The Banana Republic of Newfoundland

Hugo Chavez ain't got nothin' on Newfoundland and Labrador premier, Danny Williams. Ol' Hugh at least pays compensation for expropriating private assets owned by corporations, unlike Williams, who is just taking the assets of forestry company AbitibiBowater.

http://www.theglobeandmail.com/servlet/ ... ional/home

Scratch Newfoundland off the list of places to invest.

Welcome back stranger.

As for NF, kind of a strange world these days.

And what assets would he be taking? Why do you and the Globe and Mail insist on spreading inaccuracies? Fer gawd sake Canada stiffen your spine and stand up for what's right! The timber and water rights do not...I repeat do not....belong to Abitibi. They are leased rights with the understanding that the company will utilize those resources to run the mill. Otherwise, if they are not used and the mill shuts down, the assets revert back to the province. As for the hydroelectric sites, Williams is offering fair market value for these assets. Suck it up Abitibi. You reneged on your part of the deal, now suffer the consequences. You've been taking the province for a ride long enough.

Abitibi has not been investing any money into upgrading the mill. All profits from the Grand Falls mill has been taken out of the province to shore up operations in other parts of the world. Good riddance in my opinion. Hugo Chavez would have ridden their arses out of town long ago.

If Williams is on the wrong track why are the people of northern Ontario demanding action against Abitibi? Read on....

Should Ontario Follow Newfoundland?
Wednesday, 17 December 2008 Iroquois Falls – Northern Ontario residents are calling on Premier Dalton McGuinty to get tough with Abitibi Bowater over plans to sell off dams in Iroquois Falls. The three dams are an integral part of the success of Abitibi’s paper operations in Iroquois Falls. Hundreds of residents packed a community meeting to express their outrage over the potential sale of the dams which could seriously affect the bottom line of the local paper producer.

Northern residents say Ontario needs to take the lead of Premier Danny Williams of Newfoundland who stunned Abitibi with the news that he would expropriate the water rights at its shut down Grand Falls Mill.

MPP Gilles Bisson (Timmins-James Bay) says Ontario must act in the public interest. “Abitibi was given access to the water and trees of our region in order to create a very profitable operation. Selling off the dams to a third party will completely change the bottom line of this operation. Dalton McGuinty needs to stand up for the public interest and stop this sale.”

MP Charlie Angus (Timmins-James Bay) says the proposed sale speaks to the financial crunch facing the recently-merged paper giant. However, he points out that a quick fire sale of assets will only make matters worse. “The Iroquois Falls mill is a low-cost, reliable producer of paper. Its success is due to the fact that the three dams are part of the very infrastructure of the mill. The sale of the dams might bring some quick cash to the company but it will undermine the future of this operation. The Province would be completely irresponsible to allow Abitibi to get away with burning its furniture just to heat the house.”

The meeting included local municipal leaders, business leaders and union representatives. They have vowed to fight the sale of the dams.

Angus says Danny Williams is showing leadership while Ontario continues to fail the forestry industry. “There’s a reason Newfoundland is a have province and Ontario is not. The Province has stood back while thousands and thousands of forestry jobs have been lost across the north. This is a chance for the Province to show that it will stand up for the people of the north.”

--

Danny has only on thing in common with Chavez, and that is the people actually like him.

Hardly a banana republic. Williams simply took back control of resources after Abitibi renegued on an agreement. If Abitibi wasn't providing jobs, the deal was off. Williams did what he did because Newfoundland is not a Banana Republic.

I think Danny has a lot in common with Chavez.........he is a little looney, has a messiah complex, likes to intimidate opponents, plays at the populist.....and I don't like either a bit.

But Danny is absolutely correct to expropriate (with compensation.....and minimum compensation) lease rights to natural resources that, as he says, belong to the people of Newfoundland.

Sounds a lot like another conservative leader I know.

Hmm, I'm feeling some deja vu here ...

Here is the text from Danny Williams. It says

Ministerial Statement - Province Introduces Legislation Regarding Abitibi Bowater

"May" does not mean the government is "offering fair market value for these assets." So, it appears that the government has made no statement that Abitibi will be paid fair market value, unless you post a link otherwise. They "may" also tell the company to take a hike.

I am not a lawyer by any stretch but I know something about asset pricing. I know that a shut down mill has some value, and the fact that Abitibi has shut the mill down because they cannot make a profit from it does not mean others also cannot. This means that Abitibi can sell the mill to someone else. I also know that things change in business, and it one day may be profitable to re-open the mill. Thus, unless the company has said that the mill will never, ever, under any circumstance be opened again, it appears that the province, indeed, may be breaking the contractual agreement with Abitibi. If so, I hope justice is served and compensatory damages are rightfully awarded by the NAFTA tribunal. We do, after all, live in a nation that respects the rule of law.

I also find it interesting that the government feels the need to introduce legislation to expropriate private assets. (And despite all the "natural resources belong the people" rhetoric, a lease is a private asset.) If Danny Williams is so confident of his case, why does he not take it into a court of law rather than use the hammer of legislation? After all, courts are where contractual agreements are adjudicated.

After this, I certainly would not invest capital into Newfoundland unless the terms of the investment were so good and the legal provisions so airtight that the government could not take it on a whim.

There is no deal to provide jobs.

Hi Toro, how's bizz?

Leave it to Toro to jump in on the side of a sleasy American multinational.

Hey DB.

Pretty good, actually. I've been on the side of all those apocalyptic writings you've been posting, albeit perhaps not quite so dire, so the Toro portfolio has been holding its own this year.

Abitibi is based in Montreal.

Exactly. That's why I responded to your same thread on the other forum. My response is the same.

Toro, yes Williams may compensate Abitibi for the hydroelectric generating sites if they decide to come to the table in good faith. I retract my statement on fair market value, but the government is willing to sit down with Abitibi and work out a fair arrangement for all parties. Negotiations are ongoing and the ball is in Abitibi's court.

On another note from our *rolls eyes* national newspaper, the Glop and Fail:

International Trade Minister Stockwell Day said in a statement that Montreal-based AbitibiBowater Inc. has made no “direct allegations” that Canada has violated any international obligations.

“It is premature to raise concerns in regards of Canada's international trade obligations since the Government of Newfoundland and Labrador and AbitibiBowater Inc. are reportedly set to enter into negotiations over compensation,” he said.

The province has been very patient with Abitibi up to this point. Do you think Newfoundland should stand by while Abitibi continues to sell power to the grid at exhorbitant prices? Suddenly Abitibi is out of the paper business and are now hydro providers? The contract is null and void and we are witnessing the death throes of a dying company who will grasp at any straw on the way down.

From what I understand, Abitibi was granted Hydroelectric and Timber rights because they built the mill (technically, it was predecessor companies). Logically, if the mill closes, the rights should be forfeited.

End of story. And Abitibi management has known that this was NL's position for over a year.