One of the more common explanations is that the people of the province would have wound up in the same spot anyway since Abitibi was on the verge of bankruptcy anyway.
Finance minister Tom Marshall tried it on Friday [via the Telegram]:
“If we hadn’t expropriated, the company still would have gone into double-C double-A protection or into bankruptcy protection, and we would have been left with nothing but the contaminated assets,” Marshall said.And federation of labour boss Lana Payne [@Lanampayne] tried the same thing via Twitter:
[In my opinion] expropriation was right decision. Otherwise we'd be left with clean-up and no assets.The only problem with this argument is that is it more supposition and rationalization than fact.
…
As the saying goes, can't get blood from a turnip. AB was restructured under bankruptcy law. Because of restructuring, NL would be where it is today: one of many parties in a long line.
The provincial government’s expropriation plan at the outset was to leave the environmental contamination with the company. They developed this plan knowing the company was on the verge of bankruptcy. The provincial government did not know whether the company would fail or, as it turned out the company would emerge from bankruptcy protection.
The only way the taxpayers of Newfoundland and Labrador wound up with full liability for the environmental mess - except in the case of expropriation – would have been if the company went bankrupt and no one bought the assets and the liabilities that went with them.
If Abitibi sold the properties in Newfoundland and Labrador, the new owner or owners would have been in the same position Abitibi was in when it bought the properties years before. They bought the assets and all the liabilities that went with it. The provincial government would have had the legal power to order clean-up and the owners would be responsible to carry out the clean-up.
Had it emerged from bankruptcy protection – as it did – Abitibi would have held its assets and its liabilities in Newfoundland and Labrador. The company would have been liable for the liabilities and it would have had assets that it could use to pay for environmental clean-up.
But thanks to the provincial government action, Abitibi had no assets of any value in Newfoundland and Labrador that might have interested a buyer. All the company had was liabilities. As we have seen, no one wanted any of them.
The expropriation bill accidentally included the Grand Falls-Windsor paper mill but other than that, the expropriation played out exactly according to the original government plan. The environmental orders issued in November 2009, the ones that wound up in front of the Supreme Court of Canada, were part of the provincial government’s effort to stick Abitibi with the costs. Read the decisions in Quebec and in the Supreme Court of Canada and you can pretty quickly see that by converting themselves to creditors, the provincial government scuttled any interest it may have had in securing environmental clean-up in and of itself.
But that was really gravy. Since they’d created an unsalable package out of the Abitibi properties, the provincial government wound up with the mess it created.
In other words, the provincial government cooked up the expropriation in three days because it wanted the assets. They tried to shaft Abitibi and leave it with the environmental liabilities. In the end, though, the liabilities followed the owners of the assets just as they would have in any event.
But it wasn’t inevitable that the people of Newfoundland and Labrador wound up facing hundreds of millions of dollars in costs. Until the expropriation, someone else was in line to face that bill.
Meanwhile, the company Danny Williams tried to shaft doesn’t have to face hundreds of millions of dollars in environmental liabilities in Newfoundland and Labrador. They also didn’t have to pay $30 million to their former employees. And Abitibi walked off with $130 million in a NAFTA settlement.
The expropriation was a brilliant idea… if Danny Williams and his supporters wanted to help AbitibiBowater out of a tough spot with a ton of corporate welfare courtesy of the ordinary workers of Newfoundland and Labrador.
And what Williams, Marshall, Payne and the rest are getting on with? Well, just call that corporate welfare bum-wipe.
-srbp-
