Wednesday, December 12, 2012


The Provincial Government made a costly mistake when it inadvertently nationalized the paper mill in Grand Falls. 

The cost of that mistake is still being calculated.

What we know is that the province is on the hook for the environmental remediation of the assets it took. It is also responsible for the upkeep, security and marketing of the old mill.

Yesterday,  I pointed out that a little mistake – the delineation of the land being annexed by the province – had significant implications for the province. Someone provided the Department of Justice, Executive Council and Legislative council with inaccurate coordinates for the land in question resulting in the mill being nationalized.

The blame is governments. However, one would think that these highly paid bureaucrats writing legislation could assume that the information related to property lines was solid. Sure they could have asked for confirmation that the mill was not included in the stated expropriation zone, but from the bill’s architect’s point of view, it must have come as some surprise to learn the mill had been included.

Does anyone actually expect that the Premier, the Minister, or the CEO of NALCOR is able to go through the clauses of the bill ensuring each and everyone is accurate to the minute? We pay senior bureaucrats very good money to ensure the i’s are crossed. Due diligence is an assumption. In this case it was a poor assumption. The politicians get the blame because they are the public face of the organization – the buck stops at the Minister or Premier’s office.

The Premier, than acting minister of Natural Resources,  did not deliberately mislead the public, the opposition or her own caucus.  She was as surprised as everyone else. I am sure she felt confident that the allegation was incorrect, until it was proven that someone screwed-up.

Does this glaring example of government incompetence poison the well? Does it make every thing the government says or does suspect?

From a political perspective it is manna from political heaven. There is a lot of currency in pointing out that the government; this Premier in particular, has made enormous miscalculations before. That they have promised an outcome that has unexpectedly morphed into a pink elephant.

To the government’s defense – these assets – the timber rights and hydro – had to be protected. Generous concessions had been made for decades to the operator(s) of the mill. These public resources needed to be protected. 

Like the horribly lopsided Upper Churchill Arrangement, government made a mistake. 

Mistakes were made. Trust and confidence has been eroded.

The chickens have come back to roost.

Does government come to a stand still, do we fear bold action in the future. No. We eat humble pie, pay the bills and move on.


Anonymous said...

We have the same people running the show on Muskrat Falls. No doubt they will not make the same mistakes (on a go forward basis of course). Williams is a lawyer for God's sake. He knew or ought to have known about this. Easy enough for him to say he would do the same thing if he had to. He's moved on. Once again the taxpayers are on the hook! We must have the dumbest and most stupid of Lawyers in all of Canada. The Upper Churchill, the Mill clean up and mark my words, Muskrat Falls. Was the Mill legal work contracted out?? I would like the names of those responsible for this financial boondoggle made public!! (Of course that will never happen......they protect their own).

Anonymous said...

Remind us. What did you think of. Danny's expropriation play in December 2008 and after?

Peter L. Whittle said...

I still think the move to seize hydro assets and timber rights tied to the the mill in Grand Falls was the right move.

" one wonders what else might have been missed or done wrong in the rush. What else was missed? What other accidents, or expensive Easter Eggs, are lurking?" P&P

"I suspect the truth of it is they would like to close the mill all together and keep the lucrative power rights they have on the exploits and operate as a generator of power. If they can exploit subsidies to save jobs at the mill they will, but they have no interest in staying in this province as a paper company." p&P