-hoc committee of the board that was examining the government’s last gerrymandering attempt. When in doubt, fire them out.

-srbp-