Abitibi’s NAFTA Settlement will leave heads scratching for some time
September 10th, 2010 - 4:00am
This past week I participated in the House of Commons’ Industry Committee for a special meeting looking into the recent closure of two Abitibi–Bowater plants in Quebec. At a time when our forestry sector is reeling from the economic downturn, this might not seem like much in the way of news. What is extremely disturbing is that the Government of Canada is in the process of giving Abitibi-Bowater $130 million as a NAFTA (North American Free Trade Agreement) settlement at the same time as the company is crying poor and refusing to pay severance to the workers affected by these closures. Add to that, the fact that Abitibi-Bowater has forecast $1.5 billion in profits over the next four years and the insult becomes clearer to Canadians who are paying the freight here.
The NAFTA settlement stems from a claim that Abitibi-Bowater launched under the Chapter 11 section of the trade agreement which is meant to protect investors. It was in response to Newfoundland Premier, Danny Williams, who nationalized Abitibi-Bowater’s unused timber and water assets in 2008. This was done after the company abandoned their operations, laying off 800 people and generally wreaking havoc on the economy of Grand Falls. Williams offered Abitibi-Bowater fair market value at the time but the company balked and chose to go to the NAFTA tribunal to settle the score.
Since the NAFTA tribunal is an international body, it became the responsibility of the federal government to respond. They responded quickly, but in a way that signalled bad news for most Canadians; they offered to settle and gave Abitibi-Bowater $130 million as compensation. No fight, no hearing, just a cheque. Why did our government refuse to stand up for our (in this case provincial) right to control our natural resources? Because they don’t believe anything should stand in the way of investors. They used our money to make a point.
The Harper Conservatives are philosophically opposed to any government presence in matters it sees as purely in the realm of the market. They took the opportunity to salt the mine for future settlements that will see Canadian tax dollars handed over to foreign investors. It is important to note that this is not the only claim against Canada under review by the NAFTA tribunal. There are 28 others that total $14 billion. If the Conservatives roll over on those as well, we will be further in debt and likely see pressure to reduce government spending on the items most Canadian hold dear. Health care budgets leap to mind immediately since we have watched them get shredded in past cash crunch scenarios.
New Democrats warned about NAFTA when the Liberals signed it. The Liberals have been on both sides of this issue as they ran in opposition to NAFTA’s predecessor the original Free Trade Agreement between Canada and the United States. As always, there is plenty of blame to go around for these ridiculous capitulations and adherence to ideology that does nothing for the average Canadian. In the end the people who pay are the Canadian taxpayers and the ever-mounting line of unemployed Canadians who have been cast aside in favour of investor rights. As it stands now, we have a government that is primarily concerned with investors. Everyone else just has to pay.