The Chronicle Herald (Provincial)
Parties put taxpayer on the hook
In media coverage Sunday, all three party leaders stated they were opposed to any more taxpayer dollars going to Northern Pulp.
But the taxpayer is already on the hook for either part of the cost of the mill's proposed $350 million replacement effluent treatment or for lost profits if the project doesn't go ahead.
And during their stints in power, all three parties have contributed to putting us in this situation.
"Proponents and companies that want to do business here should be putting their own capital into it," Liberal Leader Iain Rankin was quoted by the CBC.
"We support business; we do that by reducing regulatory burden and we continue to support our traditional sectors like forestry, but they'll have to put their own (money) forward."
Internal government emails obtained by The Chronicle Herald show that in 2018, while Rankin was minister of lands and forestry, government was negotiating with Northern Pulp the taxpayer's liability for ending the company's lease to the provincially owned Boat Harbour effluent treatment plant a decade early.
In those emails the negotiations were based on the cost to build a replacement.
“We have no comment,” reads a response from the Department of Lands and Forestry on Monday to questions from The Chronicle Herald on how those negotiations are going.
In 2018, it was discovered by the group Friends of the Northumberland Strait that the province had also paid $6 million for the design of the new facility without telling anybody.
"If a company wants to put up a plant, then the company should be able to finance that," Progressive Conservative Leader Tim Houston was quoted by CBC.
But it was former PC premier John Hamm’s government that in 2002 renewed the lease agreement to Boat Harbour until 2030 that, along with an indemnity agreement and a memorandum of understanding signed by former Liberal governments, is the basis for taxpayer liability.
NDP Leader Gary Burrill told the CBC, “(Northern Pulp has) a long ways to go and an awful lot of work to do to get itself in the place of public confidence where the government of the province should give any consideration to a financial application from that company."
But it was under former NDP premier Darryl Dexter that $75 million was loaned to Northern Pulp to buy 475,000 acres of woodland from the mill’s former owners, Neenah Paper.
None of the leaders was available for an interview with The Chronicle Herald on Monday but two parties responded to questions via email.
The NDP said they weren’t aware of any liability to Northern Pulp.
“The NDP would need to see and understand any such commitment and determine whether the Pictou Landing First Nation had been consulted before deciding whether to honour it,” reads the written response.
In regard to the loan, the NDP states that it “is secured by the forest land itself.”
The loan and the land are currently part of a creditor protection order by the British Columbia Supreme Court.
The PC party provided the following written response: “We are not privy to those negotiations or discussions that are ongoing. It would be premature to commit to any decision before seeing the outcomes of those negotiations.”
The Liberal campaign did not respond by the 5 p.m. deadline.
The current Liberal government had the power to absolve itself of financial liability through legislation.
“The Legislature within its jurisdiction can do everything that is not naturally impossible, and is restrained by no rule human or divine,” ruled Justice William Riddell of the Ontario High Court in the precedent setting 1909 case Florence Mining Co v. Cobalt Lake Mining Co.
“The prohibition, “Thou shalt not steal,” has no legal force upon the sovereign body.”
Though over a century old, the precedent stands that provincial and federal governments can legislate their way out of contracts. While American citizens and private companies are at least granted a constitutional right to compensation, no such thing exists in Canada in the face of legislative authority.
“The Federal Parliament and Provincial Legislatures may pass laws of any kind, including laws that change or cancel legally binding agreements,” recently wrote Queens University law professor Bruce Pardy in a legal brief for the Fraser Institute.
“This power exists even if the enactment has the effect of expropriating property or causing hardship to innocent parties who negotiated with government in good faith in entering into the contract in the first place.”
The Boat Harbour Act, passed in 2015, got us part way there by stating: “No action lies against Her Majesty in right of the Province or a member of the Executive Council in respect of the cessation of the use of the Facility for the reception and treatment of effluent from the Mill as a result of this Act.”
However, a final clause, adds, “The enactment of this Act is deemed not to be a repudiation or anticipatory repudiation by Her Majesty in right of the Province of the lease agreement dated December 31, 1995 ...”
That lease, signed under a Liberal premier and renewed under a Progressive Conservative government, is the basis of the liability former premier Stephen Mcneil acknowledged in a 2019 interview with The Chronicle Herald.
“There is a belief we are negotiating to build the effluent treatment facility but that is not what we’re doing,” said Mcneil.
“We’re looking at what compensation do we have for closing Boat Harbour nine years earlier.”