Premier Kathy Dunderdale cannot be trusted with the Muskrat Falls hydroelectric megaproject because of the accidental expropriation of a fouled newsprint mill that has stuck Newfoundland and Labrador with a massive cleanup bill, a Liberal MHA says.

Cartwright-L'Anse au Clair MHA Yvonne Jones accused Dunderdale at the house of assembly of bungling one mess and exposing the province to enormous risk on another.

"I was in the room when the current Premier explained the Abitibi expropriation and then sent us to a technical briefing with [Nalcor CEO] Ed Martin," Jones told the house of assembly Monday.

"They stated that they would seize the water and timber rights but would leave the mill because of the environmental liabilities," said Jones, describing how MHAs went on to unanimously approve a bill in 2008 that saw the government take control of AbitibiBowater's assets as the forest company was preparing to shut down the century-old mill in Grand Falls-Windsor.

The government revealed later it had mistakenly expropriated the mill.

"What we voted for was not what we got, so how can we have any confidence in any of the information that you are providing on Muskrat Falls when it is the same cast of characters that is providing the information?" Jones asked.

Top court ruled against province

The Supreme Court of Canada ruled last week that AbitibiBowater — now known as Resolute Forest Products — was not on the hook for environmental costs associated with the mill.

Responding to Jones, Dunderdale said the Muskrat Falls project has no relation to a mistake made on the AbitibiBowater property.

"The Government of Newfoundland and Labrador has never tried to defend the expropriation of the mill ... It was never our intention to expropriate the mill," Dunderdale said.

"That sometimes is a consequence of doing things expeditiously and not doing the due diligence. That is why we do not make the same mistakes twice."

The environmental price tag for cleaning up the Grand Falls-Windsor site could pass $100 million.

Remediation fund planned

Meanwhile, Dunderdale said the government wants to avoid further environmental trouble, and is preparing new laws to that effect.

"We're going to undertake legislation to put in place financial undertakings when people intend to develop and operate an industrial site for remediation at the front end, as opposed to using the process we had, which we thought was sound until challenged by Abitibi," Dunderdale told reporters outside the house.

As well, Dunderdale said the government is pushing for changes in federal bankruptcy laws that would prevent companies from walking away from environmental responsibilities.

"Can anybody tell me why they believe that Abitibi was going to come in and clean up Grand Falls-Windsor if we hadn't expropriated?" Dunderdale said.

"And if that's so, why haven't they come and taken responsibility for Buchans? Why aren't they doing something about Stephenville and Botwood?" she said, referring to other sites where AbitibiBowater had operated.