Newfoundland and Labrador Premier Danny Williams says that if AbitibiBowater wants to start a legal fight, it is welcome to try, but he insists his government has the legislative power to expropriate the company's assets in the province.

"We have full authority to do what we've done. We have full legislative authority," Williams said.


Premier Danny Williams says his government has full legislative authority to expropriate AbitibiBowater's assets in Newfoundland and Labrador. ((CBC))

"The legislature in Newfoundland and Labrador is paramount in this jurisdiction and we stand by that. If AbitibiBowater wants to launch any legal challenges, then that is up to them. We have no control over that. I'm sure they will get legal opinions that indicate our legislature has full authority to do what it's done."

Williams was responding to the company threatening to take legal action after the province passed urgent legislation Tuesday to expropriate the company's provincial assets, with the exception of the mill in Grand Falls-Windsor.

The province is taking ownership of all hydroelectricity rights from the generating station at Star Lake, as well as timber rights to forests on Crown land.

"That corporation has the right to do whatever it has to do to keep their company profitable ... but from my perspective as premier, and on behalf of people of Newfoundland and Labrador, we're willing to tell them to go on and do their business in other parts of the country and other parts of the world," Williams said. "You came in with none of those resources, you leave with none of those resources, we wish you well."

Expropriation may break international trade rules: company

The pulp and paper maker has been asking the province to set up a joint working group to address all issues related to the Grand Falls-Windsor mill since the company announced it would close the facility, AbitibiBowater spokesman Jean-Philippe Cote said Tuesday.

"We tried to have open dialogue, we tried to have it in an orderly manner, so really today we just don't understand. In all the discussions we had with them since Dec. 4, they've never talked about such a course of action," he said.

Cote said the company is still open to working with the government to avoid a complicated legal battle, but he said AbitibiBowater is also looking into whether or not the move breaks international trade rules.

"Now we will have to review our options, including any legal considerations," he said. "AbitibiBowater also needs to assess how this destabilizing precedent opens the door to some potential U.S.-Canada trade issues."

The company said it had only 90 minutes notice Tuesday before the government announced the expropriation.

AbitibiBowater may be compensated for hydro assets such as dams and power stations, but not for the loss of any rights to the resources, the government said.

No price has yet been set for the assets.

About 250 foresters and 450 mill workers will lose their jobs when the newsprint paper mill in Grand Falls-Windsor shuts down in March 2009.

Business is good, Williams says

Meanwhile, Williams said he doesn't believe other large multinational companies would be scared away from doing business in Newfoundland and Labrador by his government's move with AbitibiBowater.

"We think it's fair, we think it's equitable and I don't think any other businesses are going to be concerned about coming to, what I think during these difficult, recessionary times, is probably one of the most prosperous ... provinces in Canada, and indeed in North America."

William said the government has shown it can reach deals with big companies, such as Petro-Canada, ExxonMobil and Vale Inco.