Nfld. & Labrador

Compensation talks between N.L. government, AbitibiBowater break off

Newfoundland and Labrador's Deputy Minister said Monday that talks between the provincial government and AbitibiBowater have broken off because the government's offer of compensation for the expropriation of AbitibiBowater's physical assets in the province is too low.

Newfoundland and Labrador's Deputy Minister said Monday that talks between the provincial government and AbitibiBowater have broken off because the government's offer of compensation for the expropriation of the company's assets is too low.

The two sides had been trying to settle on a price for all of AbitibiBowater's physical assets in the province, except the mill in the central Newfoundland town of Grand Falls-Windsor.

Deputy Premier Kathy Dunderdale won't say how far apart the two sides are, but the pulp and paper company wants $300 million from the government.

Dunderdale told the house of assembly on Monday that there is no way she's willing to pay that.

"At this point in time, talks have broken off between the government and Abitibi," she said.

AbitibiBowater spokesperson Jean-Philippe Côté said Monday he is surprised that Dunderdale made the situation public but confirmed the company walked away because the government offer was "way too low."  

AbitibiBowater is still willing to negotiate a compensation price, however it is also pursuing a legal challenge under the North American Free trade agreement.  

Dunderdale won't say what the government offered except that it is short of the $300 million the company wants. 

"We are not going to pay more for the asset than we think it's worth," she said. "So, we have determined a range of value for those assets. And, you know, we can't go beyond that just in order to settle."

Talks are also on hold regarding severance pay for loggers in central Newfoundland.  

While AbitibiBowater has no legal obligation to pay any severance at all, the government has been pressuring the company to pay it anyway as it did when it closed its mill in Stephenville.