Nfld. & Labrador

Supreme Court to rule in AbitibiBowater case

The Supreme Court of Canada will release its decision on Friday as to who is responsible for the environmental mess left behind following the closure of AbitibiBowater's paper mill in Newfoundland and Labrador.

Top court to weigh in on 'polluter pays' issue

The Supreme Court of Canada will rule on Friday as to who is responsible for the environmental mess left behind following the closure of AbitibiBowater's paper mill in central Newfoundland.

The company shut down its last mill operation, located in Grand Falls-Windsor, in March 2009. It was a devastating blow to the town's economy, and the start of a lengthy legal battle over who would pay the estimated $100-million clean-up bill.

The Supreme Court's decision could have implications not only for the provincial government, but also for governments across the country.

The case is putting so-called "polluter pays" laws to the test. There are hundreds of companies that pose some environmental risk across Canada, and Friday's ruling could determine who should be financially responsible if any issues arise in the future.

AbitibiBowater restructured itself as Resolute Forest Products  in 2011.

AbitibiBowater, formerly Canada's third largest pulp and paper manufacturer, struggled for years to remain solvent, and closed several of its mills — including two in Quebec in 2010 — while it coped with a global slump in demand for newsprint.

The case is also being closely watched by residents of Grand Falls-Windsor.

Jim Molloy lives across the street from the mill, which hired him 60 years ago.

"For my money, it's Abitibi's baby, and if they left it there, then they should clean it up," he said.

It's complicated

The provincial government is looking for Abitibi to pay, but the story is more complicated than that. Instead of negotiating a settlement with its other creditors at the time of the mill's closure, the government expropriated the company's assets, which means it became the new owner of the mill.

Because of that, AbitibiBowater said the responsibility for the cleanup no longer belongs to the company, but the province.

Finance Minister Tom Marshall said the price tag for the cleanup may end up on the shoulders of the people of the province.

"In the end ... if the site is there and there is nobody responsible for cleaning it up, then unfortunately the taxpayers will be left with the bill," he said.